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2002
Fiscal Federalism and Regional Development: The Case of Argentina

INTERNATIONAL FISCAL CONFERENCEFiscal Equalization and Economic DevelopmentPolicy within Federations FISCAL FEDERALISM AND REGIONAL DEVELOPMENT:THE CASE OF ARGENTINA I. BASIC DATA OF ARGENTINA II. ARGENTINA AS ASSYMETRICAL FEDERATION EXPENDITURE ASSIGNMENTArgentina has a reasonable and not concluded decentralization of expenditure ARGENTINA: THE LAST DECADE OF INTERGOVERNMENTAL FISCAL ARRANGEMENTS (1991-2002) IV. FISCAL CAPACITY OF NATION AND PROVINCES(% GDP) TAX ASSIGNMENTTaxing powers are far from the model of separation of the Constitution of 1853. Nowadays prevails revenue shari V. VERTICAL FISCAL IMBALANCEEXPENDITURES AND RESOURCES (%) VI. HORIZONTAL IMBALANCE: OWN RESOURCES AND PROVINCIAL GDP FISCAL FEDERALISM IN ARGENTINA: AN AGENDA FOR THE FUTURE INTERNATIONAL FISCAL CONFERENCEFiscal Equalization and Economic DevelopmentPolicy withinFederations-Miguel Angel Asensio -Secretario de Finanzas Públicas de la Provincia de Santa FeArgentinaCharlottetownPRINCE EDWARD ISLANDOctober28-29, 2002.FISCAL FEDERALISM AND REGIONAL DEVELOPMENT:THE CASE OF ARGENTINAI. BASIC DATA OF ARGENTINAFEDERAL REPUBLIC.POPULATION: 36 MillionsPeople.CONTINENTAL SURFACE: 2,76 Millionsofsquarekilometers.LEVELS OF GOVERNMENT: *1 Federal Government.*24 Intermediate Governments(23 Provinces and1 AutonomousFederal District).*2.155 Local Governments.II. ARGENTINA AS ASSYMETRICAL FEDERATIONDemographicassymetries.Regional Assymetries.UrbanAssymetries.˜Existenceofan historicalactor: the cityof Buenos Aires. Jointly with the homonimusProvince produces 65% ofArgentineanGDP.EXPENDITURE ASSIGNMENTArgentina has a reasonable and not concluded decentralizationofexpenditurePRIOR TO CONSTITUTIONAL REFORM (1992-1993).NEW CONSTITUTION (1994).AFTER CONSTITUTION (1999, 2000, 2001, 2002).ARGENTINA: THE LAST DECADE OF INTERGOVERNMENTAL FISCAL ARRANGEMENTS (1991-2002) IV. FISCAL CAPACITY OF NATION AND PROVINCES(% GDP)CONCEPTS199419962000National Fiscal Burden 17,69 16,14 17,21Provincial Fiscal Burden –3,81Total Fiscal Burden17,6916,14 21,22SOURCE: Ministry of Economics, Argentina.TAX ASSIGNMENTTaxing powers are far from the modelofseparationofthe Constitutionof 1853. Nowadays prevails revenue sharing.MAIN TAXES IN ARGENTINAV. VERTICAL FISCAL IMBALANCEEXPENDITURES AND RESOURCES (%)VII. REGIONAL DEVELOPMENT AND REVENUE SHARINGSHAREABLE (POOL)SHAREABLE (POOL)I. LOGIC YEARS 70` and 80`II. LOGIC YEARS 90` andPRESENTPROVINCES(48,5%)NATIONALGOVERNMENT(48,5%)DEVELOPMENT FUND (3%)PROVIN-CES (40%)NATIONALGOVERNMENT (59%)TREASURY GRANTS (1%)1) Act20.221.2) AproximatelyAct23.548 and others.FUTURE SCENARIOS FOR FISCAL FEDERALISM AND EQUALIZATION IN ARGENTINAFISCAL FEDERALISM IN ARGENTINA: AN AGENDA FOR THE FUTURE1REVISION OF THE LINK BETWEEN REGIONAL POLICY AND REVENUE SHARING (TREATMENT OF HORIZONTAL IMBALANCE).2CO-OCUPATION OF “TAX ROOM”.3COMPENSATIONS FOR THE USE OF EXTRAORDINARY TAXES ON FOREIGN TRADE.4COMPENSATIONS FOR COMPSUMPTION OF NON TRADITIONAL NATURAL RESOURCES.5DECISION ABOUT “CONSTITUTIONAL MANDATED” FEDERAL GRANTS IN AID TO PROVINCES.