## Fiscal Decentralization and Cyclicality in Latin America: Evidence from a New Regional Budget Database

_IMF Working Papers, May 8, 2026_

## Source details

**Canonical URL:** [Fiscal Decentralization and Cyclicality in Latin America: Evidence from a New Regional Budget Database](https://www.imf.org/en/publications/wp/issues/2026/05/08/fiscal-decentralization-and-cyclicality-in-latin-america-evidence-from-a-new-regional-575967)

## Other formats

- [Markdown version](/en/publications/wp/issues/2026/05/08/fiscal-decentralization-and-cyclicality-in-latin-america-evidence-from-a-new-regional-575967/index.md)
- [Structured JSON version](/en/publications/wp/issues/2026/05/08/fiscal-decentralization-and-cyclicality-in-latin-america-evidence-from-a-new-regional-575967/index.json)
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## Bibliographic details
- Authors: Davi Bhering Buarque de Gusmao, Hector Perez-Saiz, Joe Ue, Valeria Visser
- Published: May 8, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229046909.001

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### Main findings
- Regional governments in Latin America have grown in relevance over the past three decades, based on a newly constructed database of highly granular regional-level budgets.
- Regional governments exhibit lower revenue elasticity to national GDP than central governments, primarily due to the limited cyclicality of transfers.
- On the expenditure side, overall elasticity of regional governments is comparable to central governments, but fiscal adjustment occurs through capital expenditures.
- Transfers appear to operate primarily as redistribution mechanisms across regions rather than as instruments to offset differences in tax capacity.

### Data and scope
- New regional-level budget database covering regional governments in Latin America with high granularity.
- Time horizon referenced as "the past three decades."

### Themes and subject coverage
- Current spending
- Economic and financial statistics
- Expenditure
- Fiscal federalism
- Fiscal policy
- Government finance statistics
- Revenue administration

### Keywords
- budget
- Caribbean
- Central America
- Current spending
- Decentralization
- expenditure elasticity
- Fiscal federalism
- GDP series
- Global
- Government finance statistics
- IMF working papers
- Latin America
- South America
- Subnational database
- Subnational government
- transfers

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2026/english/wpiea2026092-source-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2026/05/08/fiscal-decentralization-and-cyclicality-in-latin-america-evidence-from-a-new-regional-575967_