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Financiamento para o subdesenvolvimento, o Brasil e o segundo consenso de Washington

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  • Pereira, Luiz C. Bresser

Abstract

While in the social and in the ethical realms the Cardoso administration was successful, its economic outcomes were frustrating. In this administration’s eight years the investment rate did not increase and income per capita growth lagged, while the public debt and the foreign debt increased substantially. This poor economic performance may be explained by three chained causes: a mistake in agenda setting, the adoption of the Second Washington Consensus, and the alienation of elites. The decision of setting high inflation as the major problem to be tackled instead of achieving equilibrium in foreign accounts represented a major macroeconomic mistake, which can be explained by the Second Washington Consensus. This consensus proposed in the 1990s that highly indebted countries should grow counting on foreign savings, although this is not the experience among OECD countries. The outcome was to evaluate the real, to increase artificially wages and consumption, so that instead of growth what we have been increased indebtedness. Why this flopped strategy was adopted? Rich countries’ interests are not difficult to guess. On the part of Brazil, the only explanation is Brazilian elites’ alienation in relation to the country’s national interest. As a final outcome, the Cardoso administration ends with another balance of payments crisis, which was empowered by the coming presidential elections. Yet, the solvency situation of the Brazilian economy have been improving since the 1999 successful floatation of the real, so that I believe that, adopted a policy that deepens fiscal adjustment, while lowers the interest rate, and avoids new evaluation of the real, the country will eventually be able to avoid default.

Suggested Citation

  • Pereira, Luiz C. Bresser, 2002. "Financiamento para o subdesenvolvimento, o Brasil e o segundo consenso de Washington," Textos para discussão 119, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:eesptd:119
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    Cited by:

    1. Pereira, Luiz C. Bresser, 2008. "The new developmentalism and conventional orthodoxy," Textos para discussão 156, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    2. Luiz Carlos Bresser-Pereira & Paulo Gala, 2008. "Foreign savings, insufficiency of demand, and low growth," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 30(3), pages 315-334, April.
    3. Luiz Bresser-Pereira & Paulo Gala, 2009. "Why Foreign Savings Fail to Cause Growth," International Journal of Political Economy, Taylor & Francis Journals, vol. 38(3), pages 58-76.
    4. Pereira, Luiz C. Bresser & Gala, Paulo, 2005. "Crítica do crescimento com poupança externa," Textos para discussão 145, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).

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