Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240817 
Year of Publication: 
2021
Series/Report no.: 
Texto para Discussão No. 2623
Publisher: 
Instituto de Pesquisa Econômica Aplicada (IPEA), Brasília
Abstract (Translated): 
The objective of this work is to analyze the impact of fiscal decentralization on the behavior of Brazilian municipal policy makers. This work uses the first three cutoffs of the transfer rules of the Municipal Participation Fund (FPM) and applies a Discontinuous Regression model (RDD) to capture the effects that affect municipal budget rates during the years 2013 to 2016. The comportment hypotheses is that transfer gains can generate: i) perverse incentives, if the gains are earmarked for personnel and administrative expenses or decrease revenues; or ii) beneficial incentives, if the main gains are spent on education or health. The results found for the estimates of the data panel model is that the increase in exogenous revenue generates a significant increase in spending only in administrative and sports and leisure functions and that the possible channel for this increase in expenses should be aimed at increasing number of employees with commissioned cargo. These results indicate that the transfers generate only perverse incentives.
Subjects: 
FPM
RDD
municipalities
JEL: 
E62
H72
C26
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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