Demand for local public expendituresevidence of the effects of fiscal illusion in Brazil

Resumo

In addition to the complexity and opacity of taxation, the strong reliance of Brazilian municipalities on federal and state transfers increases the chance of fiscal illusion.Under fiscal illusion, taxpayers tend to underestimate the costs of the goods andservices provided by the government and, thus, to demand them in excess of whatwould be demanded in the absence of fiscal illusion. The purpose of this study isto estimate the effects of fiscal illusion on the demand for local public spending inBrazil. Based on a median voter model and using data from 2010 for 5249 municipalities, a demand function for local public goods that includes variables to capture fiscal illusion is estimated. The results indicate that fiscal illusion associated to the tax structure and to the fiscal transfers can help to understand the expansion of public spending in Brazil.

Ficha do documento

Tipo

Artigo científico

Ano

2016

Instituição

Universidade de São Paulo. Faculdade de Economia, Administração, Contabilidade e Atuária

Fonte

Estudos Econômicos

Idioma

Português

Acesso

Não informado

DOI

10.1590/0101-416146116jar

Identificador

oai:revistas.usp.br:article/88756

Licença

http://creativecommons.org/licenses/by-nc/4.0

Temas

Finanças PúblicasGestão Municipal

Palavras-chave

fiscal illusionlocal public spendingintergovernmental transferstax structureilusão fiscaleleitor medianogasto público localmunicípios brasileiros