The Political Economy of Fiscal Reform in Brazil: The Rationale for the Suboptimal Equilibrum
This project examines fiscal reforms in Brazil since the 1990s, particularly in taxation, budgeting, and fiscal federalism. While recentralizing fiscal authority and massively expanding the extractive capacity of the state, policymakers chose not to revamp an inefficient tax system that has nonetheless proven capable of generating high levels of revenue. In budgeting, the economic crises of the mid-1990s prompted the government to rein in subnational fiscal imbalances but discouraged policymakers from introducing major changes in the tax system. As the executive derives utility from fiscal stability and inflation control because of electoral incentives and credibility gains in international markets, reform initiatives can generate political benefits for incumbent politicians. The paper finally argues that the Achilles’ heel of the sustainability of the Fiscal Responsibility Law is its enforcement technology: the Tribunais de Contas.
|Date of creation:||Feb 2010|
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- Pablo T. Spiller & Ernesto H. Stein & Mariano Tommasi & Carlos Scartascini & Lee J. Alston & Marcus André Melo & Bernardo Mueller & Carlos Pereira & Cristóbal Aninat & John Londregan & Patricio Navia , 2008. "Policymaking in Latin America: How Politics Shapes Policies," IDB Publications (Books), Inter-American Development Bank, number 40178 edited by Ernesto H. Stein & Mariano Tommasi & Pablo T. Spiller & Carlos Scartascini.
- Marcela Eslava, 2006.
"The Political Economy of Fiscal Policy: Survey,"
Research Department Publications
4487, Inter-American Development Bank, Research Department.
- Lee J. Alston & Bernardo Mueller, 2005.
"Pork for Policy: Executive and Legislative Exchange in Brazil,"
NBER Working Papers
11273, National Bureau of Economic Research, Inc.
- Lee J. Alston & Bernardo Mueller, 2006. "Pork for Policy: Executive and Legislative Exchange in Brazil," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(1), pages 87-114, April.
- Eduardo Lora, 2007. "The State of State Reform in Latin America," World Bank Publications, The World Bank, number 6642.
- Arturo Galindo & Carlos Scartascini & J. Mark Payne & Robert Daughters & Alberto Melo & Koldo Echebarría & Eduardo Lora & Gabriel Filc & Alejandro Micco & Alberto E. Chong & Ugo Panizza & Juan Benavid, 2007. "The State of State Reform in Latin America," IDB Publications (Books), Inter-American Development Bank, number 59578 edited by Eduardo Lora.
- repec:idb:brikps:40178 is not listed on IDEAS
- Lee J. Alston & Bernardo Mueller & Marcus André Melo & Carlos Pereira, 2010. "The Political Economy of Productivity in Brazil," IDB Publications (Working Papers) 5338, Inter-American Development Bank.
- repec:idb:brikps:59578 is not listed on IDEAS
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