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Fiscal Squeeze and Social Policy During the Cardoso Administration (1995-2002)


  • Matias Vernengo


Conventional wisdom associates the two lost decades of economic stagnation in Brazil to macroeconomic imbalances and excessive budgetary deficits. This paper suggests that, contrary to conventional wisdom, the fiscal crisis of the state in Brazil was the result of the liberalization strategy that started in 1989, and was accelerated and complemented during the Cardoso administration (1995-2002). In this view, the fiscal crisis of the State resulted from the financial liberalization of the 1990s and the increasing burden of interest payments on public debt. The interest burden, in turn, meant that fiscal spending on social policy was squeezed, a result that is common to liberalization experiences in the periphery. The amount of social spending was insufficient during the Cardoso administration, and problems were not restricted to inefficient spending.

Suggested Citation

  • Matias Vernengo, 2005. "Fiscal Squeeze and Social Policy During the Cardoso Administration (1995-2002)," Working Paper Series, Department of Economics, University of Utah 2005_11, University of Utah, Department of Economics.
  • Handle: RePEc:uta:papers:2005_11

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    Cited by:

    1. Leubolt, Bernhard, 2011. "Staat und politische Ökonomie in Brasilien: Die Regierung Lula im Spiegelbild der Geschichte," SRE-Discussion Papers 3152, WU Vienna University of Economics and Business.
    2. Bernhard Leubolt, 2011. "Staat und politische Ökonomie in Brasilien," SRE-Disc sre-disc-2011_01, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
    3. Leubolt, Bernhard., 2014. "Social policies and redistribution in Brazil," ILO Working Papers 994855073402676, International Labour Organization.
    4. repec:ilo:ilowps:485507 is not listed on IDEAS

    More about this item


    Fiscal Policy; Development; Latin America;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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