Title: Pro-Cyclical Fiscal Policy In Brazil: Evidence From The States
Abstract: No AccessPolicy Research Working Papers22 Jun 2013Pro-Cyclical Fiscal Policy In Brazil: Evidence From The StatesAuthors/Editors: Marco Arena and Julio E. RevillaMarco Arena and Julio E. Revillahttps://doi.org/10.1596/1813-9450-5144SectionsAboutPDF (0.7 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:The empirical literature on budget cyclicality has generally focused more on assessing the degree of pro-cyclicality in federal (central government) revenues and expenditures and less on budget cyclicality at the sub-national level in multi-tiered systems. This paper attempts to contribute to the literature on budget cyclicality by examining how sub-national fiscal revenues and expenditures are linked to the business cycle in Brazil, particularly after the introduction of the Fiscal Responsibility Law. It explains the degree of pro-cyclicality across Brazilian states, and assesses whether intergovernmental transfers help to stabilize states' finances. These issues are addressed using both a time-series and a cross-section dimension at the Brazilian state level for the period 1991-2006. The empirical evidence suggests the existence of a pro-cyclical fiscal policy in Brazil at the state level. However, the introduction of the Fiscal Responsibility Law helped to reduce Brazilian states' spending-side pro-cyclicality. For the Brazilian states, the main source of the observed pro-cyclicality is found in the behavior of tax revenues directly collected by the state governments. Intergovernmental transfers (federal transfers to the states) are not associated with changes in gross state product, but they are pro-cyclically aligned with national gross domestic product, which could amplify the pro-cyclical behavior of sub-national expenditures. Previous bookNext book FiguresreferencesRecommendeddetailsCited byOn the effects of intergovernmental grants: a surveyInternational Tax and Public Finance, Vol.11516 January 2024When ' uncertainty ' becomes ' unknown ': Influences of economic uncertainty on the shadow economyAnnals of Public and Cooperative Economics, Vol.93, No.326 June 2021Cyclicality of public health expenditure in India: role of fiscal transfer and domestic revenue mobilizationInternational Review of Economics, Vol.67, No.117 September 2019Central-local government fiscal relations and cyclicality of public spending: evidence from ChinaInternational Tax and Public Finance, Vol.25, No.419 September 2017Fiscal Illusion and Cyclical Government Expenditure: State Government Expenditure in the United StatesScottish Journal of Political Economy, Vol.63, No.213 August 2015Fiscal Illusion and Cyclical Government Expenditure: State Government Expenditure in the United StatesScottish Journal of Political Economy, Vol.11724 June 2015Fiscal Adjustment and Income Inequality: Sub-National Evidence from Brazil15 August 2014 View Published: December 2009 Copyright & Permissions Related Regions Latin America & Caribbean Related Countries Brazil Related Topics Finance and Financial Sector Development Macroeconomics and Economic Growth KeywordsCENTRAL GOVERNMENTEXPENDITURESFEDERAL TRANSFERSFISCAL FEDERALISMFISCAL POLICYFISCAL VARIABLESMUNICIPALITIESPROVINCESREVENUE STREAMSSTATE BUDGETSTATE GOVERNMENTSSUB-NATIONALSUB-NATIONAL EXPENDITURESSUB-NATIONAL GOVERNMENTSSUBNATIONALSUBNATIONAL EXPENDITURESSUBNATIONAL GOVERNMENTSTAXTAX BASETAX REVENUES PDF DownloadLoading ...