Incluye bibliografía

Executive summary -- 1. Introduction -- 2. Revenue-sharing and tax assignment -- 3. Expenditures on education -- 4. The federal voluntary educational transfer system -- 5. The fundo de valorizacao do magisterio (FVM) -- 6. Conclusion -- 7. Update -- Bibliography.

Brazil has a federal government with a decentralized education system and unequal sub-national government financing. Tax assignment and revenue sharing among municipalities, states, and the Union, have a detrimental impact on educational financing. This study analyzes Brazil ' s budget for FY95, with two broad objectives in mind, namely, to review and analyze inequalities in education financing through federal taxation and revenue sharing, and to describe the works of the Fund for Maintenance and Development of Primary Education and Valorization of Teachers (Fundo de Valorizacao do Magisterio - FVM). Through a simulation process of educational expenditures under the Fund ' s legislature, i.e., had it existed in 1995, the study compares both case scenarios using two common measures of inequality coefficients. It is suggested that the FVM will greatly reduce inequities in educational financing, with a relatively low government cost. Furthermore, the fund will also set and attain other inputs, inluding teacher qualifications and educational services improvement, among others.