Brazil’s Northeast Financing Constitutional Fund: Differentiated effects on municipal economic growth

Viana, Luiz Fernando Gonçalves
Gonçalves, Marcos Falcão
Linhares, Fabrício Carneiro
Soares, Ricardo Brito

2014-12-10T15:14:59Z

LC/G.2614-P
10

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This article investigates the effects of the investments made by the Northeast Financing Constitutional Fund (FNE) on the economic growth of that region's municipalities in the decade of 2000. To that end, it uses an empirical framework based on growth models that make it possible to form convergence clubs according to the municipalities' initial development level. The results corroborate the empirical strategy and reveal the existence of four groups of municipalities, in which investment flows through the FNE have different effects on growth. In general, the FNE produces positive and significant effects in most municipalities of the Northeast, except for those whose gross domestic product (GDP) per capita was either very low or very high at the start of the decade, in which case its effects are not significant.

FONDOS; EVALUACION; MODELOS ECONOMETRICOS; ADMINISTRACION PUBLICA; ECONOMIC GROWTH; REGIONAL DEVELOPMENT; MUNICIPAL GOVERNMENT; DEVELOPMENT FINANCE; FUNDS; EVALUATION; ECONOMETRIC MODELS; PUBLIC ADMINISTRATION; GOBIERNO MUNICIPAL; FINANCIACION DEL DESARROLLO; DESARROLLO REGIONAL; CRECIMIENTO ECONOMICO;