Elements for the formulation of a subnational public credit policy in Bolivia
DOI:
https://doi.org/10.35319/lajed.200810178Keywords:
Debt, Intergovernmental financingAbstract
The document presents a quantitative analysis of subnational indebtedness, whose results suggest that it is currently within reasonable limits, but worries that its repayment depends on resources related to the hydrocarbon sector and is poorly supported by resources generated in local economies. There are also signs of a dangerous growth in floating debt, especially associated with municipalities that do not manage loans and are highly dependent on transfers. With these considerations, the document highlights, in the design of fiscal rules, the need to consider future incentives for discipline from all components of intergovernmental financing, not only control of indebtedness. In this last area, current policies have shown evidence of their effectiveness, and it seems to be the moment to move towards long-term debt strategies and multi-year budgetary parameters.
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