Analysis of the ICMS Educacional Policy and Its Implications for the Distribution of Resources to the Municipalities of the State of São Paulo

Abstract

This article analyzes the policy of distributing tax revenue to municipalities based on educational performance, which was adopted by the state of São Paulo in 2022 and named ICMS Educacional. The study questions whether the assumptions of financial incentive policies, instead of promoting effective improvements in education systems, end up generating harmful consequences for educators and students. Methodologically, the impact of the ICMS Educacional was simulated by calculating the Municipal Education Quality Index using SAEB data while keeping other ICMS criteria constant. The simulations indicate that the policy has the potential to exacerbate existing educational inequalities, as it tends to benefit municipalities that already show better assessment results and those with larger populations, regardless of their relative poverty levels.

Keywords
ICMS Education Policy; Performance Evaluation; Financial Incentives; Accountability for Results; Educational Inequalities