Brazilian fiscal decentralization: budget priorities from an agenda-setting perspective

Introduction:  The Federal Constitution of 1988 established an institutional framework for the decentralization of public policies. However, the literature suggests that political and administrative decentralization has not been adequately matched by fiscal decentralization. Drawing upon agenda-setting theory, we examine how the government has prioritized budget allocations across various public policy sectors. We also explore the contextual and institutional factors that have influenced changes in these priorities.

Materials and methods:  We used content analysis to code federal intergovernmental transfers based on the Comparative Agendas Project (CAP) methodology. We grouped 814 budgetary function and sub-function combinations into 22 public policy sectors. We then created a database containing information on federal resource transfers to states and municipalities across different public policy sectors from 2000 to 2023. We measured the federal government's budget priorities by the proportion of these transfers in the total amount sent to each subnational level.

Results:  Our findings suggest that, according to Punctuated Equilibrium Theory, fiscal decentralization by the federal government generally occurs gradually, with occasional abrupt changes. Government attention to various policies differs among states and municipalities, but health and education consistently receive significant focus.

Discussion:  We posit that agenda-setting theory enhances the understanding of fiscal decentralization in Brazil. Additionally, we argue that analyzing all intergovernmental transfers proves more pertinent, as it helps identify the institutional and contextual factors influencing this process.

Keywords
federalism; intergovernmental transfers; public budget; agenda-setting; punctuated equilibrium