Cost Behavior in Local Governments from the Theory of Public Finance Perspective

Purpose – This research aims to analyze in an unprecedented way the behavior of costs local government, since current literature is incipient and there are still doubts about application cost stickiness phenomenon thepure public sector.Theoretical framework The study approaches from Theory Public Finance perspective.Design/methodology/approach unprecedented, exploratory with robust panel data regression statistics. We analyzed 295 governments southern Brazil over a 16-year period, resulting 141,600 observations.Findings All 32 models showed asymmetric costs, 75% being characterized as (47% sticky 28% anti-sticky) 25% reverse (a new identified, typical sector, but which can also occur private sector).Practical & social implications main theoretical practical contributions are: I) proof that contemporary approach applies pure sector; II) budget balance, fundamentalprecept TFP, does not apply practice; III) identification phenomenon, expanding classification consolidated accounting approach, help managers planningpublic actions.Originality/value contribution called cost, approach.Keywords: Cost behavior, stickiness, asymmetry, government costs.