Supplementary Files
Keywords
ECONOMIC FLUCTUATIONS
GROSS DOMESTIC PRODUCT
SOCIAL TRANSFERS
ECONOMIC CYCLE
PUBLIC EXPENDITURE
CICLOS ECONÓMICOS
GASTO PÚBLICO
GOBIERNO
FLUCTUACIONES ECONÓMICAS
PRODUCTO INTERNO BRUTO
TRANSFERENCIAS SOCIALES
How to Cite
Abstract
In this article, we try to determine if the social transfers of the Government in Costa Rica have been pro-cyclical or counter-cyclical. To examine the presence of cyclicity, correlations were used between the production and transfer series, after the variables were filtered using the Hodrick-Prescott method. Regression methods are also used to explain the growth of transfers with the growth of production, both contemporaneously and lagging behind. Quarterly data were used for the estimates and it was found that the contemporary transfers do not respond strongly to the cycle; however, they do respond to the lag (previous quarter), where there is a strong counter-cyclical relationship. On the other hand, it is determined that most of the important social programs have a negative relationship with the lagged quarterly production. This implies that, when production slows down, there is an increase in spending on social programs in the following quarter. We conclude that, in Costa Rica, social programs, due to their cyclicality, have had the potential to reduce the negative impacts of economic shocks on the most vulnerable populations.
References
Abbott, A., & Jones, P. (2012a). Budget deficits and social protection: Cyclical government expenditure in the OECD. Economics Letters, 117(3), 909–911. https://doi.org/10.1016/j.econlet.2012.07.011
Abbott, A., & Jones, P. (2012b). Intergovernmental transfers and procyclical public spending. Economics Letters, 115(3), 447–451. https://doi.org/10.1016/j.econlet.2011.12.104
Abbott, A., & Jones, P. (2014). ‘Leaning Against an Open Door’: Ideology and the cyclicality of public expenditure. Journal of Policy Modeling, 36(6), 957–969. https://doi.org/10.1016/j.jpolmod.2014.09.003
Ahuja, D., & Murthy, V. (2017). Social cyclicality in Asian countries. International Journal of Social Economics, 44(9), 1154–1165. https://doi.org/10.1108/IJSE-04-2016-0112
Alesina, A., Perotti, R., Giavazzi, F., & Kollintzas, T. (1995). Fiscal Expansions and Adjustments in OECD Countries. Economic Policy, 10(21), 205. https://doi.org/10.2307/1344590
Aprobación del Protocolo de enmienda al Contrato suscrito entre el Gobierno de la República de Costa Rica y el instituto Interamericano de Cooperación para la Agricultura (IICA) sobre el Centro Agronómico Tropical de Investigación y Enseñanza (CATIE). (Ley N° 8787, 2009). Costa Rica
Arreaza, A., Sorensen, B., & Yosha, O. (1998). Consumption Smoothing through Fiscal Policy in OECD and EU Countries (No. w6372). Cambridge, MA: National Bureau of Economic Research. https://doi.org/10.3386/w6372
Arze del Granado, J., Gupta, S., & Hajdenberg, A. (2013). Is Social Spending Procyclical? Evidence for Developing Countries. World Development, 42, 16–27. https://doi.org/10.1016/j.worlddev.2012.07.003
Barseghyan, L., Battaglini, M., & Coate, S. (2013). Fiscal policy over the real business cycle: A positive theory. Journal of Economic Theory, 148(6), 2223–2265. https://doi.org/10.1016/j.jet.2013.07.012
Bello, O., Ruíz, R. (2009). Gasto social en América Latina: Relación con el ciclo y opciones para reducir la volatilidad económica. Comisión Económica para América Latina y el Caribe (CEPAL). Recuperado de: https://www.cepal.org/ilpes/noticias/paginas/5/38375/omar_bello_ruizdelcastillo.pdf
Fatás, A., & Mihov, I. (2001a). Government size and automatic stabilizers: international and intranational evidence. Journal of International Economics, 55(1), 3–28. https://doi.org/10.1016/S0022-1996(01)00093-9
Fatás, A., & Mihov, I. (2001b). The Effects of Fiscal Policy on Consumption and Employment: Theory and Evidence (Working Paper 2760). Rochester, NY: Centre for Economic Policy Research. Recuperado de: https://papers.ssrn.com/abstract=267281
FODESAF (2016). Programas por institución. Recuperado de http://fodesaf.go.cr/prog_soc_selectivos/index.html
FODESAF (2018). Informe del registro de beneficiarios del 2016. Recuperado de http://fodesaf.go.cr/acerca_del_fodesaf/transparencia/estudios_iice/Informe%20de%20registro%20de%20beneficiarios%202016%20-%2019%20ABRIL.pdf
Forbes, K., & Rigobon, R. (1999). No Contagion, Only Interdependence: Measuring Stock Market Co-movements (No. w7267). Cambridge, MA: National Bureau of Economic Research. https://doi.org/10.3386/w7267
Furceri, D. (2010). Stabilization effects of social spending: Empirical evidence from a panel of OECD countries. The North American Journal of Economics and Finance, 21(1), 34–48. https://doi.org/10.1016/j.najef.2009.11.007
Lane, P. R. (2003). The cyclical behaviour of fiscal policy: evidence from the OECD. Journal of Public Economics, 87(12), 2661–2675. https://doi.org/10.1016/S0047-2727(02)00075-0
Ley de Desarrollo Social y Asignaciones Familiares (Ley N° 5662, 2009). Costa Rica
Prasad, N., & Gerecke, M. (2010). Social Security Spending in Times of Crisis. Global Social Policy: An Interdisciplinary Journal of Public Policy and Social Development, 10(2), 218–247. https://doi.org/10.1177/1468018110366627
Ramírez, E. R. (1997). Costa Rica: Desempeño macroeconómico en 1996. Economía y Sociedad, 1(05), 111–118.
Reforma Ley de Desarrollo Social y Asignaciones Familiares, N° 5662, Ley Pensión para Discapacitados con Dependientes N° 7636, Ley Creación del ICODER, N.º 7800, Ley Sistema Financiero Nacional para Vivienda N° 7052 y Ley Creación Fondo Nacional de Becas (Ley N° 8783, 2009). Costa Rica
Sauma F., P., Sánchez Cantillo, M. V., Chacón, P., & Sáenz, O. (2010). Implicaciones de la política macroeconómica, los choques externos y los sistemas de protección social en la pobreza, la desigualdad y la vulnerabilidad en América Latina y el Caribe: Costa Rica (Documentos de Proyectos No. 3). CEPAL. Recuperado de http://hdl.handle.net/11362/4175
Sørensen, B. E., Wu, L., & Yosha, O. (2001). Output fluctuations and fiscal policy: U.S. state and local governments 1978–1994. European Economic Review, 45(7), 1271–1310. https://doi.org/10.1016/S0014-2921(00)00104-5
Stein, E., Talvi, E., & Grisanti, A. (1998). Institutional Arrangements and Fiscal Performance: The Latin American Experience (No. w6358). Cambridge, MA: National Bureau of Economic Research. https://doi.org/10.3386/w6358