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Desenho de um sistema de metas sociais

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  • Neri, Marcelo Côrtes
  • Xerez, Marcelo
Abstract
This paper discusses the economic rationality of a system of social targets, as a way for the federal government to increase efficiency in the use of its social budget transferred to municipalities. The paper develops extensions of a standard principal-agent framework in various directions including static models with and without imperfect information. The results of the static models show that the use of the standard focalization criteria where the poorest municipalities get more resources may lead to adverse incentives to poverty eradication. We also show that unconditional transfers from the federal government crowds-out local social expenditures. This paper argues in favor of the use of contracts where the greater the improvement in relevant social indicators, the more resources each municipality would receive. The introduction of imperfect information in the model basically generates a penalty to the poor segments in areas where local governments are less averse to poverty. An advantage of the contract with social targets is to reduce the problem of political favoritism when certain social groups receive greater, or smaller, attention from specific governments. With the establishment of social targets it becomes possible to generate proper incentives, so that social spending is distributed more equitably among groups.

Suggested Citation

  • Neri, Marcelo Côrtes & Xerez, Marcelo, 2003. "Desenho de um sistema de metas sociais," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 519, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    • Handle: RePEc:fgv:epgewp:519
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    References listed on IDEAS

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    1. Laffont, Jean-Jacques & Tirole, Jean, 1987. "Comparative statics of the optimal dynamic incentive contract," European Economic Review, Elsevier, vol. 31(4), pages 901-926, June.
    2. Neri, Marcelo Côrtes & Costa, Daniela Ribeiro da, 2002. "O tempo das crianças," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 468, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    3. Azam, Jean-Paul & Laffont, Jean-Jacques, 2003. "Contracting for aid," Journal of Development Economics, Elsevier, vol. 70(1), pages 25-58, February.
    4. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, April.
    5. Jean-Jacques Laffont & Jean Tirole, 1990. "Adverse Selection and Renegotiation in Procurement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(4), pages 597-625.
    6. Frederic S. Mishkin, 2000. "Inflation Targeting in Emerging-Market Countries," American Economic Review, American Economic Association, vol. 90(2), pages 105-109, May.
    7. André Minella & Paulo Springer de Freitas & Ilan Goldfajn & Marcelo Kfoury Muinhos, 2003. "Inflation targeting in Brazil: lessons and challenges," BIS Papers chapters, in: Bank for International Settlements (ed.), Monetary policy in a changing environment, volume 19, pages 106-133, Bank for International Settlements.
    8. Laffont, Jean-Jacques & Tirole, Jean, 1988. "The Dynamics of Incentive Contracts," Econometrica, Econometric Society, vol. 56(5), pages 1153-1175, September.
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    Cited by:

    1. Moreira, Humberto Ataíde & Araújo, Aloísio Pessoa de & Castro Filho, Luciano I. de, 2004. "Pure strategy equilibria of multidimensional and non-monotonic auctions," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 571, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    2. Fernando de Holanda Barbosa, 2017. "Competitive Equilibrium Hyperinflation Under Rational Expectations," SpringerBriefs in Economics, in: Exploring the Mechanics of Chronic Inflation and Hyperinflation, chapter 0, pages 77-91, Springer.
    3. Athayde, Gustavo M. de & Flôres Junior, Renato Galvão, 2004. "Do higher moments really matter in portfolio choice?," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 574, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    4. Marcelo Côrtes Neri & Marcelo Casal Xerez, 2004. "Aspectos Dinâmicos De Um Sistema De Metas Sociais," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 055, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Horowitz, Andrew W. & Flôres Junior, Renato Galvão, 2004. "Beyond indifferent players: on the existence of prisoners dilemmas in games with amicable and adversarial preferences," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 576, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    6. Buchmann, Gabriel & Neri, Marcelo Côrtes, 2008. "From dakar to Brasilia: monitoring unesco´s education goals," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 685, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).

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