article · Brazilian Business Review · 2023

Intergovernmental Transfers and Economic Development: Spatial Panel Data Analysis in Brazilian States

João Paulo de Oliveira Louzano, Luíz Antônio Abrantes, Antônio Carlos Brunozi Júnior

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Abstract

Brazilian Fiscal Federalism makes intensive use of mechanisms of interjurisdictional transfers as strategies to combat poverty and regional differences, even while recognizing that, if poorly conceived, they can generate or aggravate existing regional demands and create externalities that affect the behavior of economic development of the recipients´ governments. In this sense, this paper aims to assess the effect of intergovernmental transfers from the State Participation Fund (FPE) on the economic development of Brazilian states. To this end, we employed spatial panel data models for the 27 Brazilian federative units from 1997 to 2016. The results show that when spatial dependence is controlled, the spatially lagged FPE has a negative effect on the GDP per capita of the states. This indicates that the criteria for determining the fund transfers must be expanded, considering other factors besides the sole equalization of horizontal imbalances between states.

Cite this paper

APA 7

Louzano, J. P. D. O., Abrantes, L. A., & Júnior, A. C. B. (2023). Intergovernmental Transfers and Economic Development: Spatial Panel Data Analysis in Brazilian States. Brazilian Business Review, 20(6), 625–645. https://doi.org/10.15728/bbr.2022.1288.en

MLA 9

Louzano, João Paulo de Oliveira, et al. “Intergovernmental Transfers and Economic Development: Spatial Panel Data Analysis in Brazilian States.” Brazilian Business Review, vol. 20, no. 6, 2023, pp. 625–45, https://doi.org/10.15728/bbr.2022.1288.en.

Chicago

Louzano, João Paulo de Oliveira, Luíz Antônio Abrantes, and Antônio Carlos Brunozi Júnior. 2023. “Intergovernmental Transfers and Economic Development: Spatial Panel Data Analysis in Brazilian States.” Brazilian Business Review 20 (6): 625–45. https://doi.org/10.15728/bbr.2022.1288.en.

Harvard

Louzano, J.P.D.O., Abrantes, L.A. and Júnior, A.C.B. (2023) ‘Intergovernmental Transfers and Economic Development: Spatial Panel Data Analysis in Brazilian States’, Brazilian Business Review, 20(6), pp. 625–645. Available at: https://doi.org/10.15728/bbr.2022.1288.en.

BibTeX

@article{louzano2023intergovernmental,
  title = {{Intergovernmental Transfers and Economic Development: Spatial Panel Data Analysis in Brazilian States}},
  author = {Louzano, João Paulo de Oliveira and Abrantes, Luíz Antônio and Júnior, Antônio Carlos Brunozi},
  journal = {Brazilian Business Review},
  volume = {20},
  number = {6},
  pages = {625--645},
  year = {2023},
  doi = {10.15728/bbr.2022.1288.en}
}

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