Towards Effective Social Insurance in Latin America: The Importance of Countercyclical Fiscal Policy

62 Pages Posted: 25 Apr 2011

See all articles by Miguel Braun

Miguel Braun

Center for the Implementation of Public Policies (CIPPEC)

Luciano di Gresia

affiliation not provided to SSRN

Date Written: July 2003

Abstract

Latin America is a volatile, crisis-prone region, with limited and inadequate social insurance. Therefore, the long-term as well as the recent poor suffer significantly during crises. Furthermore, social spending is procyclical in the region, but less so than total spending, indicating that the effectiveness of compensatory social policies designed to protect those vulnerable to crises is constrained by adjustments during recessions. The causes of procyclical fiscal policy lie in the political constraints on saving during expansions, combined with limited creditworthiness during recessions, and enhanced by economic volatility and a low share of automatic stabilizers in the budget.

Suggested Citation

Braun, Miguel and Gresia, Luciano di, Towards Effective Social Insurance in Latin America: The Importance of Countercyclical Fiscal Policy (July 2003). IDB Working Paper No. 409, Available at SSRN: https://ssrn.com/abstract=1818698 or http://dx.doi.org/10.2139/ssrn.1818698

Miguel Braun (Contact Author)

Center for the Implementation of Public Policies (CIPPEC) ( email )

Callao 25 ler piso
Buenos Aires
Argentina
+54-114-384-9009 (Phone)

Luciano di Gresia

affiliation not provided to SSRN

No Address Available

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