{"id":717,"date":"2025-05-06T09:00:00","date_gmt":"2025-05-06T09:00:00","guid":{"rendered":"https:\/\/poderemercado.com.br\/?p=717"},"modified":"2025-05-05T22:44:05","modified_gmt":"2025-05-05T22:44:05","slug":"o-papel-do-estado-na-baixa-produtividade-regulacao-protecionismo-e-investimentos","status":"publish","type":"post","link":"https:\/\/poderemercado.com.br\/en\/o-papel-do-estado-na-baixa-produtividade-regulacao-protecionismo-e-investimentos\/","title":{"rendered":"The role of the State in low productivity: regulation, protectionism and investments"},"content":{"rendered":"

Series: The Productivity Trap in Brazil \u2013 Part 4<\/strong><\/p>\n\n\n\n

Introduction<\/strong>
The Brazilian state is one of the biggest obstacles to productivity. This may seem like a paradox \u2014 after all, the official discourse insists on presenting the government as a promoter of development. But in practice, the public sector acts as a brake: it overregulates, protects the inefficient, and invests poorly. The result? A country that is inflexible, slow, and stagnant.<\/p>\n\n\n\n

In this article, we show how government policies have not only failed to boost productivity, but have helped bury it under a pile of bureaucracy, protectionism, and inefficient spending.<\/p>\n\n\n\n

1. Regulation as a brake on efficiency<\/h2>\n\n\n\n

Brazil is the world champion in absurd regulatory requirements. From permits for small businesses to environmental licensing for infrastructure projects, bureaucracy turns the act of undertaking a minefield. The time, cost and unpredictability of these rules drive away investors, hinder innovation and push companies into informality.<\/p>\n\n\n\n

The discourse behind regulations often invokes \u201cconsumer protection,\u201d \u201cenvironmental preservation,\u201d or \u201clegal certainty\u201d \u2014 but in practice, they function as entry barriers<\/strong> to protect already established groups and eliminate competition. Productivity loses \u2014 the cartels are grateful.<\/p>\n\n\n\n

2. Protectionism as sabotage of competition<\/h2>\n\n\n\n

Since the 1950s, Brazil has flirted with national developmentalism \u2014 an ideology that sees the foreign market as a threat and domestic industry as a defenseless baby. The result has been the construction of a system that hinders imports, raises tariffs and rewards inefficiency.<\/p>\n\n\n\n

This model discourages competition and innovation<\/strong>, fundamental elements for productivity. Instead of competing with the world, Brazilian companies have become accustomed to asking for protection. The result? Expensive products, technologically outdated and without international scale.<\/p>\n\n\n\n

Meanwhile, countries that have adopted strategic trade opening<\/strong> saw productivity soar. South Korea and Vietnam are recent examples. Brazil remains stuck in the 20th century.<\/p>\n\n\n\n

3. Public investments: lots of money, little return<\/h2>\n\n\n\n

Programs like the PAC, relaunched by Lula in 2023, symbolize the problem. Although they sell the idea of \u201caccelerating growth,\u201d these plans are based on massive spending with little or no measurement of return<\/strong>. Unfinished works, overpriced contracts and lack of technical criteria are the rule, not the exception.<\/p>\n\n\n\n

Instead of investing in productivity \u2014 such as basic education, logistical infrastructure or tax simplification \u2014 the State directs resources to politically advantageous projects, often via inefficient state-owned companies or cross-financing via BNDES.<\/p>\n\n\n\n

This model, besides being expensive, creates dependency<\/strong> and discourages the private sector from seeking efficiency. Public investment does not complement private investment \u2014 it replaces and distorts it.<\/p>\n\n\n\n

Conclusion<\/h2>\n\n\n\n

The Brazilian state should be a catalyst for productivity. But it acts as an obstacle. Its regulations protect castes, its protectionism isolates the country and its investments bury billions without return.<\/p>\n\n\n\n

As long as the public sector continues to act as the protagonist of the economy \u2014 instead of its institutional guarantor \u2014 Brazil will continue to produce little, even while spending a lot. Breaking this logic is not a technical choice. It is a political and moral decision.<\/p>\n\n\n\n

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\ud83d\udcda Read also:<\/h3>\n\n\n\n