Rebuilding state capacity in contemporary Latin America: The politics of taxation in Argentina and Mexico

Abstract

In this paper I present the preliminary findings of ongoing research on the politics of taxation in Argentina and Mexico since 1982. In both countries, the debt crisis triggered a long, complex, and conflictive process of thorough fiscal reform regarding revenue and expenditure. These reforms were applied during the wave of stabilization and structural adjustment programs monitored by international financial institutions (IFI) such as the International Monetary Fund (IMF) and the World Bank (IMF 1990; World Bank 1991). The paper is divided in three sections. First, I analyze the politics of taxation in both countries until the 1980s. Then, I focus on the emerging tax structure. I refer to both material and symbolic transformations presented by the new tax system as compared to the previous one. Finally, I ponder spill-over effects the new tax structure may provoke, and its implications for the emerging political matrix in both countries. In addition, I consider the significance of these experiences in assessing the role of the state with regard to the world-system perspective.