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Economic crisis and state reform in Brazil: Toward a new interpretation of Latin America
Book Reviews
255
important and distinctive, and that the Commission can play a facilitating role. At the same time the author highlights the serious limitations facing the EC/EU, above all given the dependence on more or less convergent national policies towards the issue in question-although, as this case makes clear, some significant degree of national variation can be processed into a consistent overall Community policy. It is a pity that the Conclusion did not seek more explicit comparison (e.g. with the Middle East, South Africa or Bosnia) in order to get a clearer sense of the conditions under which EC policy might be effective. To what extent, for example, was the relative success in Central America the result of the fact that direct European interests were not engaged, and of the specific characteristics of a region in which small amounts of material assistance and consistent political support could make a real difference? Andrew Hurrell Nuffield College, London Bresser Pereira, Luiz C. (1996), Economic Crisis and State Reform in Brazil: Toward a New Interpretation of Latin America, Lynne Rienner Publishers (Boulder and London). vi + 258~~. E43.95 hbk. The arrival of this book is of special significance, given the author’s current position as Minister of Administration in President Cardoso’s government. Luiz Carlos Bresser Pereira is a key player in the continuing struggle to push forward the programme of fiscal reform so his interpretation of the economic crisis faced by Brazil between 1980 and 1994 has a particularly intimate relevance to the current policy debate. For Bresser Pereira, the roots of Brazil’s recent economic difficulties lie in a crisis within the state. The book represents an ambitious attempt to interpret the development of this crisis without sole recourse to either of the more established Neo-Liberal and traditional Structuralist/Dependency paradigms. Instead, Bresser Pereira adopts what he terms a Crisis of the State approach, itself strongly Neo-Structuralist in orientation, which incorporates elements of both the more established paradigms. In carrying out such an analysis, the author hopes to draw conclusions that have wider relevance in Latin America. For Bresser Pereira, the crisis of the state is characterised by two main features: firstly, a fiscal crisis in which the state faces increasing difficulties in gaining access to resources with which to finance deficits as its domestic and international credibility deteriorates and secondly, ‘a crisis of the mode of intervention’ (p. 5). This is primarily micro-economic in character and concerns the growing costs of intervention as the traditional state led model of industrialisation and economic development expires. The theme of fiscal crisis is examined using mathematical models in Chapters 2 and 5 and considerable empirical evidence in Chapters 47. The chapters cogently demonstrate the extent to which the Brazilian state has encountered increasing difficulties in financing its activities in a conventional, cost-effective manner. As the crisis continued, the state, unable to make the necessary fiscal adjustments, found itself increasingly reliant on short-term domestic borrowing on the overnight market. This mode of financing proved to have a highly expansionary effect on the money supply and became an important determinant of the slide towards hyper-inflation (P. 79). The attempts of policy makers to address the inflationary consequences of the fiscal crisis through the development of stabilisation plans forms the subject matter for Chapters 12-15. Some attention is paid to the attempts of the state to reduce its interventions in the microeconomy in an attempt to address ‘the crisis of the mode of intervention’. Bresser Pereira advances the argument for appropriate heterodox rather than naive orthodox adjustment programmes and cites the Real Plan-in operation since 1944-as a successful example of the former. Despite the broadly positive impact of the Real Plan, Bresser Pereira believes that the process of fiscal and structural reform needs to be extended if the success of the plan is to be guaranteed (p. 199). Political constraints are crucial and these are discussed in some detail in Chapters 8-l 1. The strengths of Bresser Pereira’s book stem from its intricate and well-argued discussion of Brazil’s fiscal crisis and its relation with political constraints, stabilisation plans and accelerating
256
Book Reviews
inflation. This is a timely contribution to a live issue within Brazil. Despite this very important attribute, the book suffers from two distinct shortcomings. Most significantly, the fundamental issue of the crisis of the state concerning the micro-economy-‘the crisis of the mode of intervention’-is given too little attention compared with the ‘macroeconomic’ issue of fiscal crisis. This imbalance seems curious given the marked retraction of the role of the state since the end of the 1980s particularly in the areas of industrial policy and trade liberalisation. Secondly, the book would have benefited from a more extensive and explicit discussion of the relevance of the analysis to the experience of other Latin American countries. An expanded discussion in this area would be of great value given the interesting nature of some of the intra-Latin American comparisons briefly drawn in the book. Despite these weaker points, the book represents an important contribution to the study of the evolution of the Brazilian state’s recent economic policies and, as such, provides invaluable background to anyone seeking better understanding of the current policy debate within Brazil. Edmund
Amann
University of Oxford
Camp, Roderic Ai (1993, Political Recruitment Across Two Centuries: Mexico, 1884-1991, University of Texas Press (Austin). xiv + 289~~. $40.00 hbk, $17.95 pbk. Roderic Camp has produced a wide-ranging analysis of political recruitment in Mexico since the Porfiriato. In the study he examines a number of variables that have an impact on recruitment: among them, political violence, education, business, the bureaucracy, gender and socioeconomic background. Importantly, he also examines differences between the recruitment paths of PRI and opposition politicians. A number of conclusions are drawn: firstly, and unsurprisingly, Camp demonstrates the on-going importance of personal contacts in the Mexican political system; camarillas are alive and kicking. Furthermore, he notes that these contacts are generally made and consolidated during the educational process, either amongst contemporaries or between future politicians and teachers who act as mentors. Traditionally, the National University, particularly the law faculty, has been the most important networking environment, but lately this has shifted towards private universities and post-graduate work abroad, with increasing emphasis on economics and related disciplines; a trend reinforced under Salinas. Camp also demonstrates the importance in Mexico of the bureaucracy, rather than parties and the electoral process, as a recruiting ground; this is particularly the case for the PRI. This obviously has important repercussions for the stalled democratisation process in Mexico. The issue of democratisation is also present in Camp’s conclusion that the elite are becoming more homogeneous. It is for congress to represent the diversity of Mexican society but with little influence. The time frame of the analysis, allows Camp to argue that there is considerable continuity between the recruitment patterns under Porflrio Diaz and the post-1940s. The revolutionary period which opened up the recruitment process to a wider range of classes and regions, was a short-lived process. The discussion of the opposition demonstrates the over-representation of the middle-classes throughout the political elite although there is a distinction between the middle-classes participating in the PRI, generally pursuing their careers in public administration, and those involved in the PAN who favour private business. It is for the PRD to provide diversity with a majority of the ‘leadership’ group coming from working-class backgrounds. So to the problems: the first relates to Camp’s assertion that personal contacts are made young: ‘Since Mexicans have been less ready than members of some other cultures to accept the loyalty of their peers, they generally require long bonds of trust developed over a period of many years.’ (p.40). This obviously has great impact on the recruitment process and the role of educational establishments in the development of camarillas, but Camp offers no explanation regarding Mexicans’ greater wariness of their peers. Camp emphasises socio-economic background as a variable that is apparently synonymous with class, so when he argues that the PRD has a majority of leaders with working-class backgrounds, it is unclear what constitutes being working-class; given the economic crisis, income alone cannot be an adequate measure. However, my greatest criticism is reserved for his discussion of gender. Whilst he is to be
255
important and distinctive, and that the Commission can play a facilitating role. At the same time the author highlights the serious limitations facing the EC/EU, above all given the dependence on more or less convergent national policies towards the issue in question-although, as this case makes clear, some significant degree of national variation can be processed into a consistent overall Community policy. It is a pity that the Conclusion did not seek more explicit comparison (e.g. with the Middle East, South Africa or Bosnia) in order to get a clearer sense of the conditions under which EC policy might be effective. To what extent, for example, was the relative success in Central America the result of the fact that direct European interests were not engaged, and of the specific characteristics of a region in which small amounts of material assistance and consistent political support could make a real difference? Andrew Hurrell Nuffield College, London Bresser Pereira, Luiz C. (1996), Economic Crisis and State Reform in Brazil: Toward a New Interpretation of Latin America, Lynne Rienner Publishers (Boulder and London). vi + 258~~. E43.95 hbk. The arrival of this book is of special significance, given the author’s current position as Minister of Administration in President Cardoso’s government. Luiz Carlos Bresser Pereira is a key player in the continuing struggle to push forward the programme of fiscal reform so his interpretation of the economic crisis faced by Brazil between 1980 and 1994 has a particularly intimate relevance to the current policy debate. For Bresser Pereira, the roots of Brazil’s recent economic difficulties lie in a crisis within the state. The book represents an ambitious attempt to interpret the development of this crisis without sole recourse to either of the more established Neo-Liberal and traditional Structuralist/Dependency paradigms. Instead, Bresser Pereira adopts what he terms a Crisis of the State approach, itself strongly Neo-Structuralist in orientation, which incorporates elements of both the more established paradigms. In carrying out such an analysis, the author hopes to draw conclusions that have wider relevance in Latin America. For Bresser Pereira, the crisis of the state is characterised by two main features: firstly, a fiscal crisis in which the state faces increasing difficulties in gaining access to resources with which to finance deficits as its domestic and international credibility deteriorates and secondly, ‘a crisis of the mode of intervention’ (p. 5). This is primarily micro-economic in character and concerns the growing costs of intervention as the traditional state led model of industrialisation and economic development expires. The theme of fiscal crisis is examined using mathematical models in Chapters 2 and 5 and considerable empirical evidence in Chapters 47. The chapters cogently demonstrate the extent to which the Brazilian state has encountered increasing difficulties in financing its activities in a conventional, cost-effective manner. As the crisis continued, the state, unable to make the necessary fiscal adjustments, found itself increasingly reliant on short-term domestic borrowing on the overnight market. This mode of financing proved to have a highly expansionary effect on the money supply and became an important determinant of the slide towards hyper-inflation (P. 79). The attempts of policy makers to address the inflationary consequences of the fiscal crisis through the development of stabilisation plans forms the subject matter for Chapters 12-15. Some attention is paid to the attempts of the state to reduce its interventions in the microeconomy in an attempt to address ‘the crisis of the mode of intervention’. Bresser Pereira advances the argument for appropriate heterodox rather than naive orthodox adjustment programmes and cites the Real Plan-in operation since 1944-as a successful example of the former. Despite the broadly positive impact of the Real Plan, Bresser Pereira believes that the process of fiscal and structural reform needs to be extended if the success of the plan is to be guaranteed (p. 199). Political constraints are crucial and these are discussed in some detail in Chapters 8-l 1. The strengths of Bresser Pereira’s book stem from its intricate and well-argued discussion of Brazil’s fiscal crisis and its relation with political constraints, stabilisation plans and accelerating
256
Book Reviews
inflation. This is a timely contribution to a live issue within Brazil. Despite this very important attribute, the book suffers from two distinct shortcomings. Most significantly, the fundamental issue of the crisis of the state concerning the micro-economy-‘the crisis of the mode of intervention’-is given too little attention compared with the ‘macroeconomic’ issue of fiscal crisis. This imbalance seems curious given the marked retraction of the role of the state since the end of the 1980s particularly in the areas of industrial policy and trade liberalisation. Secondly, the book would have benefited from a more extensive and explicit discussion of the relevance of the analysis to the experience of other Latin American countries. An expanded discussion in this area would be of great value given the interesting nature of some of the intra-Latin American comparisons briefly drawn in the book. Despite these weaker points, the book represents an important contribution to the study of the evolution of the Brazilian state’s recent economic policies and, as such, provides invaluable background to anyone seeking better understanding of the current policy debate within Brazil. Edmund
Amann
University of Oxford
Camp, Roderic Ai (1993, Political Recruitment Across Two Centuries: Mexico, 1884-1991, University of Texas Press (Austin). xiv + 289~~. $40.00 hbk, $17.95 pbk. Roderic Camp has produced a wide-ranging analysis of political recruitment in Mexico since the Porfiriato. In the study he examines a number of variables that have an impact on recruitment: among them, political violence, education, business, the bureaucracy, gender and socioeconomic background. Importantly, he also examines differences between the recruitment paths of PRI and opposition politicians. A number of conclusions are drawn: firstly, and unsurprisingly, Camp demonstrates the on-going importance of personal contacts in the Mexican political system; camarillas are alive and kicking. Furthermore, he notes that these contacts are generally made and consolidated during the educational process, either amongst contemporaries or between future politicians and teachers who act as mentors. Traditionally, the National University, particularly the law faculty, has been the most important networking environment, but lately this has shifted towards private universities and post-graduate work abroad, with increasing emphasis on economics and related disciplines; a trend reinforced under Salinas. Camp also demonstrates the importance in Mexico of the bureaucracy, rather than parties and the electoral process, as a recruiting ground; this is particularly the case for the PRI. This obviously has important repercussions for the stalled democratisation process in Mexico. The issue of democratisation is also present in Camp’s conclusion that the elite are becoming more homogeneous. It is for congress to represent the diversity of Mexican society but with little influence. The time frame of the analysis, allows Camp to argue that there is considerable continuity between the recruitment patterns under Porflrio Diaz and the post-1940s. The revolutionary period which opened up the recruitment process to a wider range of classes and regions, was a short-lived process. The discussion of the opposition demonstrates the over-representation of the middle-classes throughout the political elite although there is a distinction between the middle-classes participating in the PRI, generally pursuing their careers in public administration, and those involved in the PAN who favour private business. It is for the PRD to provide diversity with a majority of the ‘leadership’ group coming from working-class backgrounds. So to the problems: the first relates to Camp’s assertion that personal contacts are made young: ‘Since Mexicans have been less ready than members of some other cultures to accept the loyalty of their peers, they generally require long bonds of trust developed over a period of many years.’ (p.40). This obviously has great impact on the recruitment process and the role of educational establishments in the development of camarillas, but Camp offers no explanation regarding Mexicans’ greater wariness of their peers. Camp emphasises socio-economic background as a variable that is apparently synonymous with class, so when he argues that the PRD has a majority of leaders with working-class backgrounds, it is unclear what constitutes being working-class; given the economic crisis, income alone cannot be an adequate measure. However, my greatest criticism is reserved for his discussion of gender. Whilst he is to be