Political Determinants of Fiscal Centralization: empirical evidence from Brazil.

This paper examines the theory of the median voter as an explanatory model on the choices for fiscal design in federal systems. According to this model, local governments support fiscal centralization when this decision corresponds to the preference of its median voter. This model is discussed in connection with the decisions adopted by the Brazilian Constituent Assembly of 1988 on fiscal design. From this discussion, the paper proposes an alternative explanation on the choices for fiscal designs, which takes into account not only the preference of the median voter for levels of taxation, but also the preferences of local government representatives for fiscal designs that involve an increase in revenue for local government and, primarily, do not impose revenue losses or risks of revenue losses related to the status quo. [ABSTRACT FROM AUTHOR]