Limited access to credit has been identified as a major constraint to sustainable municipal development, but empirical evidence on the effectiveness of credit operations remains inconclusive. This paper evaluates the impact of federal government guaranteed loans on public expenditures. Using data from Brazilian municipalities and a regression discontinuity design that leverages a discontinuity in the eligibility criteria for federal government guarantees, I show that the loans have a positive impact on the quality of local expenditure and social outcome indicators. This impact is characterized by a significant increase in investment while keeping personnel expenditures stable.
Authors
- DOI
- http://dx.doi.org/10.18235/0013241
- Pages
- 58
- Published in
- United States of America
Table of Contents
- Introduction 5
- Institutional Background 9
- Brazilian Fiscal Federalism 9
- Rules to Access Loans 12
- Empirical Strategy 16
- Data 17
- Research Design 19
- Descriptive Statistics 25
- Results 29
- First Stage 29
- Complier Profiling 30
- Effects in Public Finance 35
- Effects in Public Policy Outcomes 40
- Robustness Checks 45
- Summary and Conclusions 45
- Access to loans and local development_COV.pdf -1
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