First, to what extent was the crisis a result of inherent flaws in the development model that had underpinned previous successes? Second, can the crisis be finally overcome, even in the absence of fundamental reforms?

Regarding the first, the paper argues that Brazil’s development model, whatever its virtues, left unaddressed serious structural impediments to sustained inclusive growth. Once the global economic environment deteriorated and the domestic political environment fractured, these flaws brutally revealed themselves.

Thanks to buoyant global demand and improved economic management, the Brazilian economy is now in the midst of a modest recovery. Yet it would be hard to pretend that this will prove sustainable in the absence of critical reforms in such areas as export diversification, human capital formation and public sector pensions.

Without such reforms Brazil will not be able to embark on a path of sustainable, inclusive growth.

Read the full paper here.

“The Gini coefficient of labor earnings in Brazil fell by nearly a fifth between 1995 and 2012, from 0.50 to 0.41. The decline in earnings inequality was even larger by other measures, with the 90-10 percentile ratio falling by almost 40 percent. Although the conventional explanation of a falling education premium did play a role, an RIF regression-based decomposition analysis suggests that the decline in returns to potential experience was the main factor behind lower wage disparities during the period. Substantial reductions in the gender, race, informality and urban-rural wage gaps, conditional on human capital and institutional variables, also contributed to the decline. Although rising minimum wages were equalizing during 2003-2012, they had the opposite effects during 1995-2003, because of declining compliance. Over the entire period, the direct effect of minimum wages on inequality was muted.”

Read the full paper here.

Watch the wide-ranging interview here:

Read an open access special issue on the research here.

Q1: What are your reflections on the key findings?

Q2: Why is Brazil’s development experience important to analyse?

Q3: How important is the notion of the social contract? Are efforts being made to protect and/or rethink it?

Q4: Brazil is currently in a deep recession. Are you optimistic about a return to growth?

Q5: What factors could help to improve the current economic situation?

For more on the project findings, consult the IRIBA special edition of The Quarterly Review of Economics and Finance.

Q1: How did the BNDES help to mitigate the impact of the 2008 GFC in Brazil?

Q2: What has the role of the BNDES been, and how is it changing?

Q3: Is there still a role for the BNDES, given the current economic climate?

• Read a summary of Ernani’s research with Luiz Macahyba and Rodrigo Zeidan.
• Read the journal article, ‘The life-cycle of national development banks: The experience of Brazil’s BNDES‘.

Q1: Why has Brazil struggled to perform in terms of infrastructure development?

Q2: What are some challenges to securing private sector investment in infrastructure development in Brazil?

Q3: What countries do infrastructure well? How can Brazil learn from their experience?

• Read a summary of Tom’s research with Edmund Amann, Werner Baer and Juan M. Villa.
• Read the journal article, ‘Infrastructure and its role in Brazil’s development process‘.

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