There is a widespread belief that fiscal rules hinder public investment. The reasoning is straightforward: to adhere to these rules, governments often must reduce spending, particularly on infrastructure projects, which are not deemed essential in the short term. But is that really the case? New evidence from Europe, emerging markets and Latin America shows otherwise. … [Read more...] about Unveiling the Truth: How Sticking to Fiscal Rules Boosts Investment in Latin America
Carolina Ulloa Suárez
Carolina Ulloa Suárez is a consultant for the Fiscal Management Division of the IDB. She holds a Ph.D. in economics from Aix Marseille School of Economics (AMSE) and a master in macroeconomics and development from the same university. In her research, she has focused on the role of fiscal policy rules in sustaining public finances and their impact on socioeconomic development. Her work has been published in journals such as the "European Journal of Political Economy" and the "Journal of Government and Economics." She has also worked as a consultant for the Development sector of the World Intellectual Property Organisation and she regularly teaches in academic institutions, including Sciences Po Paris, Paris-Panthéon-Assas University and Aix-Marseille University and the Externado University of Colombia. Her research and policy interests include macro-fiscal issues, public finance sustainability, the stabilizing role of fiscal policy and development.
New Index Helps Governments Design Better Escape Clauses to Bridge Fiscal Rigidity with Crisis Adaptability
In recent years, the global economic landscape has been marked by unprecedented upheavals, including the Global Financial Crisis, the disruptions caused by the COVID-19 pandemic, and, more recently, geopolitical tensions. These crises have tested the resilience of fiscal frameworks, highlighting the pressing need for greater adaptability to navigate unforeseen challenges … [Read more...] about New Index Helps Governments Design Better Escape Clauses to Bridge Fiscal Rigidity with Crisis Adaptability
Complying with Fiscal Rules in Latin America and the Caribbean: From Promises to Action
Fiscal rules have become a common policy tool to promote the sustainability of public finances, as the number of countries with at least one fiscal rule has grown from ten in 1991 to more than 100 by 2021. Although fiscal rules promise to support fiscal discipline and maintain debt sustainability, their track record is often mixed, as simply adopting a fiscal rule does not … [Read more...] about Complying with Fiscal Rules in Latin America and the Caribbean: From Promises to Action
Are Latin American and Caribbean Countries Complying with Their Fiscal Rules?
Over the past two decades, a growing number of Latin American and Caribbean (LAC) countries began adopting fiscal rules to limit overspending influenced by election cycles, public pressure, and other political economy factors, helping the region strengthen its fiscal solvency and sustainability. However, in recent years the region has suffered several external shocks that … [Read more...] about Are Latin American and Caribbean Countries Complying with Their Fiscal Rules?