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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 ...
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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...