Public Value Under Constraint: Fiscal Austerity and the Conversion of Education Policy into Social Well-Being in Brazil

This paper examines whether and how fiscal austerity shapes the extent to which public value in education translates into social well -being in a decentralized setting. We theorize fiscal austerity as a constraint that can dampen the welfare ret urns of public value creation by limiting policy continuity and implementation capacity. Using panel data for Brazil’s 27 federative units over 2015-2022, we estimate a hierarchical public value model in the education policy domain and test direct and medi ated relationships with social well- being. The model is assessed via PLS-SEM, enabling the simultaneous estimation of higher- order constructs and mediation effects. Public value in education is strongly and positively associated with social well- being. Fiscal austerity operates as a countervailing mechanism that conditions how fully value creation translates into welfare outcomes, yielding a competitive mediation pattern consistent with public value under constraint. The study advances public sector managem ent research by positioning fiscal austerity not merely as contextual