RESILIÊNCIA ECONÔMICA E A PANDEMIA: o orçamento municipal como instrumento de adaptação ao choque recessivo.
The budget of Brazilian municipalities changed with the 1988 Federal Constitution and the Fiscal Responsibility Law since decentralization elevated municipalities as federal entities, generating new responsibilities for implementing public policies and new revenue and expenditure allocations. However, there is a research gap in Brazil regarding the ability of municipal budgets to adapt to economic crises. Thus, this research aims to investigate the extent to which municipal budgets are associated with resilience in the recessionary shock of the COVID-19 pandemic in 152 municipalities with more than 200,000 inhabitants. To this end, the averages and regressions of revenues and expenses of the municipalities analyzed between 2018 and 2021 were analyzed based on the Summary Budget Execution Report (RREO), released bimonthly by the federal entities. Brown's 10-Point Test was also implemented to analyze municipalities' ability to adapt to recessionary shocks. The results show that Federal Transfers were responsible for keeping the level of revenue stable since there was a drop in ISS, ITBI, and State Transfers. In addition, the expected effect of increased spending on Health was expected, but the results differed from those anticipated in expenditures on Education and Urban Planning. The research opens up the research agenda in Brazil on economic resilience and fiscal federalism, which can contribute to future discussions on mechanisms for adapting local budgets to financial crises.