Escolar Documentos
Profissional Documentos
Cultura Documentos
AND DEVELOPMENT
Francisco Ebeling,
Copyright 2014
Introduction
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sub-sea depth of 5,000 meters plus another 2,000 meters of water depth. The first
major discovery in the pre-salt layercalled Lulahas proven reserves estimated
between 5 billion and 8 billion barrels, making it one of the largest oil field discoveries in the Western Hemisphere over the past 30 years.
Inspired by the Norwegian experience, in 2010 the Brazilian government approved a new petroleum bill (12.351/2010), according to which Petrobras would
be the sole operator in the not-yet-auctioned pre-salt blocks. Under productionsharing agreements (PSAs), the government would start to auction the right to
participate in consortia with Petrobras and Pre-Sal Petroleo (PPSA), a newly
created state-owned firm to manage contracts for Brazils large oil and natural gas
fields in the offshore pre-salt region. Furthermore, that bill also created a Social
Fund, which would collect the governments share in the consortia. In 2010, the
government passed a bill (Onerous Cession) in order to capitalize Petrobras,
which will produce 5 billion barrels of oil in fields that belong to the country in
exchange for the equivalent in government bonds.
In October 2013, for the first time the government auctioned a block in accordance with the new procedures. The Libra field, a large ultra-deepwater oil area
in the Santos Basin, has been tested and is possibly the second-largest discovery
of the 21st century, only behind Kazakhstans giant Kashagan. Libra is expected
to have reserves between 8 billion to 12 billion barrels of recoverable oil. The
winning bid was presented by a consortium composed of Petrobras (40 percent),
Royal Dutch Shell (20 percent), Total (20 percent), the Chinese National Offshore
Oil Corporation (10 percent), and the Chinese National Petroleum Corporation (10
percent). They agreed to offer the minimum bid of 41.65 percent of surplus oil for
the federal government, as well as paying a signature bonus of 15 billion reais
(around U.S. $6.8 billion).1
The next decade is expected to be a very productive one for the Brazilian oil
and gas industry. It is anticipated that by 2020 the country will be producing
between 4.5 million and 5.0 million barrels per day (b/d) compared to an average
of 2.1 million in 2013. By 2035 the International Energy Agency projects that
Brazil will produce around 6 million barrels per day of which at least 2.5 million
will be exported.2 The major part of that additional production will come from the
Santos Basin pre-salt fields such as Lula (Concession Contract), Franco (Onerous
Cession), and Libra (PSA). This could place Brazil among the ranks of the top 10
oil-producing nations. To have an idea of what this means, in 2013 both Russia and
Saudi Arabia produced more than 10 million barrels per day. For Brazil, this increase in oil exploration and production will have significant ramifications. As the
Brazilian government demands oil companies to order local contentwhich may
reach up to 80 percentthis leap will only be possible if major investments are
made. Brazils Development Bank, BNDES, estimates that from 2014 to 2017
about 460 billion reais (approximately U.S. $210 billion) will be invested by the
petroleum industry in Brazil. To explore Libra, it is expected that in the next 10 to
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20 years around $100 billion to $200 billion dollars will be disbursed by the
consortium. Major investments also are needed in order to enhance the installed
capacity of the local goods and equipment industry, which will be manufacturing
floating production, storage and offloading units (FPSOs), oil rigs, and the like.
Oil and gas exploration and production (E&P) represents a huge developmental
opportunity for the country. This golden ticket will have to be carefully managed because history shows that many nations have failed to seize the opportunities that arise from the development of their energy and natural resources.
Utilizing an alternative new institutionalist perspective, this paper aims to assess
under which conditions oil and gas E&P may be an opportunity to further Brazils
social and economic development. To accomplish this, in the first section
we provide a review of the literature that relates institutions with the so-called
resource curse. In the second section, a review of a more conventional view of
new institutionalism is presented, which is followed by a discussion of how the
argument can be supported making reference to its alternative approaches. Subsequently, four typical themes of the resource curse literature are analyzedthe
relationship between the exchange rate and the Dutch disease, industrialization
and the diversification of the economy, transparent revenue use in the realm of
education, and politicsall of which are critical in determining whether oil can
promote Brazils social and economic development or not.
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when a wave of protests shook the Arab world and managed to depose several
autocratic regimes in states where oil reserves and production are scarce (a notable
exception is Libya, which has significant oil reserves). Similarly, the oil industry
has the characteristics of gold prospecting and then of a gold rush, or of blood
diamonds, and their role in engendering African warlordism.16 The second
mechanism is corporate rent seeking, as not only politicians but also oil companies
seek rents.17 In that sense, oil companies rent-seeking behavior fosters the government officials rent-seeking practices and, thus, tends to undermine democratic
politics.18
Focusing on institutions, in the last decade what one could call a fourth wave
of explanations for the resource curse has gained momentum.19 Natural resources can be a blessing or a curse depending on which institutions a country
possesses.20 If they are producer friendly, the former tends to be the case; if they
are grabber friendly, a country is more likely not to take advantage of its natural
resource endowment. It also has been argued that if a country possesses good
political institutions it may block rent-seeking behavior.21 A study has found that
when institutions endow property rights to private companies and manage to
enforce them, a country is more apt to profit from its oil and gas resources.22
Finally, another study finds that the resource curse is not a given and that the
quality and soundness of institutions matter a great deal to the outcomes.23 Some
examples of policies that are put forth by sound institutions are transparent public
bidding, environmental and social regulation of operations, taxation, auditing, and
responsible revenue spending.
However appealing the thesis that institutions matter in order to avoid the
resource curse might be, in recent years it has been convincingly criticized. For
instance, it has been found that in countries with poor institutions it is very difficult
to institute institutional change in order to develop non-primary production sectors
and to reduce the dependence on resource exports.24 Other research argues that
parsimonious explanations that ignore time and historical context are unlikely to
capture the dynamics of potentially more than one combination of a set of variables that can induce positive institutional change and that assessments of institutions and development are based more on ideological perspectives than on
scientific knowledge.25 It has been stressed that it is important to factor in the role
of the state in avoiding the resource curse: in nations with strong state institutions this occurrence is less probable.26 Moreover, it has been argued that
researchers have been too reductionist in positing a deterministic relationship between
natural resource abundance, weak institutions and various negative developmental outcomes,
27
such as poor economic performance.
Finally, another article delivers perhaps the most complete criticism of the
thesis that institutions matter in the realm of oil.28 According to the author, the
policy recommendation that countries should improve the quality of their
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institutions to prevent or cure the resource curse must be questioned for a number
of reasons. First, there is no single institutional arrangement that leads to good
outcomes. Second, the proxies used to measure what are good institutions are
flawed. Third, cases that have been cited as success stories very frequently have not
performed very well, such as Chile. Fourth, little has been said in that body of
literature about how institutions actually change. Coming to the studys conclusions,
it proposes a comprehensive analysis of what really makes for the quality of institutions. First, it compares developmental and predatory states, arguing that in the
former sound institutions tend to prevail. A second comparison is made between
concentrated and diffused natural resource property rights, in which there is not
really a single best institutional arrangement. Third, it opposes social cohesion
and social conflicts, where the latter tend to lead to better institutions. Finally, it
analyzes differences in colonial settlement structures as a source of different
institutions in resource rich countries.
To sum up, in order to argue that a resource rich nation is cursed by institutions
or that better institutions may be the cure for the resource curse, many variables
have to be considered, such as the historical context and the role of the state. In
other words, there is no room for simplistic and deterministic responses. As will be
seen in the next section, the more conventional strand of new institutionalism does
precisely that.
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brings the firm back into the analysis, it also encompasses the role of the state. But
the state in NIE is neoclassical, considering that Douglass North delivers a neoclassical theory of the State.34 In that sense, although NIE admits that the market
cannot be taken for granted and, therefore, is one of the biggest instances of the
necessarily socially created nature of human institutions,35 neoclassical analysis
does belong to what Imre Lakatos would call its protective belt. NIE preserves
neoclassicals organon (its methodological tools and theoretical concepts), which
includes methodological individualism, the idea of scarcity and competition, the
static equilibrium theory of prices, marginalism, and comparative statics.36
Oliver Williamson,37 who also uses transaction costs as the basic unit of his
analysis, goes one step further away from neoclassical economics by substituting
its instrumental rational assumption with Herbert Simons concept of bounded
rationality, according to which human behavior is intendedly rational but only
limitedly so.38 Thus, Oliver Williamsons important contribution to NIE is
characterized by (i) more realism,39 (ii) a greater willingness to give up the formalization and a supposed precision of the proposed theoretical models, and (iii)
more openness to interdisciplinary dialogue.40 Finally, another important contribution to NIE is presented by Daron Acemoglu and James Robinson.41 They build
their work upon Douglass Norths concept of open access order, according to
which the wealthier and more developed a society, is the greater the acceptance of
self-interested individual economic behavior and the more state institutions are
successful in reducing transaction costs and enforcing property rights. In that sense,
they argue that developing countries should pursue (liberal) reforms, which are
difficult to pass, mainly due to the rent-seeking behavior of self-serving political
elites.
Nevertheless, there are not a few critical voices against the way NIE portrays
how institutions work. For instance, it has been argued that transaction costs seem
to be a rather slim basis for explaining the existence of institutions.42 Douglass
Norths work has been criticized for its undertheorization,43 that is, for having
placed an exaggerated emphasis on transaction cost reduction and property rights
enforcement as the keys to capitalist economic development. Another study
criticizes NIE for its overemphasis of property rights institutions and argues that
the relationship between property rights and economic development is fraught
with weaknesses as, for instance, the difficulty in adequately measuring property
rights.44 Furthermore, it criticizes the glorification of private property rights to the
detriment of other types, which can also deliver a sound developmental performance, and maintains that a stronger protection of property rights is not always
better. It also has been argued that NIE fails to give a proper explanation of how
institutions actually emerge and change without recurring to functionalism, that is,
the belief that institutions are shaped by individual preferences.45 Finally, another
author asserts that Douglass Norths theory of the state does not consider other
ways that it can steer economic development.46 Thus, in NIE state intervention is
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becoming increasingly less competitive.60 In that sense, it is argued that Brazil already has started to suffer from a subtle form of the Dutch disease. The next
question is: how has this happened?
To some extent, what in Brazil is perceived as a subtle case of the Dutch
disease is a consequence of what has been happening in the world economy since
the 1970s. The collapse of the fixed exchange rate system, under the leadership of
the United States, marked the rise of the U.S. financial industry at the global level,
which today is known for its liquidity and capacity to innovate. From the early
1980s onwards, the United States started to attract massive inflows of capital,
which compensated for its growing current account deficits. In turn, mainly Asian
nations started to accumulate massive reserves of foreign currency. The combination of low wages, undervalued exchange rates, and abundant foreign investments
boosted the competitiveness of Asian states. In that context, the terms of trade began
to lean in favor of manufacturing to the detriment of primary products,61 a trend that
has been enhanced by the so-called currency wars, in which countries like China
competitively devaluate their currencies using their huge foreign currency reserves.
What has concerned Brazil is that those changes in the world economy have only
enhanced a constant threat to the nations competitive edgeas measured by its
international terms of trade and its exchange ratethat in reality dates to at least the
17th century. Being a producer and exporter of primary products such as ore, soya
beans, ethanol, and sugar, among others, the country always has been exposed to
both the up and down turns in the international commodity markets, which have
become ever more volatile in the past decades.
However, the collapse of the fixed exchange rate system is most known for
having disseminated a worldwide wave of capital accounts liberalization, financial
deregulation, and the movement toward floating exchange rate regimes. This bred
a global market for exchange rates that cannot be characterized by stability, efficiency and optimality.62 It is rather an institution where agents imperfectly
considered actions create currency prices.63 On the opposite side of the coin of the
excessive mobility of financial capital are national currencies that can be destabilized in a heartbeat.
In that context, after having liberalized its capital accounts and adopting
a floating exchange rate regime, in the second half of the 1990s the Brazilian
government established the goal of appreciating its exchange rate in order to
control inflation, an operation that required a constant influx of foreign currency.
To do so, it was necessary to offer very high interest rates in order to attract
extremely mobile speculative capital, thus skyrocketing public debt.64 This created
an entire class of rentiers, the majority of which were banks that unceasingly
demanded high interest rates. In 2014, this group is expected to pocket a bounty
totaling 1 trillion out of 2.38 trillion Brazilian reais out of the public budget
(approximately U.S. $480 billion). Furthermore, this liberal hiatus also left behind
a policy prescription that is very difficult to counter, namely, that the only possible
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factors, such as demand.68 Falling oil prices would pose a much greater risk as
some oil- and gas-rich nations tend to be fiscally lenient. In that sense, making
reference to the oil boom of the 2000s, it has been shown that higher oil prices tend
to be a major relief for oil-exporting states.69
The possibility of providing a more stable range of oil prices by calling upon
international oil pricing institutions also is not on the near horizon because
contemporaneous oil governancethe set of rules and organizations that guide how decisions over oil are madeis fragmented and incoherent, consisting mostly of a patchwork
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of organizations with mandates focusing on the vested interests of their members.
In that context, no matter if the greatest threat is posed by lower oil prices or
exchange rate appreciation, they both have to be managed by strong domestic
institutions. A possibly imminent Dutch disease may be countered with policies
aimed at planning the pace of production, sterilizing foreign capital through increased foreign-exchange reserves, and the creation of sovereign funds.71 Sovereign fundswhich have to be strengthened when oil prices rise simultaneously
assure a certain profitability of oil revenues and alleviate the appreciation of the
exchange rate since the investment in overseas assets functions as a countervailing
force to inflows of foreign currency. As stated above, Brazils new petroleum bill
has created a sovereign fund in order to ease exchange rate fluctuations. Also
known as the Social Fund, Brazils sovereign fund already faces a paradox. This
happens because returns on investments are actually higher in Brazil (due to high
domestic interest rates) than abroad.72 This does not invalidate the sovereign
funds logic but prevents it from being more profitablea price that necessarily
will be paid by those who will benefit from its future income flow.
To conclude this section, it is important to state that although the domestic
interest rate sometimes might not be effective in controlling the exchange rate and
is an irrelevant parameter for the Social Fund, keeping the rate at low levels is of
fundamental importance for the countrys competitive edge. In that context, it is
important to note that high interest rates are one of the main causes of what FIESP
(the Association of Industries of Sao Paulo State) calls the Custo Brasil73the
additional cost of doing business in Brazilas higher interest rates make corporate loans more expensive. As will be seen in the next section, operating oil
companies are at the center of the oil and gas supply chain. In that sense, the price
of goods and equipment that operating oil companies acquire in that supply chain
incorporatelike a snowballthe totality of these additional costs derived from
more expensive corporate loans. In a similar vein, there is a price level that depends
on the money wage and on the money rate of interest, with the latter acting as the
regulator of the ratio of the price level to the money wage.74 Thus, there is a connection between the rate of interest and the level of prices, in which the higher the
former, the higher the latter. Ceteris paribus, the higher prices are, the higher profit
rates will be. In short, a higher interest rate tends to reflect a higher profit rate and,
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with great probability, a less competitive industry. Thus, there is a common policy
nexus in which lower interest rates could alleviate the appreciation of the exchange
rates and also help the industry to recover a part of its competitive edge. The existence of such a common policy nexus calls upon the need to coordinate the diverse
policy instruments vis-`a-vis the different factors that might lead to the Dutch
disease.
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political nor technical conditions for other companies to replace Petrobras leadership position.80
In that sense, although all types of new institutionalism see the state and its
institutions as a crucial focus of study,81 it is not necessarily their principal power
center, as it certainly should be in an analysis applied to the Brazilian case. This
takes us to an institutional approach informed by sociology and history called
statism,82 which probably can be allocated to historical institutionalism. Statism is critical of what it terms actor-centered institutionalism83 because of the
latters inability to explain the origins of institutions and their resilience to change.
Furthermore, statism does not reduce institutions to less organized forms of
social interactions, such as norms, rules, or conventions, nor to the individual or
to individual actions, such as economic and social transactions.84 It offers
a state-centric explanation of political and economic life as opposed to a
society-centric one.85
Nevertheless, statism is an approach that is also in transition. In a more
moderate version of statism, it is recognized that there are other powerful
organizations and agents that also shape social, political, and economic life; the
state is analyzed in reference to those other actors. More specifically, one attempts
to explain how the state can implement its own goals despite the pressures exerted
by the dominant classes. The states autonomy is derived from its body of employees (to a great extent immune from rent-seeking practices) and from its taxing
and coercing capacity.86 In the hybrid perspective of the state,87 the states capacity
stems from three ways of guiding administrative actions (which sometimes contradict): (i) bureaucratic capacity backed by meritocratic criteria, professional
standards, and career plans; (ii) the ability to capture, interpret, and process
market signs in order to efficiently allocate resources; and (iii) the capacity to
allow democratic participation in order to ensure that state objectives are
aligned with popular aspirations. Building on those capacities, a typology of
states is proposed: developmental, intermediary, and predatory versions.
In that sense, a developmental state is the best prepared to implement its own
goals and the predatory state is almost totally captured by a rent-seeking elite.
Another study cites as well a transformative and a distributive state capacity.88
In that scheme, Japan is the archetype of a state equipped with transformative
capacities, Sweden with distributive ones, and Germany manages to blend
both. Moreover, in this paper it is considered that economic89 and political90
capacities are of major importance to guarantee that the state can implement its
own goals.
This more modern statist approach also emphasizes that the state must establish
ties with society in order to achieve economic and social development, in what has
been called embedded autonomy91 or governed interdependence.92 South Korea,
where the government managed to create strong ties with a burgeoning capitalist
class and, thus, to charge counterparts, is commonly portrayed as a developmental
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state; Brazil is viewed as an intermediary state because those ties existed but were
tenuous; and the former Zaire would be deemed a predatory state. The United
States is a typical example of governed interdependence, where both the state and
the private sector are to some extent strong.
Having the leading role in the economybeing its main power centerthe
Brazilian government currently faces an impasse regarding its ambition of
implementing a solid industrial policy for the oil and gas industry. With the
exception of support vessels and FPSOs, most of the goods and equipment
produced locally to meet the needs of the oil and gas industry are less competitive than external suppliers. It was with this reality in mind that the government
created the Brasil Maior program in 2011 and is about to launch another
programInovapetrodedicated to steering the countrys and the oil chains
capacity to innovate. Furthermore, government institutions such as FINEP93 and
BNDES, which have the incumbency of financing that chains technological
development, are being both financially and organizationally strengthened.
There appears to be a growing perception that the government should not only
spend to boost demand and stabilize the economy, but should also invest in increasing the nations capacity for innovation.94 In this sense, it has been argued
that government spending should combine the teachings of Keynes and
Schumpeter.95 Thus, to a certain extent, there seems to be a transition in how the
state manages its transformative capacity, with a stricter focus on innovation.
This shift also seems to fit into the aforementioned hybrid perspective of the state,
as this new focus on innovation may have reflected the states ability to capture,
interpret, and process market signs in order to efficiently allocate its resources
from demand management to investments in the enhancement of the countrys
technological capacity.
In this sense, creating Schumpeterian institutions 96 is of fundamental
importance. Because technological innovation is fraught with uncertainty,
Schumpeterian institutions increasingly appear as systems of innovation,
which are defined as the network of institutions in the public and private sectors
whose activities and interactions initiate, import, modify and diffuse new technologies.97 From this perspective, firms are described as belonging to a broader
network of businesses with whom they cooperate and compete.98 In that framework, great emphasis is being given now to the creation of business clusters. In
a localized cluster there are greater chances that a firm may get in touch with other
innovative companies and early adopters of new technologies.99 The relations
between firms, clients, research institutions, the education system and local
authorities create a region which shares traditions and customs.100 They form the socalled milieu, a created space that is both a result and a precondition for learning.
Firms that are embedded in the right kind of milieu tend to learn faster and become
more competitive, and the agglomeration of firms makes up a favorable milieu for
knowledge creation and spillover effects.
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The oil industry has successfully created business clusters in cities such as
Houston, Calgary, Aberdeen, and Stavanger. More recently, Brazilian cities such
as Rio de Janeiro and Santos have shown a similar potential.101 In fact, Rio de
Janeiro already has a certain tradition as a center for technological development in
the industry. Petrobras, which is headquartered in this city, is one of the global
leaders in technology for exploration and production in deep waters. In recent
years, attempts have been made to create an offshore technology business
cluster in Fundao Island, where the Federal University of Rio de Janeiro and
CENPES (Petrobras technology center) are located. The latters expansion was
concluded in October 2010 at a cost of 1.2 billion Brazilian reais (around U.S.
$550 million). In terms of offshore technology, it is perhaps one of the most
modern in the world. Research centers from equipment and service supplierssuch
as Schlumberger, Baker Hughes, and FMC Technologiesalso were established
on the island.102 Since 2012, the Brazilian government has been working on
a strategy of clustering in selected localities, such as Rio Grande or Itabora,
companies that produce similar goods, getting them to cooperate with the universities and providing them with the necessary investments. With support from
BNDES, $8 billion in investments are planned for the five chosen cities, which
also include Ipatinga, Ipojuca, and Maragogipe.
Ultimately, business clusters tend to belong to the realm of hybrid institutional
arrangements, which appear neither in the pure firm nor in the pure etatiste form.
They normally have the characteristics of the institutional arrangement networks.
Although NIE and transaction costs theory provide for the existence of networks of
firms such as business clusters, the state at the head of it seems to be alien to NIE.
The Brazilian experience of oil business clusters creation is innovative because in
these clusters, from the onset, the staterepresented by Petrobras and other state institutions such as FINEP and BNDESwill play a more central and commanding role.
Through the implementation of business clusters, the Brazilian state chose to steer
the governance of other types of governance, in what is called meta-governance.103
The state also acts as a creative institutional entrepreneur.104 With the state acting
as an institutional entrepreneur, perhaps it will be possible to forge a new type of
embeddedness between the state and firms in those networks.
The launching of an industrial policy aimed at directing the goods and services
industrys competitive edge and its technological capacity does not exhaust the
opportunities to diversify the Brazilian economy presented by oil and gas. In that
sense, a recent study compares two possible paths natural resource-specialized
countries may follow: (a) a natural-resources export-led model with induced
growth, but low productive and export diversification, and (b) a natural-resource
export-led model with induced growth but with structural change toward industrial
sectors related to the trade sector and later to non-trade sectors, leading to export
and productive diversification in general.105 This research finds that only the
second path enables sustainable economic development. In a similar vein, it has
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compensations have not positively affected the growth and development of Brazilian municipalities, nor have they promoted intergenerational justice.113 Nevertheless, the municipalities differ considerably both in the use of these resources and
their efficacy.114 At the municipal and state level the problem lies in the fact that
the 1997 petroleum bill possesses no guidelines for the investment made with the
revenues received from the petroleum sector.115 This is slightly different at the
federal level, where funds made available have several strings attached.116
In 2013 the government managed to pass a new royalties bill by which 75
percent of oil and gas royalties collected from fields whose production started in
2013 and subsequent years would be allocated to public investments in education
and 50 percent of the returns on capital of the Social Fund (created in 2010) would
be allocated to public investments in health and education. In the following section,
we will discuss what led the government to propose a stricterand possibly more
accountable and transparentapportionment of public oil revenues to education.117
From the 1960s onwards, when Brazil had an educational system comparable
in quality and quantity to states with a similar gross domestic product (GDP), such
as South Korea, the country became stuck in a vicious circle of low investments in
human capital, high inequality, and restricted growth.118 Thus, in terms of the provision of public education, Brazil chose quantity to the detriment of quality. During
Brazils military dictatorship, from the 1960s to the 1970s, very little was invested in
educationbut this was also the case in other areas of collective welfarein order to
generate a higher rate of capital accumulation.119 The result of that socially austere
policy was that in the 1970s Brazil managed to grow at yearly rates that almost
reached 10 percent while, at the same time, social and economic inequalities skyrocketed. Additionally, the nation was outpaced by other developing countries such as
South Korea in the realm of innovation and technological development. This negative
pattern continued throughout the 1980s and 1990s. In the 1990s and the first two years
of the 2000s, total expenditures also stagnated.120 Education expenditures at the
fundamental/primary levels (1st to 9th grade) expanded at the cost of stagnation and
even reductions in expenditures at the mid- and higher educational levels and at day
care centers.
However, from 2003 onwards, when Lula da Silvas presidential term began,
the state of education in Brazil has improved markedly. The systemic character of
education was recovered and there was a recognition of the interdependencies
between the levels that have to be reflected in the policies the government designs
and implements. In order to match the needs of the diverse policies that were
implemented in that period, total expenditures in all levels of education were
increased. Nevertheless, they are still way below the target of 10 percent of the
gross national product (GNP) that the government had planned to reach in
2020.121 According to the Programme for International Student Assessment
(PISA), currently Brazil invests one-third of what is recommended by the Organization of Economic Cooperation and Development (R$64,000 instead of
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politicians either as rent-seekers or as opportunistic or myopic, in any event irresponsible caterers to an economically uneducated electorate.139 This description of the average politicians behavior also underlies the description of what
constitutes bad political institutions. Notwithstanding, it is important to remember that Brazil is neither a developmental nor a predatory state, but rather
an intermediary one.140 Brazils public sector is a variegated ensemble of bureaucracies in which clusters of efficiencysuch as Petrobrasare surrounded
by a sea of less efficient public agencies. In that sense, public officials in intermediary states sometimes act independently for the sake of higher state purposes
but sometimes they do not when they seek rent. In a similar vein, the strategicrelational approachan even combination of agency and structuresfinds that
the state is an ensemble of power centers that offers unequal chances to different
forces within and outside it to act for different political purposes and that state
powers are activated through the agency of political forces in specific conjunctures.141 Another example that illustrates the particularity of politics in Brazil and,
thus, of its political institutions, is given by the passing of the new royalties bill. The
Brazilian states (what in the United States are called states and in Germany lander)
are currently in a tax war. In the past 20 years, Brazils federative pact concentrated
tax revenues at the central level.142 In the 1990s, Brazilian states lost economic
power to the central government due to policy adjustment instruments, macroeconomic stabilization, and the loss of the possibility of making fiscal policy at a state
level. However, at the same time, the states did not lose their political power. The
disequilibrium between political and economic power triggered the tax war, making
it very difficult to approve the new bill. These examples show it cannot be argued
that politics is the sole arena of rent-seeking public officials and that the countrys
political institutions are a priori bad.
As has been laid forth in the prior sections, a number of state capacities will be
requiredeconomic, transformative, and distributivein order to adjust the exchange rate, to direct Brazils industrial development so as to diversify the economy,
and to allocate public oil revenues to education. In the following section, it will be
argued that those tasks have to be mediated by the states political capacity, which
appears in two main forms. Recalling that the state is a variegated ensemble of
bureaucracies, the first capacity is the ability to coordinate different interests at stake
inside the executive branch.143 Second is interlocution,144 which relates to the interaction of the government with all other stakeholders in societysuch as congressmen, capitalists, unions, and tax payers. Therefore, it is argued that a number of
enabling political capacities exist outside the realm of mainstream institutional political analysis that are not constrained by the limitations posed by orthodox governance theory145 on the states political agency.
It has been asserted that in order to stabilize the exchange rate at a favorable level,
Brazil has to rely on its own economic capacities, that is, the ability to sovereignly
manage its main internal prices, such as its exchange and interest rates. This is
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a capacity that will have to be mediated by the states political agency. It was seen
that the Dutch disease has at least three origins: a purely financial one, one that
stems from the dependence on the export of commodities, and the one that could
result from augmented oil exports. Under all three scenarios, a policy designed to
lower interest rates would be prudent. Thus, the argument can be made that the
interest rate is not constrained by natural or technical circumstancessuch as
a relative scarcity of capital and labor or the rate of growth of the economic system.146 Rather, it is an exogenous policy-determined variable. Going further, interest
rate determination is bounded both by state policy objectives and external constraints, where the final outcome depends on the relative strength of the parties
involved. Rentiers, thus, are interested in higher interest rates and organize themselves politically in order to achieve that goal. From 2011 onwards, the administration of President Dilma Rousseff started to reduce the spread between domestic
and international interest rates.147 Nevertheless, since mid-2013 this attempt was
given up. There is a suspicion that the government has been captured by rentiers
and their associatesmedia firmswho manage to convince the public and,
above all, big retailing companies, that the fiscal situation in Brazil is strongly
negative. What could be construed as a type of blackmail for higher interest rates
functions as a self-fulfilling prophecy because, when it is announced that inflation is high, the large retail companies actually raise their prices and a subsequent chain reaction ensues. Thus, the government will have to engage in
a political dispute in order to lower interest rates, a task that will require a herculean effort. From the start, the government has very unfavorable terms of trade
in its attempt to establish a favorable interlocution with rentiers. Fortunately,
should increased oil and gas exports result in the appreciation of the exchange
rate in the near future, the implementation of a countervailing trend through the
functioning of the social fund is essentially a technical affair, to a great extent
devoid from those political tensions.
There are a number of ways in which the states political capacity has been or
will be fundamental in mediating its transformative capacitythat is, the capacity
to steer the countrys economic development and diversify its industrial base. First,
the government will have to coordinate the interests of its own state agencies
concerning the setting of fuel prices. On the one hand, there is the governments
economic branchrepresented by the Central Bank and the Ministry of Economy
which is interested in controlling inflation through the freezing of diesel and gasoline prices. There is a wide consensus that this is extremely harmful because it
hurts Petrobras cash flow and, thus, its capacity to invest. On the other hand, there
is Petrobras, which would like to see increases in these prices, as it is struggling to
explore the pre-salt layer. Through its ability to navigate a path among the diverse
interests at stake, the governments mission is to find a compromise between these
rival groups, where the most probable outcome will be to negotiate smooth transitions and adjustments from time to time.
193
194
political decisions of the past to relegate education to the lowest priority of the
public agenda (1960s to 1980s), to financially weaken the states and municipalities (1980s and 1990s), and to dismantle public planning (1990s). Considering this huge historic deficit, if the state is to deliver public education in
order to address the needs of industry and society as a whole at an accelerated
pace, then the budget for education will have to be increased significantly. The
states oil revenues are a welcome plus but will never be able to match what is
required. Political capacities have to be mobilized in order to reduce the annual
share of the state budget that is transferred to rentiers and in order to raise the taxes
on the wealthy. Those are true stress tests for the governments interlocution
ability.
Concluding Remarks
The goal of this paper was to assess under which conditions oil and gas extraction could be an opportunity to steer Brazils social and economic development.
This was accomplished be utilizing alternative strands of new institutionalism, an
exercise which we relate to the extension of the institutional turn.153 The article
began with a review of the resource curse literature, with a particular emphasis on
its institutional wave. This was followed by an examination of mainstream new
institutionalist analysis and how alternative branches of that school could further
this studys objective. In the subsequent sections, four popular themes of the resource curse literature were debated: the exchange rate and the Dutch disease,
industrialization and the diversification of the economy, the transparent distribution
of revenues and education, and politics. We believe these issues are critical in order
to assess whether this golden opportunity to convert the development of the nations energy resources into meaningful economic and social advancements can be
realized. The following encapsulates this articles most relevant messages.
1. Conventional new institutional economics (or NIE) theory places a great
emphasis on property rights endowment and enforcement as a crucial precondition
for capitalist economic development. Not denying their importance, this is hardly
a sufficient condition in order to seize the opportunity presented by the extraction
of oil.
2. Thus far, oil and gas production and exports have not led to the classical
symptoms of the Dutch disease. However, the country has been struck by
a subtle form of Dutch disease due to a combination of high interest rates and
extremely volatile worldwide financial capital, resulting in Brazil increasing its
exports of soya beans, ore, and other raw materials. Through the lens of contemporary institutional political economy theory, it can be asserted that a concessive holist approach is required in order to explain what brought about this
malaise and what can be done to remedy it.
195
3. In order to tackle the Dutch disease, strong domestic institutions are required.
It was argued that geopolitical and political economic tensions permanently condition the construction and reconstruction of the institutions that manage the exchange rate. Moreover, the management of the interest rate is a very important policy
instrument.
4. Due to its elevated technological content, the oil industry is an activity
with growing returns to scale in which the division of labor is stimulated.
This process of industrialization alleviates the dilemmas of setting the exchange rate at a competitive level and stimulates the countrys economic
diversification.
5. Because the state plays the key role in this diversifying trajectory a moderate
Statist154 approach to new institutionalism is required to the detriment of actorcentered institutionalism.155
6. The states autonomy to implement its goals derives from a number of
state capacities. In this paper it is argued that an economic capacity corresponds to the setting of the exchange rate, that a transformative one relates to
industrialization and the diversification of the economy, and that a distributive
capacity corresponds to educational policies. A political capacity also was
considered.
7. Because most domestic goods and equipment suppliers are less competitive
than foreign ones, the governments attention is now turned to enhancing the
nations ability to innovate through a number of simultaneous initiatives. This
relates to the construction of so-called Schumpeterian institutions.156 In order
to address the oil industrys need for innovation, business clusters are being
created.
8. Although business clusters are hybrid institutional arrangements which
explore institutional diversity, contrary to conventional NIE wisdom, state institutions such as BNDES and Petrobras will have a commanding role.
9. Furthermore, oil can steer the countrys development, thereby contributing to
structural change in related and non-related sectors through a number of avenues,
such as the following cases: the technologies the industry develops can find applications in other fields; the oil industrys financial strength can empower labs
to pursue other types of research in addition to what is being done on behalf of
the industry; and through the industrys support of a burgeoning biomass-based
industry.157
10. In 2012, a new royalties bill was passed, according to which 75 percent of oil
and gas royalties collected from fields whose production commenced in 2013 and
thereafter will be allocated to public investments in education and 50 percent of the
returns to capital will be directed to the Social Fund (created in 2010), which will be
allocated to public investments in health and education. Nevertheless, because
distributionism requires developmentalism and vice versa, if each is to be robust,158 there is a tension between what will be spent on education on behalf of
196
the industry and what will be spent according to the principle of social justice.159
Thus, because of its economic importance Petrobras actively shapes institutional
complementarities and ceremonially encapsulates the production of knowledge in
the country.
11. The adjustment of the exchange rate, the directing of Brazils industrial
development, and the allocation of public oil revenues to education are tasks that
have to be politically mediated. Contrary to the conventional view about political
institutions, there are a number of enabling political capacitiessuch as coordination and interlocution160that have nothing to do with an alleged tendency of
politicians as rent-seekers or profligate spenders.
12. Through its political capacities, the government must strive to negotiate
lower interest rates for the sake of adjusting the exchange rate, to find a
compromise regarding the setting of gasoline prices in order to financially
strengthen Petrobras, and to set local content targets that are both reasonable
and bold. Finally, although large public oil revenues are a welcome benefit,
the government will have to struggle with rentiers and wealthy interest groups
in order to increase the budget for education.
Unfortunately this papers scope did not permit a more detailed discussion of
a fifth and more complicated issue, which also can be related to the resource
curse literaturenamely, the environment. It has been suggested that the resource curse leaves behind a legacy of destroyed ecosystems and livelihoods in
venues where oil and gas was irresponsibly explored for decades.161 Examples of
environmental destruction caused by the oil industry are BPs oil spill in the Gulf
of Mexico, the damage caused by Chevron in the Ecuadorian rainforest, and the
transformation of vast areas into landscapes that appear like lunar surfaces due to
the exploration of the oil sands in Canada. In terms of environmental degradation,
the Achilles heel for Brazils oil industry may be the possibility of oil spills occurring in its continental waters. In fact, there is a recent history of such accidents
in Brazil, including the sinking of Petrobras P-36 oil platform in 2001 and the
accident caused by Chevron in the Campos Basin in 2011. However, in recent
years significant efforts have been made in order to improve the response to
offshore accidents. Those efforts culminated with the release of a National Contingency Plan in 2013. However, contemporary institutional political economy
theory sheds light on another issue concerning the resource curse literature that
is seldom discussed. The principle of contradiction is called upon in order to show
that, in the context of a disembedded economy, the social and environmental costs
are only partially considered and tend to be borne by the unprivileged.162 In that
sense, Petrobras and other oil companies are disembedded from society when they
argue that they do not have any responsibility for the social and environmental
costs of burning fossil fuels, that all they have to do is to make their oilfield
operations safer.
197
NOTES
1
International Energy Agency (IEA), World Energy Outlook 2013 (Paris: IEA, 2013).
3
See Ragnar Torvik, Why Do Some Resource-Abundant Countries Succeed While Others Do
Not? Oxford Review of Economic Policy, vol. 25, no. 2 (2009), pp. 24156.
4
In that particular field of analysis, important work has been presented by Sweder Van
Wijnbergen, The Dutch Disease: A Disease After All? The Economic Journal, vol. 94, no.
373 (1984), pp. 4155 and by J. Sachs and A. Warner, Natural Resource Abundance and
Economic Growth, NBER Working Paper no. 5398, Cambridge, Massachusetts, National Bureau of
Economic Research (NBER), 1995.
5
Evelyn Dietsche, Why the Quality of Institutions Is Not a Cure for the Resource Curse, The
Journal of Energy and Development, vol. 32, no. 2 (2009), pp. 26282.
6
Ibid.
Norway has a pluralistic political system in which its elites were subject to influence by and
could access the perspective of a diversity of organized interest, many of whom were not connected to petroleum. Colin Crouch, Capitalist Diversity and Change: Recombinant Governance
and Institutional Entrepreneurs (New York: Oxford University Press, 2005), p. 92. According to
J. Urry, Societies beyond Oil (London: Zed Books, 2013), p. 150, it possesses a deep democracy with institutionalized patterns of non-violence resulting from being one of the most
equal societies in the world. In that pluralistic and democratic society, besides a transparent
management of oil revenues it was possible to construct a highly sophisticated goods and
equipment industry.
9
See Michael L. Ross, Does Oil Hinder Democracy? World Politics, vol. 53, no. 3 (April
2001), pp. 32561; Thomas Friedman, The First Law of Petropolitics, Foreign Policy, vol. 154,
no. 28 (2006), pp. 2839; Ibrahim Elbadawi and Samir Makdisi, Explaining the Democracy
Deficit in the Arab World, The Quarterly Review of Economics and Finance, no. 46, no. 5
(February 2007), pp. 81331; Benjamin Smith, Oil Wealth and Regime Survival in the Developing
World, 19601999, American Journal of Political Science, vol. 48, no. 2 (April 2004), pp.
23246.; and Kevin K. Tsui, More Oil, Less Democracy: Evidence from Worldwide Crude Oil
Discoveries, The Economic Journal, vol. 121, no. 551 (March 2010), pp. 89115.
10
11
Gavin Bridge and Philippe Le Billon, Oil (Cambridge, United Kingdom: Polity, 2013), p. 140.
12
See A. Zalik, The Race to the Bottom and the Demise of the Landlord: The Struggle over
Petroleum Revenues Historically and Comparatively, in Flammable Societies, eds. J.-A. McNeish
and O. Logan (London: Pluto Press, 2012), pp. 26786.
13
See Paul Pierson, Placing Politics in Time (Princeton, New Jersey: Princeton University Press, 2004).
14
198
15
16
17
See Joseph E. Stiglitz, The Price of Inequality (London: Penguin Books, 2013).
18
As shown by Steve Coll, Private Empire (New York: The Penguin Press, 2012).
19
20
Halvor Mehlum, Karl Moene, and Ragnar Torvik, Institutions and the Resource Curse, The
Economic Journal, vol. 116, no. 508 (January 2006), pp. 120.
21
22
Pauline Jones Luong and Erika Weinthal, Oil Is Not a Curse (New York: Cambridge University Press, 2010).
23
24
Christa N. Brunnschweiller and Erwin H. Bulte, The Resource Curse Revisited and Revised:
A Tale of Paradoxes and Red Herrings, Journal of Environmental Economics and Management,
vol. 55, no. 3 (May 2008), pp. 24864.
25
Paul Stevens and Evelyn Dietsche, Resource Curse: An Analysis of Causes, Experiences and
Possible Ways Forward, Energy Policy, vol. 36, no 1 (2008), p. 56.
26
C. A. Medeiros, Natural Resources Nationalism and Development Strategies, paper presented at the 2012 ESHET Conference, St. Petersburg, Russia, May 1719, 2012.
27
O. Logan and J.-A. McNeish, Rethinking Responsibility and Governance in Resource Extraction
in Flammable Societies, eds. J.-A. McNeish and O. Logan (London: Pluto Press, 2012), pp. 146.
28
29
Vivien Schmidt, Institutionalism, in The State: Theories and Issues, eds. C. Hay and
M. Lister (Basingstoke, United Kingdom: Palgrave MacMillan, 2005), p. 101.
30
See Bob Jessop, Institutional (Re)Turns and the Strategic-Relational Approach, Environment and Planning, vol. 33, no. 7 (2001), pp. 1213235, and P. Evans, Extending the Institutional
Turn, UNU-WIDER Research Paper no. 113, Helsinki, Finland, World Institute for Development
Economics Research (UNU-WIDER), 2006.
31
B. Fine, The New Development Economics, in The New Development Economics: After the
Washington Consensus, eds. J. K. Sundaram and B. Fine (London: Zed Books, 2006), p. 84.
32
Ben Fine and Dimitris Milonakis, From Economics Imperialism to Freakonomics (Abingdon,
United Kingdom: Routledge, 2009), p. 81.
33
Douglass North and Robert P. Thomas, The Rise of the Western World: A New Economic
History (Cambridge, United Kingdom: Cambridge University Press, 1973).
34
36
199
37
Oliver Williamson, The Economic Institutions of Capitalism (New York: The Free Press,
1985).
38
39
Eirik G. Furubotn and Rudolf Richter, Institutions and Economic Theory: The Contribution of
the New Institutional Economics (Ann Arbor, Michigan: University of Michigan Press, 1998).
40
See Peter Evans, op. cit., who criticizes Norths paper, Douglass North, Institutions, The Journal
of Economic Perspectives, vol. 5, no. 1 (1991), pp. 97112, and Extending the Institutional Turn.
44
H.-J. Chang, Understanding the Relationship between Institutions and Economic Development, UNU-WIDER Discussion Paper no. 5, Helsinki, Finland, World Institute for Development Economics Research (UNU-WIDER), 2006.
45
49
A farm in occurs when oil companies acquire an already active concession or a part of it.
50
History shows that in the United States the state has actively steered the oil and gas industry
through subsidies, innovation policies, and protection from foreign competition.
51
Philip A. OHara, Marx, Veblen, and Contemporary Institutional Political Economy (Cheltenham,
United Kingdom: Edward Elgar, 2000).
52
See Francesco Boldizzoni, The Poverty of Clio: Resurrecting Economic History (Princeton,
New Jersey: Princeton University Press, 2011).
53
200
54
See Tony Aspromourgos, Sraffian Research Programmes and Unorthodox Economics,
Review of Political Economy, vol. 16, no. 2 (2004), pp. 179206.
55
Bob Jessop, op. cit., argues that the institutional turns occur when rational choice theorists,
Althusserian Marxists, and Foucauldian theorists start to consider institutions in their analysis. This
list can grow indefinitely.
56
57
The Netherlands (1950s and 1960s) and Indonesia (1970s) are good examples.
58
do petroleo
(Rio de Janeiro, Brazil: Synergia, 2011).
59
See E. L. F. Almeida, Desafios do setor de petroleo brasileiro, Blog Infopetro, August 5,
2013, available at http://infopetro.wordpress.com.
60
governos pos-neoliberais
no Brasil, ed. E. Sader (Sao Paulo, Brazil: Boitempo, 2013), pp.
69102.
61
As shown by Luiz. G. Belluzzo, O capital e suas metamorfoses (Sao Paulo, Brazil: Editora
UNESP, 2013).
62
John T. Harvey, Exchange Rates, in The Elgar Companion to Post Keynesian Economics,
ed. J. E. King (Cheltenham, United Kingdom: Edward Elgar, 2012), p. 188.
63
Ibid.
64
See Marcos Nobre, Imobilismo em movimento (Sao Paulo, Brazil: Companhia das Letras,
2013).
65
See F. Ebeling, Can Non-Deterministic Path Dependence Explain the Oil Price Revolution?
Paper presented at the 6 Jornada Cientfica da AB3E, Rio de Janeiro, Brazil, December 2012,
available at http://www.ab3e.org.br/eventos/download/33.
67
69
T. Periard, O boom do preco do petroleo nos anos 2000: um alvio para a maldicao do
petroleo? Paper presented at the 7 Jornada Cientfica da AB3E, Rio de Janeiro, Brazil, December
2013, available at http://www.ab3e.org.br/.
70
201
71
Thiago Periard and Luciano Losekann, Petroleo, doenca holandesa e dependencia da renda
Sergio W. Gobetti, Helder Q. Pinto Jr., and J. C. Sardinha, Brazil, in Oil & Gas in Federal
Systems, ed. G. Anderson (Don Mills, Ontario: Oxford University Press, 2012), pp.6187.
73
According to FIESP, the Custo Brasil is also caused by poor infrastructure, bureaucracy, and
high taxes.
74
Massimo Pivetti, Rate of Interest, in The Elgar Companion to Post Keynesian Economics,
ed. J. E. King (Cheltenham, United Kingdom: Edward Elgar, 2012), p. 477.
See Erik Reinert, How Rich Countries Got Rich and Why Poor Countries Stay Poor (New
York: Carroll & Graf Publishers, 2007).
75
76
As a matter of fact, the idea that a country should develop industries with increasing returns
to scale is implicit in the work of the founding father of Latin American Structuralism, Raul
Prebisch. He argued that a country should finance industries with better terms of trade (higher
elasticity of demand) with the revenue it obtained in the primary-exporting activity, which he
supposed had worse terms of trade (lower elasticity of demand). Brazil pursued that strategy from
the 1930s onwards, which was called industrializacao substituidora de importacoes (export
substituting industrialization).
77
78
Joao Sicsu, Dez anos que abalaram o Brasil (Sao Paulo, Brazil: Geracao Editorial, 2013).
79
81
Michael Lister and David Marsh, Conclusion, in The State: Theories and Issues, eds.
C. Hay, M. Lister, and D. Marsh (Basingstoke, United Kingdom: Palgrave MacMillan, 2005)
p. 24860.
82
See Theda Skocpol, Bringing the State Back In: Strategies of Analysis in Current Research,
in Bringing the State Back In, eds. P. Evans, D. Rueschmeyer, and T. Skocpol (Cambridge, United
Kingdom: Cambridge University Press, 1985).
202
86
87
Peter Evans, Autonomia e parceria (Rio de Janeiro, Brazil: Editora UFRJ, 2001).
88
Linda Weiss, The Myth of the Powerless State (Ithaca, New York: Cornell University Press, 1998).
89
I rename Michael Manns economic powers and refer to them as economic capacities. See
Eli Diniz, Governabilidade, Democracia e Reforma do Estado: Os Desafios da Construcao de uma
A blend of Michael Manns infrastructural and despotical powers, which I call political
capacities. See Eli Diniz, Governabilidade, Democracia e Reforma do Estado: Os Desafios da
Construcao de uma Nova Ordem no Brasil dos anos 90.
91
92
93
94
95
Ibid.
96
See E. S. Reinert, Institutionalism Ancient, Old and New: A Historical Perspective on Institutions and Uneven Development, UNU-WIDER Research Paper no. 77, Helsinki, Finland,
World Institute for Development Economics Research (UNU-WIDER), 2006.
97
Chris Freeman, The National System of Innovation in Historical Perspective, Cambridge
Journal of Economics, vol. 19, no. 1 (1995), pp. 524.
98
99
Magnus Lagerholm and Anders Malmberg, Path Dependence in Geography, in The Evolution of
Path Dependence, eds. L. Magnusson and J. Ottosson (Cheltenham: Edward Elgar, 2009), pp. 7086.
100
Ibid, p. 94.
101
ystein Noreng, Brazil and NorwayOffshore Petroleum Experiences and Lessons, The
Journal of Energy and Development, vol. 35, no. 1 (2011), pp. 7899.
102
Additionally, in the near future the research centers for Siemens/Chemtech, BG, Halliburton,
General Electric, Vallourec and Mannesmann, and TenarisConfab will be opening.
103
See Bob Jessop, The Future of the Capitalist State (Cambridge, United Kingdom: Polity,
2005).
104
105
203
106
C. Perez, Technological Dynamism and Social Inclusion in Latin America: A ResourceBased Production Development Strategy, CEPAL Review no. 100, Santiago, Chile, La Comision
Economica para America Latina (CEPAL), 2010, p. 139.
107
Ibid.
108
109
Andrew Glyn, Capitalism Unleashed (Oxford, United Kingdom: Oxford University Press,
2007).
110
Alexandre Szklo and Roberto Schaeffer, Alternative Energy Sources or Integrated Alternative Energy Systems? Oil as a Modern Lance of Peleus for the Energy Transition, Energy
Policy, vol. 31, no. 14 (2006), pp. 2177186.
112
Wolfgang Drechsler, Governance In and Of Techno-Economic Paradigm Shifts: Considerations For and From the Nanotechnology Surge, in Techno-Economic Paradigms: Essasys in
Honour of Carlota Perez, eds. W. Drechsler, R. Kattel, and E. S. Reinert (London: Tulika, 2011), p.
101.
113
See B. O. Cruz and M. B. Ribeiro, Sobre Maldicoes e Bencaos: e possvel gerir recursos
naturais de forma sustentavel? Uma analise sobre os royalties e as compensacoes financeiras no
Brasil, IPEA Texto para discussao no. 1412, Braslia, Brazil, Institute of Applied Economic
Research (IPEA), 2009.
See Daniel Bregman, Formacao, distribuicao e aplicacao de royalties de recursos naturais: o
caso do petroleo no Brasil, Dissertacao de Mestrado do Instituto de Economia da UFRJ, Rio de
Janeiro, Brazil, 2007.
114
115
116
Ibid.
117
Although according to the new royalties law public health will receive oil revenues, the
governments original intention was to allocate 100 percent to education.
118
Vanilda Paiva, Educacao brasileira: errar e um luxo que ja nao nos podemos permitir, in
Brasil em Desenvolvimento: 2, eds. A. C. Castro, A. Licha, H. Q. Pinto Jr., and J. Saboia (Rio de
Janeiro, Brazil: Civilizacao Brasileira, 2005).
119
Wanderley G. Dos Santos, Cidadania Regulada (Rio de Janeiro, Brazil: Editora Campus, 1979).
120
According to Celia L. Kerstenetzky, O Estado do Bem-Estar Social na Idade da Razao (Rio
de Janeiro, Brazil: Elsevier, 2012).
121
122
204
123
See Rodrigo V. Serra, O Novo Marco Regulatorio do Setor Petrolfero Brasileiro: Dadiva ou
Maldicao? in Mar de Riqueza, Terra de Contrastes, ed. R. Piquet (Rio de Janeiro, Brazil: Mauad
X, 2011), pp. 1148.
124
Amartya Sen, Desenvolvimento como liberdade (Sao Paulo, Brazil: Companhia das letras,
2000).
125
P. Evans, In Search of the 21st Century Developmental State, CGPE Working Paper no. 4,
University of Sussex, United Kingdom, The Centre for Global Political Economy (CGPE), 2008.
126
Wolfgang Streeck and Daniel Mertens, Public Finance and the Decline of State Capacity in
Democratic Capitalism, in Politics in the Age of Austerity, eds. A. Schafer and W. Streeck
(Cambridge, United Kingdom: Polity Press, 2012), p. 54.
127
Luigi Pasinetti, Keynes and the Cambridge Keynesians (Cambridge, United Kingdom:
Cambridge University Press, 2009.)
128
With regard to the design and institutional change in educational systems in Brazil, history
shows that tensions seem to be recurrent. As M. Busemeyer and C. Trampusch righty put it, institutional arrangements of skill formation are institutions fraught with tensions and always are
temporary and contested solutions to ongoing conflicts about the distribution of power. Marius R.
Busemeyer and Christine Trampusch, The Comparative Political Economy of Collective Skill
Formation, in The Political Economy of Collective Skill Formation, eds. M. R. Busemeyer and C.
Trampusch (Oxford, United Kingdom: Oxford University Press, 2012), p. 4.
129
130
Ibid.
131
According to P. Hall and D. Soskice, institutional complementarities are one of the key
features of a capitalist variety: either Liberal Market Economies (LMEs) or Coordinated Market
Economies (CMEs). Peter Hall and David Soskice, An Introduction to Varieties of Capitalism, in
Debating Varieties of Capitalism, ed. B. Hancke (New York: Oxford University Press, 2009), pp.
2174.
132
See Bruno Amable, The Diversity of Modern Capitalism (Oxford: Oxford University Press,
2009), p. 63.
133
136
Clear-cut examples are the business clusters, whose success depends on the synergies with
universities.
okonomische
Wissenschaft?, eds. V. Caspari and B. Schefold (Frankfurt: Campus Verlag, 2011),
pp. 2158.
137
205
138
See Wolfgang Streeck, The Crisis in Context: Democratic Capitalism and its Contradictions, in Politics in the Age of Austerity, eds. A. Schafer and W. Streeck (Cambridge, United
Kingdom: Polity Press, 2012), and Wolfgang Streeck, Gekaufte Zeit: die vertagte Krise des
demokratischen Kapitalismus (Berlin: Suhrkamp, 2013).
139
Wolfgang Streeck, Institutions in History: Bringing Capitalism Back In, in The Oxford
Handbook of Comparative Institutional Political Analysis, eds. G. Morgan, J. L. Campbell, C.
Crouch, O. K. Pedersen, and R. Whitley (Oxford: Oxford University Press, 2012), p. 264.
140
141
Bob Jessop, State Power (Cambridge, United Kingdom: Polity Press, 2008), p. 47.
142
Ibid.
145
According to E. Diniz (Ibid.), the term governance first appeared in the sphere of the World
Bank in order to assess government action simultaneously through economic and political criteria.
Very rapidly the concept that politics should not constrain free markets started to prevail, in which
government was replaced by governance. In the realm of the World Bank, as E. Van
Waeyenberge argues, it became common to condition financial assistance to practices of good
governance, which were measured through the lenses of neoclassical economics. Elisa Van
Waeyenberge, From Washington to Post-Washington Consensus: Illusions of Development, in
The New Development Economics: After the Washington Consensus, eds. J. K. Sundaram and B.
Fine (London: Zed Books, 2006), pp. 2145. This conditioning, according to M. Khan is highly
criticizable because there is little evidence . that stable property rights and good governance can
be meaningfully achieved before the conditions for rapid growth have been set in place. Mushtaq
Khan, Corruption and Governance, in The New Development Economics: After the Washington
Consensus, eds. J. K. Sundaram and B. Fine (London: Zed Books, 2006), pp. 22021.
146
147
Franklin Serrano and Ricardo Summa, A desaceleracao rudimentar da economia brasileira
desde 2011, OIKOS, vol. 11, no. 2 (2012), pp. 166202.
148
149
150
Ibid.
151
Ibid
206
152
Eli Diniz, O Pos-Consenso de Washington: globalizacao, Estado e governabilidade reexaminados, in Globalizacao, Estado e Desenvolvimento, ed. E. Diniz (Rio de Janeiro, Brazil: FGV,
2007).
153
154
155
156
157
158
159
Wolfgang Streeck, The Crisis in Context: Democratic Capitalism and its Contradictions,
and Gekaufte Zeit: die vertagte Krise des demokratischen Kapitalismus.
160
Eli Diniz, Governabilidade, Democracia e Reforma do Estado: Os Desafios da Construcao
de uma Nova Ordem no Brasil dos anos 90, and Governabilidade, governance e reforma do
Estado: consideracoes sobre o novo paradigma.
161
162
Philip A. OHara, Political Economy of Climate Change, Ecological Destruction and Uneven Development, Ecological Economics, vol. 69, no. 2 (December 2009), pp. 22334.