Federalismo e Endividamento Subnacional: Uma Discussão Sobre a Sustentabilidade da Dívida Estadual e Municipal

The subnational debt in Brazil was marked by successive bailouts by the federalgovernment. The path of subnational debt induced some locals and state authoritiesto claim for further renegotiations. More specifically, some governors and mayorsdemanded a revision of the refinancing contracts.This article intends to present arguments sustained by simulations of theevolution of the path of the subnational debt, denying the necessity of changes inlegal framework which rules the state and municipal debt. The Section 1 consists of abrief overview. Section 2 treats of the institutional framework designed to safeguardthe fiscal intertemporal balance. In the Section 3, the implications of newinstitutional framework on the subnational debt are approached; in the Section 4, thepossible causes that distorted the expected path of the debt are discussed. Section 5analyzes the future perspectives for the debt in general terms and focuses somespecific cases, while the Section 6 discusses the problem under a federal optics.Finally, the conclusion is presented.