Efeitos do porte e do tempo de instalação em indicadores fiscais municipais no Brasil: A questão dos micro municípios

Abstract

By the institutional design of a Federalist Republic, the public financing mechanisms are designed so that a large part of the municipal budget comes from transfers from the Union and the States. In this scenario, the need for a sustainable fiscal framework is essential to maintain the level of public investment. The interaction between fiscal policy and the time path of the public debt is what is called fiscal sustainability. And, specifically in Brazil, one of the crucial points in the fiscal discussion is the pressure that small municipalities exert on public accounts. Thus, this monograph proposes to revisit the historical context of Brazilian Federalism, understand the democratic cycles in which there was an expansion in the number of municipalities and evaluate the impacts on different fiscal and economic indicators. To this end, this work had as objectives: i) discuss what led Brazil to be composed of a very large number of micro municipalities; ii) investigate how traditional fiscal performance indicators behave as a function of municipal size (population); and iii) evaluate whether greater political decentralization - size and age of municipalities as proxies - affect municipal fiscal performance. The analyses were estimated static panel models (fixed effects) with municipal data from 2003 to 2017. The results signaled that in many observed indicators, municipalities created after the enactment of the 1988 Constitution hold worse fiscal and social indicators than municipalities installed earlier.