Brazil
The rural sector in the socio-economic context of Brazil
In this article the author analyses the evolution of Brazil’s rural sector in recent decades and some of its socio-economic effects both in the countryside and in the towns. Although only Brazil is considered here the processes discussed and their repercussions are found to differing degrees in many other countries of Latin America.
The external crisis, adjustment policies and agricultural development in Brazil
At the end of the 1970s the development style based on accelerated industrial grow th and on modernization and expansion of the exports segment of agriculture was looking very vulnerable. This was borne out by the sharply expansionary economic policy adopted in 1979 which generated faster inflation against a background of an increased trade deficit and a very unfavourable external situation.
An overview of social development in Brazil
This paper analyses the structural characteristics and dynamics of social policies in Brazil. Once the Brazilian model of the Welfare State was consolidated under the authoritarian régime in the 1960s and 1970s its meritocratic-individualist features became more acute owing to the socio-economic base of poverty and social exclusion on which it rested. In dynamic terms this model eventually was reproduced according to some clearly defined principles: extreme political and financial centralization; pronounced institutional fragmentation; lack of user participation in the basic decision-making processes; self-financing of social investment; privatization of the public sphere of resources and decision-making; and the clientelist use of the social apparatus. These principles of reproduction partially explain the system’s current degree of social exclusion as well as its increasingly social-assistance bias.
Notes on microelectronic automation in Brazil
The objective of this work is to evaluate the results of the principal investigations conducted in recent years on the socio-economic implications of microelectronics-based automation in Brazil and in particular the investigations carried out by the author himself.
The competitive challenge for Brazilian industry
This article defines the stages of development reached by industries that account for half of Brazil’s total output and identifies the competitive challenges they face including those associated with the country’s industrial policy. Between 1980 and 1994 Brazilian industry experienced persistent macroeconomic instability as the country’s trade liberalization efforts proceeded. By means of a series of adjustments however the sector did manage to adapt to this hostile environment; in fact it not only survived but actually succeeded in maintaining its ability to help cover the existing deficit meet domestic demand and aid the country in achieving balanced linkages with the external economy.
Education and development in Brazil, 1995-2000
This article analyses the education policies applied in Brazil in the six-year period from 1995 through 2000. After noting the need to prepare citizens and the country to face the twenty-first century it addresses the long-standing lag in Brazilian education and the general characteristics of the educational system of that country. It then describes the educational policy options adopted in the period in question which were aimed primarily at the expanding the system while improving its quality and analyses the special features of the programmes in the field of basic education (understood as the education given from the earliest stages up to the end of secondary education); compensatory programmes aimed at keeping students in school; special education; literacy training plans and the education of young people and adults. Next it looks at the training of teachers secondary and techno-professional training and higher education as well as matters connected with the transparency of information on the educational system and the possibilities of evaluating the system the financing of education and the implementation of the corresponding constitutional rules. The article ends with an analysis of the challenges and prospects of education in Brazil noting that the main challenge is the pursuit of increasingly high levels of quality at all levels of education: an objective which is intimately linked with the upgrading of teachers and the financing of the system.
The impact of public investment on private investment in Brazil, 1947-1990
This article analyses the impact of public investment on private investment. Apart from purely ideological aspects two opposing interpretations may be distinguished with regard to the relationship between these variables. The first is that there is competition between public and private investment so that the former “crowds out” the latter. The second is that public investment is complementary to private investment in so far that by generating positive externalities it creates favourable conditions for the latter. In view of the relative scarcity of empirical studies on this matter this study deals with the case of the Brazilian economy in the period from 1947 to 1990. Its main conclusions are that private investment is indeed crowded out by public investment in the short term but in the long term the cointegration vector coefficients indicate that these two variables complement each other.
Financial openness: The experience of Argentina, Brazil and Mexico
This article seeks to analyse the effects of globalization on the financial systems of Argentina Brazil and Mexico which were the countries that received most of the foreign investment in the region in the 1990s. This capital was mostly made up of portfolio flows and investments in shares traded on the local financial systems. The movement was not homogeneous in all the countries because of their different degrees of openness and differences in macroeconomic policies. In the case of the portfolio investments the effects of the openness were concentrated in different segments and they therefore had different impacts on the financial systems in question. The recent experience of these countries shows that there is still some room for national economic policies to take action in the context of financial globalization even though their capacity to reduce the perverse effects of financial flows is limited. Foreign firms are observed to be assuming growing importance in the countries studied as a function of the degree of openness of the local financial systems. This tendency is due to the liberalization measures adopted in order to make possible capitalization of the banking systems and competition among banks to find new sources of profits and strengthen their position in globalized markets. Although the predominance of foreign companies has given a more solid capital base to the national banking systems it could have an adverse macro- economic impact especially in Mexico and Brazil which still maintain relatively independent monetary policies.
Brazil: Options for the future
This article analyses the present situation and future prospects of Brazil in the light of the globalization process. In the author’s view the market only generates globally coherent decisions in countries with a high degree of social homogeneity. Thus the greater the social heterogeneity of a country the greater the need for a national development policy. Such a policy should link up the concepts of globalization and social profitability on the economic and political level. Globalization furthers the destructuring of production systems in favour of companies that plan their investments on an international scale and promotes the concentration of political power widening of the productivity gap and the destructuring of cultures. Social profitability on the other hand has to do with the priorities of economic decision-making in national political systems and allows the values of the community as a whole to be taken into account. In a country of continental size with great population mobility the danger of disintegration of the national production system makes it hard to subordinate the channeling of investments to the rationale of the transnational corporations. If globalization is an unavoidable technological imperative then the country has little room for taking its own decisions. The author concludes that in these circumstances countries like Brazil with great natural resources and marked social disparities may disintegrate or slither in the direction of fascist-type authoritarian regimes in response to the growing social tensions. In order to escape from this prospect it is necessary to return to the idea of a national project and make the domestic market once again the dynamic centre of the economy. The greatest difficulty is in reversing the tendency towards income concentration which can only be done through a great social mobilization process.
The impact of gender discrimination on poverty in Brazil
This paper analyses the effects of gender discrimination on poverty in Brazil between 1992 and 2001 using data obtained from the National Household Survey. A counterfactual distribution of per capita household income was estimated based on a hypothetical scenario in which the labour market pays equal wages to men and women in accordance with their qualifications. The results show that when gender discrimination is eliminated the percentage of poor persons tends to decline by an average of 10%. Results were even more striking among the most vulnerable segments of the population such as members of households headed by black women who lack a formal employment contract or union membership.
Bank consolidation and credit concentration in Brazil (1995-2004)
Since monetary stabilization in 1994 bank consolidation has been gathering pace in Brazil as part of a global concentration trend following bank deregulation processes. This article analyses the effect of bank concentration on lending in Brazil in the period 1995-2004 distinguishing two stages and estimating panel data for Brazil’s 27 federative units. The results support the hypothesis that the process of consolidation in the Brazilian banking sector has an adverse effect on lending which mainly harms the less developed regions of the country.
Fiscal federalism in Brazil: An overview
Although the states and municipalities that comprise the Brazilian Federation have considerable autonomy in raising their own tax income and spending public funds this is not the outcome of a planned decentralization process. The improvement in fiscal indicators at the subnational-government level since the promulgation of the Fiscal Responsibility Act has made a major contribution to the success of the country’s macroeconomic stabilization policy. Nonetheless the Federation is seen as a major stumbling block for reform of the tax system. As a contribution to the debate on federative balance in the division of fiscal responsibilities this paper makes a diagnostic study of the federative framework and recent institutional changes and proposes a new federative agenda.
Exchange-rate management in Brazil
This paper examines four hypotheses: (i) in Brazil as in other peripheral countries in the post-crisis context a policy choice appears to have been made for a flexible exchange rate within a currency band (“dirty float”); (ii) the underlying reasons for this policy appear to have more to do with pass-through of exchange-rate variations and precautionary demand for reserves than with the maintenance of a competitive real exchange rate; (iii) in the country’s peculiar situation considerable capital mobility is conjoined with large and liquid financial derivatives markets and a reserves build-up policy that carries a high fiscal cost; (iv) until April 2006 reserves accumulated in much the same way under the floating exchange-rate system as they had under the currency band regime; there have been changes since then owing to the rapid growth of reserves.
Productivity, growth and industrial exports in Brazil
Because productivity is a determinant of comparative advantages over the medium and long terms the relationship between productivity industrial growth and exports of manufactures is coming under increasing scrutiny in studies on development and trade policy. This article analyses that relationship in Brazil where the rise in industrial productivity has been slowing since the mid-1970s.
Development pattern and environment in Brazil
After describing the present situation of ecological transition which is one of the factors in the economic institutional and environmental crisis of present-day society the author tries to identify the main features of the industrial and agricultural expansion of Brazil highlighting the socio-environmental impact of the style of development pursued by that country since the war. On the basis of this diagnostic study and especially of the technical background material prepared for (he drafting of the National Report presented by Brazil at the United Nations Conference on Environment and Development (UNCED) (Rio de Janeiro June 1992) the author describes the main requirements and components of a sustainable industrial and agricultural development strategy which will permit both proper management of the country’s natural resource endowment and the maintenance of the environmental quality of the Brazilian ecosystem while at the same time ensuring satisfaction of the basic needs of present and future generations.
Transnational corporations and structural changes in industry In Argentina, Brazil, Chile and Mexico
The central focus of this article is on the role played by transnational corporations in the industrial realignment of Argentina Brazil Chile and Mexico between the end of the import substitution stage and the early 1990s. Based on recently published studies dealing with the sweeping changes occurring in Latin America’s manufacturing sector following the region’s economic crisis and liberalization process a computer programme developed by the ECLAC Division of Production Productivity and Management has been used to examine the changes that have taken place in the sector’s production structure (sectoral composition and efficiency) and its linkages with the global economy.
Brazil: How macroeconomic variables affect consumer confidence
Identifying which macroeconomic variables underlie consumer confidence is an essential step towards implementing sound economic policies. This article contributes to the subject by way of an empirical analysis based on ordinary least squares (ols) generalized method of moments (gmm) and vector autoregression (var) techniques for the case of Brazil. The findings indicate that following a loose fiscal policy which increases public debt and taking measures to increase the volume of lending to the private sector does not represent a good strategy for improving consumer confidence. Moreover the credibility of inflation targeting is a very important driver of consumer expectations. Working to enhance credibility is thus a key step for economies seeking to attain a high level of consumer confidence.
Institutional reform and government coordination in Brazil’s social protection policy
This study now being published posthumously examines Brazil’s recent experience in formulating and implementing government social policies and assesses the prospects for establishing a “social authority” for centralizing and coordinating such policies. It describes the complex pattern of exclusion and vulnerability against which social reforms must be instituted in Brazil. It then goes on to review the social development strategy adopted as part of the Plano Real in 1994 which seeks to restructure the financing outlays and benefits of the social protection system in order to increase its effectiveness coverage and redistributive impact. Finally it analyses the coordination of federal social policies especially at the macropolitical and intergovernmental level drawing special attention to the creation of sectoral chambers and policy integration mechanisms to replace former bureaucratic coordination structures.
An econometric analysis of private-sector investment in Brazil
This article analyses the main determinants of private-sector investment in Brazil during the period 1956-1996 using an empirical model employed in the most recent studies on developing countries. The econometric procedures followed not only take into account the non-stationarity of the data series examined but allow for the possible difficulties involved in treating the conditioning variables as exogenous ones or as policy instruments. The findings –both the longterm equations and the short-term models– reveal the positive impact of the output public investment and financial credit variables and the negative effect of the exchange rate. The results of the weak exogeneity and superexogeneity tests show the importance of credit and public investment as economic policy instruments while obviating Lucas’ critique.
Education and income distribution in urban Brazil, 1976-1996
Despite tremendous macroeconomic instability Brazil’s urban income distributions in 1976 and 1996 appear at first glance deceptively similar. Mean household income per capita was stagnant with a minute accumulated growth of 4.3% over the two decades. The Gini coefficient hovered just above 0.59 in both years and the incidence of poverty (with respect to a poverty line of R$60/month at 1996 prices) was effectively unchanged at 22%. Yet behind this apparent stability a powerful combination of labour market demographic and educational dynamics were at work one effect of which was to generate a substantial increase in extreme urban poverty. Using a micro-simulation-based decomposition methodology which endogenizes labour incomes individual occupational choices and education decisions we show that the distribution of incomes was being affected on the one hand by a decline in average returns to both education and experience and by impoverishing changes in the structure of occupations and labour force participation (all of which tended to increase poverty) and on the other hand by an increase in educational endowments across the distribution and a progressive reduction in dependency ratios (both of which tended to reduce poverty).