The heterogeneity of Brazilian municipalities is widely acknowledged. For some scholars, however, it constitutes a phenomenon to be systematically mapped and explained, while for others it functions primarily as contextual information. A first broad set of studies has sought to document variation among Brazilian municipalities across fiscal, political, and administrative dimensions, in addition to their sociodemographic characteristics.

Afonso and Escovedo (2021) use the FIRJAN Fiscal Management Index as a measure alongside cluster analysis as a technique to argue that municipalities are more homogeneous than typically assumed and highly vulnerable in terms of fiscal management. Melo, Souza and Bonfim (2015) examine the heterogeneity of local fiscal capacity in 2010 using the FIRJAN index, finding substantial variation explained by the degree of electoral competition and participation, as well as by the educational level of municipal employees. Similarly, Silva et al. (2020) seek to explain the determinants of fiscal management – measured using FIRJAN indices for 2013 and 2016 – and conclude that wealth (measured by GDP per capita), the Municipal Governance Index (IGM), and Brazil’s macroregions help explain fiscal management outcomes. Mendes et al. (2018) examine correlations between human development, local economic profiles, revenue and expenditure capacity, and intergovernmental transfers. Their study suggests that higher levels of development are found in municipalities with more industrial economic profiles, as well as in more agriculture-oriented municipalities, and in those receiving greater volumes of intergovernmental transfers. Municipalities with a service-sector profile (which may reflect the relative weakness of other sectors) are negatively associated with development.

Still focusing on the determinants of municipal expenditure, Souza and Monte (2021) analyze the finances of all Brazilian municipalities between 2000 and 2016, arguing that fiscal decentralization (measured through intergovernmental transfers) positively affects both personnel and investment expenditures. They also show that own-source tax revenues tend to increase administrative expenditure, but not social expenditure. Marenco and Cate (2021) examine local budgetary decisions across all Brazilian municipalities between 2013 and 2016. Their study distinguishes between earmarked and discretionary expenditures and finds substantial heterogeneity, driven primarily by the inertial dynamics of past expenditures rather than by demographic, political, or administrative capacity variables.

Also examining municipal heterogeneity, but focusing on the presence of municipal transparency mechanisms, Baldissera et al. (2020) show that larger and wealthier municipalities disclose more information publicly. In another study addressing a relatively underexplored topic, Satyro and Cunha (2018) analyze heterogeneity in the provision of welfare services. Their findings suggest that the universe of Brazilian municipalities encompasses distinct welfare regimes. Using factor and cluster analysis, and considering policies related to social insurance and social assistance, education, and health, the authors identify types of social protection such as assistance-based, quasi-assistance, corporatist, quasi-corporatist, family-based insurance, and intermediate regimes.

Another extensive and productive research agenda examines the relationships among elections, fiscal outcomes, and local public policy. In this literature, heterogeneity typically appears as a contextual factor to be controlled for. Marciniuk, Bugarin and Ferreira (2020) study the effect of political alignment between mayors and members of the lower house of Congress on the distribution of discretionary transfers between 2001 and 2012, measured through federal grant agreements (‘convênios’). Their findings confirm the importance of political alignment and show that first-term mayors tend to receive larger transfer volumes.

Peixoto et al. (2016) examine how municipal context, candidate profiles, and administrative performance relate to reelection prospects in Brazil in 2016, suggesting that the first set of factors is more influential than the second. Teixeira and Mattos (2021) test the effects of political competition on the allocation of municipal expenditure in Brazil between 2004 and 2016, arguing that the effect of the level of competition has declined and that municipalities with more competitive elections reduced expenditure in election years. Gralak et al. (2023) conduct a panel study of the 35 municipalities with populations above 500,000 between 2005 and 2016, testing whether expenditure increases in election years. Contrary to earlier studies, their findings find no evidence of political budget cycles.

Several studies devote attention to the determinants of federal transfers, which may help equalize an important dimension of municipal heterogeneity. Andrade and Caldas (2025) test explanations for voluntary federal transfers between 2010 and 2021, arguing that partisan alignment between the president and the mayor positively affects transfers, as does municipal GDP per capita, while other socioeconomic indicators show no statistically significant effects. Baião et al. (2017) analyze the potential equalizing effects of transfers on municipal finances, given the substantial heterogeneity among Brazil’s municipalities. Their results for 2010 counterintuitively suggest that mandatory transfers (FPM) have limited equalizing effects, whereas conditional transfers such as FUNDEB – and even resources from programs such as ‘Bolsa Família’ – have positive effects. Finally, Cate (2023) seeks to explain the determinants of municipal access to parliamentary amendments between 2015 and 2019, prior to the recent sharp increase in their use. The study finds that low revenue-raising capacity, low electoral competition, and political alignment between the mayor and the legislator increase the likelihood of receiving such amendments. With regard to the effects of amendments on expenditures, the article tests whether larger allocations to education, health, and urban development increase local expenditure in these policy areas and improve reelection prospects, but finds mixed and inconclusive results across policy areas.

Finally, another set of studies examines municipal heterogeneity by investigating both its determinants and its consequences. In a highly influential study, Marenco et al. (2017) analyze the influence of local state capacity on fiscal capacity, measured by municipalities’ ability to raise own-source revenues, using data from 2008 to 2012. Their results suggest that professional bureaucracies – measured by the proportion of tenured employees with a university degree – positively affect the ability to collect local property taxes. In a complementary study, Marenco (2017) examines the effects of professional bureaucracies in Brazilian municipalities on the adoption of land-use regulation policies, as well as related policy instruments and urban policy councils, finding positive effects based on data from the 2012 Municipal Basic Information Survey (MUNIC).

In another influential line of research, Grin and Abrucio (2018) examine the relationship between decentralization and the modernization of local state capacities during Brazil’s recent democratic period. The authors ask whether the capacities developed have been sufficient to meet the challenges created by decentralization, considering dimensions such as financial management, administrative organization, personnel management, and information technology. Their findings point to insufficient progress, particularly among municipalities with populations below 50,000 inhabitants.

Pursuing the same research agenda, Grin et al. (2018) test the correlation between municipal fiscal capacity (measured by the proportion of own-source revenues) and state capacity dimensions (administrative, technical, institutional, and political), measuring the former in 2015 and the latter between 2012 and 2015. The results strongly suggest a positive effect of these capacities, although they are not entirely consistent, with some variables indicating effects in the opposite direction. It is worth noting that the study relies on variables from the Municipal Basic Information Survey (MUNIC), whose self-reporting by municipalities may affect measurement reliability, which may explain why not all results converge in the same direction.

In a complementary study, Cardoso and Marenco (2020) examine, through multiple specifications, the effects of the presence, number, and qualifications of political appointees on fiscal performance (GDP per capita and the FIRJAN indices), also considering regional and spatial effects. Their results are inconclusive, showing positive effects for municipal wealth (GDP per capita) but negative effects for indicators of local fiscal management.

But must all territorial units be treated as equivalent? Brazil is a symmetrical federation, yet adopting a particular institutional format for government does not necessarily require treating territorial units as isomorphic for the purposes of policy design and analysis. Whereas in Brazil the political, administrative, conceptual, and statistical units of analysis all overlap, creating considerable potential for analytical confusion, other countries adopt different institutional arrangements. We discuss this issue from a comparative perspective and then summarize how Brazilian institutions address municipalities and their heterogeneity, particularly in fiscal matters.

The issue involves several dimensions related to how territorial units are classified (and often naturalized), affecting the definition of local units (in Brazil, municipalities), what constitutes a city, urban areas, and the territorial structures and transitional spaces between rural and urban areas. The issue does not lie in the definitions themselves, but in their appropriate use. Like any concept, when applied outside the context in which it was developed, it requires specific analytical care.

Many countries use criteria different from Brazil’s to define their territorial units, although the Brazilian case is by no means unique. Portugal’s territorial classification, for example, distinguishes between villages, towns, local centers, and cities. In a 2018 survey covering 233 countries¹, the United Nations found that 119 use combined criteria to define cities, while 104 rely on a single criterion. Among the latter, 59 countries use purely administrative criteria (as in Brazil), 37 rely exclusively on population thresholds, and 08 use only urban characteristics.

Defining urban areas is typically far more complex. A total of 121 countries distinguish between urban and rural areas by combining administrative criteria with other dimensions, while 108 combine population size and density with additional criteria, 69 combine urban characteristics with other criteria, and 38 incorporate economic dimensions alongside other classification criteria.

To illustrate what combining criteria may involve, in India agglomerations are classified as urban only when they have a population exceeding 5,000 inhabitants, at least 75% of their economically active population is employed in non-agricultural occupations, and a population density above 400 inhabitants per square kilometer. Agglomerations with populations above 100,000 inhabitants are designated as cities, while those below that threshold are classified as towns.

Forms of local government also vary substantially across countries (MOURITZEN and SVARA, 2002). In some cases, local government institutions vary internally even when the institutional structure of local territorial units is standardized, as in the United States² and, until recently, in northern Germany and the Nordic countries (GOLDSMITH and LARSEN, 2004).

Brazil, by contrast, has adopted a fully standardized territorial structure centered on a single geographic unit – the municipality – as well as a standardized form of local government, at least since 1938³. This standardization is based on political-administrative criteria, with municipalities functioning as the basic administrative units of local government. The existence of a City Hall defines a city, while an urban locality that hosts a district is classified as a village (‘vila’)⁴. Municipalities also serve as the smallest units for the redistribution of fiscal resources and as the single electoral district for local elections.

In practice, the definition of a municipality is political and legal in nature, as it involves legislative approval of municipal emancipation and is tied to the definition of the administrative seat where the municipal government is located. Following the promulgation of the 1988 Constitution, which established the rules for creating municipalities, a major wave of municipal creation occurred, producing nearly 1,450 new municipalities in just twelve years (TOMIO, 2002). Along with these new political-administrative units, an equivalent number of fiscal and statistical units were automatically created, as well as an equivalent number of cities (administrative seats). Brazil’s municipalities therefore include a substantial number of units that attained this status through political dynamics rather than through their underlying social, territorial, or economic characteristics.

Urban areas are defined by municipal administrations through local legislation. This arrangement may appear desirable from the standpoint of democratic governance and local knowledge, since such decisions rest with local residents and draw on detailed information and lived experience. However, because urban properties are subject to a municipal property tax (IPTU), while rural properties are subject to a federal land tax (ITR), local governments have incentives to expand urban areas artificially or prematurely (VEIGA, 2008). This practice dates back to the creation of the ‘décima urbana’, a property tax introduced in 1808 within urban perimeters (GLEZER, 2007). This historical legacy introduces an additional source of institutional artificiality into current definitions.

Traditionally, the Brazilian Institute of Geography and Statistics (IBGE) defines urban areas as ‘territories characterized by buildings, street networks, and dense human occupation’. This definition does not specify the scale of agglomerations and refers to density in a very imprecise way, simply equating it with the presence of human occupation. In addition, it establishes no minimum threshold in terms of population size or land area. As a result, for many decades this approach produced a purely dichotomous classification between rural and urban areas, which does not capture transitional forms.

For classifying urbanization, across the territory, more sophisticated strategies have been developed recently. The European Union, for example, uses levels of settlement density – the Degree of Urbanization (DEGURBA)⁵ – which enables a systematic differentiation of population and economic agglomerations across the territory.

In an attempt to mitigate the limitations of broad, generalized definitions, the Brazilian Institute of Geography and Statistics (IBGE) commonly relies on population size categories and has also developed more sophisticated approaches in specific studies. Among these, the analytical typology developed in the REGIC study (IBGE, 2018), based on the position and hierarchy of the urban network, is particularly noteworthy, classifying municipalities into eleven categories⁶. Another important recent study classifies territories according to the characteristics of their intra-municipal census tracts (IBGE, 2022), along urban, rural, and natural dimensions across the country, resulting in sixteen types.

These classifications offer clear analytical advantages, but thus far their impact has been largely confined to specific thematic debates. They have had little influence on discussions of federalism, local government, and local public finance in Brazil, which remain strongly shaped by the assumption of a homogeneous classification of municipalities.

In sum, the definition of municipalities in Brazil – the unit of analysis in studies of local government – has an administrative origin and automatically defines cities, while the delimitation of urban areas is susceptible to pressures arising from local fiscal incentives. Although Brazil is not unique in this regard, the use of a single, unified administrative, electoral, fiscal, and statistical unit tends to induce interpretations of homogeneity – or of continuous heterogeneity – in a context characterized by a far more complex empirical reality.

To characterize the municipal types identified above, this section analyzes their average profiles in terms of local state capacity and political dynamics. The analysis draws on a dataset compiled by the Center for Metropolitan Studies (CEM) that integrates demographic, political, local state capacity, and fiscal variables for Brazilian municipalities from 2005 to 2024, totaling 102,800 municipality-year observations.

Drawing on data from the Brazilian Institute of Geography and Statistics’ Municipal Basic Information Survey (MUNIC), we can gain insights into the administrative dimension of local state capacity, particularly with regard to the presence of agencies, policy instruments, councils, funds, and intermunicipal consortia, as well as the qualifications of municipal personnel.

However, this source has an important limitation, as it does not provide a consistent time series, since the survey collects different information across years. We therefore focus on the 2015–2018 period, which provides the most comprehensive coverage. For each category, we construct an index that takes the value ‘01’ when a given institution is present and 0 otherwise. For instance, the 2017 MUNIC includes information on the existence of housing and environmental agencies; municipalities are assigned a value of ‘02’ if both are present, ‘01’ if only one is present, and ‘0’ if neither is present.

Table 03 reports the average values for these indicators. We also include data from the MUNIC on the share of employees in direct municipal public administration holding a college degree in 2018, as well as the average score on the FIRJAN Fiscal Management Index.

Table 03

		Municipal agencies (0-2), 2017	Policy instruments (0-6), 2017	Councils and funds (0-6), 2017	Intermunicipal consortia (0-6), 2015	Direct admin. staff w/ college degree, 2018 (%)	FIRJAN Index, 2022
Metropolises and large cities	Average	0.73	3.36	4.81	1.01	0.40	0.714
	Median	0.68	3.52	4.86	0.47	0.40	0.757
	Standard Error	0.013	0.023	0.017	0.033	0.002	0.003
Medium-sized municipalities	Average	0.68	2.56	4.01	0.97	0.36	0.663
	Median	0.64	2.54	4.10	0.55	0.37	0.705
	Standard Error	0.011	0.022	0.021	0.027	0.002	0.003
Small-to-mid-sized municipalities	Average	0.39	2.14	3.48	0.91	0.33	0.656
	Median	0.37	2.07	3.53	0.50	0.32	0.702
	Standard Error	0.006	0.013	0.015	0.018	0.001	0.002
Small, dynamic municipalities	Average	0.35	1.62	3.09	0.73	0.31	0.752
	Median	0.33	1.57	3.21	0.42	0.31	0.802
	Standard Error	0.008	0.017	0.019	0.022	0.002	0.003
Small, poor municipalities	Average	0.24	1.11	2.13	0.84	0.28	0.578
	Median	0.23	1.00	2.13	0.48	0.27	0.615
	Standard Error	0.002	0.004	0.005	0.006	0.000	0.001
Total	Average	0.29	1.35	2.45	0.85	0.29	0.600
	Median	0.27	1.22	2.45	0.48	0.28	0.641
	Standard Error	0.002	0.004	0.005	0.005	0.000	0.001

Note: Agencies: housing and environment. Policy instruments: mapping systems, GIS, and plans for housing, transport, sanitation, and solid waste. Councils and funds: housing, environment, and transport. Intermunicipal consortia: housing, transport, environment, urban development, sanitation, water supply, and solid waste.

As Table 03 shows, the presence of agencies, instruments, councils and funds, as well as the share of staff with a college degree, declines sharply across municipal types as we move down the table. The median values for small, poor municipalities are roughly one-third of those observed for metropolises. The only dimension that remains relatively stable is the presence of intermunicipal consortia. The FIRJAN Fiscal Management Index shows higher values in both metropolises and small, dynamic municipalities, pointing to stronger local fiscal capacity, consistent with findings in the literature (MELO, SOUZA and BONFIM, 2015; SILVA et al., 2020). This pattern is expected, to some extent, and reflects the increasing complexity of municipal administrations and urban challenges as the municipal scale grows. At the same time, the presence of local state capacity is a necessary condition for effective governance, the efficient implementation of public policies, and the sound use of available financial resources. In this context, the limited capacity of small municipalities contrasts with the relatively high levels of resources they receive, as discussed in the next section. Taken together, these patterns point to important dynamics of circular causality, as noted by Marenco (2017), Marenco and Cate (2021), and Grin et al. (2018).

We also examine how municipal types differ along political and electoral dimensions. Previous research has documented a pronounced rightward shift in electoral outcomes across Brazilian municipalities between 1994 and 2018 (POWER and RODRIGUES-SILVEIRA, 2019). We evaluate this pattern along three dimensions: the ideological orientation of mayors, the competitiveness of local elections, and electoral mobilization capacity. For each municipality-year, we compute an index of mayoral ideology following Zucco and Power (2024). We assign to each local party the national-level ideological position identified in that study, based on legislators’ responses to surveys on substantive policy issues. The index ranges from ‘−01’ to ‘01’, with lower values indicating more left-leaning positions and higher values indicating more right-leaning ones; ‘zero’ corresponds to the ideological center.

For the country as a whole, between 2005 and 2022, the overall average across Brazilian municipalities was 0.146, thus indicating a right-leaning orientation, although this pattern varied over time. The average over the period was 0.039 for metropolises, 0.116 for medium-sized municipalities, 0.113 for small-to-mid-sized municipalities, 0.172 for small, dynamic municipalities, and 0.155 for small, poor municipalities. Thus, while all municipal types are, on average, to the right of the political spectrum, right-leaning orientations are less pronounced in larger and more central urban areas. The temporal dynamics are particularly striking, as shown below.

As Graph 01 shows, small, poor municipalities and small, dynamic municipalities consistently have positive values (i.e., are predominantly governed by the right), whereas small-to-mid-sized municipalities and medium-sized municipalities show lower values up to 2014, falling into negative territory between 2008 and 2010 (i.e., predominantly governed by the left). Metropolises lie further below, remaining negative throughout the 2005–2014 period. After 2015, values for metropolises and medium-sized municipalities increase markedly and converge toward those of smaller municipalities, indicating a substantial rightward shift in municipal governments overall, consistent with the national political context following the impeachment of Dilma Rousseff. From 2015 onward, all municipal types become very similar in terms of the ideology of their mayors, with values clustered on the right.

Graph 01 Source: Elaborated by the authors based on data from the Superior Electoral Court (TSE, 2024) and the methodology developed by Zucco and Power (2024).

The graph thus confirms earlier findings of a general predominance of right-leaning mayors and underscores the influence of national political dynamics on local electoral outcomes (POWER and RODRIGUES-SILVEIRA, 2019). At the same time, it shows that voting patterns vary across municipal types: prior to 2015, the left was dominant in larger and more central urban areas, even when national averages pointed in the opposite direction.

Another electoral indicator that sheds light on differences across these territorial units is the margin of victory in local elections. Across the five elections held between 2006 and 2022, the average first-round vote share of the winning candidate was 56.6% in small, poor municipalities and 57.1% in small, dynamic municipalities, compared to 50% in metropolises and 53% in the two intermediate groups. These differences are statistically significant at the 95% level in tests of differences in averages. Overall, this pattern indicates that smaller and less central municipalities tend to have less competitive local elections.

A final indicator that local politics is structured differently is party membership. Brazil has a national average of 78 party members per 1,000 inhabitants, or roughly one for every 13 residents – a notably high figure⁸. This suggests that the indicator is less a measure of active party life than of the presence of grassroots electoral mobilization structures, the so-called electoral machines.

Membership rates are substantially higher in smaller municipalities: 65.9 per 1,000 inhabitants in metropolises, 69.7 in medium-sized municipalities, 89.7 in small-to-mid-sized municipalities, and a striking 186.9 in small, dynamic municipalities and 157.9 in small, poor municipalities. In fact, in several hundred municipalities, rates reach as high as 670 party members per 1,000 inhabitants, effectively encompassing the entire adult (voting-age) population.

This pattern points to the need for further research on the dynamics of party membership, although such an inquiry lies beyond the scope of this article. For present purposes, it is sufficient to note the substantial and systematic differences in membership rates across municipal types, as well as the clear break between the first three groups and the smaller municipalities. Thus, membership rates are positively and significantly associated with more rural settings, lower levels of urbanization, and places where right-leaning parties perform better. The graph below shows a highly consistent distribution across types, clearly separating the first three groups from the latter. It also includes estimates of the relationship between party membership rates and the natural logarithm of population. As the figure shows, the smaller the population, the higher the estimated coefficient.

Graph 02 Source: Elaborated by the authors based on data from the Superior Electoral Court (TSE, 2024).

Thus, local politics in smaller and less central municipalities tends to be more clearly dominated by the right, with lower electoral competition and a more prevalent presence of electoral machines. In contrast, larger and more central municipalities show a slight predominance of the left at the beginning of the period, before converging with the others toward right-leaning dominance in the last decade.