This paper shows that the rules established to control state and municipal debt in Brazil are inefficient. They cannot prevent the excessive growth of the debt nor avoid the approval of loans that have a negative benefit-cost relation. The paper uses theoretical models to show that the federal...

The objective of this article is to discuss alternatives to finance investments by municipalities. In general, current revenues are insufficient to finance large investments, what brings about the necessity of municipal indebtedness. These could assume different manners, according to the nature...