Impacto dos desastres naturais sobre as finanças municipais no Ceará: uma análise com dados em painel para o período 2003-2016

Abstract

This study sought to investigate the impacts of the state of abnormality decreed by municipalities due to natural disasters on local public finances in Ceará. Using a data panel for the 184 municipalities of Ceará between 2003 and 2016, the effects of the declarations of state of emergency and public calamity on the expenses and revenues of the municipalities were estimated. Due to the intrinsic endogeneity of the declarations of abnormality in the municipalities, rainfall was used as an instrumental variable. The results show an increase in per capita current expenditure in municipalities with each additional declaration of a state of emergency or public calamity, especially with public investment. Spending on social assistance, health/sanitation, and education/culture are positively affected by the state of emergency and public calamity in the municipalities. There is also a growth in current per capita municipal revenue due to the state of emergency or public calamity, especially influenced by the growth in revenue from transfers to municipalities. On the other hand, the state of abnormality caused by natural disasters generates a reduction in per capita tax revenue. Therefore, this study contributes by showing evidence of the sensitivity of municipal public finances to economic shocks caused by natural disasters.