Coercion in Disguise? A Reassessment of Brazilian Education and Health Reforms

In federations and other regionalised arrangements, the search for co-operation may lead to a hierarchical alignment where the centre concentrates policy decision-making power. The use of conditional grants to build this kind of co-ordination can disguise its rather coercive character when opt-out clauses are counteracted by fiscal constraints that virtually force subnational adherence. Previous accounts on recentralisation in Latin America have overlooked this feature, particularly by mistakenly identifying the transfer of fiscal resources and responsibilities with authority over policies. The article adopts a configurational approach, focused on mechanisms, to reassess two Brazilian programmes redesigned in the 1990s and 2000s – the Fundamental Education Fund (Fundef) and the Basic Health Care Programme (Programa de Atenção Básica, PAB). Our evidence shows that both reforms followed hierarchical paths and received massive adherence of municipalities. We discuss how this kind of coercion in disguise is especially concerning in settings where some retrenchment of social expenditure is expected.