Sustentabilidade fiscal dos estados brasileiros (1995-2012)

Abstract

The objective of this study is to evaluate the sustainability of the public finances of the Brazilian States during the period from 1995 to 2012. For this purpose, the condition of the states’ public finances is analyzed in a disaggregated manner and considering three different fiscal balance, with the purpose to evaluate the impact of government transfers on state fiscal policy. Another aspect considered in the study is the presence of correlation between the cross-sectional units. The results indicate that the series of revenues and expenditures (in % of GDP) that make up the three fiscal balances considered are cointegrated and this is an indication of sustainability of the states’ fiscal policy. Still, on the last result, it is necessary to emphasize that the reaction of the tax collection to increases in the non-financial expenditures is very low, which shows the importance of the government transfers to the financial health of the States.