The logic of Congressional delegation: Explaining Argentine economic reform

Abstract

This study evaluates the role played by the legislature in one of Argentina's most important economic reforms of recent decades: the reform of tax incentives for regional development. As implemented by the last military government, this sytem of tax incentives provoked sharp distributive conflicts among provinces. Although a majority of legislators favored reform after the return to democracy in 1983, interprovincial conflicts created bargaining problems that prevented the passage of reform legislation through regular channels. Pro-reform legislators decided instead to delegate reform authority to President Raúl Alfonsín because he shared their interest in containing the fiscal cost of tax incentives. Subsequent uses of this delegated authority by two presidents promoted the interests of the enacting coalition that supported delegation. These findings support the usefulness of delegation models when carefully applied to Latin America and challenge theories that neglect the different ways that legislators shape economic reform. © 2004.