Fiscal Federalism and Decentralization in the Unified Health System: evidences from a natural experiment

Abstract

The objective of this article is to verify to what extent the intergovernmental transfer of the Fundo de Participação dos Municípios (FPM), associated with the audits of municipal accounts carried out by the Controladoria Geral da União (CGU), can be important for social well-being, measured through of maternal and child health indicators. The results suggest that the effectiveness in the allocation of public resources, in improving the health indicators of the municipalities, is only verified in audit situations, that is, on average, a 1% increase in transfers, when auditing is present, resulted in in a 0.5% drop in mortality indicators.