TITLE:
Brazil and Its Turning Point, the Possible Impacts of the Ideology on Private Investment Behavior
AUTHORS:
Luiz Marques Andrade
KEYWORDS:
Brazilian Economy, Economic Growth, GDP, Institutional Economics, Neoliberalism, Productive Investment
JOURNAL NAME:
Modern Economy,
Vol.13 No.2,
February
28,
2022
ABSTRACT: This paper analyzes the loss of dynamics in the Brazilian
economy from 2015/2016 onwards, which has resulted in a worsening of social
conditions in Brazil and seeks to answer what caused this loss of pace of
economic growth. The dominant ideology that started to rule the Brazilian
economy in 2016 is strictly related to the logic of reducing the public sector
participation in the economy, and the widespread belief among its supporters is
that this would lead to an increase in the private investment and,
consequently, to boost the economic growth. Nevertheless, we did not observe
this: despite the implementations of the neoliberal logic, the investment
decreased, the GDP levelled off around only 1% per year (from 2017 to 2019),
and the unemployment rate surged in parallel to the worsening of social conditions.
Here we try to explain what has been happening in the Brazilian economy,
supported by the institutional economy. It is essential to understand this due
to the importance of the Brazilian economy in the global and regional context.
What took place in Brazil could occur in other countries. Therefore,
understanding the hindrances to economic growth, even considering that the
elites had implemented an ideology that they believe is crucial to provide
sustainable growth, is pivotal because the assumptions of the ideology ex-ante
its implementations did not produce the results that were expected.