Structural change, income redistribution and the Pink Tide governments in Brazil and Argentina

• In Event: Economic cycles under the Pink Tide: the commodities boom, structural change and inequality

Abstract

This paper compares the development strategies of Argentina and Brazil under the left-of-centre governments that were in power from the 2000s until 2015 and 2016. It interrogates how the parties–the Workers’ Party (PT) in Brazil and the Justicialist Party (PJ) in Argentina–tried (or not) to transform the countries’ productive structure, to redistribute income and to reduce deprivation. A crisis in the beginning of the 2000s and strong popular mobilisation made the PJ pull stronger levers of change, compared to the PT’s milder instruments in Brazil. The size and structure of the state shifted more in Argentina, the drivers of redistribution were more intense, and more varied economic policies were implemented. This led to stronger results, as poverty and inequality declined more and growth was faster than in Brazil. Nevertheless, both countries did not improve their insertion into the world market, as there was a continuous regressive structural change with the rise of low-productivity services; the deeper drivers of distribution were unchanged, shown in persistently high inequality levels that stagnated during the 2010s; and no long-term popular empowerment obtained. This paper argues that the development strategies of the PT and the PJ floundered in the 2010s, incapable as they became to further redistribute income and drive growth, due to the continuous attempt to promote class conciliation and cater to large, domestic capitalists, who were not the parties’ natural allies and would only support them under facile distributional scenarios.



Key words: The Pink Tide; Argentina; Brazil neoliberalism; inequality; structural change.

Author

• Pedro Mendes Loureiro, University of Cambridge