Political Economy of Brazil

Transcription

1 Political Economy of Brazil

2 Also by Philip Arestis: FINANCIAL LIBERALIZATION (Co-editor with Malcolm Sawyer) THE POLITICAL ECONOMY OF ECONOMIC POLICIES (co-editor with Malcolm Sawyer) MONEY AND BANKING: Issues for the Twenty-first Century (editor) MONEY, PRICING, DISTRIBUTION AND ECONOMIC INTEGRATION RELEVANCE OF KEYNESIAN ECONOMIC POLICIES TODAY (co-editor with Malcolm Sawyer) WHAT GLOBAL ECONOMIC CRISIS? (co-editor with Michelle Baddeley and John McCombie) POST-BUBBLE US ECONOMY: Implications for Financial Markets and the Economy (with Elias Karakitsos) FINANCIAL DEVELOPMENTS IN NATIONAL AND INTERNATIONAL MARKETS (co-editor with Jesus Ferreiro and Felipe Serrano) ADVANCES IN MONETARY POLICY AND MACROECONOMICS (co-editor with Gennaro Zezza) ASPECTS OF MODERN MONETARY AND MACROECONOMIC POLICIES (co-editor with Eckhard Hein and Edwin Le Heron) ON MONEY, METHOD AND KEYNES: Selected Essays (by Victoria Chick, co-editor with Sheila Dow) IS THERE A NEW CONSENSUS IN MACROECONOMICS? (editor) Also by Alfredo Saad-Filho: THE VALUE OF MARX: Political Economy for Contemporary Capitalism (author) MARX S CAPITAL: Fourth Edition (co-author with Ben Fine) ANTI-CAPITALISM: A Marxist Introduction (editor) NEOLIBERALISM: A Critical Reader (co-editor with D. Johnston)

3 Political Economy of Brazil Recent Economic Performance Edited by Philip Arestis and Alfredo Saad-Filho

4 Selection and editorial matter Philip Arestis and Alfredo Saad-Filho 2007 Individual chapters Contributors 2007 S o f t c o v e r r e p r i n t o f t h e h a r d c o v e r 17s t e d i t i o n All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act First published 2007 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN ISBN (ebook) DOI / This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress Transferred to Digital Printing in 2009

5 Contents List of Tables List of Figures Notes on Contributors vii ix x 1 Introduction 1 Philip Arestis and Alfredo Saad-Filho 2 Neoliberalism, Democracy and Economic Policy in Brazil 7 Alfredo Saad-Filho 3 Lula s Government in Brazil: A New Left or the Old Populism? 24 Fernando J. Cardim de Carvalho 4 The Real Meaning of the Economic Policy of Lula s Government 42 Leda Maria Paulani 5 The Twilight of Lula s Government: Another Failed Experiment with Left-Wing Administrations? 55 Fernando Cardim de Carvalho and Fernando Ferrari-Filho 6 Lula s Social Policies: New Wine in Old Bottles? 73 Alcino Ferreira Câmara Neto and Matías Vernengo 7 Assessing the Empirical Evidence on Inflation Targeting and Possible Lessons for Brazil 94 Alvaro Angeriz, Philip Arestis and Tirthankar Chakravarty 8 Inflation Targeting in Emerging Countries: The Case of Brazil 116 Philip Arestis, Luiz Fernando de Paula and Fernando Ferrari-Filho 9 Fiscal Policy, Credit Availability and Financing of Regional Policies in Brazil: Has Lula s Government Changed Anything? 141 Frederico G. Jayme Jr and Marco Crocco v

6 vi Contents 10 Disentangling Policy and Politics: Non-Fiscal Implications of the Calculation of the PSBR in Brazil 165 Lecio Morais and Alfredo Saad-Filho 11 The Interest Rate During the Lula Government: A Research Agenda 180 Carlos Vidotto and João Sicsú 12 Fixed Income Debt Management and Uncertainty in the Lula Administration, Rogério Sobreira and Paulo Gaya Index 217

7 List of Tables 2.1 PT election results, (number of elected candidates) Brazilian presidential elections, number of votes and percentage of votes received, Short-term macroeconomic indicators Social indicators Level of employment formal labour market 29 5A.1 Some macroeconomic indicators of the Brazilian economy Social indicators ( ) Brazil inflation targets and headline consumer price index (IPCA) Emerging IT countries Emerging non-it countries Emerging IT countries (full period) Transfers from the National Treasury to the investment fiscal funds Annual transfers from the National Treasury to constitutional financing funds Number of credit operations (OP) and contracted values (CV) Contracted values/transfers from STN Index of credit concentration by regions unit Brazil Participation of regions on the added value of total activities and financial intermediation Brazil Impact of the net cost of the rediscount of the BCB on the central government deficit Net cost of the rediscount of the BCB and primary surplus Brazil: Net debt evolution Days of LTN auctions Days of NTN-F auctions Regressors and expected signal Regression for the LTN auctions LTN auctions: new regression Serial autocorrelation test for LTN auctions White test for LTN auctions ARCH test for LTN auctions 209 vii

8 viii List of Tables 12.9 Regression for the LTN auctions without secondary market Regression for NTN-F auctions New regression for NTN-F auctions Serial correlation test for NTN-F auctions White heteroskedasticity test for NTN-F auctions ARCH test for NTN-F auctions 213

9 List of Figures 6.1 Real minimum wage ( ) Government spending (% of total) Unemployment rate Real average wages Nominal interest rates (19 Latin American countries) Inflation rates (19 Latin American countries) Real interest rate and growth (19 Latin American countries) Brazil: average Selic rate from 1999 to Brazil: exchange rate volatility Brazil: percentage of administered prices over consumer price index (IPCA) Brazil: administered and market prices in extensive consumer price index (IPCA) Brazil: exchange rate deviation and prices indexes Latin American IT/non-IT countries Other emerging non-latin American IT countries Emerging non-it countries Brazil: Exchange rate and interest rate ( Jan 2000 Jul 2004) Brazil: Exchange rate and interest rate (Aug 2004 Oct 2006) Brazil: International reserves Brazil: Debt/GDP and over-selic interest rate ( ) Brazil: public debt: average maturity, Brazil: Selic rate, Brazil: public debt by type, LTN maturity, Fixed income debt in the market by type of bond, Weighted variance of the rate of LTN auctions, Weighted variance of the rate of LTN auctions, ix

10 Notes on Contributors Alvaro Angeriz is at the University of Cambridge, UK. Philip Arestis is at the University of Cambridge, UK. Tirthankar Chakravarty is at the University of Cambridge, UK. Marco Crocco is Associate Professor at the Department of Economics and Center for Regional Development and Planning (CEDEPLAR) UFMG, and is a CNPq researcher. Fernando J. Cardim de Carvalho is Professor of Economics at the Institute of Economics at the Federal University of Rio de Janeiro, Brazil. Luiz Fernando de Paula is at the University of the State of Rio de Janeiro, Brazil, and CNPq. Fernando Ferrari Filho is Full Professor of Economics at the Federal University of Rio Grande do Sul, Brazil, and a Researcher at CNPq. Paulo Gaya is Master in Public Administration at the Brazilian School of Public and Business Administration (EBAPE/FGV) and is an analyst at the Brazilian Central Bank. Frederico G. Jayme Jr is Associate Professor at the Department of Economics and Center for Regional Development and Planning (CEDEPLAR) UFMG and is a CNPq Researcher. Lecio Morais is at Câmara dos Deputados, Brasília DF, Brazil. Alcino Ferreira Câmara Neto is Dean of the Law and Economics Center, Federal University of Rio de Janeiro, Brazil. Leda Maria Paulani is at the Economics Department at the University of São Paulo, Brazil. Alfredo Saad-Filho is at the Department of Development Studies, SOAS, University of London, UK. João Sicsú is Associate Professor at the Universidade Federal do Rio de Janeiro, Brazil. x

11 Notes on Contributors xi Rogério Sobreira is Associate Professor of Economics and Finance at the Brazilian School of Public and Business Administration, Getulio Vargas Foundation (EBAPE/FGV), Brazil. He is also a Member of the Money and Financial Markets Study Group at the Institute of Economics, Federal University of Rio de Janeiro (IE-UFRJ), Brazil, and a Researcher at Pronex (FAPERJ/MCT). Matías Vernengo is Assistant Professor of Economics at the University of Utah, USA. Carlos Vidotto is Associate Professor at the Universidade Federal Fluminense, Brazil.