Paulo Roberto Arvate

Flypaper effect revisited: evidence for tax collection efficiency in Brazilian municipalities

The purpose of this article is to propose a reinterpretation of the traditional flypaper effect according to which central government transfers to local governments increase public spending by more than do increases in private income. Here, higher transfers from the federal government might induce less efficiency in local tax collection opposed to the income effect. Initially, we build a model in order to point out the possible existence of that flypaper effect in a context of standard maximization on the part of local governments. Next, we construct efficiency scores for Brazilian municipalities using Free Disposable Hull (FDH), taking into consideration two outputs: amount of per capita local tax collected -tax revenue- and the size of local informal economy - tax base. Last, using two stages least squares and Tobit regressions, which the instruments is built upon the rules established in the 1988 Brazilian Constitution and where we find that unconditional transfer funds to municipalities, we estimate that transfers have the opposite effect (negative) of consumers income on efficiency of taxation, which leads us to a reinterpretation of the flypaper effect.

Corruption and the size of government: causality tests for OECD and Latin American countries

The purpose of this article is to examine the causality between government size and corruption, and to verify if there is a different pattern of causality between developed Organization for Economic Co-operation and Development (OECD) countries (excluding Mexico) and developing countries (Latin American countries) during the period 1996 to 2003. Applying Granger and Huangs (1997) methodology we find evidence that size of government Granger causes corruption in both samples. Since a larger government involvement in private markets today will be followed in future by a higher level of corruption a policy advice would be to enhance governance. The promotion of good governance helps to combat corruption given that it complements efforts to reduce corruption more directly, and it is strongly recommended by the International Monetary Fund, other multilateral institutions, and all worried with the negative impacts of corruption on economic activity.

Are voters fiscal conservatives? Evidence from Brazilian municipal elections

Some papers in literature show that voters are fiscal conservatives, while others find evidence of a preference for fiscal profligacy. We use a traditional Probit model to analyze the preference of Brazilian municipal voters in the 2000 election. The main result suggests that voters prefer greater expenditure. We present evidence that this result is a consequence of a fiscal federalism model where there is a soft budget constraint for municipalities (institutional context). Moreover, we obtained evidence that voters with different levels of schooling impose a different result on expenditure. The effect of expenditure is more marked in municipalities with a low level of literacy.

Existe influência da ideologia sobre o resultado fiscal dos governos estaduais brasileiros

This paper focuses on the influence of party ideology on fiscal behavior in Brazilian states between 1986 and 2005. To carry out its objectives, the paper first builds up a new variable to measure party ideology of both the state Executive and Legislative. The paper, also considers the series of institutional changes, hardening budget constraints, which occurred during the period. Three results stand out. First, party ideology does influence fiscal behavior. Second, right wing governments showed better fiscal behavior, mostly by increasing revenues. Finally, institutional changes mediated the influence of party ideology over fiscal behavior: left wing government showed better fiscal results, mostly as a reaction to the debt restructuring process; similarly, left wing legislatives showed better fiscal results as a reaction the Fiscal Responsibility Law. The results were obtained with a Panel Corrected Standard Errors (PCSE).

Tamanho do governo Brasileiro: conceitos e medidas

The purpose of this paper is to build a measure of government size for Brazil in terms of state-owned companies. We build the government size considering the federal governments current expenditure (international measure) and the state-owned companys current expenditure. Our measure shows that the government size between 1980 and 2005 was around 20% of the GDP. Additionally, we investigate the relationship of this measure and the number of coalition parties. We use non-conditional correlated because we did not have a higher number of observations (Greene, 2000). Our results show that there is a high correlation between the reduction in the expenditure of the state-owned companies and the growth of the expenditure of the central government (that explains the maintenance of the government size). Moreover, there is a high correlation between the expenditure and the increase of the political space in federal government (measured by the number of parties that participate of the government coalition). Our theoretical references between government size and the number of coalition parties can be found in the works of Volkerink and de Haan (2001), Perotti and Kontopoulos (2002), Persson and Tabellini (2003), and Amorim and Borsani (2004).

Uma nova versão sobre a oferta de moeda no Plano de Ação Econômica do Governo (PAEG)

The control of the money supply was one of the most important instruments used in the carrying out of the monetary policy designed by the author of PAEG (1964/1966). Although the inflation has been controlled, the targets for monetary supply have not been reached. Pastore (1973, 1973a), Lara Resente (1982) and Cysne (1993) disaggee both on the reasons for that and the timing of the relevant facts. With a Time Series analysis it was possible to investigate what really happened with the money supply. The main conclusions are: a) During the PAEG, only one important structural change had happened (July 1965); other breaks have happened before the plan; b) although all of these authors agree with the role played by the money financing of Treasury, the credit supplied by Banco do Brasil as Monetary Authority is the best candidate in explaining the behavior of the Money Supply during the plan; c) the credit supplied by the Commercial Banks to the private sector had not any role in the determination of money supply during the period and d) the role of international reserves described by the authors is different from what really happened. The use of data on reserves other than those made available by SUMOC in real terms turned impossible a more precise work by these authors.

Eleições eliminam corruptos e maus gestores

Como o politico que “rouba, mas faz” tem a chance de continuar na vida publica, a saida e bloquear a sua candidatura.

Future electoral impacts of having a female mayor

We explore an electoral quasi-experiment where a woman nearly won or lost to a man in a mayoral election. Our data combines municipal Brazilian election results, which occur every four years, with municipal level votes for female and male candidates in state and federal deputy elections, whose districts are larger than the municipalities. Our results show that when voters are exposed to a female leader, the relative number of votes given to female candidates increases. This result depends on the political environment in which the exposure occurs. These effects on the electorates response tend to be stronger: 01. in municipalities where there is a previous higher proportion of female councilors, and 02. when the mayors have higher education levels. Our results provide evidence that the observed electorates gender preferences in politics are alterable, but that policy interventions aimed to equalize access will be more effective if they are targeted at underrepresented populations that have the correct skill requirements to perform in leadership positions.

Governos autoritários e câmbio nos países latino-americanos

Authoritarian governments and exchange rate policy in Latin American countries. Our aim on this paper is to identify the exchange rate policies used by Authoritarian governments in Latin America during the 170’s and 180’s. The literature shows that the focus of the exchange rate policy was on inflation control, which was not consistent with the evidence. We show on this paper that these governments aimed at a undervalued currency because of the behavior of the external balance of the countries.