Oil Royaties and Socialand Economic Development: the Case of Espírito Santos State

Abstract

Abstrat: The institutional reform implemented in the national oil industry in the second half of nineties generated two kind of impacts. Firstly, it stimulates the oil and gas production; moreover, as a consequence of this larger production and changes in legislation, it did the government participation grow substancialy, mainly royalties. Such resources have been important for the public finances of some states and many cities in Brazil. However, the aplication of this resources by public administrations, by and large, have been failed, i.e., in many cases the intergenerational question has not been observed and the resources of royalties are not invested, in a clear way for society, in the search of economic development. This paper aims to present some types of dificulties (institutional and political) that induce the governants to follow that problematic trend, and, within this context, analyse the recent case of Espírito Santo state and its cities.