Equalization grants and asymmetric sharing of natural resources: options for Latin America

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2015

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Urban Public Economics Review




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Giorgio Brosio et al., « Equalization grants and asymmetric sharing of natural resources: options for Latin America », Urban Public Economics Review, ID : 10670/1.jzb90c


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"Latin American countries face a high participation of Non Natural Resources Revenues (NNRR) in their fiscal schemes. Also, NNRR are concentrated in a few regions which generate a high territorial inequality. In this context, the aim of this paper is to provide a close look at how inclusion of NNRR into equalization grants can be made and how countries are actually doing it and/or could implement adequate equalization grants. Taking as reference fiscal equalization theory, we evaluate vertical and horizontal system in Argentine Provinces. In sum, the main emerging conclusion is that vertical general equalization systems are better suited to satisfy high standards of equalization with likely lower financial and political costs."

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