The primacy of management over planning in Brazilian states

Abstract

We assume that there is currently a primacy of management over planning and seek to investigate the relationship between the primary and nominal budget balances and investments in Brazilian states and verify the effect that political cycles had on this relationship during the period from 2001 to 2018. To accomplish this, we use multiple linear regression models with errors clustered by state and year. The results demonstrate the existence of a positive relationship between fiscal management and planning in the Brazilian states, confirming the literature’s findings and our research hypothesis. In addition, we demonstrate that electoral cycles interfere with the relationship between fiscal management and governmental planning, given that investments increase in pre-election years.