Fiscal Responsibility Law: effects and impact on Alagoas’ municipalities in the period 2000-10

Abstract

This paper studies the effect of the law of Fiscal responsibility (LRF) on public finances of Alagoas’ municipalities. There was the option of working a theoretical reference less formalist and more critical in relation to the introduction of the new legislation. In the methodology, we manipulated information and data available by the National Treasury Department, raising statistics on those municipalities. Based on fiscal performance and capacity ratings, it was confirmed, on the whole, the success of the pretensions of the LRF in the period 2000-2010. The calculations indicate that these limits were reached, but it was found that they do not guarantee long-term fiscal balance. We conclude that the concept of fiscal responsibility needs to be revisited and this condition does not warrant the municipalities the allocation and distribution capacity of resources more efficiently, in the context of routine changes in national economic policy.