Analysis of shipments intergovernmental and its effects on public finance of municipalities of Rio Grande do Norte (2001 - 2010)

Abstract

the Brazilian tax structure has specific characteristics and the performance level of government. Although there was a better regulation of these transfers after the enactment of the Fiscal Responsibility Law, it is observed that the amount of resources transferred to the municipalities of Rio Grande do Norte is quite high. In light of the theory of federalism and fiscal decentralization, in particular, the theories related to intergovernmental transfers seek to diagnose the transfers from the systematization of information as to the origin, value and destination. We used the econometric model of Dynamic Panel System GMM in diagnosis and verification of the impact of transfers on public finances of municipalities in the RN, a dynamic econometric model that captures the lagged effects of variables making use of adjustment mechanisms based on a model differences distributed so that the dependent function is a concatenation of variable contemporary and out of phase. The data point to what is predicted in theory: an increasing trend of dependency. The paper presents some proposals for the transfer system and the composition of spending in order to contribute to greater tax efficiency.