Economic policy, institutions and social classes: an analysis of the workers’ party governments in Brazil (2002-2016)

Abstract

From a political economy perspective, this paper analyzes the Lula and Rousseff administrations in Brazil, focusing on the relationship between macroeconomic policy and its political, economic and social constraints. It shows that both administrations implemented relatively successful projects of income redistribution. However, contradicting part of the literature, the paper advocates that they cannot be characterized as neoliberal nor developmentalist. It also advocates that the “new macroeconomic matrix”, set forward by the Rousseff administration, represented more than a mere change in economic policy: it constituted an inflection point in the Workers’ Party (PT) administrations, since it meant the undoing of a “classes coalition pact” agreed between Lula and businesses segments, which supported PT’s governments since the “Letter to the Brazilian People” (2002). As of 2008, the conjunction of a world economic crises, ongoing deindustrialization and a set of permissive conditions exposed the limits of the coalition in force, hindering the continuity of the redistributive project.

Keywords:
Lula Administration; Rousseff Administration; Developmentalism; Brazilian economy