Analysis of the effect of federal, state and municipal social spending on poverty in Brazil − 1988 to 2010

Abstract

The total amount of public social (three levels of government) spending in Brazil reached about R$ 800 billion in 2009, 30% of Brazilian GDP. Due to this increasing and expressive volume, this article analyzes the effect of the three levels of government social spending on poverty in Brazil − federal, state and municipal. Four models were estimated with a nineteen years’ state panel data (1988-2009) analyzing the federal and state spending effect. We also estimated the municipal expenditure effect on poverty (1991, 2000 and 2010) in 5.058 municipalities. The results demonstrated that spending on health sanitation has the greatest effect on poverty reduction in Brazil, followed by spending on social security and assistance, education and culture, housing and urbanism and investment.