Vol. 22 No. 2 (2002): Apr-Jun / 2002

Vol. 22 No. 2 (2002)

Apr-Jun / 2002
Published April 1, 2002


Celso Furtado and the beginning of industrialization in Brazil
Tamás Szmrecsányi
Brazilian Journal of Political Economy

Several authors have been referring these last decades to the absence in Celso Furtado’s historical works of any more elaborate explanations on the origins and initial evolution of the Brazilian economy’s manufacturing sector. In an attempt to test empirically the validity of these assertions, the article presents the result of systematic revision not only of the famous book on The Economic Growth of Brazil, but also of the Author’s other works. By its way, some quite different conclusions were reached. These conclusions don’t have the purpose of criticizing previous affirmations, rather intending to synthesize and characterize Furtado’s ideas on this very important process of our country’s economy history.

JEL Classification: B3, N16.

Restructuring of the International Financial System and Peripheral Countries
Maria Cristina Penido de Freitas, Daniela Magalhães Prates
Brazilian Journal of Political Economy

The purpose of this article is to present an evaluation of the international financial system reformulation propositions and their likely consequences for the national sovereignty of underdeveloped countries. To attain this objective, the article analyses the underlying rationale of the IMF’s main policy recommendations for the “new international financial architecture”, the new capital adequacy rules drawn by the Basle Committee, and the reform proposals for the IMF and the World Bank proposed by the US Congress and by the US government.

JEL Classification: F33; F53; G15; O19.

Why China survived the asian financial crisis?
Shalendra D. Sharma
Brazilian Journal of Political Economy

The Chinese economy shows a remarkable resemblance to those of pre-crisis Thailand, Indonesia, South Korea and Malaysia — especially the asset bubbles, high reliance on banking intermediation, poor prudential supervision, and fragility of the financial system. Yet, China defied the common prediction and did not succumb to the financial crisis. What explains the China ability to withstand a major region-wide financial crisis? This study addresses this complex question, besides elaborating the reform measures China must implement to immune itself from future financial crises or its contagion effects. 

JEL Classification: O53. O57.

Economic Reorganization, Labor Absorption and Qualification
Claudio Salvadori Dedecca
Brazilian Journal of Political Economy

In the 90’s, the Brazilian society knew a very important process of economic and social changes. After a long period of the development centered in the internal market and local industrial base, a new economic policy was adopted aiming increase to the competitiveness of the industrial structure. The new economic dynamic induced the growth of the importation and reduced the importance of local productive base for internal market level. This dynamic has imposed systematic reductions of the formal employment level. The government argues that the employment problems are explained by the reduced level of the qualification of national workers. This paper shows that this dynamic is based in the unskilled labor force. It reinforced the low skill of the Brazilian labor market and doesn’t improve the competitiveness of national productive base. We don’t find indicators able to confirm the arguments of the actual economic policy.

JEL Classification: J12, J13, O25

Business and delays in port reform in Brazil
Mahrukh Doctor
Brazilian Journal of Political Economy

The case of port modernization reform in Brazil encapsules the problems Brazilian reformers face. Although reform legislation was passed in 1993 (Law 8.630/93), many obstacles remain for full implementation of its provision. This article focuses on how business attitudes and actions deferred reform, and demonstrates how business is unable to contribute to reform implementation because of institutional obstacles and collective action problems. It then suggests a mechanism to overcoming these difficulties; specifically, it examines the evolution of corporatism and the value of constructing democratic close-knit policy communities meeting the needs of each sector. The empirical work is complemented with an unusual combination of three theoretical approaches to explain the political economy of institutional modernization: institutional economics as developed by Douglass North, the logic of collective action as elaborated by Mancur Olson, and policy network analysis as developed by Marsh and Rhodes, Jordan and Richardson.

JEL Classification: P11; R10.

Políticas de empleo en economias semi-industrializadas
Julio López G., Penélope Pacheco L.
Brazilian Journal of Political Economy

The main objective of this paper is to analyze economic policy options to foster economic growth and the absorption of unemployment in the short run in open semi-industrialized economies. We take into account the existence of idle capacity, and we postulate that at least part of these capacities could be put to use in the short run, stimulating output growth even as equilibrium in the trade balance is maintained. We emphasize the necessity to combine competitiveness of the real exchange with price stability and with a fair distribution of income. We thus propose to counterbalance the negative effects of an increase in the exchange rate on workers’ purchasing power, with compensation achieved either through direct subsidies or reduction in the Value Added Tax for basic goods. With two econometric exercises carried out for Brazil and Mexico we empirically analyze the basic hypothesis of this paper.

JEL Classification: E12; J0; L6.

The role of a special insurance agency for loans in Brazil
João Sicsú, Eduardo da Motta e Albuquerque
Brazilian Journal of Political Economy

This paper suggests a Special Insurance Agency (SIA) for the financing of innovative investments. The objective of this Agency is to establish a link between the banking system and the innovation system. This paper evaluates the Brazilian banking system and the national system of innovation and suggests an institutional innovation. This Special Insurance Agency would support an increase in the amount of private resources allocated to the financing of innovative activities, both for established firms and for new firms. This Special Insurance Agency might rearrange the division of labor among the institutions of the Brazilian system of innovation.

JEL Classification: G2; O3.

Municipal budget and planning: a case study
Eloi Dalla Vecchia, Marco Antonio Montoya
Brazilian Journal of Political Economy

The present article searches to evaluate the efficiency of planning in the municipal area, within the period of 1989 to 1997, aiming to establish if the variable inflation determines higher or lower levels considering the municipal adjusting. For this, it was used as data base the budget of 67 municipal districts of the Medium Plateau region of the state of Rio Grande do Sul. The methodological process implied the construction of efficient indexes, evaluated through the adjust grade of the budget variable. It was verified that: a) the variable inflation is not the only determining of the municipal planning adjusting; b) It exists, in the municipal technical staff, lack and deficiency about the planning and the discipline (technical) budget; c) The absence of a formal and established process that could evaluate the budget proposals, in the discussion and approval of the laws, considering this a legislative responsibility. Therefore, it concludes that the legislators, mainly in the period of price establishment, were not efficient considering the exercise of their jobs, judgment, discussion and approval of the budget laws in the cities of the Medium Plateau Region of the state of Rio Grande do Sul, since they permitted the systematic superevaluation budget, which proposed the generation of a series of deficits.

JEL Classification: H7; R51.

Deregulation of the Sugar and Alcohol Sector
Geraldo Santana de Camargo Barros, Márcia Azanha Ferraz Dias de Moraes
Brazilian Journal of Political Economy

The objective of this article is to determine the most important actors and decisions arenas involved in the deregulation of the Brazilian sugar and alcohol sector, using concepts of Political Economy. The deregulation was conducted by actors from both Southeastern and Northeastern production regions (such as sugar cane farmers’ associations, sugar and alcohol producers’ unions and associations and workers’ unions) and by politicians from several sugarcane production regions, whose conflicting interests influenced the decision makers. CIMA was the main decision arena. The main actors determining public policies for the sector are the congressmen and the State and Municipal governments.

JEL Classification: L5; L7.

Will be consistent the proposal for the creation of a monetary union in Mercosur?
Fernando Ferrari Filho, Luiz Fernando de Paula
Brazilian Journal of Political Economy

This paper aims to discuss the proposal for monetary union in Mercosur in the light of the theory of Optimal Currency Area (OCA). It shows that there is no evidence that macroeconomic convergence can be reached in Mercosur, since the area only minimally achieved some basic criteria defined by the OCA literature.

JEL Classification: F2; F15; F45.