Fiscal Contracting in Latin America

13 Pages Posted: 17 Sep 2014 Last revised: 20 Mar 2015

See all articles by Richard M. Bird

Richard M. Bird

affiliation not provided to SSRN

Eric M. Zolt

University of California, Los Angeles (UCLA) - School of Law

Date Written: September 15, 2014


Latin America has long been characterized as a region of high income inequality. In recent years, however, many countries have seen a decrease in income inequality and poverty levels and an increase in economic mobility. Fiscal policies have played a role in achieving these results. One important explanation for changing fiscal policies is the increasing economic and political role played by the growing middle class in shaping the level and quality of collective goods and services and the types of taxes and relative tax burdens to fund these expenditures. Through a process we call “fiscal contracting,” less unequal societies may be willing to pay more in taxes for expanded, relatively universal public services.

Keywords: Fiscal redistribution, taxation, inequality, fiscal contracting, middle class, Latin America

Suggested Citation

Bird, Richard Miller and Zolt, Eric M., Fiscal Contracting in Latin America (September 15, 2014). World Development, Vol. 67, pp. 323, 2015, UCLA School of Law, Law-Econ Research Paper No. 14-13, Rotman School of Management Working Paper No. 2496576, Available at SSRN:

Richard Miller Bird

affiliation not provided to SSRN

No Address Available

Eric M. Zolt (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

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