Fiscal war in Brazil and state productive structure alterations since the 1990's

Author(s)

Soraia Aparecida Cardozo

• Document type: Doctoral Thesis
• Press: Campinas, SP.
• Institution: Universidade Estadual de Campinas (UNICAMP). Instituto de Economia
• Defense date: 2010-05-02

Examining board members

Wilson Cano; Ana Lucia Gonçalves da Silva; Fabricio Augusto de Oliveira; Reinaldo Souza Santos; Sergio Roberto Rios do Prado

• Advisor: Wilson Cano

Abstract

This thesis aims at examining to what extent 'fiscal war' interferes in the dynamics of industrial activity decentralization process in Brazil. In doing so, it is intended to respond to the following questionings: facing national policies dismantling, which focused on regional development and heterogeneity obliteration among the different regions, how much can state tax and financial incentives alter inter-regional labor division and change territorial productive specializations? Do fiscal incentives necessarily change state industrial activity within national production? Do they bear straight relation to the state productive structures' alterations? The subsidizing data, for the present analysis, illustrate that tax reduction do not necessarily contribute to regional industrial activity decentralization. Furthermore, many of the activities which were favored by the aforementioned incentives and presented spatial decentralization were also influenced, to a considerable extent, by other conditioning circumstances, mainly observed in non-durable consumer goods' producing activities. Industrial activities classified as producers of capital goods and consumer durables were largely favored by fiscal incentives; nevertheless, their decentralization was restricted to the South and Southeast regions, with exception to those activities developed in Manaus Tax-Free Zone, assembly lines in BA and GO, as well astechnological devices' assembly lines also in BA. It has also been observed that states presenting a less diversified and less complex productive structure incur great difficulties so as to attract enterprises producing more complex goods and with reater technological value. The decentralizing policies' frailties are also revealed when one acknowledges that different Federal States withstand an incredibly different capacity to attract investment, what one could notice based on the resources directed to the companies under state taxation for Products and Services Circulation Tax (ICMS). It has been verified, therefore, that state policies, in the format of fiscal competition assumed in the 1990's, consist in public resources transfer to the private sector without having these resources necessarily effecting positively on the State part in the national industry transformation (AU)