A Literature Review on Productivity and Growth in Brazil

Productivity growth in Brazil has not kept pace with developed and emerging economies, despite progress in achieving macroeconomic stability and implementing reforms in product and input markets. This paper reviews the literature on reforms and growth in Brazil to understand the factors that have hindered productivity growth. The paper discusses the impact of competitive distortions on productivity, the effect of structural change on productivity growth, and the evidence on misallocation and growth dynamics. Additionally, the paper analyzes the direct and indirect effects of several reforms, such as trade liberalization and formalization policies. Based on the main lessons from this review, the paper proposes a potential reform agenda to improve improve productivity in Brazil in the coming years and narrow the income gap with developed countries.