Fiscal federalism in theory and practice: Brazil by Teresa Ter-Minassian published by IMF, eLibrary (9/1997).
“The history of intergovernmental fiscal relations in Brazil has been characterized by alternating phases of decentralization and recentralization. The period of the dictatorship, from the mid-1960s to the mid-1980s, was marked by strong centralist tendencies, with a clearly dominant role of the federal government and its enterprises in the management of public resources, as well as in the economy as a whole. The democratization process, culminating in the enactment of the 1988 Constitution, was accompanied by a resurgence of decentralization trends. These tendencies have been especially marked on the revenue side, resulting in a relatively high degree of control over revenue sources by the state and local governments, compared with other large federations around the world.
In 1995, own tax revenues of the subnational governments accounted for nearly 38 percent of total tax revenues (including social security contributions) and were equivalent to 10.5 percent of GDP. The share of tax revenues at the disposal of subnational governments (defined to include own plus shared revenues) represented nearly 50 percent of total tax revenues (Tables 1 and 2). In the same year, state and local governments accounted for about 60 percent of public consumption and for 63 percent of public investments. By contrast, the federal government (mainly through the social security system) maintained a preponderant (over 80 percent) share in social transfers (Table 3)…”