The Politics of Intergovernmental Fiscal Relations in Argentina

The search for political determinants of intergovernmental fiscal relations has shaped much of the recent literature on the economic viability of federalism. This study assesses the explanatory power of two competing views about intergovernmental transfers; one emphasizing the traditional neoclassical approach to federal-subnational fiscal relations and the other suggesting that transfers are contingent on the political fortunes and current political vulnerability of each level of government. The author tests these models using data from Argentina, a federation exhibiting one of the most decentralised fiscal systems in the world and severe imbalances in the territorial distribution of legislative and economic resources. It is shown that overrespresented provinces ruled by governors who belong to opposition parties can bring into play their political overrepresentation to attract shares of federal transfers beyond social welfare criteria and to shield themselves from unwanted reforms to increase fiscal co-responsibilty. This finding suggests that decision makers in federal countries must pay close heed to the need to synchronize institutional reforms and fiscal adjustment.

When federalism is not enough? Paths to cooperation in Federal democracies

This paper explores an overlooked issue in the literature on federations and federalism: the relationship between federalism and democracy. Starting from the assumption that federalism per se is not enough to guarantee cooperative intergovernmental dynamics between different levels of governments, this article analyzes how democracy reinforces cooperative intergovernmental relations under a federal design. Drawing from empirical evidence of federations in the making – Brazil, India, Malaysia, Mexico, South Africa and Spain – this article shows that in countries where the federal design was built under democratization, namely Brazil, Spain and South Africa, intergovernmental dynamics evolved under an increasingly cooperative mode of interaction.