To understand the Brazilian fiscal question: an unorthodox approach to fiscal policy after the Real Plan

Abstract

ABSTRACT The present work aims to analyze fiscal policy in Brazil after the Real Plan from an unconventional perspective, that is, with primary focus on political and institutional aspects. The evolution of analytical indices between 1995 and 2010 points to a highly relevance of the interest payments on public debt, that were accommodated by the policy of getting primary surpluses and increasing the tax burden, with great imbalance in the total budget outcomes. These results demonstrate the existence of a high cost that fiscal policy should bear created by the contractionary monetary policy, in correspondence with the interests of financial capital. On the other hand, starting at 2003, there is a raise in public investment and social transfers, representing a change in public spending structure. Didactically, the paper defines the logic which structures fiscal policy after the Real Plan. Key-words Brazilian economy; Fiscal Policy; government debt. Clasificação JEL: H11, H60 Artigo recebido em mar. 2012