Vol. 7 No. 3 (1987): Jul-Sep / 1987

Vol. 7 No. 3 (1987)

Jul-Sep / 1987
Published July 1, 1987


The imbalance of the Brazilian public sector: alternative scenarios
Carlos Alberto Primo Braga, John H. Welch, Paulo de Tarso Afonso de André
Brazilian Journal of Political Economy

The Brazilian public sector disequilibrium, as measured by growth in the global
net public sector debt to GDP ratio, is examined with and without the “Plano Cruzado”.
Two models are used, one based upon a discrete time framework and the other based upon a
continuous time framework, to trace paths of the debt-GDP ratio for the rest of the decade
concentrating on the 1985-1990 period. Two major conclusions are reached. The first, of a
theoretical nature, is that discrete-time models are inappropriate in an inflationary context
as they severely underestimate the inflation tax. The second is that the Plano Cruzado may
put strong pressure on government finances due to the drastic fall in the inflation tax.

JEL Classification: H63; E31.

International finance and domestic politics: financial internationalization and the United States
Jeff Frieden
Brazilian Journal of Political Economy

This paper intends to show that the changes that occurred in the international
capital movements and monetary relations have transformed the domestic political economies
resulting in changes that have transformed the international political economy. Especially
considering the United States, the author argues that the international economic
hegemony of U.S., after the World War Two, was based on three principal elements: massive
outflows of long-term capital, a commitment to stabilizing the international monetary system,
and commercial liberalization. These three elements had initially broad support, both
inside and outside the United States. However, when the financial and commercial openness
gradually changed the domestic economic orders, the political support for hegemonic stability
eroded. For the author, the battle decided there will determine the very character of the
U.S. and the international political economy for the foreseeable future.

JEL Classification: F38; F32.

Dollarization and heterodoxy in Latin America
Pierre Salama
Brazilian Journal of Political Economy

Changes in the international financial markets implied new conditions for the financing
of Latin American foreign debts. The “dolarização “ of these economies, both in the
broad sense (using the dollar rather than the local currency) and strict (capital flight) sense,
acquired new importance, intensely affecting the monetary sovereignty of these countries.
As a result, new economic policies were instituted in Argentina and Brazil aimed at reducing
inflation by imposing a price freeze and a general de-indexation of the economy without
causing a recession as well as at maintaining a minimal servicing of their external debts.
The author takes into account the external context as well as both the economic structures
and the accumulation of capital, which vary depending on the country and moment, as he
analyzes the limitations of the measures used to slow down the long-terrn “dolarização” and
the main features of the “Austral” and “Cruzado” plans, which were presented as heterodox.
Lastly, he presents the possible need to adopt measures that are more heterodox than those foreseen in those plans: success would be a result of a partial moratorium of the payment of
foreign debts and a sensible modification of the distribution of income.

JEL Classification: F34; E31; E52.

Argentinean financial system after the Austral Plan
Mario Damill
Brazilian Journal of Political Economy

This paper analyzes the recent evolution of the monetary and financial system of
the Argentine economy, particularly from the implementation of “Plano Austral”, on June
15, 1985. The financial system is presented through a long-term perspective, as a result of
two financial reforms (1977 and 1982) whose principal features have determined the present
fragile situation. The monetary system is analyzed through the behaviour of the principal
monetary aggregations particularly observing the case of the evolution of different kinds of
actives in the hands of the people. According to the author, the initial impact of the stabilization
plan (‘’Plano Austral”) had two elements that were emphasized: the increasing of the
demand for monetary resources, and the reduction of the fiscal deficit.

JEL Classification: F34; E31; E52.

The form of public administration
Ferran Brunet
Brazilian Journal of Political Economy

This paper attempts to conceptualise the forms of Public Administration from
the Marxist political economy. This research is exposed in two parts. In the first one we
stablish how the capitalist forms of production shape the State organizing activities. The
social necessary activities who can’t produce in commodity and/or in capitalist ways must
be developed in administrative forms by the state agencies and corporations. Through this
the contradiction and the complementation between accumulation and State. In the second
part of this research we analyse systematicaly the subject-matters, aims, and capacities of the
Public Administration.

JEL Classification: B51; P11; H83.

Land structure and agrarian reform in Brazil
Marcos C. Cavalcanti de Albuquerque
Brazilian Journal of Political Economy

This paper is an attempt to analise land ownership patterns in Brazil and their
relation to economic variables such as production, productivity, land use, and profitability.
Some conclusions and derived with respect to the implementation of the land reform program
and its effects on the economic aspects of the Brazilian agricultural sector. The main
conclusions are: a) from an economic point of view ‘land should be treated on equal terms
with any other factor of production; b) there is no evidence as to land being extensively used
with speculative purposes; e) no significant change has been occurring in regard to the heavily
concentrated land ownership pattern observed in Brazil; d) no significant differences were
observed among different size-group of farms with respect to economic efficiency (partial
productivity differences are explained by differences in factor availability and reflect proper
resource allocation behavior by farmers); e) land-reform in Brazil, such as proposed by the
government, is not the correct policy to promote agricultural growth and development.

JEL Classification: Q15; Q18.

Notes and Comments

Conditions and limits of Brazil’s insertion in the international soybean market
Vincent Leclercq
Brazilian Journal of Political Economy

Brazil has experienced a great boom in the production of soybean. Since the
1960s, the country was capable of diversifying its export matrix, including exports of soybean
and its oil, orange juice, and meat. However, the 1982-3 crisis decreased the capacity of
the State to support the agricultural sector. This paper aims to analyze the impact of the new
financial condition on the production costs of the sector.

JEL Classification: Q11; Q14; Q17.


Economic Stabilization Plan
João Sayad
Brazilian Journal of Political Economy

Before quitting his position as Minister of Planning, João Sayad presented a heterodox
stabilization plan to President José Sarney, presented in its full version here.

JEL Classification: E31; E52.