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Developmental State with Neoliberal Tools: A Portrait of the Brazilian Housing Financial System

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  • Gomes Schapiro Mario
  • Pereira Saylon Alves

    (Law, Fundacao Getulio Vargas Escola de Direito, Sao Paulo, Brazil)

Abstract

In the last decades, several countries have undertaken institutional reforms in their national housing finance systems (SFH). At the end of the 1990s, the Brazilian government followed this global trend and reformed its national SFH. In 1997, Congress enacted Law no. 9.514, instituting the Real Estate Financial System (SFI) that should gradually replace the former SFH. The new SFI sought a different model of financing based on the creation of a mortgage market, which consisted of securitizing debts and fundraising via the capital market. In contrast, the former SFH was a state-led arrangement that relied on direct credit policies, public subsidies and the performance of state-owned banks. This paper aims to assess the Brazilian housing reform outcomes. Regarding legal security, the data collected pointed to the satisfactory success of these measures. However, concerning the extent to which the market relation expanded over the state domains, the achievement is different. The most apparent effect of the reform is a repositioning of state agents in the new institutional frameworks, most notably the state-owned bank in the housing market.

Suggested Citation

  • Gomes Schapiro Mario & Pereira Saylon Alves, 2019. "Developmental State with Neoliberal Tools: A Portrait of the Brazilian Housing Financial System," The Law and Development Review, De Gruyter, vol. 12(2), pages 457-493, June.
    • Handle: RePEc:bpj:lawdev:v:12:y:2019:i:2:p:457-493:n:8
    DOI: 10.1515/ldr-2019-0019
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    References listed on IDEAS

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    1. Bruno Martins & Eduardo Lundberg & Tony Takeda, 2011. "Housing Finance in Brazil: Institutional Improvements and Recent Developments," Research Department Publications 4730, Inter-American Development Bank, Research Department.
    2. Luiz Carlos Bresser-Pereira, 2016. "Reflecting on new developmentalism and classical developmentalism," Brazilian Journal of Political Economy, Center of Political Economy, vol. 36(2), pages 237-265.
    3. Richard K. Green & Susan M. Wachter, 2007. "The housing finance revolution," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 21-67.
    4. Loic Chiquier & Michael Lea, 2009. "Housing Finance Policy in Emerging Markets," World Bank Publications - Books, The World Bank Group, number 2641, December.
    5. Andrews,Matt, 2013. "The Limits of Institutional Reform in Development," Cambridge Books, Cambridge University Press, number 9781107016330.
    6. Bruno Martins & Eduardo Lundberg & Tony Takeda, 2011. "Housing Finance in Brazil: Institutional Improvements and Recent Developments," Research Department Publications 4730, Inter-American Development Bank, Research Department.
    7. Martins, Bruno & Lundberg, Eduardo & Takeda, Tony, 2011. "Housing Finance in Brazil: Institutional Improvements and Recent Developments," IDB Publications (Working Papers) 3742, Inter-American Development Bank.
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