Eyes wide shut? Reforming and defusing checks and balances in Argentina

Abstract

How effective are autonomous audit agencies (AAAs) in curbing corruption and improving fiscal governance in emerging economies? AAAs are autonomous oversight agencies tasked with scrutinising government finances. However, they are not as effective as they could or should be, partly because of the political constraints they face and the political economy context in which they are embedded. This article assesses the performance and trajectory of the Argentine AAA. It suggests that AAAs can have only a limited impact when formal fiscal institutions are undermined by informal practices and undercut by adverse political incentives. It further highlights the limits of radical reform strategies based on the import of exogenous institutional models. This research has important research and policy implications for the reform and strengthening of AAAs in developing countries. Copyright © 2007 John Wiley & Sons, Ltd.