Abstract
With each new period of international insertion, the Brazilian state has sought capacity to promote dynamic sectors, evident in major, coincident changes to two institutions: federalism and tax. Coincident reforms mobilize new resources and achieve accommodations among elites leading different jurisdictions and levels of government. To make sense of these accommodations, this chapter explores the social relations of fiscal and federal affairs—fiscal federal sociology. In contrast to coincident reforms to advance state capacity, divergent reforms occur when fiscal agreements and/or accommodations among regional elites breakdown. The historical evolution of coincident and divergent reforms produces the current paradox of a Brazilian state that shows great capacity in some areas and some periods, but has experienced long periods of stagnation and regression.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
http://www.ibge.gov.br/seculoxx/estatisticas_economicas.shtm. Checked 3/19/07.
- 2.
As Furtado notes, “Unconsciously, Brazil undertook an anticyclical policy of larger relative proportions than had been practiced in industrial countries until that time” (Furtado, 1972: 192).
- 3.
The only sources of revenue which were moved from the subnational to the national level were the Unified Tax on Combustibles and Lubricants (IUCL, by the abbreviation in Portuguese) and the tax on rural properties. In relative terms, the states lost ground, but absolute revenues increased with GDP growth (Blanco Cossio, 2002).
- 4.
Municipalities received 10% of income tax, distributed equally, and they were required to spend half on rural development (Lopreato, 2002: 32).
- 5.
Furthermore, the states were required to share 30% of revenues with municipalities, provoking an increase from 2000 municipalities in 1946 to 4000 in 1960 (Blanco Cossio, 2002: 31).
- 6.
“On one hand, the tax format assured freedom to member units to manipulate tax and fiscal policy to defend their interests, and on the other, to create federal mechanisms to support peripheral oligarchies, such that they could reproduce their form of domination at the local level” (Lopreato, 2002: 34).
- 7.
Collier refers to “a type of authoritarianism characterized by a self-avowedly technocratic, bureaucratic, non-personalistic approach to policy making and problem solving” in which authors vary in the number of additional regime, coalition, and policy characteristics (1979: 364–371, 399–400).
- 8.
Institutional Act Number Five of 1968 cut federal transfers in half, and made them conditional on approval of local investment plans consistent with central government priorities. Furthermore, 1967 tax reform greatly diminished local revenues, and gave the central government power to grant exemptions. To access federal discretionary grants, states and municipalities had to provide their own matching funds, as well as cover current expenses associated with investments (Abrucio, 1998: 62–68).
- 9.
During the 1990s, total proceeds from privatization including transferred debts was $36.6 billion, led by $8.2 billion in steel, $6.9 billion in mining, $5.6 billion in electricity, and $4.0 billion in oil and gas (BNDES, 2000).
- 10.
- 11.
- 12.
Contributions now include social security, a social security contribution on business receipts (COFINS), a contribution to unemployment benefits for dismissed workers (FGTS), a health contribution on receipts (CSS), a welfare contribution on receipts (PIS), a public sector social security contribution (CPSS), a contribution on profits toward social security (CSL), a contribution on fuel toward education and health (CIDE), and for a time there was a contribution toward education and health on financial transactions (CPMF).
References
Abranches, S. (1988). Presidencialismo de Coalizao: O DilemaIs Institucional Brasileiro. Revista de Ciencias Sociais, 31(1), 5–34.
Abrucio, Fernando, & Samuels, David. 1997. A Nova Politica dos Governadores. Kriterion: Revista de Filosofia, 40, 135–167.
Abrucio, F. (1998). Barões da Federação. São Paulo: CEDEC.
Afonso, Jose Roberto. 2012. Desafios do Federalismo Brasileiro. Presentation.
Alston, L. J., et al. (2006). Pork for Policy: Executive and Legislative Exchange in Brazil. Journal of Law Economics and Organization, 22(1), 87–114.
Arida, Perseo, & Resende, Andre Lara. 1984. Recession and the Rate of Interest: A Note of the Brazilian Economy in the 1980s. Textos Para Discussão. PUC-RJ, 85.
Arretche, M. (2012). Democracia, Federalismo, e Centralizacao no Brasil. São Paulo: Fiocruz/Ed. FGV.
Baer, W. (2001). The Brazilian Economy (5th ed.). Chicago: Greenwood Publishing Group.
Ban, C. (2012). Brazil’s Liberal Neo-Developmentalism: New Paradigm or Edited Orthodoxy? Review of International Political Economy, 2290, 1–34.
Barros de Castro, A., & Pires de Souza, F. E. (1985). A Economia Brasileira em Marcha Forçada. Rio de Janeiro: Paz e Terra.
Blanco Cossio, Fernando Andrés. 2002. Ensaios sobre Federalismo Fiscal no Brasil. Ph.D. thesis, PUC-Rio, Rio de Janeiro.
Brautigam, Deborah, Odd-Helge Fjeldstad, and Mick Moore (2008). Taxation and State-Building in Developing Countries: Capacity and Consent. New York: Cambridge University Press.
Brautigam, D., Fjeldstad, O.-H., & Moore, M. (2009). Taxation and State-Building in Developing Countries. New York: Cambridge University Press.
Bresser Pereira, L. C., & Nakano, Y. (1987). The Theory of Inertial Inflation: The Foundation of Economic Reform in Brazil and Argentina. Boulder, CO: Lynne Rienner.
Bresser Pereira, Luiz Carlos. 1996. Da administração pública burocrática à gerencial. In Bresser-Pereira e Spink, orgs. Reforma do Estado e Administração Pública Gerencial. São Paulo: Editora.
Bresser Pereira, L. C. (2010). Taxa de câmbio, doença holandesa, e industrialização. Cadernos FGV Projetos, 5(14), 68–73.
Buchanan, J. M., & Wagner, R. E. (1977). Democracy in Deficit. New York: Academic Press.
Campello de Souza, M. d. C. (1976). Estado e Partidos Políticos no. Brasil (1930 a 1964). São Paulo: Alfa Omega.
Cohen, Y. (1994). Autoritarismo e Corporativismo no Brasil. New York: Academic Press.
Collier, D., & Collier, R. B. (1979). Inducements Versus Constraints: Disaggregating Corporatism. American Political Science Review, 73(4), 967–986.
Collier, D. (1979). The New Authoritarianism in Latin America. Princeton, NJ: Princeton University Press.
Collier, R. B. (1999). Paths Towards Democracy. New York: Cambridge University Press.
Diaz-Cayeros, A. (2006). Federalism, Fiscal Authority, and Centralization in Latin America. New York: Cambridge University Press.
Dillinger, B. (1995). Brazil – State Debt: Crisis and Reform. In World Bank Report 14842-BR. Washington, DC: World Bank.
Draibe, S. (1985). Rumos e Metamorfoses: Estado e industrialização no Brasil: 1930–1960. Rio de Janeiro: Paz e Terra.
Evans, P. (1979). Dependent Development: The Alliance of Multinational, State and Local Capital in Brazil. Princeton, NJ: Princeton University Press.
Fairfield, T. (2014). Private Wealth and Public Revenue in Latin America: Business Power and Tax Politics. New York: Cambridge University Press.
Furtado, C. (1972). Formação Economica do Brasil. Rio de Janeiro: Saraiva.
Gerschenkron, A. (1962). Economic Backwardness in Historical Perspective. New York: Cambridge University Press.
Gibson, E. (2012). Boundary Control: Subnational Authoritarianism in Federal Democracies. New York: Cambridge University Press.
Graham, L. (1990). Political Economy of Brazil. Austin: University of Texas Press.
Hagopian, F. (1996). Traditional Politics and Regime Change in Brazil. New York: Cambridge University Press.
Hamilton, A., Madison, J., & Jay, J. (1961). Federalist Papers. New York: New American Library.
IMF. (2001). Brazil: ROSC – Fiscal Transparency. In IMF Country Report 01/217. Washington, DC: IMF.
Levi, M. (1988). Of Rule and Revenue. Berkeley: University of California Press.
Lieberman, E. (2003). Race and Regionalism in the Politics of Taxation in Brazil and South Africa. New York: Cambridge University Press.
Lopreato, F. L. (2002). O Colapso das Finanças Estaduais e a Crise da Federação. São Paulo: Editora UNESP-IE.
Love, J. (1982). São Paulo in the Brazilian Federation. Stanford, CA: Stanford University Press.
Love, J. 2013. The Brazilian Federal State in the Old Republic: Did Regime Change Matter. Working Paper. Lemann Institute for Brazilian Studies.
Mann, M. (1984). The Autonomous Power of the State: Origins, Mechanisms, Results. European Journal of Sociology, 25(2), 185–213.
Martinez Fritscher, A. C., & Musacchio, A. (2009). Endowments, Cost of Capital, and Fiscal Federalism. NBER Working Paper 15411. Cambridge, MA: NBER.
Martin, I., Mehrota, A. K., & Prasad, M. (2009). The New Fiscal Sociology. New York: Cambridge University Press.
Moore, M. (2004). Revenues, State Formation, and the Quality of Governance in Developing Countries. International Political Science Review., 25(3), 297–319.
Nobre, M. 2010. O Fim da Polarização. Revista Piaui. http://piaui.folha.uol.com.br/materia/o-fim-da-polarizacao/
Oates, W. (1971). Fiscal Federalism. New York: Harcourt Brace Jovanovich.
Pereira, C., Power, T., & Renno, L. (2005). Under What Conditions do Presidents Resort to Decree Power? Theory and Evidence from the Brazilian Case. Journal of Politics, 67(1).
PINHEIRO, Armando Castelar; FUKASAKU, Kiichiro (Ed.). A privatização no Brasil: o caso dos serviços de utilidade pública. Rio de Janeiro: Banco Nacional de Desenvolvimento Econômico e Social, 2000.
Reuschemeyer, D., Stephens, E. H., & Stephens, J. (1992). Capitalist Development and Democracy. Chicago: Chicago University Press.
Rezende, A. L. (1982). Recessão e Ajuste Estrutural o Brasil Diante Da Crise da Divida Externa. Rio de Janeiro: Paz e Terra.
Riker, W. H. (1964). Federalism: Origin, Operation, Significance. Boston: Little Brown.
Rodden, J. (2006). Hamilton’s Paradox: The Promise and Perils of Fiscal Federalism. New York: Cambridge University Press.
Ross, M. (2014). What Have We Learned About the Resource Curse. Annual Review of Political Science, 18, 239–259.
Sallum Júnior, B. (1994). Transição política e crise de Estado. Lua Nova, 32, 133–167.
Samuels, David (2003). Ambition, Federalism, and Legislative Politics in Brazil. New York: Cambridge University Press.
Schmitter, P. (1971). Still the Century of Corporativism? Review of Politics, 36(1), 85–31.
Schneider, A. (2012). State-Building and Tax Regimes in Central America. New York: Cambridge University Press.
Schumpeter, Josef. 1917. The Crisis of the Tax State (Reproduced in Swedberg, Richard, 1991). The Economics and Sociology of Capitalism. Princeton, NJ: Princeton University Press.
Snyder, R. (2004). Federalism and Democracy in Latin America. Baltimore: Johns Hopkins University Press.
Stepan, A. (1975). The Military in Politics: Changing Patterns in Brazil. Princeton, NJ: Princeton University Press.
Stepan, A. (1978). The State and Society: Peru in Comparative Perspective. Princeton, NJ: Princeton University Press.
Stepan, A. (2000). Federalism and Democracy: Beyond the US Model. Journal of Democracy, 10(4), 19–34.
Tendler, J. (1997). Good Government in the Tropics. Baltimore: Johns Hopkins Press.
The BNDES (2000). PINHEIRO, Armando Castelar; FUKASAKU, Kiichiro (Ed.). A privatização no Brasil: o caso dos serviços de utilidade pública. Rio de Janeiro: Banco Nacional de Desenvolvimento Econômico e Social, 2000.
Varsano, R. (1996). A evolução do sistema tributário brasileiro ao longo do século: Anotações e reflexões para futuras reformas. Rio de Janeiro: IPEA.
Webb, S. 2004. Fiscal Responsibility Laws for Subnational Discipline: The Latin American Experience. Policy Research Working Paper Series 3309. Washington, DC: World Bank.
Ziblatt, D. (2008). Structuring the State: Formation of Italy and Germany and the Puzzle of Federalism. Princeton, NJ: Princeton University Press.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Schneider, A. (2018). State Capacity and Development: Federalism and Tax in Brazil. In: Atria, J., Groll, C., Valdés, M. (eds) Rethinking Taxation in Latin America. Latin American Political Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-60119-9_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-60119-9_3
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-60118-2
Online ISBN: 978-3-319-60119-9
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)