1683
Views
189
Downloads |
Fiscal decentralization and economic growth: evidence from Brazilian states
Pedro Jorge Holanda Figueiredo Alves* 
Jevuks Matheus Araujo*
Jevuks Matheus Araujo
Affiliation: Federal University of Paraiba, Campus I Lot, Cidade Universitaria, PB, 58051-900
 0000-0002-5618-4502
Ana Karolina Acris Melo*
Ana Karolina Acris Melo
Affiliation: Federal University of Paraiba, Campus I Lot, Cidade Universitaria, PB, 58051-900
0000-0002-9688-1249
Eduarda Mashoski*
Eduarda Mashoski
Affiliation: Federal University of Paraiba, Campus I Lot, Cidade Universitaria, PB, 58051-900
0000-0001-7061-4727
Article | Year: 2023 | Pages: 255 - 280 | Volume: 47 | Issue: 2 Received: June 30, 2022 | Accepted: February 6, 2023 | Published online: June 12, 2023
|
FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
|
Municipalities
|
85-94
|
95-99
|
00-04
|
05-09
|
10-15
|
85-94
|
95-99
|
00-04
|
05-09
|
10-15
|
|
Brazil
|
11.37
|
22.66
|
18.08
|
18.07
|
19.48
|
60.26
|
60.92
|
65.67
|
66.86
|
64.13
|
|
Midwest
|
9.53
|
24.84
|
12.11
|
12.98
|
15.71
|
66.83
|
75.12
|
74.28
|
72.31
|
71.90
|
|
Northeast
|
6.90
|
12.12
|
9.54
|
9.68
|
18.05
|
60.56
|
79.25
|
79.27
|
80.74
|
84.70
|
|
North
|
5.80
|
13.27
|
9.35
|
10.33
|
31.69
|
56.73
|
76.73
|
77.45
|
79.05
|
86.47
|
|
Southeast
|
22.04
|
26.43
|
23.81
|
23.84
|
19.75
|
50.59
|
52.64
|
58.44
|
59.42
|
49.62
|
|
South
|
12.57
|
19.86
|
15.19
|
15.41
|
17.40
|
66.57
|
67.31
|
65.41
|
65.88
|
71.21
|
|
States
|
85-94
|
95-99
|
00-04
|
05-09
|
10-15
|
85-94
|
95-99
|
00-04
|
05-09
|
10-15
|
|
Brazil
|
79.14
|
65.59
|
63.35
|
62.34
|
61.91
|
18.66
|
24.22
|
22.31
|
24.53
|
22.43
|
|
Midwest
|
59.79
|
50.11
|
58.70
|
62.58
|
58.44
|
31.08
|
40.97
|
27.74
|
22.75
|
20.98
|
|
Northeast
|
56.38
|
50.25
|
47.28
|
45.79
|
48.49
|
34.64
|
43.69
|
39.48
|
43.19
|
40.26
|
|
North
|
45.18
|
42.68
|
41.85
|
41.15
|
41.61
|
62.08
|
49.87
|
48.53
|
48.87
|
44.35
|
|
Southeast
|
82.70
|
77.23
|
72.10
|
71.02
|
70.09
|
9.07
|
13.13
|
11.95
|
13.99
|
11.94
|
|
South
|
84.69
|
62.59
|
67.33
|
67.21
|
68.29
|
10.50
|
18.34
|
19.61
|
22.35
|
19.90
|
Note: Data from the National Treasury Secretariat.
Note: Data from the National Treasury Secretariat.
Note: Data from the National Treasury Secretariat.
|
Explanatory variable
|
Variable
|
Reason for inclusion
|
Source
|
|
Main variables
|
|
|
|
|
Revenue indicator
|
RI
|
Ratio between the state revenue i and the
consolidated revenue
|
STN
|
|
Production Indicator
|
PI
|
Ratio between the expenditure of state i
and the consolidated expenditure
|
STN
|
|
Production and Revenue Indicator
|
PRI
|
Weighted average between Revenue and
Production indicator
|
STN
|
|
Autonomy Indicator 1
|
A1
|
The ratio between the own revenue of the
states and their total revenue, excluding transfers
|
STN
|
|
Autonomy Indicator 2
|
A2
|
The ratio between the own revenue of the
states and the total of their revenue.
|
STN
|
|
Control variables
|
|
|
|
|
Degree of commercial opening
|
OPNESS
|
Ratio between the trade balance result
and GDP
|
Comex Stat
|
|
Gini Index
|
Gini
|
Gini Index for income concentration
|
IPEADATA/IBGE
|
|
Population
|
POP
|
Population value
|
IBGE
|
|
Employed population
|
POP OCUP
|
Number of people who are employed
|
IBGE
|
|
Dummy Election
|
ELECTION
|
Dumymy variable indicating state election
years
|
Superior electoral court (TSE)
|
|
Homicide Rate
|
HOM
|
Homicide rate per one hundred thousand
inhabitants
|
IBGE
|
|
School Effectiveness
|
PSE
|
Efficiency indicator created from school
attendance, years of schooling, and illiteracy rate variables
|
IPEADATA/IBGE
|
|
Variables
|
Mean
|
Std. dev.
|
Min
|
Max
|
|
Dependent variables
|
|
Δ GDP
|
0.124593
|
0.064578
|
-0.07
|
0.33
|
|
Δ Agriculture
|
0.123953
|
0.270231
|
-0.62
|
2.29
|
|
Δ Industry
|
0.131147
|
0.243828
|
-0.43
|
2.40
|
|
Δ Services
|
0.151147
|
0.205321
|
-0.50
|
4.03
|
|
Mainly variables
|
|
A1
|
0.809024
|
0.092698
|
0.14
|
1.00
|
|
A2
|
0.498713
|
0.173038
|
0.09
|
0.87
|
|
PI
|
0.007712
|
0.012192
|
0.0006
|
0.13
|
|
RI
|
0.007681
|
0.012195
|
0.000533
|
0.14
|
|
PRI
|
0.007697
|
0.012186
|
0.000546
|
0.13
|
|
Control variables
|
|
Education
|
1.00
|
0.094177
|
0.77
|
1.21
|
|
Openness
|
0.145475
|
0.127781
|
0.01
|
0.59
|
|
POP
|
6,762,641
|
8,029,421
|
254,499
|
44,000,000
|
|
Gini
|
0.55241
|
0.049231
|
0.42
|
0.69
|
|
Homicide Rate
|
28.13537
|
13.15587
|
4.50
|
71.40
|
|
Occupied population
|
2,952,986
|
3,778,686
|
70,996
|
22,000,000
|
Note: The colored lines represent the standard error. See table A1 in appendix for more details.
Note: The colored lines represent the standard error. See tables A2, A3 and A4 for more details.
|
Estimator: GMM
|
Equations
|
|
Variables
|
(1.1)
|
(1.2)
|
(1.3)
|
(1.4)
|
(1.5)
|
|
∆ GDP L1.
|
0.01
|
-0.00
|
0.04
|
0.02
|
0.03
|
|
(0.38)
|
(-0.16)
|
(1.24)
|
(0.74)
|
(1.09)
|
|
A1
|
0.05
|
–
|
–
|
–
|
–
|
|
(1.03)
|
–
|
–
|
–
|
–
|
|
A2
|
–
|
0.07***
|
–
|
–
|
–
|
|
–
|
(3.29)
|
–
|
–
|
–
|
|
RI
|
–
|
–
|
0.12***
|
–
|
–
|
|
–
|
–
|
(5.65)
|
–
|
–
|
|
PI
|
–
|
–
|
–
|
0.04**
|
–
|
|
–
|
–
|
–
|
(2.38)
|
–
|
|
PRI
|
–
|
–
|
–
|
–
|
0.09***
|
|
–
|
–
|
–
|
–
|
(3.44)
|
|
Education
|
-0.14
|
-0.05
|
0.29**
|
0.08
|
0.15
|
|
(-1.13)
|
(-0.61)
|
(2.56)
|
(0.96)
|
(1.03)
|
|
Openness
|
0.03**
|
0.02
|
0.05***
|
0.03**
|
0.04**
|
|
(2.37)
|
(1.53)
|
(2.73)
|
(2.04)
|
(2.23)
|
|
Gini
|
0.19***
|
0.14***
|
0.34***
|
0.24***
|
0.27***
|
|
(4.95)
|
(4.41)
|
(8.79)
|
(7.43)
|
(7.81)
|
|
Pop
|
-0.03
|
-0.05*
|
-0.14***
|
-0.05
|
-0.10**
|
|
(-1.50)
|
(-1.65)
|
(-3.90)
|
(-1.60)
|
(-2.39)
|
|
Homicide Rate
|
0.00*
|
0.00
|
-0.00
|
0.00
|
0.00
|
|
(1.72)
|
(0.85)
|
(-0.17)
|
(0.88)
|
(0.33)
|
|
Occupied Population
|
0.00
|
0.01*
|
0.00
|
0.00
|
0.00
|
|
(0.98)
|
(1.67)
|
(0.78)
|
(0.47)
|
(0.72)
|
|
Dummy Election
|
-0.00
|
-0.00*
|
-0.01***
|
-0.01***
|
-0.00**
|
|
(-1.37)
|
(-1.90)
|
(-4.40)
|
(-3.36)
|
(-2.20)
|
|
Constant
|
0.72**
|
0.93**
|
3.14***
|
1.29**
|
2.35***
|
|
(2.08)
|
(2.19)
|
(4.39)
|
(2.35)
|
(2.83)
|
|
Observations
|
513
|
513
|
513.00
|
513
|
513
|
|
Wald Test
|
178.48
|
260.44
|
397.17
|
354.57
|
270.53
|
|
Number of Instruments
|
286
|
439
|
286
|
286
|
286
|
|
Sargan Test Chi2
|
25.28
|
24.97
|
24.62
|
25.81
|
25.37
|
|
Prob > Chi2
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
|
Arellano-Bond Test
|
|
|
|
|
|
|
Order 1
|
-4.23***
|
-4.14***
|
-4.40***
|
-4.18***
|
-4.34***
|
|
Prob > z
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
|
Order 2
|
-1.80*
|
-1.88*
|
-1.35
|
-1.79*
|
-1.57
|
|
Prob > z
|
(0.08)
|
(0.07)
|
(0.12)
|
(0.05)
|
(0.11)
|
|
Estimator: GMM
|
Equations
|
|
Variables
|
(1.1)
|
(1.2)
|
(1.3)
|
(1.4)
|
(1.5)
|
|
∆ GDP L1.
|
-0.04
|
-0.06
|
-0.05
|
-0.04
|
-0.05
|
|
(-0.79)
|
(-1.23)
|
(-1.64)
|
(-1.40)
|
(-1.53)
|
|
A1
|
-0.03
|
–
|
–
|
–
|
–
|
|
(-0.19)
|
–
|
–
|
–
|
–
|
|
A2
|
–
|
0.07
|
–
|
–
|
–
|
|
–
|
(0.44)
|
–
|
–
|
–
|
|
RI
|
–
|
–
|
0.17***
|
–
|
–
|
|
–
|
–
|
(3.47)
|
–
|
–
|
|
PI
|
–
|
–
|
–
|
0.16**
|
–
|
|
–
|
–
|
–
|
(2.18)
|
–
|
|
PRI
|
–
|
–
|
–
|
–
|
0.17***
|
|
–
|
–
|
–
|
–
|
(2.82)
|
|
Education
|
0.30
|
0.44
|
1.22***
|
1.12***
|
1.22***
|
|
(0.48)
|
(0.75)
|
(2.99)
|
(2.70)
|
(2.84)
|
|
Openness
|
0.04
|
0.04
|
0.06
|
0.05
|
0.05
|
|
(0.64)
|
(0.59)
|
(1.45)
|
(1.06)
|
(1.21)
|
|
Gini
|
0.17
|
0.24*
|
0.40***
|
0.29***
|
0.37***
|
|
(1.46)
|
(1.67)
|
(3.27)
|
(2.69)
|
(3.17)
|
|
Pop
|
-0.09
|
-0.07
|
-0.16
|
-0.13
|
-0.15
|
|
(-0.48)
|
(-0.35)
|
(-1.24)
|
(-0.97)
|
(-1.13)
|
|
Homicide Rate
|
0.01***
|
0.00
|
0.00
|
0.00
|
0.00
|
|
(2.90)
|
(1.34)
|
(1.21)
|
(1.03)
|
(1.19)
|
|
Occupied Population
|
-0.00
|
-0.01
|
-0.02
|
-0.03
|
-0.03
|
|
(-0.00)
|
(-0.16)
|
(-0.23)
|
(-0.38)
|
(-0.31)
|
|
Dummy Election
|
-0.02
|
-0.03***
|
-0.02**
|
-0.02
|
-0.02*
|
|
(-1.60)
|
(-3.42)
|
(-1.97)
|
(-1.20)
|
(-1.70)
|
|
Constant
|
1.61
|
1.56
|
4.18***
|
3.69**
|
4.02**
|
|
(0.65)
|
(0.56)
|
(2.68)
|
(2.13)
|
(2.38)
|
|
Observations
|
513
|
513
|
513
|
513
|
513
|
|
Wald Test
|
32.27
|
58.71
|
57.19
|
63.72
|
55.09
|
|
Number of Instruments
|
286
|
286
|
286
|
286
|
286
|
|
Sargan Test Chi2
|
22.77
|
18.23
|
20.79
|
20.85
|
24.50
|
|
Prob > Chi2
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
|
Arellano-Bond Test
|
|
|
|
|
|
|
Order 1
|
-3.68***
|
-3.51
|
-3.67***
|
-3.77***
|
-3.73***
|
|
Prob > z
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
|
Order 2
|
-1.41
|
-1.97**
|
-1.65*
|
-1.36
|
-1.52
|
|
Prob > z
|
(0.15)
|
(0.04)
|
(0.09)
|
(0.17)
|
(0.12)
|
|
Estimator: GMM
|
Equations
|
|
Variables
|
(1.1)
|
(1.2)
|
(1.3)
|
(1.4)
|
(1.5)
|
|
∆ GDP L1
|
-0.18
|
-0.08
|
0.56
|
-0.06
|
0.51
|
|
(-0.68)
|
(-0.20)
|
(0.96)
|
(-0.15)
|
(1.03)
|
|
A1
|
0.27**
|
–
|
–
|
–
|
–
|
|
(2.54)
|
–
|
–
|
–
|
–
|
|
A2 -
|
–
|
0.03
|
–
|
–
|
–
|
|
–
|
(0.52)
|
–
|
–
|
–
|
|
RI -
|
–
|
–
|
0.06
|
–
|
–
|
|
–
|
–
|
(1.05)
|
–
|
–
|
|
PI -
|
–
|
–
|
–
|
-0.05
|
–
|
|
–
|
–
|
–
|
(-0.55)
|
–
|
|
PRI -
|
–
|
–
|
–
|
–
|
0.07
|
|
–
|
–
|
–
|
–
|
(0.69)
|
|
Education
|
-0.18
|
-0.08
|
0.56
|
-0.06
|
0.51
|
|
(-0.68)
|
(-0.20)
|
(0.96)
|
(-0.15)
|
(1.03)
|
|
Openness
|
0.04**
|
0.00
|
0.08**
|
0.04*
|
0.09**
|
|
(1.98)
|
(0.20)
|
(2.40)
|
(1.91)
|
(2.36)
|
|
Gini
|
0.72***
|
0.66***
|
0.79***
|
0.81***
|
0.86***
|
|
(10.21)
|
(6.80)
|
(5.04)
|
(7.50)
|
(4.87)
|
|
Pop
|
-0.01
|
-0.00
|
-0.15*
|
-0.01
|
-0.17
|
|
(-0.16)
|
(-0.01)
|
(-1.68)
|
(-0.12)
|
(-1.63)
|
|
Homicide Rate
|
0.00
|
0.00
|
0.00
|
0.00*
|
0.00
|
|
(1.03)
|
(0.47)
|
(0.45)
|
(1.89)
|
(0.81)
|
|
Occupied Population
|
0.03***
|
0.04***
|
0.03***
|
0.02***
|
0.05
|
|
(6.34)
|
(6.56)
|
(4.32)
|
(3.25)
|
(0.89)
|
|
Dummy Election
|
0.00
|
-0.00
|
-0.00
|
-0.01*
|
-0.00
|
|
(0.15)
|
(-0.06)
|
(-0.09)
|
(-1.95)
|
(-0.78)
|
|
Constant
|
0.38
|
0.03
|
2.90*
|
0.20
|
3.14
|
|
(0.54)
|
(0.04)
|
(1.67)
|
(0.12)
|
(1.45)
|
|
Observations
|
513
|
513
|
513
|
513
|
513
|
|
Wald Test
|
651.69
|
795.83
|
482.41
|
404.99
|
306.72
|
|
Number of Instruments
|
286
|
286
|
286
|
286
|
286
|
|
Sargan Test Chi2
|
21.58
|
24.61
|
21.11
|
22.20
|
20.44
|
|
Prob > Chi2
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
|
Arellano-Bond Test
|
|
|
|
|
|
|
Order 1
|
-3.04***
|
-2.86***
|
-3.00***
|
-2.94***
|
-2.96***
|
|
Prob > z
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
|
Order 2
|
-1.87*
|
-1.84*
|
-2.04**
|
-1.93*
|
-2.32**
|
|
Prob > z
|
(0.06)
|
(0.05)
|
(0.04)
|
(0.05)
|
(0.02)
|
|
Estimator: GMM
|
Equations
|
|
Variables
|
(1.1)
|
(1.2)
|
(1.3)
|
(1.4)
|
(1.5)
|
|
∆ GDP L1.
|
-0.07***
|
-0.07***
|
-0.07***
|
-0.08***
|
-0.07***
|
|
(-31.90)
|
(-27.23)
|
(-37.12)
|
(-17.04)
|
(-44.84)
|
|
A1
|
7.65***
|
–
|
–
|
–
|
–
|
|
(9.25)
|
–
|
–
|
–
|
–
|
|
A2 -
|
–
|
7.40***
|
–
|
–
|
–
|
|
–
|
(13.73)
|
–
|
–
|
–
|
|
RI
|
–
|
–
|
2.27***
|
–
|
–
|
|
–
|
–
|
(15.23)
|
–
|
–
|
|
PI
|
–
|
–
|
–
|
-2.27***
|
–
|
|
–
|
–
|
–
|
(-8.15)
|
–
|
|
PRI
|
–
|
–
|
–
|
–
|
-0.15
|
|
–
|
–
|
–
|
–
|
(-1.19)
|
|
Education
|
-7.14**
|
-0.82
|
2.30
|
-9.64***
|
-3.41**
|
|
(-2.05)
|
(-0.50)
|
(1.02)
|
(-4.98)
|
(-2.10)
|
|
Openness
|
-1.00***
|
-0.77***
|
-0.71***
|
-1.34***
|
-0.99***
|
|
(-4.59)
|
(-3.80)
|
(-4.44)
|
(-9.90)
|
(-8.02)
|
|
Gini
|
-6.92***
|
-8.43***
|
-1.53***
|
-5.01***
|
-3.43***
|
|
(-10.96)
|
(-9.55)
|
(-4.36)
|
(-11.40)
|
(-7.04)
|
|
Pop
|
0.60
|
-3.28***
|
-1.55***
|
2.56***
|
0.78**
|
|
(0.46)
|
(-6.45)
|
(-3.41)
|
(3.92)
|
(2.25)
|
|
Homicide Rate
|
0.00
|
0.00
|
0.00
|
0.03*
|
0.01
|
|
(0.13)
|
(0.32)
|
(0.43)
|
(1.96)
|
(1.40)
|
|
Occupied Population
|
0.65***
|
0.95***
|
0.43***
|
0.51***
|
0.40***
|
|
(3.39)
|
(6.22)
|
(4.21)
|
(5.22)
|
(4.53)
|
|
Dummy Election
|
-0.55***
|
-0.47***
|
-0.69***
|
-0.66***
|
-0.63***
|
|
(-10.28)
|
(-7.00)
|
(-13.49)
|
(-10.98)
|
(-18.43)
|
|
Constant
|
-22.27
|
36.00***
|
28.08***
|
-64.55***
|
-22.18***
|
|
(-1.26)
|
(4.29)
|
(3.85)
|
(-6.02)
|
(-3.74)
|
|
Observations
|
513
|
513
|
513
|
513
|
513
|
|
Wald Test
|
1,7021.67
|
14,106.26
|
19,232.38
|
26,595.50
|
87,624.82
|
|
Number of Instruments
|
286
|
286
|
286
|
286
|
286
|
|
Sargan Test Chi2
|
26.30
|
26.53
|
26.6256
|
26.82
|
26.77
|
|
Prob > Chi2
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
(1.00)
|
|
Arellano-Bond Test
|
|
|
|
|
|
|
Order 1
|
-1.17
|
-1.18
|
-1.14
|
-1.16
|
-1.15
|
|
Prob > z
|
(0.24)
|
(0.23)
|
(0.25)
|
(0.24)
|
(0.24)
|
|
Order 2
|
-1.45
|
-1.45
|
-1.54
|
-1.56
|
-1.55
|
|
Prob > z
|
(0.14)
|
(0.14)
|
(0.12)
|
(0.11)
|
(0.12)
|
Table 1Distribution of municipal and state average revenues according to the regions of Brazil, 1985-2015, by percentage DISPLAY Table
Figure 1Evolution of the average of municipal own tax collection, 1995-2015, R$ million DISPLAY Figure
Figure 2Expenditure per level of the Brazilian government, 1995-2015, by percentage DISPLAY Figure
Table 2Definition of variables and reason for inclusion DISPLAY Table
Table 3Averages, standard deviations, and definitions of the variables used DISPLAY Table
Figure 3Results for coefficients of decentralization DISPLAY Figure
Figure 4The impact of decentralization on the economic growth of various sectors DISPLAY Figure
Table A1Main results of the estimation – 1996-2015 DISPLAY Table
Table A2Main results of the estimation for Agriculture Value Added – 1996-2015 DISPLAY Table
Table A3Main results of the estimation Industry Value Added – 1996-2015 DISPLAY Table
Table A4Main results of the estimation Services Value Added – 1996-2015 DISPLAY Table
* The authors are grateful to two anonymous referees who have contributed to the quality of the final version of the paper.
1 The authors cite papers with comparable results.
2 When necessary, the collected data was deflated, as the literature recommends.
3 The defined period is due to the large distortions of the economic growth rate before the system of the Real Plan, and the last results of variables only extended to 2015.
|
|
June, 2023
II/2023
|
