BIAS IN THE COMPOSITION OF PUBLIC EXPENDITURES AND ECONOMIC GROWTH: AN ANALYSIS FOR BRAZILIAN STATES (1999-2018)
DOI:
https://doi.org/10.61673/ren.2025.1618Keywords:
Budget, Fiscal responsibility, Federation, GDPAbstract
Public expenditures of Brazilian states have been influenced by factors that create biases in the composition of expenditures. They direct expenditures and limit the flexibility of managers to adjust budgets according to their attributions, whether allocative, distributive, or stabilizing. To analyze the impacts of these biases on the economic growth of Brazilian states, an Expenditure Composition Indicator was applied to control changes in public expenditures. The effects of these changes on the performance of the economy were captured through a data panel analysis. In the period from 1999 to 2018, the results showed that biases in the composition of expenditures, to the extent that they constrain the budget, tend to be detrimental to economic growth. However, for subnational entities more dependent on Union resources, this rigidity had a more significant impact on the economy.
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