The macroeconomic policy in a social-developmentalist strategy
Please cite the paper as:
André Biancarelli, Pedro Rossi, (2014), The macroeconomic policy in a social-developmentalist strategy, World Economics Association (WEA) Conferences, No. 1 2014, Is a more inclusive and sustainable development possible in Brazil?, 5th May to 12th August 2014
Economic development, in any of the several possible definitions, is a medium- and long-term process. More than that, it is always a set of structural changes, which are not to be confused with the short term fluctuations in the macroeconomic variables that generally have more attention in the economic news: exchange rate, interest rates, inflation, unemployment, public deficit. Not even the rate of growth is a parameter, much less a synonym, of development. This, from the point of view of governmental actions, is defined more by issues such as the role of the Government in the economy, the set of industrial, regulation, infrastructure, financing and income distribution policies and other social action fronts, among many other policies. That is, it takes a lot more than a macroeconomic management (here understood as the handling of the monetary, exchange rate and fiscal policies) to characterize a development strategy, although there are several points of contact between the two dimensions. The former president Lula administration is a clear example of gradual and important changes in the development strategy that occurred despite the visible continuities in management of the macroeconomic regime.
Using an expression to the liking of economists, the macro regime is therefore a non-sufficient condition for development. But it seems to be a necessary condition, mainly because of the negative influences and barriers that it can impose on the conduct of procedures defined by the broader strategy. Again, the processes under way in the Brazilian economy over the past few years are a clear example of these restrictions.
Thus, the present paper deals with these relationships between the macroeconomic policy fronts themselves (exchange rate, monetary and fiscal) and an ideal development project, whose constituent elements were presented, in part, over the past presidential terms, but whose contents need to be revisited, deepened and complemented. This strategy, here called as “social-developmentalist”, has its social component contextualized and summarized in the first section. On the second one, we present an overview of the constraints (mainly external) to the Brazilian growth model and to the operation of economic policy in the current context and the general directions that should guide it. The third section focuses on the institutional framework of each of these three policy fronts and assesses their recent conduct in Brazil, in the light of the preceding considerations. Brief conclusions finish the text.