Evolution of fiscal rules in the treatment of Brazilian public budget

• Grant number: 17/22398-7
• Support type: Scholarships in Brazil - Scientific Initiation
• Effective date (Start): February 01, 2018
• Effective date (End): January 31, 2019
• Field of knowledge: Applied Social Sciences - Law - Public Law
• Principal researcher: Gabriel Loretto Lochagin
• Grantee: Isabella Miranda
• Home Institution: Faculdade de Direito de Ribeirão Preto (FDRP). Universidade de São Paulo (USP). Ribeirão Preto , SP, Brazil

Abstract

This research aims to analyze how the need for controlling administrative discretion of political agents in formulating and implementing a public budget has been translated to the adoption of fiscal rules, those responsible for setting restrictions both on the content of budget laws as well as on the expenditure amounts in certain sectors. Therefore, this research adopts the concept that these institutes came to be a legal limit for budget's law formulation at the same time they determined parameters for its fulfillment. Yet, they set certain goals over consecutive terms. The present research is based on the hypothesis that the introduction process of public finances disciplinary norms in Brazil (those being the generals, forecasted in the Federal Constitution, article 163, or the specifics for each federal entity) is associated with the idea of budget's decision consolidation and rationalization in the search for responsible fiscal management. This diagnostic has led to adopt fiscal rules, whose first function is to promote public finances sustainability beginning by controlling some of its variables, such as public deficit, expenses and debt. Thereby, the paper seeks to understand Brazil's history in fiscal rules incorporation and its progressive imposition, of which the Constitutional Amendment 95/2017 is the most recent example. In this scenario, the introduction of fiscal rules on Brazilian legal and financial order represents not only the focus on certain components of public finances, but also a redefinition of the traditional conception of public budget as a neutral instrument - in other words, changeable by the variety of agents that operate in the governability scenario. For these reasons, it's intended to investigate how restrictions of political agents' behavior seek to rectify imbalances arising from public's budget indiscriminate use as an authorizing act of limitless expenditure that could control it beyond the budget law itself. Thus, an analysis of budget's legal nature is necessary to adapt it to the suitable control mechanisms in accordance with Brazil's legal order, among which fiscal rules are extremely relevant. (AU)