Determinants of municipal public debt in Brazil
Abstract
Public debt studies focus on the search for socioeconomic, demographic, fiscal control, etc. determinants, and therefore simply do not inform how much management is to be performed. In this sense, the objective of this paper is to explain the formation of municipal public debt and to verify how much of this is due to the management effort, the circumstances and, finally, to the debt stock inherited from previous managements. The empirical strategy is based on a data panel for the 5,565 Brazilian municipalities between 2000 and 2016 formed from the Finance Brazil - FINBRA database of the National Treasury Secretary; Brazilian Institute of Geography and Statistics - IBGE and Superior Electoral Court - TSE. Estimates were obtained from the GMM System model. The results highlight that circumstances and debt stock are the main components of municipal public debt, to the detriment of local management effort. Therefore, a new municipal management faces a scenario that limits its ability to manage its debt condition.
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