Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil

Detalhes bibliográficos
Autor(a) principal: Mattos, Enlinson
Data de Publicação: 2018
Outros Autores: Cardim, Rafael, Politi, Ricardo
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Revista Brasileira de Economia (Online)
Texto Completo: https://periodicos.fgv.br/rbe/article/view/57961
Resumo: This paper documents empirical evidence on price-effect caused by lumpsumgrants for local governments in Brazil between 2006 to 2010. Dahlby(2011) demonstrates theoretically that lump-sum grants can reduce thecost of public goods provision (price-effect), in addition to the traditionalincome effect. Our contributions are threefold. First we estimated semielasticityof the effects of tax rate changes on tax base (−0.016). Second, wecalculate the MCF of the local tax imposed on the supply of services (ISS)for Brazilian municipalities (average of 0.04). Finally, we estimate the priceeffectestimation for ISS tax. Our results suggests that for the entire sample,that an increase in R$ 1.00 in per capita unconditional transfers reducesthe local price effect (MCF) around 0.07%, but this result is not consistentlyestimated across all subsamples.
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spelling Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in BrazilGrants and marginal cost of public funding: Empirical evidence for local governments in BrazilPrice effectincome effectgrantsmarginal cost of public provision.This paper documents empirical evidence on price-effect caused by lumpsumgrants for local governments in Brazil between 2006 to 2010. Dahlby(2011) demonstrates theoretically that lump-sum grants can reduce thecost of public goods provision (price-effect), in addition to the traditionalincome effect. Our contributions are threefold. First we estimated semielasticityof the effects of tax rate changes on tax base (−0.016). Second, wecalculate the MCF of the local tax imposed on the supply of services (ISS)for Brazilian municipalities (average of 0.04). Finally, we estimate the priceeffectestimation for ISS tax. Our results suggests that for the entire sample,that an increase in R$ 1.00 in per capita unconditional transfers reducesthe local price effect (MCF) around 0.07%, but this result is not consistentlyestimated across all subsamples.This paper documents empirical evidence on price-effect caused by unconditional transfers for local governments in Brazil. Dahlby (2011) demonstrates theoretically that lump-sum transfers can reduce the cost of public goods provision (price-effect), in addition to the traditional income effect. Our contributions are threefold. First, we estimate the effects off tax rate changes on tax base. More important, we calculate the marginal cost of public funding (MCF) regarding the local tax imposed on the supply of services (ISS). Third, we control for potential simultaneity between unconditional transfers and local tax revenue in a two-stage least square approach using instrumental variables. Our price-effect estimation for tertiary sector tax suggests that a 10% increase in the amount of unconditional transfers resources reduces the local price effect (MCF) around 0.01%.EGV EPGE2018-12-12info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionArticlesArtigosapplication/pdfhttps://periodicos.fgv.br/rbe/article/view/57961Revista Brasileira de Economia; Vol. 72 No. 4 (2018): OUT-DEZ; 479-496Revista Brasileira de Economia; v. 72 n. 4 (2018): OUT-DEZ; 479-4961806-91340034-7140reponame:Revista Brasileira de Economia (Online)instname:Fundação Getulio Vargas (FGV)instacron:FGVenghttps://periodicos.fgv.br/rbe/article/view/57961/74546Copyright (c) 2018 Revista Brasileira de Economiainfo:eu-repo/semantics/openAccessMattos, EnlinsonCardim, RafaelPoliti, Ricardo2018-12-13T16:28:21Zoai:ojs.periodicos.fgv.br:article/57961Revistahttps://periodicos.fgv.br/rbe/https://periodicos.fgv.br/rbe/oai||rbe@fgv.br1806-91340034-7140opendoar:2024-03-06T13:03:43.673855Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)true
dc.title.none.fl_str_mv Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
Grants and marginal cost of public funding: Empirical evidence for local governments in Brazil
title Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
spellingShingle Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
Mattos, Enlinson
Price effect
income effect
grants
marginal cost of public provision.
title_short Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
title_full Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
title_fullStr Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
title_full_unstemmed Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
title_sort Grants and Marginal Cost of Public Funding: Empirical Evidence for Local Governments in Brazil
author Mattos, Enlinson
author_facet Mattos, Enlinson
Cardim, Rafael
Politi, Ricardo
author_role author
author2 Cardim, Rafael
Politi, Ricardo
author2_role author
author
dc.contributor.author.fl_str_mv Mattos, Enlinson
Cardim, Rafael
Politi, Ricardo
dc.subject.por.fl_str_mv Price effect
income effect
grants
marginal cost of public provision.
topic Price effect
income effect
grants
marginal cost of public provision.
description This paper documents empirical evidence on price-effect caused by lumpsumgrants for local governments in Brazil between 2006 to 2010. Dahlby(2011) demonstrates theoretically that lump-sum grants can reduce thecost of public goods provision (price-effect), in addition to the traditionalincome effect. Our contributions are threefold. First we estimated semielasticityof the effects of tax rate changes on tax base (−0.016). Second, wecalculate the MCF of the local tax imposed on the supply of services (ISS)for Brazilian municipalities (average of 0.04). Finally, we estimate the priceeffectestimation for ISS tax. Our results suggests that for the entire sample,that an increase in R$ 1.00 in per capita unconditional transfers reducesthe local price effect (MCF) around 0.07%, but this result is not consistentlyestimated across all subsamples.
publishDate 2018
dc.date.none.fl_str_mv 2018-12-12
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Articles
Artigos
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv https://periodicos.fgv.br/rbe/article/view/57961
url https://periodicos.fgv.br/rbe/article/view/57961
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv https://periodicos.fgv.br/rbe/article/view/57961/74546
dc.rights.driver.fl_str_mv Copyright (c) 2018 Revista Brasileira de Economia
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Copyright (c) 2018 Revista Brasileira de Economia
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv EGV EPGE
publisher.none.fl_str_mv EGV EPGE
dc.source.none.fl_str_mv Revista Brasileira de Economia; Vol. 72 No. 4 (2018): OUT-DEZ; 479-496
Revista Brasileira de Economia; v. 72 n. 4 (2018): OUT-DEZ; 479-496
1806-9134
0034-7140
reponame:Revista Brasileira de Economia (Online)
instname:Fundação Getulio Vargas (FGV)
instacron:FGV
instname_str Fundação Getulio Vargas (FGV)
instacron_str FGV
institution FGV
reponame_str Revista Brasileira de Economia (Online)
collection Revista Brasileira de Economia (Online)
repository.name.fl_str_mv Revista Brasileira de Economia (Online) - Fundação Getulio Vargas (FGV)
repository.mail.fl_str_mv ||rbe@fgv.br
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