Luci Nychai

The prevailing view of New Public Management (NPM), disseminated from the State reform, advocated the municipal fiscal equilibrium based both on rational and instrumental action of the public manager as on the enforcement of formal rules. However, the reality of fiscal management of Brazilian municipalities is characterized by different levels of performance that is distant from the fiscal equilibrium endorsed by NPM. Of the total number of Municipalities, 66% are in difficult or critical fiscal situation. As much as the NPM has valued the figure of the public manager, it did it as a rational and instrumental applicator of formal rules capable of achieving fiscal equilibrium, non-cognitive institutional implications. It is understood that the NPM relaxed the incidence of informal norms, i.e. the beliefs, values, norms of behavior, perceptions that are shaped through the mental model of the manager and influence in the choices and decisions that impact on municipal fiscal performance. This premise, formal rules bound the conduction and the consequent fiscal performance, but the informal norms shaped internally by sociocultural inputs and the path dependence through the mental model. The mental model also receives the influence of the path dependence intra and inter-cycle. Based on that, this study aims to analyze the influence of sociocultural factors and the path dependence that impact on fiscal management performance of Brazilian municipalities from the New Institutional Economics’ mental model approach. Methodologically, the study encompasses two four-year terms of municipal management from 2005 to 2008 and from 2009 to 2012, for which data covered 5250 municipalities. We perform the analysis with descriptive statistics and robust type regressions, named Multivariate Regression (MVREG) and Multinomial Probit Regression (MPROBIT). The functions estimated the influences of the shared sociocultural inputs delimited by the experience, education and partisan political spectrum, and personal factors among them stand out the age, sex and marital status, as well as the intra and inter-cycle path dependence and the municipal demographic and economic size according to the levels of mental model of fiscal performance: low, medium and good. The results suggest that the sociocultural impact on the in fiscal performance through mental model of the fiscal manager has significant effects, differentiating between low, medium, and good fiscal performance according to the general dimension, the local revenues, the wage expenses and investment under the induction of path dependence intra and inter-cycle according to economic-demographic size. We characterized the mental model of municipal fiscal management performance as flexible or rigid and restrictive or no restrictive, according to induction of path dependence on sociocultural factors.We conclude that the fiscal condition of Brazilian Municipalities should be understood from a cognitive-institutional vision that goes beyond the simplified look at the instrumental and rational application of formal rules from its change as recommended by the NPM. The analysis must include, in addition to the local economic that are conditions determinants in the generation of public revenues, wages and investment expenditures, and additional reflexes from informal rules shaped in the form of mental model of the fiscal manager (trough sociocultural and individual inputs) with induction of intra and inter-cycle path dependence.