Munich Personal RePEc Archive

Inequidades y Ausencia de Criterios Explícitos de Reparto: La distribución del Presupuesto Nacional a las provincias en el periodo post crisis (2004-2007)

Uña, Gerardo and Cogliandro, Gisell and Bertello, Nicolas (2009): Inequidades y Ausencia de Criterios Explícitos de Reparto: La distribución del Presupuesto Nacional a las provincias en el periodo post crisis (2004-2007). Published in: Fundacion Siena Website No. Publicación No. 7 (2009): 01-48.

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As part of a broader discussion of fiscal federalism in Argentina, this research analyzes the role of the National Budget as an instrument of resource allocation that has an impact located in the provinces. To do this, we consider the evolution between 2004 and 2007 transfers and budget programs from national level that have a geographic impact, which represented an average of 75% of the National Budget primary spending.

At first we develop a classification of the National Budget programs according to their impact at the subnational level. It is found that 25% goes to functions such as Defense, Diplomatic Services or Justice, whose impact is not likely to be geographically distributed. Another 7% consists of direct transfers to the provinces, usually established by different laws. Meanwhile, the remaining 68% of the National Budget is allocated to various programs implemented from the national level, but whose benefits are geographically limited. Goods and services financed in this way, although for many provinces account for an amount greater than what they receive from the Federal Revenue Sharing Scheme, are often left out of the analysis of fiscal federalism.

In a second instance, we conduct a detailed analysis of national programs with a subnational level impacts associated with the Social Services purpose. The aim is to consolidate the distribution criteria and the extent to which this distribution is aligned with the essential function of the National Government to ensure minimum levels of interregional equity. To do this, we did an analysis of the changes produced in the social programs in the considered period and performed exercises with empirical data to identify the extent to which this distribution is associated with indicators of socioeconomic status of each province.

As a result of the analysis we observed that although there is a relationship between allocated funds and objective criteria such as poverty, unemployment or housing deficit of the provinces for the national program distribution, this relationship provides inequities and lack of explicit criteria for distribution. Overall, the predominant criterion is population size. This particularly occurs with Promotion and Social Assistance programs (except those which by law are distributed according to NBI). In the case of Housing and Urban Development, a role that increased significantly during the analysed period, with major housing schemes promoted by the National Government, the housing shortage indicator partly explain the average evolution of the resources distributed by this feature from 2004 - 2007, albeit with significant deviations, both positive and negative for some provinces. For its part, the geographical allocation of the funds of the Job function responds more to the level of poverty and the number of people, than the unemployment rate in each province. In all cases there are important cases of particular provinces benefited or harmed in the distribution, without regard to criteria linked to demographic or socioeconomic status.

As a main conclusion, we highlight the relevance that the National Budget should have in the discussion of fiscal federalism. Unlike the Federal Revenue Sharing Scheme, the National Budget is discussed every year, a situation that allows for discussions on the funds distribution on a regular basis. In particular, it stands out the need to discuss the criteria that directly or indirectly with which the resources to the provinces are allocated, especially for programs with greater social impact. In these cases it is necessary to establish explicit and transparent criteria of distribution, linked further un the social situation of the provinces, thus strengthening the role of National Government as a guarantor of minimum standards of interregional equity.

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