Unlike previous growth cycles in Brazil, the new one that will complete the Real
stabilization plan can no longer count on the state as the main financier and undertaker of
the infrastructure investments. This represents a world trend, that originated the project
finance, a way to finance heavy investments designed to make possible the private/public
partnership. The project finance separates the firm risk from the business risk, and designs
finance arrangements that are specific to each investment project. In Brazil, now that the
law that regulates concession to the private sector has been enacted and the privatization
program has been accelerated, the project finance will probably constitute the main finance
procedure for infrastructure investments. For the project finance to work, the regulatory
environment should be clear, and the contracts should be credible, preventing the public sector to be put into a corner, forced to bail out insolvent projects. A new proposal for the
BNDES system – an insurance against the macroeconomic risk in credit operations – is laid
out. This proposal aims at building a long-term credit market in Brazil.

JEL Classification: H30; O40.

This essay begins with a history of the relationship between budgeting and
democracy, from the dawn of the modern state and liberalism to today. The various
budgetary ideologies – from the balanced budget dogma to the welfare state’s redistributive
budget – are examined. Current budgetary practices are reviewed below, in the context of
the general trend towards decentralization, with increased autonomy and resources from
local governments. The discussion finally culminates in the participation of organized
sectors of civil society in budget preparation and execution, examining alternatives to the
predominance of corporate and group interests over the general interest.

JEL Classification: H50; O20.

The tendency to concentrate solely on the analysis of macroeconomic
indicators when studying economic liberalization in Latin America has led to an extremely
homogenizing view of the experiences of economic actors and to a mitigation of the effects
of liberalization on political representation. There is also a general tendency to assume
that every business class supports these policies. This study tests these assumptions by
examining the effects of trade liberalization on the capital goods industry in Brazil, from
the late 1980s to 1994. Policy responses to liberalization are also examined. In general, the data demonstrate a widespread agreement in relation to liberalization policies, although
nuanced by a reformist trend that seeks to make the new Brazilian economic paradigm more
palatable to industry interests. The selective response model is proposed as a theoretical
framework to study the dynamics and multifaceted behavior of the private sector during
periods of profound economic and political changes, as is the case today in Brazil.

JEL Classification: F61; F62.

The definition and the concept of national innovation system are summarized,
and a typology (with three categories) is suggested to specify the Brazilian situation. Brazil
is included in the category of countries that hadn’t their scientific and technological systems
transformed into mature national innovation systems. This hypothesis is investigated in
the light of available data on Brazilian R&D basic statistics: R&D expenditures, scientists
and researchers employed, scientific production and patents granted to residents in Brazil.
International comparisons are made, and two exercises are performed to test the “efficiency”
in the use of R&D resources as an input of scientific articles production and patents granting
(both seen as an R&D output). In the conclusion, it is argued that exists a methodological
question when one intends to apply the concept of national innovation system to semiindustrialized
countries like Brazil.

JEL Classification: B52; O30.

In this study the price transmission elasticity between the frozen concentrated orange juice (FCOJ) industries and the price received by the orange farmers in the State of São Paulo, Brazil, was analyzed for the period July 1980 to June 1992. The main hypothesis is that the elasticity was less than one before 1986/1987, and equal to one from that crop on, due to the use of Participation Contracts between the industries and the farmers. According to these Contracts, the price payed by the Brazilian FCOJ industries to the orange farmer is expected to take into account the international orange juice price variations. That hypothesis was studied using autoregressive integrated moving average (ARIMA) and transfer function models.

JEL Classification : Q13; Q17.

Taking into account the international context, the theoretical debate, and the
lessons that could be extracted from successful countries, the article examines the trade
policy basis that should be followed by Argentina to get a dynamic international insertion.
It is pointed out that trade policy could be used as an instrument of both, macroeconomic
and microeconomic gestion. Its employment as a suboptimal instrument could be justified
when the optimal ones are restricted (for example the case of the exchange rate policy in
Argentina). It is also emphasized that it is necessary to follow a close coordination between
trade and industrial and technological policies to get high levels of investment in the
tradable sectors, an increase in competitivity based in higher levels of productivity, and an improvement in the profile of specialization. Finally, it is pointed out the importance of
improving the autonomy and efficiency of the State to guarantee the effectiveness of the
public interventions.

JEL Classification: F13; O20.

This paper discusses the reform of the State under two aspects: “what the
State must do” and “what kind of State will provide only what must be done”. First it
revises the history of the State and economy relationship, evidencing the repercussion of the
theory of incomplete markets and incomplete information. Following, the paper analyses
three groups of relations of the “principal-agent” kind: between governments and private
economic agents (regulation), politicians and bureaucrats (oversight), and citizens and
governments (accountability). The conclusion is that the performance of the State depends
on the institutional structure of all these mechanisms, and that well-structured institutions
will permit and induce government to intervene in the economy in a superior way than a
non-interventionist State.

JEL Classification: H11; H61.

This paper shows the increase of the expenditures related to the Brazilian federal
government t payroll and the payment of retired people previously employed by the federal
government. This variable suffered a jump of around 2.5 points of the GDP between 1985
and 1995. It is also shown the evolution of the aggregate value and the composition of this
kind of expenditure according to the different government agencies (including ministries).
It is concluded that this process is difficult to reverse in the short-term, especially in an
economy with a low level of inflation.

JEL Classification: H55.

This note describes the methodology of the quarterly GDP measured at current
prices and allows to calculate the quarterly federal government revenues (excluding the
Social Security System) / GDP ratio, on a quarterly basis, since 1991. The data show a
more agile analysis of the evolution of the fiscal revenues. It is shown that, beginning in
1993, an undeniable increase of the fiscal revenues / GDP ratio has occurred. This movement
continued along 1995, despite the end of the Temporary Tax on Financial Transactions
(IPMF). Consequently, between 1992 and 1995, the federal government fiscal revenues
experienced an increase of almost 3 points of GDP.

JEL Classification: H20; H22.

This text presents arguments according to which the pressures of organized
groups – but which act in an uncoordinated way – on government decisions related to fiscal
issues, cause an increase in inflation, at the same time that they favour the disorganization
of the economy. This last effect imposes limits on the behavior of these groups. A “preypredator”
model is used to describe the cyclical correction between the level of organization
of such groups and inflation

JEL Classification: E31; D72.

This paper intends to build a simple model of accumulation given the concept
of unbalanced growth between the productive and unproductive sector. This implies in
theoretically define the concept of unproductive sector and to study in the long run the
evolution of this sector in relation to the totality of the created value, as well as to analyse
the implications of this evolution in relation to the profit rate and to the accumulation rate.
By the fact that it takes into account several modes of distribution of labor productivity, this
model allows to analyse the differences there exist between central countries and periphery.

JEL Classification: O40; B51.