The tax revenues effects on the attraction of foreign direct investments. The case of Latin American economies: Chile, Costa Rica, Brazil, Panama and Mexico

In the context of globalization the interdependency between economies is unquestionably relevant for transition, developing and developed countries. The continuous growth and development is a major preoccupation for governments which with recent events have been threatened and the revision of macroeconomic policies are gaining importance in forums and discussions. The flows of capitals and investments have been specially promoting the progress in transition and developing economies, many countries in Latin America have received the benefits of these movements of resources and in response, a revision of main policies for maintaining international competitiveness and attracting investments is continually performed. This investigation will focus on the importance of fiscal policy particularly in most representative countries of the Latin American region. Contrary to the conventional views of fiscal policy as threat to growth (via the disincentive effect of taxes on work and investment), this research points out the relevance of obtaining and collecting enough government resources to provide pro-growth investments and other benefits in a region which is still affected by problems of poverty and inequality. Measurement and comparisons of performances of taxation collection in the selected Latin American countries are studied through statistical examinations with the purpose to detect and identify the effects on foreign investment flows. Complementary revision of recommendations in terms of fiscal policies provided by economic institutions addressed to these economies, are included with the aim to highlight directions, challenges and constraints that nations should face to preserve the attractiveness of investing.