Federalismo Fiscal Market-Preserving: uma análise de Equilíbrio Geral Computável para o Brasil ^♦

Abstract

The purpose of a federal system is to provide a stable political decentralization structure. In Brazil, on the other hand, there has been sequential periods of fiscal decentralization and centralization with impacts on the economic performance. The most recent literature predicts problems of incentives for governments in both movements. Thus, this paper aims to test empirically the validity of the main market-preserving federalism proposition (MPF), which is: more tax autonomy to regional governments, disciplined by imposing hard budget constraint and interregional factor mobility, raises de economic gains. For this, some experiments were carried out in a computable general equilibrium model seeking to simulate the different intensities of these MPF characteristics. In general, the results confirm that the Brazilian economy improves its performance (increases in GDP and welfare). However, at regional level and in some situations, there is an increase in inequalities.

Keywords
Fiscal decentralization; Hard budget constraint; CGE models