O comportamento fiscal dos estados brasileiros e seus determinantes políticos

The objective of this paper is twofold. The first is to identify and describe the fiscal stance of the Brazilian state governments during the period 1985-97. The second objective is to analyze the political determinants of this fiscal behavior in the context of the redemocratization process. In order to attain the first purpose, two measures was constructed for the evaluation of the fiscal stance: the observed fiscal impulse (change in the primary balance) and the Blanchard modified fiscal impulse measure that includes cyclical fluctuations and the inflationary acceleration. With this two measures, the main inferences can be summarized in: i) it is possible to observe symmetry between expansionist and contractionist fiscal stances; ii) generally, state governments adopted stop-and-go polices, expansion years was followed by contraction years and veceversa; iii) the number of expansionist episodes in electoral years is significantly greater than in normal years iv) expenditure-side polices was predominantly used by state governments both in expansions and in contractions. To analyze the influence of the partisan system characteristics on the state fiscal policies, the second part asks the following questions: i) there exists political electoral cycles? ii)electorate participation determines the fiscal stances and in which direction? ii) competitiveness of the political system explains the fiscal behavior?; iv) fragmentation of the representative system leads to expansionist stances?; v) ideology is important in the definition of fiscal stance? And vi) coincidence between state and federal administrations leads stronger expansionist stances? With panel data econometric techniques, the answers for the questions placed above were the following: i) there are political cycles?; ii) voter’s participation is a factor that disciplines the fiscal behavior of state governments; iii) competitiveness of the political system do not explain fiscal stances; iv) on the other side political fragmentation determines expansionist bias, v) left- wing governments tend to adopt more expansionist policies, for right and center parties the results are not clear; finally, vi) there are no evidences of expansionist effects of political solidarity between state and federal governments.