CONGRESS AS ENGINEER OF FISCAL FEDERALISM

Abstract

This paper examines the role of the National Congress as a structuring and conditioning agent of Brazilian fiscal federalism, within the broader study of state organization and the distribution of tax, budgetary, and financial powers. The research asks how congressional legislative action strengthens the federative pact while simultaneously generating institutional tensions and limitations. The main goal is to understand how the Legislature designs fiscal arrangements, mediates conflicts, and shapes the actions of other branches. The study employs a qualitative, historical-institutional analysis based on literature review, examination of the 1987-1988 Constituent Assembly, subsequent tax reforms, constitutional amendments, and related legislation. Findings show that Congress not only defines revenue-sharing criteria but also directly influences the autonomy of subnational entities and their capacity to finance public policies. The study concludes that congressional action is marked by paradoxes: it reinforces federative democracy by creating cooperative mechanisms, yet its fragmentation and legislative inaction generate gaps that foster judicialization and delegate the resolution of conflicts to the Federal Supreme Court. Therefore, Congress stands as a central—though limited—actor in building and maintaining Brazil’s fiscal federalism.