S-Space College of Humanities (인문대학) Institute of Latin American Studies (라틴아메리카연구소) Revista Iberoamericana (이베로아메리카연구) Revista Iberoamericana (이베로아메리카연구) vol.02 (1991)
브라질 경제: 정부의 실패인가? 시장의 실패인가?
Brazilian Economic Crisis: Government Failure? Or Market Failure?
- Issue Date
- 서울대학교 라틴아메리카연구소(SNUILAS)
- Revista Iberoamericana, Vol.2, pp. 77-96
- This paper discusses the Brazilian economic policies during the last 20 years
from the standpoint of what economic reasoning supported that kind of policies.
And we investigate whether these policy-decisions are based on the belief
in market mechanism or, on the contrary, on the idea that government can do
better than market. If the underlying logic of policy making was the latter, we
may conclude that the current Brazilian economic crisis is the outcome of government
The basic lines of economic policies in the 70s are: 1) promotion of deficit
financed growth and 2) acceleration of government led import substitution.
Motivated by the oil shock, the implementation of these policies were possible
only through increasing borrowings of recycled petro-dollars. Inflation and consequent
economic instability caused by the fiscal deficits and credit expansion
became a burden to persistant growth, while gains from these were insignificant.
The 1980s were marked by recurrent crises of debt and inflation. And economic
policies of the 80s focused on these two issues. Bacause of the requirement
to meet the debt services, external economic policy turned to making of
trade surpluses. And domestic economic policy was nothing but stabilization
program to control the increasing inflationary pressure. Policies of the 80s, as
those of the 70s, were inspired not by price mechanism of market, but were
attempts to solve the problems by govermnent regulation and market control.
We conclude that the current Brazilian economic crisis is government made.
This government failure originated from the misjudgement of reality and the
belief on wrong economic theory which promises prosperity without cost.