<p>Fiscal policy outcomes are shaped not only by Legislative and Executive actions but also by judicial decisions. To examine if courts respond to fiscal pressures, we analyze 358 binding cases adjudicated by the Brazilian Supreme Court (STF) between 2008 and 2024 involving taxation, pensions, and public budgeting. Using statistical, machine learning, and natural language methods, we find that: (i) government entities win appeals at nearly twice the rate of private parties (62% overall); (ii) worse budget balances correlate with increased pro-government rulings; (iii) when the government loses high-impact cases, the Court modulates decision effects in over 68% of them to reduce budgetary impact; and (iv) consequentialist reasoning increasingly appears in STF opinions during crises. These patterns persist regardless of the ruling party’s political orientation, suggesting a structural dynamic in fiscal judicial decisions. Our findings indicate that government financial stress shapes judicial behavior, potentially making the Judiciary an endogenous component of fiscal adjustment.</p>

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The Judiciary as a fiscal policy tool? Budget stress and judicial decision-making in Brazil

  • Eduardo da Silva Mattos

摘要

Fiscal policy outcomes are shaped not only by Legislative and Executive actions but also by judicial decisions. To examine if courts respond to fiscal pressures, we analyze 358 binding cases adjudicated by the Brazilian Supreme Court (STF) between 2008 and 2024 involving taxation, pensions, and public budgeting. Using statistical, machine learning, and natural language methods, we find that: (i) government entities win appeals at nearly twice the rate of private parties (62% overall); (ii) worse budget balances correlate with increased pro-government rulings; (iii) when the government loses high-impact cases, the Court modulates decision effects in over 68% of them to reduce budgetary impact; and (iv) consequentialist reasoning increasingly appears in STF opinions during crises. These patterns persist regardless of the ruling party’s political orientation, suggesting a structural dynamic in fiscal judicial decisions. Our findings indicate that government financial stress shapes judicial behavior, potentially making the Judiciary an endogenous component of fiscal adjustment.