Desenho de um sistema de metas sociais
This paper discusses the economic rationality of a system of social targets, as a way for the federal government to increase efficiency in the use of its social budget transferred to municipalities. The paper develops extensions of a standard principal-agent framework in various directions including static models with and without imperfect information. The results of the static models show that the use of the standard focalization criteria where the poorest municipalities get more resources may lead to adverse incentives to poverty eradication. We also show that unconditional transfers from the federal government crowds-out local social expenditures. This paper argues in favor of the use of contracts where the greater the improvement in relevant social indicators, the more resources each municipality would receive. The introduction of imperfect information in the model basically generates a penalty to the poor segments in areas where local governments are less averse to poverty. An advantage of the contract with social targets is to reduce the problem of political favoritism when certain social groups receive greater, or smaller, attention from specific governments. With the establishment of social targets it becomes possible to generate proper incentives, so that social spending is distributed more equitably among groups.
|Date of creation:||01 Dec 2003|
|Contact details of provider:|| Postal: Praia de Botafogo 190, sala 1100, Rio de Janeiro/RJ - CEP: 22253-900|
Web page: http://epge.fgv.br
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laffont, Jean-Jacques & Tirole, Jean, 1987. "Comparative statics of the optimal dynamic incentive contract," European Economic Review, Elsevier, vol. 31(4), pages 901-926, June.
- Neri, Marcelo Cortes & Costa, Daniela Ribeiro da, 2002. "O tempo das crianças," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 468, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Jean-Jacques Laffont & Jean Tirole, 1990.
"Adverse Selection and Renegotiation in Procurement,"
Review of Economic Studies,
Oxford University Press, vol. 57(4), pages 597-625.
- Laffont, Jean-Jacques & Tirole, Jean., 1988. "Adverse Selection and Renegotiation in Procurement," Working Papers 665, California Institute of Technology, Division of the Humanities and Social Sciences.
- Jean-Jacques LAFFONT & Jean TIROLE, 1990. "Adverse Selection and Renegotiation in Procurement," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9005, Université de Lausanne, Faculté des HEC, DEEP.
- Azam, Jean-Paul & Laffont, Jean-Jacques, 2003. "Contracting for aid," Journal of Development Economics, Elsevier, vol. 70(1), pages 25-58, February.
- André Minella & Paulo Springer de Freitas & Ilan Goldfajn & Marcelo Kfoury Muinhos, 2003. "Inflation targeting in Brazil: lessons and challenges," BIS Papers chapters,in: Bank for International Settlements (ed.), Monetary policy in a changing environment, volume 19, pages 106-133 Bank for International Settlements.
- André Minella & Paulo Springer de Freitas & Ilan Goldfajn & Marcelo Kfoury Muinhos, 2002. "Inflation Targeting in Brazil: Lessons and Challenges," Working Papers Series 53, Central Bank of Brazil, Research Department.
- Laffont, Jean-Jacques & Tirole, Jean, 1988. "The Dynamics of Incentive Contracts," Econometrica, Econometric Society, vol. 56(5), pages 1153-1175, September.
- Jean-Jacques Laffont & Jean Tirole, 1985. "The Dynamics of Incentive Contracts," Working papers 397, Massachusetts Institute of Technology (MIT), Department of Economics.
- Frederic S. Mishkin, 2000. "Inflation Targeting in Emerging-Market Countries," American Economic Review, American Economic Association, vol. 90(2), pages 105-109, May.