Procyclical Spending (Sturzenegger & Werneck)

Fiscal federalism and procyclical spending: The cases of Argentina and Brazil by Federico Sturzegger and Rogério L. F. werneck. “This paper studies the sources of procyclicality for the spending of subnational governments in Argentina and Brazil. The conclusion is that the debate on prociclical subnational spending should focus on improving the tax collection schemes at the local level and not on reforming the tax sharing agreements.”