Fiscal Effort, Expenditures and Petroleum Royalties: a case study for Sao Paulo coast.

• Grant number: 09/09249-6
• Support Opportunities: Scholarships in Brazil - Scientific Initiation
• Effective date (Start): September 01, 2009
• Effective date (End): August 31, 2010
• Field of knowledge: Applied Social Sciences - Economics - Fiscal and Monetary Policies
• Principal Investigator: Fernando Antonio Slaibe Postali
• Grantee: Lauro Carnicelli
• Host Institution: Faculdade de Economia, Administração e Contabilidade (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil

Abstract

From 1997, the Petroleum Law established new criteria for the sharing of oil rents (royalties) to states and municipalities, substantially increasing such revenue for these federal entities. This work aims to elaborate a case study on the relationship between efficiency of public sector and petroleum royalties in the coastal municipalities of São Paulo that are major recipients of royalties. The main objective is to examine if there is evidence of reduced tax effort in these municipalities, as a result of this increase in oil rents. The secondary purpose is to study the evolution of some components of its expenditure budget, such as spending on personnel, funding, education, health and investment, trying to assess possible evidence of flypaper effect, ie an increase in budgetary expenses resulting from royalty transfers.