REGIONAL WEIGHTS: A PROPOSAL FOR THE DISTRIBUTION OF THE FUND FOR PARTICIPATION OF THE MUNICIPALITIES (FPM)

Abstract

This study applies the methodology of the regional social welfare weights for the distribution of the Fundo de Participação dos Municípios (FPM). Microdata from the 2010 IBGE Census were used to calculate welfare weights for Brazilian municipalities using two methods: per capita income and EDEI (equally distributed equivalent income). It is shown that the actual distribution of FPM is not spatially progressive, whereas the one proposed here is more equitable, benefiting the poorer and more unequal municipalities. This example illustrates the potential applications of the methodology of regional weights for the design and evaluation of public policies.