Fiscal Straitjacket

The Politics of Macroeconomic Reform in Brazil, 1995-2002

Bibliographic Data

ID3686465
AuthorsDavid Samuels (0000-0002-5481-8217, University of Minnesota, corresponding author)
Year2003
Volume35
Issue3
Pages545-569
Publication date2003-08-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Latin American Studies (JOURNAL)
Journal identifiersISSN: 0022-216X • E-ISSN: 1469-767X
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s0022216x03006825
OpenAlexW2161044362
LanguageEN
Citations received15

Brazil's President Fernando Henrique Cardoso will be remembered for his administration's accomplishments as well as the problems his government left unresolved. On the one hand, fiscal policy represents one of Cardoso's success stories: the Plano Real curbed inflation, established economic stability, and enabled the central government to rein in subnational governments' out-of-control spending patterns, which had been a key source of macroeconomic instability. However, the question remains whether Brazil can truly escape from the political and economic consequences of past fiscal profligacy. Despite many successes, Cardoso's own policies have created additional obstacles that future administrations will necessarily confront, in particular a dramatic increase in Brazil's internal debt. Observers of Brazil should count both sides of the accounting ledger when evaluating the Cardoso administration. Much has been gained, but the costs of those gains must be recognised and the impact of those gains on the range of policy choice available to future administrations understood. This article explores the factors that contributed to Brazil's macroeconomic difficulties prior to 1995, and then explores how the Plano Real provided the Cardoso administration with leverage to constrain the capacity of subnational actors to affect Brazil's economy. Subsequently, however, the paper describes how the Cardoso administration's policies have created Brazil's current 'fiscal straitjacket', and concludes by discussing how Cardoso's policies will constrain future administrations

Administration (probate law) · Debt · Economic policy · Economics · Fiscal policy · Government (linguistics) · Government Debt · Inflation (cosmology) · Leverage (statistics) · Macroeconomics · Political economy · Political science · Politics · Economic Theory and Policy · Finance · Fiscal Policies and Political Economy · Fiscal Policy and Economic Growth