Uruguay has been traditionally characterized as one of the most stable and representative democracies in Latin America. Part of this evaluation rest on the strength of its political institutions and the clear preferences of citizens and elites to conceive democracy as the best regime to solve political conflicts (Latinobarometro 2004). But to a large extent, the dominant view of Uruguay as one of the strongest democracies in Latin America lies on the way in which the policy making process takes place and particularly the form in which institutions and actors interact in the making of most policy outputs. This interaction between a complex institutional design with a large number of actors (with divergent preferences), has made of Uruguay an outlier during the last ten years of economic and state reforms in the region (Lora 2001). In this context, the budgetary policy in Uruguay represents one of the best examples to illustrate the extent to which politics and institutions affect policy outputs and particularly the fiscal policy. This paper explores the extent to which Uruguayan institutions (as interbranch relations, electoral rules, budgetary laws, etc…) and political actors (parties, factions, interest groups and bureaucrats) involved in the budgetary process affect fiscal performance in terms of sustainability, efficiency and representativeness. Since the early nineties (with the structural adjustment and the economic reforms), Uruguay has been temporally consistent with restrictive fiscal policies. However, unlike most Latin American countries, Uruguay has been able to sustain a large public sector and particularly one of the largest welfare states in the region. To a large extent, this particular combination has been the result of a singular small democracy where domestic political actors and institutions drive most policy outputs.
- Budget; Executive-Legislative; Party System
Available at: http://works.bepress.com/chasquetti/1/