Fiscal resilience of Brazilian states: a methodological-applied proposal to support the preventive action of Courts of Accounts

Abstract

This article develops and applies a methodology to operationalize the construct of fiscal resilience in the context of Brazilian governmental entities, with the aim of providing an additional analytical tool to support the external oversight carried out by Courts of Accounts. Grounded in the Governmental Financial Condition (GFC) literature and in resilience approaches applied to the public sector, the study uses Principal Component Analysis (PCA) to process fiscal indicators for all Brazilian states between 2015 and 2024. The technique enabled the extraction of three structural dimensions that make up an overall resilience rating. The findings reveal that economic size, in itself, does not ensure greater fiscal resilience. While states such as Goiás, Mato Grosso, and Rondônia were classified in higher rating tiers, economically larger entities such as Rio de Janeiro, Minas Gerais, and São Paulo appear at lower levels due to structural fiscal constraints that reduce their fiscal response capacity. As a contribution, the article offers a methodological tool to support the comparative identification of fiscal vulnerabilities, with potential complementary application in fiscal analyses within the scope of the Courts of Accounts.