A Perspective on Public Debt and Fiscal Rules

Abstract

In Brazil, over the past 25 years since the enactment of the Fiscal Responsibility Law, discussions on fiscal targets, public spending, social policies, infrastructure investments, public budgeting, and debt sustainability have become increasingly interwoven and more prominent in major newspapers, television news, social media, and civic-political debates at all levels of democratic participation and decision-making. These topics, although highly relevant to the country’s development and the population’s well-being, are technical and often, depending on the approach, tedious and difficult to understand. This article, centered on the core issue of controlling public indebtedness through fiscal rules, aims to address, from a broader and more integrated perspective, related public finance discussions by revisiting literature, texts, and studies pertinent to historical, theoretical, technical, institutional, conjunctural, and systemic-normative aspects of responsible fiscal management—such as the Fiscal Responsibility Law, the Public Spending Cap, and the New Fiscal Framework—with the objective of building a vision that goes beyond specialized theoretical and technical aspects and constitutes a holistic approach relevant to understanding the broader framework of the subject.