Budgetary Institutions and their Impacts on the Fiscal Results of the Brazilian States
Name: RAFAEL ALMEIDA LEAL
Publication date: 29/05/2020
Advisor:
Name |
Role |
|---|---|
| ANA CAROLINA GIUBERTI | Advisor * |
| EDSON ZAMBON MONTE | Co-advisor * |
Examining board:
| Name |
Role |
|---|---|
| ANA CAROLINA GIUBERTI | Advisor * |
| EDSON ZAMBON MONTE | Co advisor * |
Summary: The purpose of this paper is to verify the impact that state budget
institutions have on the fiscal results of these entities. Institutions were
measured using the composite index calculated by Alesina et al. (1999), using
data from the budget rules of the 26 Brazilian states plus the Federal
District, from 1995 to 2016. To achieve the objective of the study, the methodology of Generalized Method of Moments System (GMM-sys) was applied to estimate the function of fiscal reaction. The dependent variable was the state's primary results in relation to GDP, and the explanatory variable was
the budget indices. The economic control variables were the dependent
variable lagged one period, the public debt and the output gap also lagged
one period. The results obtained by the Alesina et al. (1999), as well as the
alternative method Partially Ordered Set Theory (POSET), indicated that
budget institutions positively affect the budget results of states. From this
result, it is possible to say that the formal rules around the process of
preparing, approving and executing the budget, (i) can be used to explain
part of the state fiscal deficit, (ii) can serve as a means of making fiscal
policy less discretionary and more disciplined and (iii) as an explanatory
factor between the differences in the fiscal positions of the states.
