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Impact Assessment of Interregional Government Transfers in Brazil: An Input-output Approach

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  • Eduardo A. Haddad

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  • Carlos A. Luque, Gilberto T. Lima, Sergio N. Sakurai, Silvio M. Costa

Abstract

Redistributive policies carried out by the central government in Brazil through interregional government transfers is a relevant feature of the Brazilian federal fiscal system. Regional shares of the central government revenues in the poorer regions have been recurrently smaller than the shares of central government expenditures in those regions. Appeal to core-periphery outcomes could be made, as São Paulo, the wealthiest state in the country, concentrated, in 2005, over 40% of total Federal tax revenue, receiving less than 35% of Federal expenditures. These figures suggest an effective redistribution of public funds from the spatial economic core of the economy to the peripheral areas. In this paper we investigate the role interregional transfers play in the redistribution of activities in the country, using an interregional input-output approach. Counterfactual simulations allow us to estimate some costs and benefits, for the core and periphery respectively, from such fiscal mechanisms.

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File URL: http://www.fea.usp.br/feaecon/RePEc/documentos/Nereus112011.pdf
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Bibliographic Info

Paper provided by University of São Paulo (FEA-USP) in its series Working Papers, Department of Economics with number 2011_11.

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Date of creation: 14 Nov 2011
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Handle: RePEc:spa:wpaper:2011wpecon11

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Keywords: interregional government transfers; input-output analysis; impact analysis; Brazilian economy;

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  1. Daniel Bergvall & Claire Charbit & Dirk-Jan Kraan & Olaf Merk, 2005. "Intergovernmental Transfers and Decentralised Public Spending," OECD Journal on Budgeting, OECD Publishing, vol. 5(4), pages 111-158.
  2. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, October.
  3. Chang Woon Nam & Rüdiger Parsche, 2001. "Municipal Finance in Poland, the Slovak Republic, the Czech Republic and Hungary: Institutional Framework and Recent Development," CESifo Working Paper Series 447, CESifo Group Munich.
  4. Marta Ferreira Dias & Ricardo Silva, 2004. "Central Government Transfers and Regional Convergence in Portugal," ERSA conference papers ersa04p443, European Regional Science Association.
  5. Richard Bird & Andrey Tarasov, 2002. "Closing the Gap: Fiscal Imbalaces and Intergovernmental Transfers in Developed Federations," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0202, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  6. Nicolaas Groenewold & Alfred Hagger & John Madden, 2003. "Interregional transfers: A political-economy CGE approach," Papers in Regional Science, Springer, vol. 82(4), pages 535-554, November.
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Cited by:
  1. Luis Armando Galvis Aponte & Adolfo meisel R., 2010. "Fondo de Compensación Regional: Igualdad de oportunidades para la periferia colombiana," DOCUMENTOS DE TRABAJO SOBRE ECONOMÍA REGIONAL 006634, BANCO DE LA REPÚBLICA - ECONOMÍA REGIONAL.

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