TransferÊNcias Intergovernamentais: O Papel Do Contexto Institucional Para A Sustentabilidade Das DÍVidas Estaduais

Abstract

The purpose of this paper is to verify if Brazilian states’ fiscal sustainability during the period 2001 to 2015 depends on the system of intergovernmental transfers. The results indicate that the public debt is not sustainable, regardless the inclusion/exclusion of grants. The effects are, however, heterogeneous. States in the South and Southeast regions, which are liquid donors of grants, do not attend the sustainability condition for the usual primary balance, the reverse occurring when the primary balance excludes the intergovernmental transfers. The remaining states, however, show great fiscal fragility, since they do not attend the sustainability condition under no circumstance. They do not show an adequate fiscal performance even when transfers are included, although they are beneficiaries of resources.