The turn of the last century saw two important pieces of legislation introduced in Brazil: the Law of Fiscal Responsibility or LFR (2000) and the Statute of the City (2001). Each legislative act has been separately celebrated for introducing progressive reforms, however in this article I argue that a combination of the LFR’s strict fiscal rules and accounting practices is engendering vulnerabilities for social mandates in cities requiring large capital investments, like slum upgrading. In the city of São Paulo, municipal agencies dedicated to upgrading settlements have seen declines in the relative importance of their budgets since the introduction of the LFR. By presenting budget trends in São Paulo and discussing how the LFR regime has influenced for and by whom upgrading decisions are made, this research reveals that a perversion of intents behind both the LFR and the Statute of the City is evident in practice in São Paulo. More here.
