Presidential Term Limits and Fiscal Policy in Latin America. Maria Elena Guadamuz PhD Student, UCLA. Motivation. M: 1.) Responsible fiscal policy is one of the key features the “Washington Consensus” emphasized for better economic performance in Latin America.
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Maria Elena Guadamuz
PhD Student, UCLA
Term limits affect Fiscal Policy
Binding term limits have an effect on fiscal policy.
When an incumbent faces a binding term limit, government spending (as a % of GDP) by 2.5%, from 16.1% to 19.4%.
When an incumbent faces a binding term, tax revenues decrease by -0.9% (from 19.1 to 18.2%).
My results for government revenue differ from Johnson and Crain (2004), leading me to believe that the effects of uncontrolled spending can have more dramatic effects in the context of Latin America.Preliminary Results