The Determinants of Fiscal Health: An Exploration of Municipalities in Brazil

The public administration literature has largely focused on local government fiscal health, mostly using data from the U.S. However, how well does this research hold up in other contexts? Using data from 5,524 municipalities from 2013 to 2021, we explore determinants of financial conditions, employing two financial indicators tailored to Brazil’s context: operational positioning and immediate liquidity. Our findings reveal that municipalities with experienced mayors and greater fiscal autonomy tend to have more favorable fiscal conditions. While local characteristics such as per capita income, population size, and density occasionally played a role, they were not consistently the most significant factor.