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THE STRUCTURE OF THE

BUREAUCRACY OF THE

BRAZILIAN STATE

AN ANALYSIS OF

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THE STRUCTURE OF THE

BUREAUCRACY OF THE

BRAZILIAN STATE

AN ANALYSIS OF PUBLIC EMPLOYMENT

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FGV/DAPP

Director

Marco Aurelio Ruediger DAPP

+55 (21) 37994300 | www.dapp.fgv.br | dapp@fgv.br

Head Office

Praia de Botafogo 190, Rio de Janeiro | RJ, CEP 22250-900 ou Caixa Postal 62.591 CEP 22257-970 | Tel: (21) 3799-5498 | www.fgv.br

Founding President Luiz Simões Lopes

FGV is an institution with a philanthropic, educational, technical and scientific nature, created on 20 December 1944 as a private entity, whose aim is to act in a broad manner in all questions with a scientific nature, with an emphasis on the social sciences, administration, law, and economy, contributing to the socio-economic development of the country.

TEAM

IMPLEMENTATION TEAM Coordination

Marco Aurelio Ruediger Researchers

Amaro Grassi Miguel Orrillo

Rafael Martins de Souza Graphic project

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BRAZILIAN STATE

THE STRUCTURE OF THE

BUREAUCRACY OF THE

BRAZILIAN STATE

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The Structure of the Bureaucracy of the Brazilian State is the first study in a series by FGV/DAPP about Brazilian bureaucracy, produced on the basis of data about the various levels and administrative spheres of public employment in Brazil. The aim of this series of studies is to shed some light on the public service in the three levels of the Federation and also among the three powers, offering contributions to the debate about the size of the Brazilian state and the quality of the services provided by this bureaucratic body, in a comparative perspective with the rest of the world. It is thus intended to seek responses to the most recurrent concerns in the Brazilian public debate, above all at a moment when discussions about reforms in the Brazilian state and its bureaucracy have returned to center stage.

Among the results found in this first stage of the research, one that most stood out was related to the role of municipalities within the federative pact currently in force in Brazil. According to the survey, the number of municipal employment positions grew by 210% between 1998 and 2014, tripling the total employees at this level. Per capita annual expenditure (how much each Brazilian pays to maintain this structure) rose from R$216 to R$671. This growth is a reflection, amongst other things, of the municipalization of services stipulated in the 1988 Constitution, highlighting an overload of responsibilities at the tip of the federative structure. In this context, municipalities are induced to hire more public employees in order to meet the growing demand of society for high quality public services, but pay badly due to their reduced fiscal capacity in comparison with the other governmental spheres.

Finally, the study makes a comparison between the number of municipal public employees per thousand inhabitants in every Brazilian state capital. There is also a special focus on the city of Rio de Janeiro, especially the comparison of data on personnel expenditure with the other Brazilian state capitals. The data was published at the beginning of September 2016 in “O Globo” as part of a partnership between FGV/ DAPP and the newspaper to cover the municipal elections.

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Federal State Municipal

Servidores Públicos - Brasil

5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Brasil milion

Níveis de Administração Pública

0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Federal Estadual Municipal

milion

This section, the first of this study, shows the evolution of public employment between 1998 and 2014, based on data from RAIS, which is part of the Ministry of Labor. Presented in the figures below is data about the number of general public employees and per administrative level (federative entity). The charts below show the growth in the amount of public employees in Brazil between 1998 and 2014. During this period, there was an increase of 71.6% in the number of public employees in Brazil. Municipalities had the steepest rise (around 210%), almost tripling in size.

EVOLUTION OF PUBLIC

EMPLOYMENT

Number of employees

(1998-2014)

Source: MTE/RAIS(1998-2014) Prepared by: FGV/DAPP

Public Employees – Brazil

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Federal State Municipal

Servidores Públicos - Brasil

26 28 30 32 34 36 38 40 42 44 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Servidores Públicos - Brasil thousand

Níveis de Administração Pública

10 20 30 40 50 60 70 80 90 100 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Federal Estadual Municipal

thousand

The following figures show the development of annual average earnings (payment) per position. It can be seen that in Brazil, as a whole, there was an increase in the average earnings of public employees after 2003, reaching the level of R$43,500 in 2014.

According to the survey, federal employees are the best paid, while municipal receive the lowest earnings.

Annual earnings per position

(1998-2014)

Source: MTE/ RAIS(1999-2014) Prepared by: FGV/DAPP

Public Employees – Brazil

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Federal State Municipal

Níveis de Administração Pública

30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Federal Estadual Municipal

bilion

Servidores Públicos - Brasil

140 160 180 200 220 240 260 280 300 320 340 360 380 400 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Servidores Públicos - Brasil bilion

Over the years, annual expenditure on wages increased at all levels of public administration, in all regions of the country, and in the three spheres of federal public administration. The figures below show the growth of this expenditure. Between 1999 and 2014, there was a total increase of around 167% (in real values), rising from R$146.56 billion to R$391.79 billion. In the comparison between the federative bodies, states have the highest expenditure, but municipalities had the highest rate of growth, according to the survey.

Annual expenditure on public employee pay

(1999-2014)

Source: MTE/ RAIS(1999-2014) Prepared by: FGV/DAPP

Public Employees – Brazil

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Federal State Municipal

Servidores Públicos - Brasil

31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Servidores Públicos - Brasil Emplo ymen t positions

Níveis de Administração Pública

2 4 6 8 10 12 14 16 18 20 22 24 26 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Federal Estadual Municipal

Emplo

ymen

t positions

In the attempt to measure the efficiency of Brazilian public employment between 2000 and 2014, two indexes were analyzed: (a) the distribution of the number of Public Employees among the Brazilian population; (b) annual per capita expenditure with the public machine, in other words, per Brazilian citizen. First, the number of positions per each thousand inhabitants it is examined.

In Brazil, the proportion increased by 41.85% between 2000 and 2014. In relation to administrative levels, the number of municipal employees more than doubled during the same period, reaching 24 employees per thousand inhabitants. State and federal employees had a slower rate of growth over the years.

Employment positions per thousand inhabitants

(2000-2014)

Source: MTE/ RAIS(2000-2014) , IBGE Prepared by: FGV/DAPP

Public Employees – Brazil

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Federal State Municipal

Servidores Públicos - Brasil

900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Servidores Públicos - Brasil

Níveis de Administração Pública

200 250 300 350 400 450 500 550 600 650 700 750 800 850 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Federal Estadual Municipal

In relation to annual per capita expenditure with public employee payroll, there was growth a higher than 100% between 2000 and 2014, rising from R$932.40 to R$1932.20.

Annual per capita expenditure

(2000-2014)

Source: MTE/ RAIS(2000-2014), IBGE Prepared by: FGV/DAPP

Public Employees – Brazil

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Servidores Públicos

75.33% 13.78% 10.89% Estatutário Não Efetivo CLT

Municipal

63.86% 17.66% 18.48% Statutory Non-Permanent CLT

The figure below shows that at least three out of four public employees in Brazil are contracted in a statutory system. Municipal administration is the sphere with the lowest percentage of statutory employees (63.9%), and the highest proportion of CLT and non-permanent employees, which suggests that municipal administrators are searching for alternatives to increase services provided.

Contracting systems

(2014) Public Employees

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Area

Area

Executivo 95.29% Legislativo 2.07% Autarquias 1.64% Outros 0.99%

Executivo

Legislativo

Autarquias

Outros

Administrative spheres

Administrative spheres

Executive 95.29% Legislature 2.07% Agencies 1.64% Others 0.99%

Executive

Legislature

Agencies

Others

The second part of the study presents a brief profile of municipal public employees focusing on the city of Rio de Janeiro. Comparative methodology is still used, but now between Brazilian capitals. Firstly, we present the different administrative spheres of Brazilian municipal employees in 2014. As was to be expected, it can be observed that 95.29% of municipal employees are from the Executive. Shortly afterwards, two important variables are presented to compare the Brazilian state capitals: employment positions per thousand inhabitants and average income. This short analysis can also be visualized per region of Brazil. Finally, we trace a profile of the municipal employees in Rio working for the Executive.

MUNICIPAL EMPLOYEE

PROFILE

Source: MTE/ RAIS(2014) Prepared by: FGV/DAPP

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Past GDP

João Pessoa Vitória Palmas Porto Velho Boa Vista Goiânia Cuiabá São Luís Macapá Curitiba Teresina Campo Grande Natal Aracaju Florianópolis Maceió Recife Rio de Janeiro Belo Horizonte Belém São Paulo Rio Branco Manaus Porto Alegre Fortaleza Salvador Brasília 0 5 10 15 20 25 30 35 40 38,88 35,35 32,68 26,2 23,46 21,33 21,26 20,83 18,98 18,45 18,36 17,49 16,83 16,52 16,39 15,48 15,25 14,33 13,46 12,44 12,22 11,94 11,41 11,2 10,72 7,47 0 Positions

Norte

Palmas Porto Velho Boa Vista Macapá Belém Rio Branco Manaus 0 5 10 15 20 25 30 35 40 32,68 26,2 23,46 18,98 12,44 11,94 11,41 Positions

This section reveals the distribution of municipal employees from the Executive in Brazilian state capitals, offering a panorama of public employment in these municipalities. The first figures show the number of employment positions per thousand inhabitants; the second ones, the average earnings of public employees per capital. It can be noted that the city of Rio de Janeiro is the second city in the Southeast region in the number of employment positions per thousand inhabitants. The city of Vitória occupies the highest rank in this index. On the other hand, the employment positions which correspond to these cities are the lowest paid among the cities of the southeast region. The municipal employes in Rio have average earnings of R$3.450,00.

Distribution of municipal employees

Positions per thousand inhabitants - 2014

Source: MTE/ RAIS(2014)

Brazil

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Brasil

Porto Alegre Florianópolis São Paulo Campo Grande Belo Horizonte Salvador Curitiba Fortaleza Manaus Rio de Janeiro Aracaju Vitória Teresina Recife Rio Branco Maceió Goiânia Natal Palmas Belém Macapá Porto Velho Cuiabá São Luís Boa Vista João Pessoa Brasília 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 5,97 4,76 4,05 4,04 3,95 3,91 3,82 3,72 3,62 3,45 3,17 3,14 3,14 3,04 2,86 2,85 2,84 2,83 2,80 2,76 2,66 2,62 2,38 2,35 2,03 1,61 0

Norte

Manaus Rio Branco Palmas Belém Macapá Porto Velho Boa Vista 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 3,62 2,86 2,8 2,76 2,66 2,62 2,03

Distribuição de servidores municipais

Average earnings - 2014

Source: MTE/ RAIS(2014) EPrepared by: FGV/DAPP

Brazil

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Nordeste

João Pessoa São Luís Teresina Natal Aracaju Maceió Recife Fortaleza Salvador 0 5 10 15 20 25 30 35 40 38,88 20,83 18,36 16,83 16,52 15,48 15,25 10,72 7,47 Positions

Centro Oeste

Goiânia Cuiabá Campo Grande 0 5 10 15 20 25 30 35 40 21,33 21,26 17,49 Positions

Sudeste

Vitória Rio de Janeiro Belo Horizonte São Paulo 0 5 10 15 20 25 30 35 40 35,35 14,33 13,46 12,22 Positions

Sul

Curitiba Florianópolis Porto Alegre 0 5 10 15 20 25 30 35 40 18,45 16,39 11,2 Positions

Source: MTE/ RAIS(2014) Prepared by: FGV/DAPP

Northeast

Center-west

Southeast

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Nordeste

Salvador Fortaleza Aracaju Teresina Recife Maceió Natal São Luís João Pessoa 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 3,91 3,72 3,17 3,14 3,04 2,85 2,83 2,35 1,61

Centro Oeste

Campo Grande Goiânia Cuiabá 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 4,04 2,84 2,38

Sudeste

São Paulo Belo Horizonte Rio de Janeiro Vitória 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 4,05 3,95 3,45 3,14

Sul

Porto Alegre Florianópolis Curitiba 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 5,97 4,76 3,82

Source: MTE/ RAIS(2014) Prepared by: FGV/DAPP

Northeast

Center-west

Southeast

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Sexo

76.85% 23.15% Feminino Masculino

Escolaridade

0.34% 1.40% 5.03% 5.59% 5.68%

Finally, the figures below show the profile of public employees from the Executive in the municipality of Rio de Janeiro, focusing on gender, education, age group, type of contracting, income, and time employed.

Profile of public employees in the municipality of Rio de Janeiro

2014 Gender

Education

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Idade

0.94% 16.28% 26.30% 33.80% 22.68% 18|--25 25|--35 35|--45 45|--55 55 ou +

Regime

98.32% 1.68%

Estatutário

Não efetivo

Source: MTE/ RAIS(2014)Prepared by: FGV/DAPP

Age

Type of contract

18|--25 25|--35 35|--45 45|--55 55 or +

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Faixa renda

10.56% 44.87% 39.60% 3.48% 1.49% 0|--2 2|--4 4|--10 10|--20 20 ou +

Tempo emprego

28.16% 11.83% 10.72% 16.04% 7.70% 6.74% 10.90% 7.91%

0|--4 4|--8 8|--12 12|--16 16|--20 20|--24 24|--28 Source: MTE/ RAIS(2014)Prepared by: FGV/DAPP28 ou +

Average income band (Minimum Wages)

Time in employment (years)

0|--2 0|--4 20|--24 4|--10 8|--12 28 or + 2|--4 4|--8 24|--28 10|--20 12|--16 20 or + 16|--20

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The data used in this study is extracted from RAIS (2008-2014) and the principal research unit in a large part of this work is considered to be each employment position active in December of each year. Evidentially, when it was necessary to research the balance of employment positions, we considered the differences between the positions at the start and end of each year. To obtain the population in each region of the study, the IBGE population projection was used.

The monetary values of the historic series were deflated to values of December 2014.

According to the RAIS 2014 manual, adopted as public employees were those workers governed by the Single Judicial Regime (federal, state, and municipal) and the military, linked to the Single Pension System; employees governed by the Single Judicial Regime (federal, state, and municipal) and the military, linked to the General Social Security System, and non-permanent public employees (who can be dismissed ad nutum or who were hired by special legislation, not governed by the CLT). Moreover, the base of our study was restricted to the employees of the three powers (Executive, Legislature, and Judiciary) together with employees from agencies and public foundations (whether subject to public or private law), in the three administrative levels (federal, state, and municipal).

RAIS provides the average income of each position. This variable was used to estimate the annual value spent on each position. For this, average income was multiplied by the number of months worked for each position.

The analysis in this research were carried out using R software.

MTE/RAIS Years: 1998 - 2014 http://www.rais.gov.br/ IBGE

Instituto Brasileiro de Geografia e Estatística http://www.ibge.gov.br/home/

http://www.ibge.gov.br/apps/populacao/projecao/ Central Bank of Brazil

https://www3.bcb.gov.br/sgspub/localizarseries/localizarSeries. do?method=prepararTelaLocalizarSeries

METHODOLOGICAL

NOTES

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FGV/DAPP Department of Public Policy Analysis | Getulio Vargas Foundation DIRECTOR Marco Aurelio Ruediger Researchers Amaro Grassi Miguel Orrillo Rafael Martins de Souza

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dapp.fgv.br

Referências

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