There is no doubt a greater fiscal awareness on behalf of the citizens that is translated not only in higher demands of services, but also in higher demands of information on the results of the public sector. Within this context of greater fiscal awareness, the idea has set in that fiscal prodigality may impair the expectations for a long term economic growth and, consequently, the results from the management of public finance are further analyzed by everybody –citizens and leaders alike.
           
Although the concern for the influence of public finance in growth has a long-standing tradition in literature, we could confirm, through an increased number of publications on the subject, a marked interest on the subject.
           
The macroeconomic implications of the budgetary policy have been studied intensively either academically or administratively, and their reflections have served to elaborate the political agenda of many leaders across the world.
           
Although there is no discrepancy on the strategic targets of the budgetary policy, including the increase of the real revenue of the population in an environment of social protection and acceptable basic public services, the issue as to which combination of expenses, taxes and institutions is necessary to reach such goals is still pending.
           
There seems to be unanimous agreement on the fact that without increasing the potential growth rate of the long term economy, there is no way to increase the real revenue per capita of people and, therefore, their standard and quality of living.
           
Modern theories on endogenous growth open the doors to the intervention by the State on the economy, on a selective basis, due to the existence of flaws in the market, because such flaws do not ensure an efficient allocation of certain goods and services by the private sector.
           
The basic formulas on growth show that the sole manner to increase the long term growth rate of the economy is increasing the intensity of capital –the accumulation of capital per worker- and the Total Productivity of Factors which is associated with the evolution of technology, where Research and Development play an important role as well as the organization and institutional aspects of the State.
           
But this concern for the goods and services more directly linked to growth should not lead us to ignore that the lack of essential public services such as justice, security, education and primary health, the basic infrastructures and social welfare, reduce the opportunity for economic growth.
           
The experience of economic growth in Latin American countries shows that structural factors such as human capital, financial maturity and public infrastructures have a positive correlation with economic growth and, conversely, high inflation rates and strong differences in exchange rates have caused negative effects on economic activity.