PUBLIC INVESTMENTS AND THE BUDGET POLICY CYCLE IN LARGE BRAZILIAN MUNICIPALITIES.

Abstract

This research analyzed public investments and the possible occurrence of budget political cycles in the large Brazilian municipalities during the period from 2005 to 2016. The study sample comprised 35 municipalities with population over 500 thousand inhabitants, based on the 2010 census data of the Brazilian Institute of Geography and Statistics (IBGE). The study is based on the assumption that in electoral years, politicians tend to expand public investment spending as a way of making a positive impression on voters and, as a result, gaining political advantage. To identify the possible occurrence of budget political cycles, data were collected on public investment spending of large Brazilian municipalities in the STN/Finbra database. The analysis was performed using the panel data. The results found were contrary to expectations, since there was no evidence of the occurrence of budgetary policy cycles in public investment spending of large Brazilian municipalities, from 2005 to 2016, unlike the results of similar studies performed.