Abstract
This article examines the decision process in states governments and the political-institutional context (intergovernmental flow of funds, competences of governmental entities in federation, legislatives proceedings) that produced, between 1988-2000, the proliferation of 1,438 new municipalities in Brazil (25% from total of municipalities). The approach emphasizes the role of institutional mechanisms on direction of actors' political strategies and determination of politics outcomes. The interpretation and empiric research produced the following hypothesis to explain this political process: 1) the new municipalities' proliferation process is resultant from mechanisms (institutional arrangement) which shaped a favourable situation to decisions that created the municipalities; and 2) the state variation in process shall have resulted from: (a) how the regulations changed the available quantity of localities/towns to be able to turn municipalities, (b) kind of interaction between executive/ legislative, (c) size/type of government coalition in state parliament and (d) existence of legal provision (about initiative and procedure of legislative proposition in the state parliament) which enlarged the autonomy of state parliament on decision process to create municipalities.
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