Fiscal Policy and the Financing of Social Policies in Brazil (1994-2000)

Clarice Melamed, Federal University of Rio de Janeiro

 

Objectives:

To evaluate how fiscal policy applied after the stabilization plan (1994), which have created a new currency – the real, impacted the financing of public health and education.

 

To create two econometric model sets relating new forms of financing and results obtained in health and education sectors.

 

Background:

After implementing the Real Plan, the Brazilian federal government had among its tasks control fiscal deficit and at the same time definee a new direction to social policies as determined by the new Constitution of 1988. Basically the new legislation focused on increasing health services and public expenditure on education associated with the decentralization of the public sector and the co-financing of these activities by the three levels of public administration: federal, states and counties. Targeting these goals the federal government managed to increase revenues and to develop a new legislation to regulate increasing debts and expenditures at the state and county levels. Nevertheless, each policy comprehend a different combination of resources at each level and should be evaluated by its own indicators.

 

Data and Methods: 

The current paper will present two different kinds of data:

1-     to evaluate the results obtained by fiscal policy it will be necessary to work with the variation of GDP, growth rates, national expenditure levels in the framework of the government budget constraint models;

2-     a second approach will be used to analyze health and education policies.  There is a big data set for each one of these policies like morbid/mortality indicators, increasing number of health facilities and human resources applied to public services, number of children enrolled at school, etc. It will be built two sets of econometric models; one for health and other for education, trying to relate new forms of financing and results obtained in both sectors.

 

Expected Results: 

I expect to be able to show that the social policies developed since 1994 in Brazil were well designed and managed to achieve results among poor groups of the population,  specially related to primary health care and elementary education. On the other hand the econometric models built for this paper, should be applied later to analyze the same policies in other developing countries.

 

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