Performance of public spending on education and the law of fiscal responsibility in Brazilian state capital cities

Abstract

The use of public expenditures for education is essential for the development of the national economy; and the Brazilian law of fiscal responsibility determines that municipalities must apply 25% of their tax collections and transfers to public investment in education. In view of this, our study seeks to identify how efficiently the requirements on public spending for education and the Law of Fiscal Responsibility are being met in Brazilian state capital cities. This research is descriptive in nature, using document analysis procedures and quantitative data to study a sample of 26 Brazilian state capitals. It was found that the smaller capital cities have better Basic Education Development Indicators (BEDI) and are meeting the goal of 25% established by the Law of Fiscal Responsibility for investment in education. However, in the state capitals with higher GDP, this does not occur.  Results show that greater investments in education are associated with better BEDI, better GDP performance and more schools. Capital cities identified as efficient in this regard were Curitiba, Manaus, Rio de Janeiro, Salvador, Sao Paulo, Teresina and Vitoria.