Democracy over Governance

Vol. 33 No. 4 (2013)

Oct-Dec / 2013
Published October 1, 2013

How to Cite

Correa, Amelia, and Romar Correa. 2013. “Democracy over Governance”. Brazilian Journal of Political Economy 33 (4):638-48.

Democracy over Governance

Amelia Correa
Department of Economics, St. Andrew’s College, Mumbai 400 058, INDIA.
Romar Correa
Department of Economics, University of Mumbai Mumbai 400 098, INDIA.
Brazilian Journal of Political Economy, Vol. 33 No. 4 (2013), Oct-Dec / 2013, Pages 638-648


Varieties of institutional economics are available to evaluate varieties of capitalism. These methodologies dig behind preferences and technology to arrive at the ground on which agents make choices. The individual is at the foundation of these edifices, neoclassical and otherwise. Consequently, the denouement of all these models is that the market knows best in the absence of effective counterfactuals. A natural corollary is that the task of the government is to set effective mechanisms in place in order to approach the best outcomes. In contrast, we propose a framework which contends with the modern economy as an aggregate that evolves in historical time. Problems like effective demand failures are endemic to capitalist economies. Therefore, systematic State intervention is essential to their functioning. In particular, political economy teaches us that intervention must be in the interest of wage earners. In contrast to the earlier model, the fabric of norms and conventions that facilitate the growth and development of economies must emerge from the consciousness and practices of the working class. 

JEL Classification: B52; E02; E12.

Keywords: New Developmentalism