Intergovernmental Fiscal Relations in Latin America and the Caribbean

Subnational public finance statistics for 26 Latin American and Caribbean countries

The Outlook of Fiscal Relations between Levels of Government in Latin America and the Caribbean (Panorama de las relaciones fiscales entre niveles de gobierno en países de América Latina y el Caribe) is a joint publication prepared by the Inter-American Development Bank (IDB) and the Economic Commission for Latin America and the Caribbean (ECLAC) with the aim of providing a regional and national analysis of the subnational public finances of the countries of the region.

The document present detailed and internationally comparable statistics on the subnational public finances of 26 Latin American and Caribbean countries, including previously unpublished information on some Caribbean countries. Also included are analyses of topics from Vision 2025, Reinvest in the Americas, such as the contribution of subnational finance to gender equality and climate change.

Chapter 1 summarizes the main regional trends and points out the advances and challenges in fiscal relations between the different levels of government in the region. Chapter 2 is dedicated to the impact of the subnational public finance crisis caused by the coronavirus disease (COVID-19) pandemic. This crisis, which has exacerbated historical problems and poses new challenges, is one of the reasons for renewing the policy agenda on subnational finances in the region. Chapter 3 presents a compilation of country cases, which offers a summarized overview, but at the same time presents complete details of the main aspects of the fiscal relations between the levels of government of 26 countries of the region.

The topics presented for each country summarize the most relevant characteristics of fiscal relations between levels of government in six areas, namely:

i) Organization of the subnational public sector: the basic characteristics of said sector in each country are described, including the main aspects of election of subnational authorities.

ii) Key issues of subnational finance in each country: a summary of the historical evolution of the decentralization process, the current situation and recent trends is presented.

iii) Public spending by subnational governments: the levels and composition of spending by subnational governments, investment and functional spending are analyzed.

iv) Public revenues of subnational governments: the main own income, the most outstanding features of the collection and the transfers received by subnational governments are examined.

v) Public debt of subnational governments: the characteristics of subnational indebtedness are analyzed, including the legal framework and, if applicable, the rules of subnational fiscal responsibility.

vi) Entities in charge of managing the relationship between the central government and subnational governments: the governing entities, the coordination forums between levels of government, the associations of subnational entities and the sources of fiscal information are presented, with their main characteristics.

This publication is analytical in nature, and its conclusions and recommendations arise from the literature review and the information presented. The Overview of fiscal relations between levels of government in Latin American and Caribbean countries seeks to be a reference for the analysis of the main characteristics and trends of subnational public finances of 26 countries in the region and contribute to the design and implementation of policies public that strengthen the subnational sector.

Access the entire report on the website of the Inter-American Development Bank (in Spanish).