State capacity and public debt in Brazil: The case of the National Treasury

ABSTRACT

Introduction:

The literature on state capacity has grown in recent decades, but several theoretical and methodological problems have been pointed out in studies on the subject. Even guided by policymakers’ concerns, the concept can also have analytical utility. Thus, this article resumes and redefines it to explain processes of transformation within the Brazilian State.

Materials and Methods:

We conducted here a case study of the process of capacity building in the fiscal area by the State in Brazil. The empirical object of analysis is the National Treasury Secretariat of the Ministry of Finance, an agency created in the context of the State’s fiscal crisis, in charge of public debt management and unified control of the federal government’s budget execution. The empirical material of the analysis is composed of qualitative and quantitative elements.

Results:

In dialogue with the literature and distinguishing the capacity for results, the analysis shows that despite the temporal variations presented by the fiscal area (greater or lesser deficit, greater or lesser level of indebtedness), which depend on contingent economic factors, it is possible to verify the existence of state capacity in public debt management in Brazil, resulting from the deliberate action of the economic bureaucracy, carried out over several decades and which remains as a feature today constituting the Brazilian State.

Discussion:

The preliminary findings seek to contribute to the literature on state capacities and affirm their analytical usefulness insofar as it allows to account for a specific form of power, that exercised by bureaucracy.

KEYWORDS:
state capacity; public debt management; National Treasury Secretariat; economic bureaucracy; Brazilian State