Brazilian Journal of Political Economy <p><strong>The Center of Political Economy </strong>is a cultural character association that publishes, since 1981, the <em>Brazilian Journal of Political Economy /</em><em>Revista de Economia Política</em> - and conducts regular seminars and conferences on the issue of economic and social development and macroeconomic stability. <a href="">Read More</a></p> <p><strong>Brazilian Journal of Political Economy</strong> is a peer-reviewed, bilingual academic journal, published quarterly since 1981 by the Center for Political Economy through Editora 34. It is the most cited academic journal of economics in Brazil. <a href="">Read More</a></p> Center of Political Economy en-US Brazilian Journal of Political Economy 0101-3157 Political economy of Brazilian startups: <p>The article investigates the conditions that enable the creation and evolution of Brazilian startups in the context of uncertainties and instability of the country’s economy since 2010. The paper examines the premises of Complexity Theory and Chaos Theory applied to Economics. The study outlines the conditions for the emergence and evolution of these disruptive business models in the 1990s world scenario of crises and uncertainties. The last section deals with the evolution of these companies in Brazil until 2019, seeking to explain these services’ dynamic behavior, in the country’s conjuncture of instability and disorder.</p> <p><strong>JEL Classification:</strong> O; O14.</p> Anita Kon Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 611 632 10.1590/0101-31572021-3082 The political economy of the Workers’ Assitance Fund: <p>This study analyzed the political and economic factors that conditioned the recent evolution of the public employment system in Brazil, focusing on the operational mechanisms of the Workers’ Assistance Fund (FAT). Based on the accounting information of the annual periods, it was found that such financing arrangement has shown signs of fragility, with a reduction in the capacity to cover all of its current expenses. However, the imbalances are largely explained by economic policy decisions that have caused significant leaks in recent years, especially budget disengagement and tax relief.</p> <p><strong>JEL Classification:</strong> E22; E62; E65; H53; I38; J38; J68.</p> Sandro Pereira Silva Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 588 610 10.1590/0101-31572021-3040 The unfounded enthusiasm towards private participation in infrastructure <p>Despite the widespread enthusiasm for private participation in the provision of infrastructure, international assessments of its results are rare and inconclusive. Audit offices are generally skeptical of their superiority, multilateral institutions have been cautious, and the population is critical in many countries. I show these frustrating results are associated with the extraordinary profits and slow progress of productivity derived from reduced competition and ineffective regulation common in the sector, and point out reasons that explain this situation. I argue that enthusiasm is theoretically and empirically unfounded, and that on the ideological acceptance of two crucial, highly questionable hypotheses.&nbsp;</p> <p><strong>JEL Classification:</strong> L32; H54.</p> Emilio Chernavsky Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 563 587 10.1590/0101-31572021-3208 The future of capitalism for Branko Milanovic <p>The article analyses the latest book by Branko Milanovic, Capitalism, Alone: the future of the System That Rules the World, which was published in 2019, according to recent publications. First, it is presented the book’s overview. Second, its relations to other similar publications. Third, the book’s detailed analysis and fi nally, some of its argumentative problems regarding the Brazilian social and economic reality. </p> <p><strong>JEL Classification:</strong> P16; F50; P48.</p> David Beltrão Simons Tavares de Albuquerque Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 555 562 10.1590/0101-31572021-3211 Credit constraints and structure: <p>We develop a theoretical model that explains the relationship between credit constraints and economic growth in the context of a three-sector economy, including an “extractive” sector. The model belongs in the structuralist tradition and it is inspired by the Colombian economy. In contrast to neoclassic development economics models, we prove that: 1) relaxing the credit crunch would foster formal sector growth but it may nevertheless not imply formal employment growth; and 2) the economy can converge to a pattern where the extractive sector increases while the formal one shrinks.</p> <p><strong>JEL Classification:</strong> O11; O41; E24; E26.</p> Leopoldo Gómez-Ramírez Nestor Garza Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 538 554 10.1590/0101-31572021-3122 Legalization of drugs and strategic behaviour <p>The growing number of users, about 250 million, in 2016, and the sheer number of health problems, that cause 190,000 deaths per year, are just some of the data that has rekindled the debate and discussion into the efficiency of the prohibitionist drug policies concerning drug consumption throughout the world. As a result, there has been the establishment of a special branch of literature focused on the investigation into this theme. In this regard, the present article conducts an economic analysis of scenarios where there is no decriminalization of drugs and other areas where legalization has been partial (marijuana) or complete, based on Game Theory. Thus, different from other studies, this paper establishes conditions of compatibility of incentives so that the economy could become formal, after decriminalization, to avoid contraband under a legal guise. This paper also manages to show which situation (Nash equilibrium) provides the greatest well-being for society.&nbsp;</p> <p><strong>JEL Classification:</strong> C70; D6; H26.</p> Vinícius Phillipe de AlbuquerqueMello Francisco S. Ramos Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 525 537 10.1590/0101-31572021-3117 Reason, scientism, and methodology: <p>This article presents a narrative on the emergence of the concept of complexity in Friedrich A. Hayek’s work. We show that complexity emerges from Hayek’s methodological concerns and, specifically, from his texts that compose the first two parts of the Abuse of Reason Project. Namely, a) ‘Individualism: True and False’, from 1946; b) ‘Scientism and the Study of Society’, published between 1942 and 1944; and c) ‘The Counter Revolution of Science’, from 1941. In this paper, we aim to expose that the concept of complexity emerges gradually and organically and is integrated with the Hayekian research program from the 1940s.&nbsp;</p> <p><strong>JEL Classification:</strong> B25; B31; B41.</p> Keanu Telles da Costa Eduardo Angeli Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 507 524 10.1590/0101-31572021-3145 PEC 32 of Administrative Reform: <p>This article aims to make a critical analysis of the proposal for administrative reform presented by PEC 32/2020. As we will argue, the proposal does not solve any of the distortions that are willing to eliminate, weakens the power of intervention of the Brazilian State over the economic system, decreases the autonomy of public servants and discourages the hiring of qualified and motivated civil servants, having as probable consequence the reduction of the supply and quality of public services. Thus, the result of administrative reform is the weakening of the State of Social Welfare in Brazil.&nbsp;</p> <p><strong>JEL Classification:</strong> H1; H11; H12.</p> José Luis Oreiro Helder Lara Ferreira-Filho Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 487 506 10.1590/0101-31572021-3308 Business cycles fluctuations and commodities prices: <p>This paper aims at evaluating macroeconomic impacts of commodities prices’ shocks on the Brazilian economy during the 2000s. The econometric methodologies employed allowed to identify three regimes of high and three of low behavior in those prices, all of them presenting the expected effects of stimulating the level of activities, at times when external price shocks are favorable; and the reverse, when price shocks were negative. The&nbsp;decomposition exercises made it possible to isolate the effects of commodities shocks from the other potential determinants of the level of activities. Thus, it was possible to verify that in the most recent upward cycle, starting in 2016, the recovery in commodities prices has not been able to compensate for the other domestic (or external) factors that, for the moment, block a more robust economic recovery.</p> <p><strong>JEL Classification:</strong> O11; F44; E32; F63.</p> André Moreira Cunha Marcos Tadeu Caputi Lélis Priscila Linck Copyright (c) 2021 2021-07-20 2021-07-20 41 3 466 486 10.1590/0101-31572021-3164 National policy space: <p>This paper critiques the trilemma framing of the political economy of globalization, and offers an alternative framing based on the construction of national policy space. The paper makes three main contributions. First, building on Stein (2016), it deconstructs the categories used by Rodrik (2011) and introduces distinctions between the “degree”, “type”, and “dimensions” of globalization; “effective” versus “formal” national sovereignty; “content” versus “process” of democracy; and “national” versus “global” democracy. The deconstruction shows countries face choices involving a series of margins, not a trilemma. Second, that suggests reframing the problematic in terms of national policy space, which is&nbsp;the “funnel” through which globalization impacts democracy and national sovereignty. Third, the paper shows a country can be impacted by globalization even if it does nothing because other countries’ actions change its possibility set. The reframing shows globalization is an intrinsically political project. To the extent it is now driving a nationalistic anti-democratic turn in politics, responsibility lies with political elites.</p> <p><strong>JEL Classification:</strong> F0; F02; F50.</p> Thomas Palley Copyright (c) 2021 Brazilian Journal of Political Economy 2021-07-20 2021-07-20 41 3 447 465 10.1590/0101-31572021-3270