Fiscal policy and external constraints: state credibility, taxation, public goods and the budget

This volume draws together the work of political economy specialists from Latin America, the United States and Europe. Its innovative approach provides a multi-disciplinary comparison of fiscal and tax policies in Latin America and the United States. The contributors identify the common budgetary problems of the nations of the Americas in terms of their status as ‘small fiscal states’ that have failed to generate adequate tax resources to fund the responsibilities of modern government. They also consider the differing effect of capital inflows on the autonomy of the public sector in the United States and Latin America. While the former has been able to operate large budgetary and trade deficits without adverse reaction from global financial markets, the latter has experienced the ‘disciplining’ effect of these external forces to maintain low public deficits. The volume therefore offers a timely assessment of hemispheric fiscal developments on the eve of the greatest crisis for the world economy since the depression of the 1930s