巴西经济学家新书：不平等拖累经济增长

Brazil continues to squander its economic potential, and the latest national elections suggest this situation is unlikely to change in the short term, according to economists Michael França and Daniel Duque. They are co-authors of a new book, “Os Custos das Desigualdades: uma carta às elites econômicas” [literally, The Costs of Inequality: A Letter to the Economic Elite]. In an interview with Valor, França and Duque argued that Brazil’s economic and social inequality is not merely a moral dilemma or a matter of social justice, but a serious impediment to economic growth. “We live in one of the most unequal countries in the world, yet Brazilians rarely discuss how this affects the economic system,” says Michael França, who holds a PhD in economic theory from the University of São Paulo (USP) and coordinates Insper’s Center for Racial Studies. Lula seeks Central Bank shake-up to accelerate rate cuts Lula’s election-year pledges could push Brazil’s deficit to 1% of GDP Analysis: Copom remains faces test as economy’s only anchor In a column published Saturday in O Globo newspaper, economist Ana Carla Abrão also highlighted the issue. “An economy that wastes talent and restricts opportunities produces less than it could. Inequality constrains markets, reduces productivity, fuels violence, and undermines the trust needed for prosperity. Tackling it is not just a matter of social justice. It is also a matter of economic rationality,” she wrote. “Brazil’s budget reflects this reality. While resources and the capacity to deliver quality public services to the most vulnerable are lacking, billions are directed toward subsidies, tax breaks, and privileges whose contribution to development is rarely subjected to the scrutiny it deserves,” the economist added. For França, Brazil pays a very high price for failing to bring most of its population into a cycle of quality education and productive employment. The cost is reflected in wasted human capital, the toll violence takes on daily life in cities and limited opportunities for social mobility. “Millions of individual talents and productive capabilities are squandered by the lottery of birth, depriving the country of opportunities to develop a more skilled workforce and foster innovation,” França said. “Extreme inequality is one of the main drivers of urban crime, generating millions in costs for public and private security, as well as the constant fear that undermines the business environment,” he added. While many right-wing voters see efforts to reduce inequality and promote prosperity as conflicting goals, a significant part of the left believes the government can provide everything, as if resources were unlimited and there were no need to safeguard fiscal balance. Yet economic growth, fiscal responsibility, and reducing inequality should go hand in hand. According to Daniel Duque, who holds a PhD in economics from the Norwegian School of Economics and is a researcher at Fundação Getulio Vargas’s FGV Ibre, some economic players in Brazil and nearly half of voters who identify ideologically with the current right or Bolsonarism have embraced a mistaken conclusion: that economic growth and reducing inequality involve an inherent trade-off. “In countries with levels of inequality as stark as Brazil’s, narrowing these economic and social disparities is itself a catalyst for prosperity,” Duque said. “There is a kind of shortsightedness on this issue,” he added. He believes the political dynamics that played out in Brazil in October reflect the sense of stagnation felt by the population, amid the perception that social mobility has been lacking for decades. But he regrets that this could further delay recognition that, without a consensus on the need to reduce inequality, the country will continue to waste its economic potential. França and Duque argue that a group increasingly identifying itself as right-wing in Brazil is promoting the idea that income redistribution comes at an economic cost, reinforcing a mindset among voters that leads them to vote against their own social inclusion. In their view, this cycle is preventing the country from building a basic consensus around the priority of fighting poverty, regardless of which party is in power. “By exploiting this sense of economic frustration, they have promoted a policy prescription that, far from solving the problem, creates even more inequality and reduces opportunities for social mobility,” França noted. “This undermines the development of human capital and the country’s long-term economic capacity,” he added. Duque, however, believes the Lula administration has made mistakes and failed to take sufficient action to put Brazil on a consistent path toward reducing inequality. “Although its intentions point in the right direction, there have been many mistakes,” he pointed out. Duque is particularly critical of subsidies for large companies and the government’s failure to pursue a rigorous fiscal adjustment focused on eliminating privileges and improving the efficiency of public spending. He also argues that Brazil must move beyond the notion that reducing poverty and achieving fiscal balance are mutually exclusive goals. “We have a chronic fiscal problem. We have been living with an unresolved situation for 13 years, and some bitter remedies need to be taken. But if we could prioritize the right groups—which I know is politically difficult—fiscal adjustment measures could be implemented without increasing inequality. In fact, they could help reduce it by contributing to lower interest rates,” Duque said. “But that could upset certain groups. The biggest problem is that we have been stuck in this situation for more than 10 years,” he concluded. For economist Zeina Latif, a partner at Gibraltar Consulting, fiscal balance is part of the effort to reduce inequality, since poorly managed public finances undermine the economic environment and hit lower-income households hardest. “When you go too far with fiscal spending, the entire economy suffers, and the most vulnerable bear the brunt,” she said. “No social policy can achieve its intended results in an unbalanced macroeconomic environment marked by high inflation and interest rates.” Her assessment echoes Duque’s view that Brazil’s problem is not simply a lack of resources, but also shortcomings in how public funds are allocated and managed. These prevent the state from delivering quality services in essential areas such as health care, education, and public safety. “Taking care of people does not necessarily mean allocating more money to a particular public policy. In some cases, it does, but that does not mean the problem is solved. Proper management is essential,” she said. Latif also criticizes the loss of focus in the Bolsa Família income-transfer program, the overlap between social benefits, and the lack of coordination among the federal, state, and municipal governments. In her view, program design needs to be reassessed, and the federal government’s social welfare database, known as CadÚnico, improved so that vulnerable households and their needs can be identified more accurately. The economist also sees room to review tax expenditures, including the Simples Nacional simplified tax regime for small businesses, incentives for the Manaus Free Trade Zone, and deductions for health care expenses under the personal income tax system. According to her, the wide variety of these benefits and resistance from the sectors that receive them make a broader review difficult. One alternative would be to start with small, across-the-board cuts while taking into account the specific characteristics of each incentive. “Possibly, if you make a small across-the-board cut that applies to everyone, the total amount of resources freed up could be significant,” she said. For Latif, the first step should be to stop expanding these subsidies. “The first task is to stop increasing them,” she said.