Latin America and the Caribbean (LAC) suffers from chronically low rates of investment, which hurts economic growth. Since high taxes on corporations disincentivize firms´ investments, an important policy question is whether the region should reduce taxation on corporate profits. A first step in answering this question is to analyze how high the tax burden is on corporate … [Read more...] about Should Latin America and the Caribbean Countries Cut Taxes on Corporate Profits to Stimulate Investment and Growth?
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
In many countries, state-owned enterprises (SOEs) play a key economic role, either as providers of fundamental public services or generating fiscal revenues by controlling strategic assets. To better achieve the objectives for which they were created, SOEs need to use their resources efficiently and effectively. As a result, how governments monitor and govern these institutions … [Read more...] about It is Time to Do Away with Boards in State-Owned Enterprises and Create a New Model of Monitoring
All countries in the region have signed the Paris Agreement, which aims to increase countries' resilience and adaptive capacity, as well as stabilize global warming below 2°C and as close to 1.5°C as possible. This objective implies two major challenges for finance ministries. First, they need to help drive large-scale and unprecedented changes in the energy, construction, … [Read more...] about Six opportunities to promote resilience and decarbonization through fiscal policy
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?