Regional disparities shape intergovernmental relations in Brazil

Roundtable co-ordinator Marta Arretche (middle) and Alberto Kleiman (right) of the Secretary for Federative Affairs listen to Fernando Rezende of the School of Public Administration (Brazil) at a recent Forum roundtable on intergovernmental relations in Brazil.

The challenges of delivering public services in a country characterized by regional economic disparities and varied local government capacity was discussed recently by a group of federalism experts in Brasilia. The roundtable on intergovernmental relations in Brazil was part of the Forum’s Global Dialogue on Federalism series.

In 1988, Brazil adopted a new constitution that recognized municipalities as equal to the country’s 26 states and its one federal district, making Brazil the first country in Latin America to formally recognize local power. The South American country is now composed of more than 5,000 municipalities. Municipalities are responsible for the delivery of public services such as education, health care, housing, transportation and welfare.

Participants noted that national policy governing service-delivery has led to improvements. However, the effectiveness of local government implementation of what participants considered to be rigid policies is often hampered by a lack of capacity.

Metropolitan cities also have insufficient resources to provide services for their large populations as a result of fiscal policies that favour smaller municipalities in the distribution of federal revenues.

In Brazil, most revenue is distributed via constitutional transfers monies from income tax and industrial products that are passed from the federal government to state and municipal governments, and from state governments to municipal governments. Participants said that constitutional transfers are subject to less political favouritism than discretional transfers, where those allied with the ruling party may receive more funds than those who are not.

The most controversial topic of the roundtable regarded the role of state governments. Many participants remarked that state governments’ fiscal control continues to be eroded, in part because of current policies that delegate public service delivery to municipalities. Other participants noted that state governments have been crucial to public service delivery, providing critical support to municipal governments.

The event was organized by Marta Arretche, Associate Professor at the University of São Paulo and Research Director of the Center for Metropolitan Studies and took place on June 25, 2009.

Participants included: Fernando Abrucio, School of Public Administration, Fundação Getúlio Vargas, São Paulo; Marta Arretche, University of Sao Paulo/Center for Metropolitan Studies; Leandro Piquet Carneiro, University of São Paulo; Ricardo Ceneviva, University of Sao Paulo; Cibele Francesi, School of Public Administration, Fundação Getúlio Vargas, São Paulo; Sol Garson, Federal University of Rio de Janeiro, former Municipal Finance Secretary of Rio de Janeiro; Sandra Gomes, Center for Metropolitan Studies; Renata Gonçalves, Ministry of Cities; Maria Helena Guimarães de Castro, former State Secretary for Education of São Paulo State; Alexandre Padilha, Secretary for Federative Affairs; Alberto Kleiman, Secretary for Federative Affairs’ staff; Paula Ravanelli, Secretary for Federative Affairs’ staff; Fernando Rezende, School of Public Administration, Fundação Getúlio Vargas, Brasilia; Fatima Ribeiro, States’ Fiscal Forum; Junia Santa Rosa, Ministry of Cities; Jose Raimundo Trindade, Coordinator of the States’ Fiscal Forum and Helder Ferreira do Vale, European University Institute.

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