Title: Jobs and Growth: Brazil's Productivity Agenda
Abstract:Brazil enters the election year 2018 with an economy that is gradually recovering from the deepest recession in its recent economic history. This book is motivated by the need to understand the possib...Brazil enters the election year 2018 with an economy that is gradually recovering from the deepest recession in its recent economic history. This book is motivated by the need to understand the possible drivers of future income and employment growth. Shifting Brazil’s production structure to be the same as that of the United States will raise productivity by just 68 percent; making all Brazilian industries work as efficiently as their counterparts in the United States will boost productivity more than four times. This book analyses some of the factors that may be behind such low productivity. Among the most important: (a) a lack of competition both internally, thanks to a business environment that favors incumbents and hampers innovation and entry, and externally, due to high-tariff and nontariff barriers to trade; (b) government policies that have concentrated on subsidizing existing firms, and distorting capital and labor markets, rather than fostering competition and innovation; and (c) fragmented government institutions for business support that have allowed policies to persist without much regard for whether or not they had shown to be effective. The book recommends a policy shift in all three areas, with the ultimate objective to change the relationship between business and the state from one governed by perks and privileges to one built on creating a level playing field that incentivizes initiative and supports workers and firms to adjust to the demands of the market. This book fits into the context of a growing policy debate about what should be Brazil’s future development model.Read More