Analysis of the Northeast Constitutional Financing Fund (FNE) on Municipal Economic Indicators in the Period 2010–2020

Kerlen Andrade Do Monte, Guilherme Irffi, Felipe de Sousa Bastos and Diego Rafael Fonseca Carneiro

Journal of Regional Science, 2025, vol. 65, issue 3, 678-697

Abstract: This paper aims to evaluate the effects of the Constitutional Fund for Financing the Northeast (FNE) on the regional economy during the period from 2010 to 2020. To achieve this objective, we used the Generalized Propensity Score (GPS) econometric methodology, applying the analysis of dose–response functions proposed by Imbens (2000) and Hirano and Imbens (2004). We found evidence of positive and increasing impacts on the economic indicators of the municipalities benefiting from the FNE. Notably, we observed significant effects on Average Income, GDP per capita and Wage Mass when the resources were directed to women and legal entities. The results also suggest that there is some heterogeneity in the effect of the FNE according to the magnitude of the volume of credit contracted, with the exception of Average Income, which does not show an effect when the resources were contracted by women. In the case of total transfers, positive impacts on average income, GDP per capita and wage mass were observed only in the last levels of treatment. In summary, we can infer that FNE resources have a positive impact on the economic indicators of municipalities with higher contracted values. Este artigo visa avaliar os efeitos do Fundo Constitucional de Financiamento do Nordeste (FNE) na economia regional durante o período de 2010 a 2020. Para alcançar esse objetivo, utilizamos a metodologia econométrica Generalized Propensity Score (GPS), aplicando a análise das funções dose‐resposta proposta por Imbens (2000) e Hirano e Imbens (2004). Encontramos evidências de impactos positivos e crescentes nos indicadores econômicos dos municípios beneficiados pelo FNE. Notadamente, observamos efeitos significativos na Renda Média, PIB per capita e Massa Salarial quando os recursos foram direcionados a mulheres e pessoas jurídicas. Os resultados sugerem ainda que há certa heterogeneidade do efeito do FNE de acordo com a magnitude do volume de crédito contratado, com exceção da Renda Média, que não apresenta efeito quando os recursos foram contratados por mulheres. No caso das transferências totais, impactos positivos sobre a renda média, PIB per capita e a massa salarial foram observados apenas nos últimos níveis do tratamento. Em síntese, podemos inferir que os recursos do FNE impactam positivamente os indicadores econômicos dos municípios com maiores valores contratados.

Date: 2025
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