Pro-cyclical Fiscal Policy in Brazil : Evidence from the States

Arena, Marco; Revilla, Julio E.

dc.creator	Arena, Marco
dc.creator	Revilla, Julio E.
dc.date	2012-03-19T19:14:16Z
dc.date	2012-03-19T19:14:16Z
dc.date	2009-12-01
dc.date.accessioned	2023-02-18T19:39:03Z
dc.date.available	2023-02-18T19:39:03Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091202102938
dc.identifier	http://hdl.handle.net/10986/4337
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/249837
dc.description	The empirical literature on budget cyclicality has generally focused more on assessing the degree of pro-cyclicality in federal (central government) revenues and expenditures and less on budget cyclicality at the sub-national level in multi-tiered systems. This paper attempts to contribute to the literature on budget cyclicality by examining how sub-national fiscal revenues and expenditures are linked to the business cycle in Brazil, particularly after the introduction of the Fiscal Responsibility Law. It explains the degree of pro-cyclicality across Brazilian states, and assesses whether intergovernmental transfers help to stabilize states finances. These issues are addressed using both a time-series and a cross-section dimension at the Brazilian state level for the period 1991-2006. The empirical evidence suggests the existence of a pro-cyclical fiscal policy in Brazil at the state level. However, the introduction of the Fiscal Responsibility Law helped to reduce Brazilian states spending-side pro-cyclicality. For the Brazilian states, the main source of the observed pro-cyclicality is found in the behavior of tax revenues directly collected by the state governments. Intergovernmental transfers (federal transfers to the states) are not associated with changes in gross state product, but they are pro-cyclically aligned with national gross domestic product, which could amplify the pro-cyclical behavior of sub-national expenditures.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5144
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCESS TO CAPITAL
dc.subject	ACCESS TO CREDIT
dc.subject	AUTONOMY
dc.subject	BAILOUTS
dc.subject	BALANCE OF PAYMENTS
dc.subject	BORROWING
dc.subject	BUDGET CONSTRAINT
dc.subject	BUDGET CONSTRAINTS
dc.subject	BUDGET RIGIDITIES
dc.subject	BUSINESS CYCLE
dc.subject	BUSINESS CYCLES
dc.subject	CAPITAL EXPENDITURE
dc.subject	CAPITAL EXPENDITURES
dc.subject	CAPITAL FLOWS
dc.subject	CAPITAL MARKET
dc.subject	CAPITAL MARKETS
dc.subject	CAPITAL SPENDING
dc.subject	CENTRAL BANK
dc.subject	CENTRAL GOVERNMENT
dc.subject	CENTRAL GOVERNMENT REVENUES
dc.subject	COEFFICIENTS
dc.subject	CONSOLIDATION
dc.subject	CORRUPTION
dc.subject	CREDIT CONSTRAINT
dc.subject	CREDIT MARKETS
dc.subject	CREDITWORTHINESS
dc.subject	CURRENT EXPENDITURES
dc.subject	CYCLICAL FISCAL POLICY
dc.subject	DEBT CRISES
dc.subject	DEBT RESTRUCTURING
dc.subject	DEBT STOCK
dc.subject	DEBTS
dc.subject	DECENTRALIZATION
dc.subject	DEFICIT BIAS
dc.subject	DEFICITS
dc.subject	DEVALUATION
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPMENT BANK
dc.subject	DISCRETIONARY EXPENDITURES
dc.subject	DISCRETIONARY FISCAL POLICY
dc.subject	DOMESTIC INTEREST RATES
dc.subject	DUMMY VARIABLE
dc.subject	ECONOMIC ACTIVITY
dc.subject	ECONOMIC CHARACTERISTICS
dc.subject	ECONOMIC GROWTH
dc.subject	EMERGING ECONOMIES
dc.subject	EMERGING MARKETS
dc.subject	EMPLOYEE
dc.subject	EQUALITY
dc.subject	EXPENDITURE
dc.subject	EXPENDITURE CATEGORIES
dc.subject	EXPENDITURE DATA
dc.subject	EXPENDITURE EQUATIONS
dc.subject	EXPENDITURES
dc.subject	EXTERNAL BALANCES
dc.subject	EXTERNALITIES
dc.subject	FEDERAL ADMINISTRATIONS
dc.subject	FEDERAL COUNTRIES
dc.subject	FEDERAL DISTRICT
dc.subject	FEDERAL GOVERNMENT DEBT
dc.subject	FEDERAL REVENUES
dc.subject	FEDERAL SYSTEMS
dc.subject	FEDERAL TAX
dc.subject	FEDERAL TAXES
dc.subject	FEDERAL TRANSFERS
dc.subject	FEDERAL TRANSFERS TO STATES
dc.subject	FINANCES
dc.subject	FINANCIAL DEPTH
dc.subject	FINANCIAL MARKETS
dc.subject	FISCAL ADJUSTMENT
dc.subject	FISCAL ADJUSTMENT PROCESS
dc.subject	FISCAL ADJUSTMENTS
dc.subject	FISCAL BALANCES
dc.subject	FISCAL CONSOLIDATION
dc.subject	FISCAL DECENTRALIZATION
dc.subject	FISCAL EXPANSION
dc.subject	FISCAL FEDERALISM
dc.subject	FISCAL IMPULSE
dc.subject	FISCAL PERFORMANCE
dc.subject	FISCAL POLICIES
dc.subject	FISCAL POLICY
dc.subject	FISCAL STANCE
dc.subject	FISCAL SURPLUSES
dc.subject	FISCAL VARIABLES
dc.subject	FIXED EFFECTS
dc.subject	FOREIGN CAPITAL
dc.subject	GOVERNMENT DEBT
dc.subject	GOVERNMENT FINANCES
dc.subject	GOVERNMENT SPENDING
dc.subject	GOVERNOR
dc.subject	GROSS DOMESTIC PRODUCT
dc.subject	GROSS REVENUE
dc.subject	GROSS REVENUES
dc.subject	HARD BUDGET CONSTRAINTS
dc.subject	INCOME SHOCKS
dc.subject	INCOME TAX
dc.subject	INDEBTEDNESS
dc.subject	INFLATION
dc.subject	INTEREST PAYMENTS
dc.subject	INTEREST RATE
dc.subject	INTERGOVERNMENTAL REVENUE
dc.subject	INTERGOVERNMENTAL TRANSFERS
dc.subject	INTERNATIONAL BANK
dc.subject	INVESTMENT SPENDING
dc.subject	LEVEL OF GOVERNMENT
dc.subject	LIABILITY
dc.subject	LIABILITY MANAGEMENT
dc.subject	LIMITED ACCESS
dc.subject	LOCAL GOVERNMENTS
dc.subject	MACROECONOMIC CONDITIONS
dc.subject	MACROECONOMIC INSTABILITY
dc.subject	MACROECONOMIC POLICIES
dc.subject	MACROECONOMIC POLICY
dc.subject	MACROECONOMICS
dc.subject	MATCHING GRANTS
dc.subject	MONETARY FUND
dc.subject	MUNICIPAL GOVERNMENTS
dc.subject	MUNICIPALITIES
dc.subject	NATIONAL TREASURY
dc.subject	NET CURRENT REVENUE
dc.subject	PENSIONS
dc.subject	PERSONAL INCOME
dc.subject	POLICY DISCRETION
dc.subject	POLICY FRAMEWORK
dc.subject	POLITICAL ECONOMY
dc.subject	PRIMARY EXPENDITURE
dc.subject	PRIMARY SURPLUS
dc.subject	PRIVATE CREDIT
dc.subject	PROVINCES
dc.subject	PROVINCIAL GOVERNMENT
dc.subject	PROVINCIAL REVENUES
dc.subject	PUBLIC DEBT
dc.subject	PUBLIC GOODS
dc.subject	PUBLIC SECTOR
dc.subject	PUBLIC SPENDING
dc.subject	RECESSIONS
dc.subject	REDISTRIBUTION
dc.subject	REVENUE CONTRIBUTIONS
dc.subject	REVENUE STREAMS
dc.subject	REVENUE VARIABLES
dc.subject	REVENUE VOLATILITY
dc.subject	RISK SHARING
dc.subject	SOCIAL SERVICES
dc.subject	STATE BUDGET
dc.subject	STATE EXPENDITURES
dc.subject	STATE FISCAL BEHAVIOR
dc.subject	STATE GOVERNMENTS
dc.subject	SUB-NATIONAL
dc.subject	SUB-NATIONAL DEBT
dc.subject	SUB-NATIONAL EXPENDITURES
dc.subject	SUB-NATIONAL GOVERNMENT
dc.subject	SUB-NATIONAL GOVERNMENTS
dc.subject	SUBNATIONAL
dc.subject	SUBNATIONAL EXPENDITURES
dc.subject	SUBNATIONAL GOVERNMENTS
dc.subject	TAX
dc.subject	TAX BASE
dc.subject	TAX REVENUE
dc.subject	TAX REVENUE VOLATILITY
dc.subject	TAX REVENUES
dc.subject	TOTAL EXPENDITURE
dc.subject	TOTAL EXPENDITURES
dc.subject	TOTAL HEALTH EXPENDITURES
dc.subject	TRANSPARENCY
dc.title	Pro-cyclical Fiscal Policy in Brazil : Evidence from the States
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Latin America & Caribbean
dc.coverage	Latin America & Caribbean
dc.coverage	South America
dc.coverage	America
dc.coverage	Brazil