Cooperative Public Policy in Brazil: Can National Systems of Public Policies bring Rationality to the Allocation of Federal Discretionary Grants?

Given the central importance of discretionary grants to finance local governments in Brazil, the aim of this Conceptual Paper is to discuss how the implementation of national systems of public policies in Brazil can be coupled with the research agenda on the political economy of intergovernmental transfers. The 1988 Brazilian Constitution brought several changes regarding the competences of each sphere of government in the promotion of public policies. As a consequence, two complex types of national policy systems were constituted, both regulated at the federal level. The first system, characterized by compulsory membership, defines the participation of the subnational governments in health and education policies and ties resources of the three levels to its provision. The second type of system, characterized by voluntary membership, comprises a wide range of public policies such as culture, tourism, housing, among others. Even though in the second system membership is not mandatory, to access federal financial resources, several types of counterparts, financial and institutional, are required. Therefore, the expansion of national systems of public policies in Brazil, a highly decentralized federation, not only represents a movement toward a more cooperative federalism, as preconized by 1988 Brazilian Constitution, but also represents an institutional change that can encourage, in several areas, a more balanced and technical allocation of federal discretionary funds, reducing, as a consequence, the still predominant influence of political or partisanship factors. Moreover, the recent creation of several national systems of public policy in Brazil raises the question about the role played by local governments’ capabilities on the allocation of voluntary transfers, a theme that has been neglected by several studies dealing with tactical intergovernmental allocation.