Public finances in Brazilian states: an evaluation of budget execution from 1995 to 2004 / As finanças públicas nos estados brasileiros: uma avaliação da execução orçamentária, no período de 1995 a 2004

AUTOR(ES)
DATA DE PUBLICAÇÃO

2006

RESUMO

In despite of the Federal Government has been sustaining the articulation of the federative pact by means of financial support of states, the 1988 Constitution consolidated the weak budget restrictions in national fields that contributed to an ineffective fiscal administration resulting in primary deficits and continuous growth of state debts participating in public debt. The first success of Plano Real, concurrent with aggravation of the crisis of state finances, allowed the government adopt policies of control under aegis of fiscal austerity is the necessary condition to decrease interest rate and, as a last resort, to sustained growth. On the other hand, there is the conception that the commitment with fiscal austerity would compromise investments and public services which would legitimate state administration claims. This problem is very stated but little studied. The dichotomy between conceptions of federal and state administration reveals a lack of studies providing more accurate, precise, continuous indicators related to the performance of state budget executions. At the same time, this lack doesnt contribute to transparent government actions, making it difficult systematical evaluation avoiding bias of these actions by means of organized societies. To such an extent, this study aims to evaluate the evolution of state budget executions from 1995 to 2004, when it was started the process of structural and institutional of state reforms. This evaluation tries to conciliate the needs of fiscal restrictions taking into consideration local social demands and efficient allocation of public expense regarding that they must generate the minimum of tax gravamen. Theoretical review of Union economical jurisdiction, including federative aspect, permitted to outline three phases of development of thought: A welfare economics, a Public Choice Theory e a New Institutional Economics/New Political Economy. A public financial resurvey including federative feature to become defined the Union role. After that, the Brazilian planning system, budget and administration were described and characterized, specially criteria of budget revenue and expense classification and main indicators used by the Lei de Responsabilidade Fiscal (Law of Fiscal Responsibility -LRF). As a theoretical model, the concept of excess of gravamen of tax system by classical and neoclassical approaches that comes forth when this system introduces distortion in decisions of economical agents involving a Pareto-inferior situation. The concept of efficiency in budget expense allocation was scanned by analogy with the principles of theory of production. Thus, it was verified that actions adopted since the creation of Parafe in 1995 until Resolution 78 in 1998 permitted the states accomplish the rules established by LRF (Law of Fiscal Responsibility) in 2000, when all states adopted a severe fiscal attitude. However, it was evident that São Paulo, Rio de Janeiro, Minas Gerais and Rio Grande do Sul havent managed to become stable and decrease debt inventory. Since those states have the largest total budget income and comprehend almost half of Brazilian population, coerce for negotiations with Union are completely possible. It was verified that the increasing encumbrance applied to societies of those states (levy increase) has been an indirect mechanism of financing gravamen excess in state public administration. The increase of inefficiency in allocation of budget expense whose excess is a part of the society income that does not contribute to generate goods and public service and it is not used to abatement of debt inventory of states. This excess that may reflect many types of institutional excess intermediations, bureaucracy, privilege and power relations results in pecuniary benefits directly or indirectly to people connected to administration. Without this excess, expenses would increase - with the purpose of increasing pecuniary benefits to people connected to these functions, and it would generate also benefits from increasing or improvement of goods and services to the whole society, above all positive externalities involved. Thus, the excess of budget gravamen burdens local social inequality. We cant deny that the inexistence of expressive economical growth associate to a high tax rate policy (exogenous factor to state administration) cancels the positive effects of fiscal austerity on debt inventory of the relevant states. However, stating that commitment with fiscal adjustment has restricted investments and public services is shrewd and focuses just one side of the problem.

ASSUNTO(S)

financas publicas internas finanças públicas estaduais public debt dívida pública law of fiscal responsibility state public finances lei de responsabilidade fiscal state reform

ACESSO AO ARTIGO

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