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Is there a Brazilian model of development?

Here, in our guest article, Professor Armando Barrientos and Dr. Ed Amann introduce the work of the International Research Initiative on Brazil and Africa (IRIBA) and discuss whether Brazil has its own development model.

Brazil’s ascent to prominence on the international economic stage has been a prolonged affair. Perhaps the most curious feature of Brazil’s economic and political development has been an enduring discrepancy between the country’s size and obvious potential on the one hand, and its surprisingly low international profile on the other.

Rio from the airThough lower profile than it should be, Brazil’s image has changed rapidly over the last few years. Initially lauded for its social and economic ‘take off’ and resilience following the financial crisis, popular protests ahead of the World Cup then drew global attention to the problems the country still faces. With the 2016 Rio Olympics and an upcoming election that could see Lula’s protégé Dilma Rousseff replaced by the world’s first Green president, attention on Brazil looks unlikely to fade.

In development circles too, Brazil has forged a distinctive approach, in part through its energetic promotion of South-South cooperation. With Brazil’s experience of implementing innovative social policies often the starting point for discussions, African governments, in particular, are looking towards Brazil for inspiration and practical support.

In response to this interest, a team of researchers from Brazil, the USA, and Europe, coordinated by The University of Manchester, have come together to examine if there is a Brazilian development model and the ways in which this experience could best inform individual African countries. Following the publication of 12 working papers, looking at different aspects of agriculture, macroeconomic policy, social policies and labour market intuitions, we contend that Brazil does indeed possess a distinctive model of development.

Since the mid-1990s, despite occasional short-lived crises, Brazil appears to have embarked on a new developmental trajectory in which reasonable growth performance has been combined with an increasingly effective assault on poverty and inequality. The pro-poor character of economic growth in Brazil during the contemporary era stands in marked contrast to the experience of previous boom periods.

Our assessment is that a unique combination of economic and social policies is primarily responsible for the unexpected success shown by Brazil. Specific features of the institutions of economic management developed after the stabilization plan of 1994 combined with innovative social policies and a favourable social contract, have set a new course for Brazil.

A renewed consensus or ‘social contract’ is fundamental IRIBA modelin setting the conditions for a positive evolution of these institutions. It ensures economic and social policies work together and reinforce each other. The 7% rise in Brazil’s tax/GDP ratio from 1995-2010, which funded a significant expansion of social assistance transfers, is emblematic of this effect.

Of course, not all policies fitted together and in the last few years, a variety of signals suggest the Brazilian model could be running against hard constraints. The recent economic slowdown and eruption of popular protests in mid-2013, if nothing else, serve to underline the fact that Brazil’s economic and social reforms are still very much a work in progress.

We believe that the specific combination of economic and social policy at the core of Brazil’s success merits close attention by other developing countries. As the IRIBA project continues to develop, we hope to shed further light on how the Brazilian experience can help inform the development dilemmas facing many African countries.

Photo: Ed Amann

More from IRIBA...

Is there a new Brazilian model of development? Main findings from the IRIBA research programme
E. Amann; A. Barrientos / International Research Initiative on Brazil and Africa 2014
It has been suggested that Brazil’s unexpected successes in the last two decades are the outcome of a new model of development, with strong inclusive growth at its core. The paper reviews the main findings of the IRIBA research ...
The economics of the Brazilian model of agricultural development
B. Mueller; C. Mueller / International Research Initiative on Brazil and Africa 2014
The success of Brazilian agriculture in increasing production and productivity in a relatively short period of time has attracted much attention to what policies and programmes have been behind this transformation. This paper a...
What explains the intensification and diversification of Brazil’s agricultural production and exports from 1990 to 2012?
C.J.C. Bacha; L.V. de Carvalho, / International Research Initiative on Brazil and Africa 2014
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Technological catch-up and indigenous institutional infrastructures in latecomer natural resource-related industries: an exploration of the role of EMBRAPA in Brazil’s soybeans and forestry-based pulp and paper industries
P.N. Figueiredo / International Research Initiative on Brazil and Africa 2014
This article reports the results of an exploratory study on the role of indigenous institutional infrastructures in the accumulation of world-leading innovative capabilities (technological catch-up) in natural resource-related industr...
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A. Barrientos; D. Debowicz; I. Woolard / International Research Initiative on Brazil and Africa 2014
Brazil’s has attracted considerable attention among low and middle income countries for the way it has successfully combined economic and social policies to reduce poverty, inequality, and social exclusion. The emergence of larg...
The impact of SENAI's vocational training programme on employment, wages, and mobility in Brazil: what lessons for Sub Saharan Africa?
C.V. Barría; S. Klase / International Research Initiative on Brazil and Africa 2014
In Brazil, the National Service for Industrial Training (SENAI) has existed for decades as the main building block of the Brazilian S-system of vocational training. It is a private non-profit organisation, managed and led by industria...
Restructuring Brazil’s national financial system
E.T. Torres Filho; L. Macahyba; R. Zeidan / International Research Initiative on Brazil and Africa 2014
This paper examines the main institutional reforms that had a major impact in terms of building a robust (but not flawless) domestic financial system in Brazil after 1994, when the high inflation period came to an end. Its aim is to i...
Institutions for macro stability in Brazil: inflation targets and fiscal responsibility
J.R. Afonso / International Research Initiative on Brazil and Africa 2014
Monetary and fiscal institutions have played a decisive role in the stabilisation of the Brazilian economy since the mid-1990s. Brazil’s experience of designing and managing institutions to this end is likely to be of interest t...
Mapping corruption & its institutional determinants in Brazil
L. Carson; M. Mota Prado / International Research Initiative on Brazil and Africa 2014
As an emerging economic power that has witnessed peaceful regular exchanges of political power, Brazil has avoided the most calamitous potential consequences of corruption, but its persistence in the country’s economic and gover...
Brazilian anti-corruption legislation and its enforcement: potential lessons for institutional design
L. Carson; M. Mota Prado / International Research Initiative on Brazil and Africa 2014
Over the past few decades corruption has emerged as a major issue in the global development discourse as policymakers and academics have increasingly focused on the political economy factors that promote or hinder inclusive, sustainab...
Taxation, redistribution and the social contract in Brazil
M.A. Melo; A. Barrientos; A. Canuto Coelho / International Research Initiative on Brazil and Africa 2014
The paper explores theoretically and empirically Brazil’s tax revenue from a political and political economy perspective. The absence of ‘big bang’ reforms to the tax code and tax administration suggests that policy ...
A more level playing field? Explaining the decline in earnings inequality in Brazil, 1995 - 2012
F.H.G. Ferreira; S.P. Firpo; J. Messina / International Research Initiative on Brazil and Africa 2014
Long one of the world’s most unequal countries, Brazil has experienced a non-trivial reduction in income inequality since macroeconomic stabilisation around 1994-1995. The decline was particularly pronounced since 2003, a period...