Aspectos institucionais da performance fiscal de estados e municípios
By: Mendes, Marcos
.
Material type: 
ArticlePublisher: São Paulo : Editora 34, jan./mar. 1999Revista de Economia Política = Brazilian Journal of Political Economy 19, 1, p. 145-158Abstract: This paper shows that the rules established to control state and municipal debt in Brazil are inefficient. They can not prevent the excessive growth of the debt nor to avoid the approval of loans that have a negative benefit-cost relation. The paper uses theoretical models proposed by Shepsle and Weingast (1981) and Niou and Ordershook (1985), related to pork barrel projects, to show that The Federal Senate, responsible for the debt control, does not have enough incentives to restrict the debt. The strategy chosen by the majority of senators, trying to maximize the probability of being reelected, results in the approval of all applications made by states and municipalities that want to raise loans. The paper proposes changes in the control rules, to make them efficient
This paper shows that the rules established to control state and municipal debt in Brazil are inefficient. They can not prevent the excessive growth of the debt nor to avoid the approval of loans that have a negative benefit-cost relation. The paper uses theoretical models proposed by Shepsle and Weingast (1981) and Niou and Ordershook (1985), related to pork barrel projects, to show that The Federal Senate, responsible for the debt control, does not have enough incentives to restrict the debt. The strategy chosen by the majority of senators, trying to maximize the probability of being reelected, results in the approval of all applications made by states and municipalities that want to raise loans. The paper proposes changes in the control rules, to make them efficient
Revista de Economia Política 1999
v. 19, n. 1(73)
Click on an image to view it in the image viewer
There are no comments for this item.