What should Paraguay understand by fiscal responsibility? Gladys Benegas explains

Argentina’s “zero deficit” can coexist with unfinished roads, canals and hospitals when money collected for specific purposes stays inside the public sector but changes function. Economist Gladys Benegas presents that tension as a warning for Paraguay, which is debating changes to its Fiscal Responsibility Law.

The issue, she argues, cannot be judged only by the size of the deficit. The more difficult question is what happens to public liquidity between collection and expenditure. Argentina’s experience offers a case study, although Benegas stresses that the mechanism does not simply repeat itself in Paraguay.

During Javier Milei’s first two years in office, Argentina’s 29 state trust funds collected more than 8.2 trillion pesos and recorded a financial surplus of about $3 billion. Yet they executed only 55.8% of their revenue in 2024 and 69.5% in 2025. The remaining money was invested in Treasury bills and bonds to support the government’s zero-deficit policy.

These funds were created by law to finance specific needs, including roads, drinking water, housing and transport. The most frequently cited example is a fuel levy intended to fund roads. The article also points to the Water Infrastructure Trust Fund, which held about 258 billion Argentine pesos in LECAP securities in April 2026 while works in the Salado Basin remained delayed.

The result is a fiscal paradox. The money did not leave the public sector, so it could help the accounts close at zero. But the need for which the revenue was raised remained unmet. For Benegas, that is the silent cost of measuring what enters and leaves the Treasury without also measuring what was not built.