A propositional analysis of local government capacity in Brazil

This article aims to build a multidimensional index of Local Government Capacity (LGC) based on the Brazilian case and define a multidimensional concept of local government capacity. Three dimensions of the LGC were defined: 1) Fiscal Management Capacity; 2) Political Capacity; 3) Administrative Capacity. Using official databases from 2011 and 2012, covering a sample of 5,565 municipalities, exploratory factor analyzes were used to calculate, for each municipality and create subindexes for the three capacity dimensions. The final LGC was calculated by averaging the subindexes. Observing instruments of government and capabilities of the State is fundamental to understanding socioeconomic development and the execution of public policies. The issue matter in a decentralized federative system, where local governments are constitutionally responsible for formulating and implementing policies. The results suggest that the decentralization process in Brazil is still marked by regional inequalities that influence the capacities of local governments.