<i>Grassroots</i> fiscal centralization: subnational delegation of revenue authority in Argentina

Abstract

The concept of delegation offers scholars of federalism a novel analytical framework for examining previously overlooked aspects of fiscal centralization. Adopting a bottom-up approach, we develop a taxonomy of delegation types to assess the dynamic evolution and feedback effects of key milestones of fiscal centralization in Argentina, a developing federation with institutionally strong provinces that have increasingly surrendered revenue authority. We conceptualize fiscal centralization as a cyclical economic adjustment, wherein provinces delegated tax and borrowing powers following major economic disruptions – specifically, the Great Depression and Argentina’s sovereign debt default. In contrast, during periods of economic growth that promised increased subnational fiscal revenues, provinces further relinquished tax authority as a procyclical correction. Overall, this analysis demonstrates how categorizing delegation into distinct types can enrich the literature on the distribution of fiscal power – a central dimension of subnational self-rule in federal systems.