Democracy and Growth in Brazil

Produced by: 
INSPER - Instituto de Ensino e Pesquisa
Available from: 
October 2013
Paper author(s): 
Marcod de Barros Lisboa (Insper, Instituto de Ensino e Pesquisa)
Zeina Abdel Latif (Gibraltar Consulting)
Topic: 
Politics and Economy
Year: 
2013

Democracy is a relatively recent achievement in Brazilian history. Since the end of the imperial era in late 19th century, the country has experienced two long periods of dictatorship in 1930-45 and in 1964-85. For most of last century, political participation was rather limited. Evolution towards democracy was convoluted, moving forward and backwards up to mid-1980s, when mass democracy was finally established.

Brazil’s economic development has been equally convoluted. In the last century, many years of strong economic growth were followed by severe economic crises. Fiscal and external disequilibrium were common, as was high inflation. Government played a central role in the country’s economic development, financing public and private investment, coordinating production decisions, providing protection to selected sectors and setting prices.

In this paper, we propose the term institutionalized rent-seeking in order to broader its original meaning. It refers to the existence of discriminatory policies intended to provide privileges or benefit specific groups, often imposing non transparent costs upon the rest of society, extending the standard definition of rent-seeking in three aspects: discriminatory policies, political pressure, public policy intended for specific groups.

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