Economia & Região (Jan 2021)
The effect of state funds of combating poverty on the inequality of income of the Brazilian states: 2003-2014
Abstract
The objective of this study was to analyze the correlation between the State Funds to Combat Poverty contributed to the reduction of the income inequality of the states, from 2003 to 2014 due to Constitutional Amendment No. 31/2000. In order to achieve the proposed objective an econometric model of data analysis was developed in a fixed-effect panel, with the State Gini coefficient being the dependent variable that indicates the level of income concentration and the State Fund to Combat Poverty, an observation variable that explains the effect of the Fund on income inequality. According to the model used, the results show that the Fund had no significant effect on the reduction of inequality. Suggesting that the funds raised may be diverted from the proposed purpose, poorly managed or, due to its origin, may be generating the inverse effect on the distribution because its institution is from an additional ICMS tax rate, on the budget of the poorest sections of society.
