Good structural reforms are fundamental to raising the economy’s productivity in the long run. Although this is an uncontroversial fact, putting it into practice is one of the greatest challenges for governments. Short-term costs can be high and interests that benefit from the status quo are organized to block changes that favor society. Those who are less able to coordinate politically, often those who most need the State, have difficulties in fulfilling their demands.
That is why reforms usually materialize under very special conditions. Generally, at the beginning of term, when the newly anointed by the ballot box has the power to fight for them, although without any guarantee of success. No less important is having mature projects that enjoy a certain consensus in society in order to mobilize it to oppose pressure groups and castes that appropriate political power.
Bolsonaro has always shown a very low interest in solving problems — in Brazil or even in his government. It refrained from supporting the reforms the country needed and, when it did, it was to dilute them or protect small groups. Even so, part of the government, with the support of Congress and society, managed to mobilize to make the country move in the right direction with two fundamental reforms: Social Security and the new sanitation framework. Added to these were other relevant projects and the maintenance of relative control over public spending, despite the pandemic.
Unfortunately, the Covid crisis has brought forward the electoral calendar and the conditions that allow for the advancement of good reforms are not present. A president facing difficulties to be re-elected, puts pressure (and receives pressure from those who have their own electoral intentions) for a strategy that would supposedly give him greater competitiveness: the expansion of public spending. As the consequences always come later, the temptation is great.
It is not acceptable to use “reforms” as a pretext to accommodate clearly electoral demands. One should not insist on projects of low quality or which, to become politically viable, have a high probability of being defaced in Congress. It is a guarantee of crystallizing more obstacles to the growth of the Brazilian economy in the long term, in addition to being a process that accentuates macroeconomic instability in real time.
As Francis Bacon said, God forbid we take the dreams of our imaginations as the reality of the world. Utopians, in their meritorious eagerness to do more, tend to ignore it.
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