Analysis reveals democratic conditions affect public debt and expenditures in Latin America, suggesting reforms may promote fiscal stability.
This article examines the relationship between institutional and democratic indicators and fiscal behavior in Latin American countries. The study reveals that democratic conditions affect not only expenditure patterns but also public debt levels. Furthermore, debt levels are influenced by other political-institutional framework characteristics. The results suggest that democratic advancement in Latin America has the potential to curb the scale of State intervention in the region’s economies and to provide the stability needed to reduce public debt and improve fiscal performance.
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Guerra et al. (2025) studied this question.
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