Uma análise do efeito flypaper e ilusão fiscal para os municípios do Nordeste brasileiro

Abstract

In Brazil, the large majority of the revenues of municipalities are composed by transferences from the state's government, specially in Northeast Region, characterized by it's low level of socioeconomic development. That being said, the main goal of this paper is to investigate if government transferences have led to an increase in local government's expenses disproportionate to an increase in local income, known as the flypaper effect, besides looking for evidences of fiscal illusion in local governments. For this, we used a panel with all Brazilian Northeast municipalities, between 2007 and 2012. The results indicate the presence of fiscal illusion, and that the expenses are more sensible to increases in governments transferences than increases in local income.