Expenditure needs estimation for argentinian provinces : a structural modeling approach

Abstract

Argentina has been reneging on its Constitution since 1994 by not passing a law that fully determines national intergovernmental fiscal transfers. This paper uses an innovative structural framework to estimate and ultimately propose a new distribution scheme for such transfers. The structural approach allows to recover the deep parameters to properly estimate each province’s expenditure needs and use them to establish the distribution rates that should be assigned to each jurisdiction.