Fiscal Rules in Brazil: The Limits of Fiscal Stabilization for Poverty Reduction
Date
2008-01-30
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Latin American Studies Program, University of Delaware, Newark, DE
Abstract
This work examines the influences of fiscal rules on fiscal stabilization of the Brazilian states. In addition, we investigate whether fiscal policy rules have promoted socio-economic development in the country. The statistical results point to a linear negative association between the budget balance of the states and important expenditure items, e.g., public investments, personnel payroll, and social spending. We conclude that, despite the success of the rules for Brazil’s macroeconomic stability, a fall in the level of public deficit has not been able to increase the GDP per capita in the country.1
Description
Keywords
Fiscal rules, Stabilization, Socioeconomic development, Poverty reduction