Public Economics

October, Friday 28th | 14:30-16:30hs

Contributed Session CS21

Room 33

 
Chair: Carlos Santiso, UK Department for International Development and Johns Hopkins School of Advanced International Studies
 
 

 

 Intergovernmental Transfers and Fiscal Effort in Peruvian Local Governments

 

  

 

Session: Public Economics

 

  

Presenter(s)

Fernando Aragon, London School of Economics and Political Science and Universidad del Pacifico, Perú

Vilma Gayoso, Universidad del Pacifico, Peru

 

  

Author(s)

Fernando Aragon, London School of Economics and Political Science and Universidad del Pacifico, Perú

Vilma Gayoso, Universidad del Pacifico, Peru

 

  

Sponsor

The American University of Paris Scholarship

 

  

 

 

The purpose of this paper is to identify the causal relationship between intergovernmental transfers and fiscal effort. Panel data from Peruvian local governments and a quasi experiment are used to identify the causal relationship. The evidence supports an elasticity of substitution value around –1.5. The substitution effect is significantly higher among low expenditure municipalities and tends to disappear in the high expenditure group.

 

 

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 Efficiency of Public Spending in Developing Countries : An Efficiency Frontier Approach

 

  

 

Session: Public Economics

 

  

Presenter

 Santiago Herrera, The World Bank

 

  

Author(s)

Santiago Herrera, The World Bank

Gaobo Pang, The University of Maryland

 

  

 

 

This paper estimates efficiency of public spending by calculating the distance between observed input-output bundles and an efficiency frontier estimated by means of the Free Disposable Hull and Data Envelopment Analysis techniques. We explain cross-country variation in efficiency based on the size of expenditure, the proportion of publicly financed expenditures, the prevalence of the AIDS epidemic, and other control variables.

 

 

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 Do Poor Institutions Discourage Access to Public Services? Micro-evidence from Public Officials and Service Users in Peru

 

  

 

Session: Public Economics

 

  

Presenter

Judit Montoriol Garriga, Universitat Pompeu Fabra

 

  

Author(s)

Francesca Recanatini, The World Bank

Daniel Kaufmann, The World Bank

Judit Montoriol Garriga, Universitat Pompeu Fabra

 

  

 

 

We provide evidence of the link between institutions and access to public services. The novelty is the use of micro-level data from users and providers of services from 61 agencies in Peru. We create agency-level measures for quality of institutions and an index of access to measure whether a user decided not to seek a service when needed. The OLS and Probit results suggest that both institutional factors and individual characteristics affect the decision not to seek a service.

 

 

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 Concessions of Infrastructure in Latin America: Government-led Renegotiation

 

  

 

Session: Public Economics

 

  

Presenter

 Stephane Straub, University of Edinburgh

 

  

Author(s)

Stephane Straub, University of Edinburgh

J. Luis Guasch, The World Bank and University of California at San Diego

Jean-Jacques Laffont, Université de Toulouse

 

  

 

 

This paper extends Guasch, Laffont & Straub (2003) to govt-led renegotiations. We extend the model to multiple periods with Pareto improving and rent shifting govt-led renegotiations. The empirical analysis on 307 water and transport projects in L.A. in the 90s confirms the importance of having a regulator and the fragility of price caps. Differences concern investment, financing and corruption. A good regulatory framework matters most when there is weak governance and political opportunism.

 

 

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 Tax Reform and the Formalization of the Economy: Simulating Different Alternatives for Brazil

 

  

 

Session: Public Economics

 

  

Presenter

 Reynaldo Fernandes, Universidade de São Paulo

 

  

Author(s)

Reynaldo Fernandes, Universidade de São Paulo

Renata Del Tedesco Narita, University College of London

Amaury Patrick Gremaud, Universidade de São Paulo

 

  

Sponsor

The Tinker Foundation Scholarship

 

  

 

 

The article develops a model to evaluate the impacts of tax changes on the formal sector of the Brazilian economy. The results indicate that a small linear cut in all taxes may generate an increase in the formal product that is sufficient for the tax collection to return to the initial level. The greatest impact over the formal product is obtained from the reduction of capital income taxes. On the other hand, switching a payroll tax to a VAT tends to reduce the formal product of the economy.

 

 

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 Strengthening Fiscal Governance and Public Sector Auditing: Multilateral Support to Parliaments and External Audit Agencies

 

  

 

Session: Public Economics

 

  

Presenter

 Carlos Santiso, UK Department for International Development and Johns Hopkins School of Advanced International Studies

 

  

Author(s)

Carlos Santiso, UK Department for International Development and Johns Hopkins School of Advanced International Studies

 

  

 

 

This study reviews the lessons learned from a decade of multilateral support to the institutions of budget oversight in Latin America by the World Bank and the Inter-American Development Bank, principally national parliaments and external audit agencies. It argues that there exists unexplored potential to improve the effectiveness of multilateral support to external auditing and financial accountability, including in the choice of lending strategies and the synergies between instruments.

 

 

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