The data set comprises of 14 years panel data on municipal revenues and expenditure outcomes, primarily the quality and quantity of locally funded public education infrastructure. The resulting paper considers a program that invests in the tax capacity of Brazilian municipalities to assess whether better tax infrastructure has an effect on public service provision relative to grants. It compares how municipalities allocate increases in funds from the tax capacity program to increases in funds from tax and transfer revenues from the central government. The main measure of public expenditure outcomes considered is municipal education infrastructure. This data is available in the annual school census conducted by the Ministry of Education. Other expenditure outcomes that complement the results on education in the data are health infrastructure and corruption. Corruption data is obtained from the random audits for corruption in Brazil by an independent audit agency. The data on municipal health units comes from a census of health facilities conducted in 1999, 2002, 2005 and 2009.CAGE will aim to build on initial success while offering some important innovations. The overarching theme will continue to be 'succeeding in the global economy' and the Centre will be organised into research themes each with an 'organizing question': Theme 1: What Explains Comparative Long-Run Growth Performance?; Theme 2: How do Culture and Institutions Help to Explain Development and Divergence in a Globalizing World?; Theme 3: How Can the Measurement of Wellbeing be Improved and What are the Implications for Policy?; Theme 4: What are the Implications of Globalization and Global Crises for Policymaking and for Economic and Political Outcomes in Western Democracies? During phase 1, research in Theme 1 made excellent progress in establishing a detailed quantitative picture of the dimensions of long-run economic growth over the last 800 years in Europe and Asia and the analysis will now be extended to cover Africa, and move from measuring real GDP per capita to accounting for the sources of growth in terms of factor inputs and their productivity. Research will also analyse the reasons for success and failure over the long-run at a more fundamental level with investigations covering pre-industrial to post-industrial times looking at the roles of geography, institutions, trade costs, and human capital and knowledge as well as economic policy. Some of this will be forward-looking considering reforms that may be need to sustain catch-up growth in the BRICs and in post-crisis Europe. Theme 2 will continue to examine the political economy of institutional change and to investigate other aspects of supply-side policy relevant to enterprise performance in developing countries. Research will now be expanded and slightly re-orientated to address the role of trust and, in particular, to consider how trust can be nurtured. This will enable further investigation into why reform programmes such as those based on Washington-Consensus principles have not worked well besides permitting insights into the roots of underdevelopment. Theme 3 will further develop the evidence base for its innovative approach to the analysis of poverty with a programme of field experiments and will continue to augment the evidence base on the determinants of wellbeing and the policy implications thereof. It will elaborate the ways in which poverty via cognitive impairment leads to unfortunate decision-making, to examining implications of adaptation to well-being shocks and to the role that cognitive biases and genetics play in wellbeing outcomes. Theme 4 will build on the work begun after the appointment of a Professor of Quantitative Political Science as a key investment to further the work of CAGE. This research has examined the implications of tax competition for capital mobility and viability of welfare state policies in OECD countries as globalization has intensified. The research highlights differing exposure to globalization threats. During phase 2, research on these issues will be deepened and extended using formal analysis and econometrics to investigate issues which are deeply political in that they involve contentious policy choices and are conditioned by political institutions. The topics to be studied include the implications of globalization and economic crises for voter preferences and for redistribution and welfare spending in different types of advanced economy, and much more detailed investigation of the dimensions of the responses available to co-ordinated and liberal market economies. In conclusion, the distinctive feature of CAGE is that it crosses divides within economics broadly defined and explores issues traditionally regarded as at the boundaries of economics. CAGE research and policy advice is sensitive to context and based on an empirical approach that does not arbitrarily impose the priors of neoclassical economics. Finally, CAGE is able to bring an informed historical perspective to current policy issues.

The dataset used in this project is a combination of publicly available census data for Brazil on the population, censuses on education and on health as well as audit reports on corruption