Local Government Capacity in Brazil: An Index Proposal

Resumo

Understanding government instruments and state capacities are critical to comprehend socioeconomic development and public policy performance. The topic assumes greater importance in decentralized political systems, given the constitutional role of sub-national units in policy design and implementation. Our knowledge about local government capacities, how they can be measured, and how they relate to social-economic outcomes is, nonetheless, limited. This paper develops a conceptual framework to measure a multidimensional index of Local Government Capacity (LGC) in Brazil. Three LGC dimensions were defined: 1) Fiscal Management Capacity; 2) Political Capacity; and 3) Administrative Capacity. Using official databases for the years 2011 and 2012, covering a sample of 5,565 municipalities, exploratory factor analyses were employed to calculate, for each municipality, sub-indexes for the three capacity dimensions. The final LGC construct was calculated, then, averaging the sub-indexes. The results suggest that the process of decentralization in Brazil is still marked by inter-regional disparities.