A Brazilian municipal bond market: theory, repression and prospects

Abstract

I n 1 8 9 0 , H e n r y A d a m s lamented municipal corruption in the US caused by credit practices and compounded by a liberal bias against public finance that reproduced underdevelopment o f l o c a l g o v e r n m e n t a n d marginalized municipal managers. The development of a municipal bond market proved critical for reversing repression of local public finance, reducing corruption, sustaining growth and modernizing government. Over a century later, the US$3.2 trillion municipal bond market provided safe haven for investors in the US amidst the 2008