SUDAM became extinct in May 2001 with the official argument being that the Institution had been infiltrated by fraud and corruption. Therefore, allegedly faced with the pressure of public opinion, the Brazilian Government closed-down this Institution (the same as SUDENE) and its tax incentive policies that had fomented regional development in Brazil. This thesis supports the opposite argument that corruption was not the determining factor for the extinction of SUDAM, but that this came about due to the incapacity of the Brazilian Government to continue maintaining this level / standard of financing for regional development in Amazonia based on the policy of tax incentives, given the fiscal-financial crisis being faced since the eighties. Numerous economic policy measures were taken by the State that diminished / reduced the financial resources operated by SUDAM´s Investment Fund, consequently restricting its operational capacity for the maintenance of payments to projects that had received incentives and the financing of new projects in the region. By shutting down SUDAM and its policy of fiscal incentives, the funding that had been the standard for financing regional development since it was conceived in the seventies also automatically ended. As a result the region was left without any viable and acceptable alternative for financing its development. The creation of a new form of funding as part of the new Institutions - ADA, without the existence of the fiscal incentives has not proven advantageous to private capital, making the demands for these resources unviable. As an alternative policy, the government is being forced to recreate SUDAM, but without any link to fiscal incentives. However this has still not taken place and the resurrection of the Institution itself has slowed down.
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