Abstract
Brazil with its policies of combining growth with income redistribution gained high attention especially since the Global Financial Crisis. These policies often have been labeled as developmentalist. Now, with a deep economic crisis, the question arises how far developmentalist policies were responsible for this downturn. To address this question, we first deliver a more precise definition of different variants of developmentalism. Second, based on stylized facts of the Brazilian economy in the period of three successive leftist governments between 2003 and 2016, we classify relevant macroeconomic, social, and industrial policies. Thus, we can see that different types of developmentalist policies came to application to a certain degree, with the dominance of redistributional policies fostering domestic consumption. However, there were also orthodox policy elements to be found especially within macroeconomic policies and to a highly varying degree over time. Most remarkably, we found the later part of the period under analysis characterized by permanent changes in the policy mix, and a final and frustrated orthodox attempt to revert the crisis. We thus conclude that not only has developmentalism per se been a fallacy, but rather its lack of conceptual clarity at the theoretical level, and incoherent policy coordination at the policy level in the case of Brazil.
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Notes
- 1.
For an extended comparative analysis to the two recent developmentalist concepts see Fritz et al. (2017).
- 2.
This should be reflected rather quickly in a significant reduction of the Gini index .
- 3.
This is also discussed as the phenomenon of Dutch disease.
- 4.
On the external context over the analysed period, see also Chap. “New Features of the Brazilian External Sector since the Great Global Crisis” of this book.
- 5.
For more details, see Fritz et al. (2017).
- 6.
On the Brazilian income distribution, see Chap. “Income Distribution, Productivity and Economic Growth: Empirical Evidence in the case of Brazil” of this book.
- 7.
Poverty index is the percentage of the population with household income lower than poverty line.
- 8.
On the Brazilan industry performance, see Chaps. “Brazilian Industry: Recent Performance and Future Challenges”, “Financialisation and Investment Behaviour Among Non-Financial Corporations in Brazil Since the Global Crisis” and “Income Distribution, Productivity and Economic Growth: Empirical Evidence in the case of Brazil” of this book.
- 9.
For more details on Brazil’s external sector, see Chap. “New Features of the Brazilian External Sector since the Great Global Crisis” of this book.
- 10.
For more details on monetary policy, see Chaps. “Monetary Institutions and Macroeconomic Performance in Brazil After the Global Financial Crisis of 2007–2008” and “Asymmetric Exchange Rate Pass-Through: Evidence, Inflation Dynamics and Policy Implications for Brazil (1999–2016)” of this book.
- 11.
On the role of FX derivatives on the Brazilian exchange rate dynamics, see Chap. “Foreign Exchange Derivatives and Financial Fragility in Brazil” of this book.
- 12.
For more details on the countercyclical role of public banks after the global financial crisis, see Chap. “The Brazilian Credit Market During The Great Recession” of this book.
- 13.
‘Car Wash operation is an investigation being carried out by the Federal Police of Brazil and the Court since March 17, 2014. Initially a money laundering investigation, it has expanded to cover allegations of corruption at the state-controlled oil company Petrobras , see https://nacla.org/news/2017/03/30/corruption-and-controversy-brazil.
- 14.
for more details on brazilian fiscal policy, see Chap. “Brazilian Fiscal Policy in Perspective: From Expansion to Austerity” of this book.
- 15.
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Prates, D.M., Fritz, B., de Paula, L.F. (2017). Brazil at Crossroads: A Critical Assessment of Developmentalist Policies. In: Arestis, P., Troncoso Baltar, C., Prates, D. (eds) The Brazilian Economy since the Great Financial Crisis of 2007/2008. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-64885-9_2
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