Mandatory budget and fiscal transfers of article 166-A of the Constitution: notes on legal architecture, accountability and corruption

Abstract

The purpose of this paper is to fill a gap in the doctrine on the legal regime of intergovernmental transfers of article 166-A of the Constitution - introduced by Constitutional Amendment 105/2019. Thus, we address the following problems: What would be the legal regime applicable to mandatory transfers resulting from parliamentary amendments to the public budget (art. 166-A of the CF)? Mandatory transfers to whom? Who has the duty to transfer: the subnational governments or the Executive Branch? What are special transfers? What about transfers with a specific purpose? What are the limits? What is the destination of the resources? Who owns the transferred funds? Where is it spent and under what conditions? Who controls? What about the criticisms regarding accountability and corruption in this context? Three conclusions can be highlighted: (1) The special transfer, an unconditional transfer form, was the type that represented the true innovation presented by the text of article 166-A in the Constitution, allowing the immediate transmission of ownership of the resources transferred to subnational governments with broad power to define expenses. The transfer with a specific purpose, in fact, is conceptualized by exclusion and it is a general regime of fiscal decentralization observed by the parliamentary amendments, being able to follow countless procedures of transfer of resources. In practice, these transfers were already carried out before Constitutional Amendment 105/2019. (2) There are no violations of the eternity clauses (paragraph 4 of article 60 of the Brazilian Constitution) by article 166-A. (3) One should make a systematic interpretation between Article 166-A and Article 163-A of the Constitution, as special transfers do not escape the duties of transparency and accountability duly ensured on a public platform with world wide access.