Open to Competition

Positively, Brazil has become a lot more open over the past decade– in almost every way. My wife still recalls the limitations of a closed economy under military rule. She likes the example of yogurt: only one type of yogurt was available in the supermarket, and if you bought it and it was rotten, there was not a damn thing you could do about it.

Open or closed?

Back then, tariff and non-tariff barriers warded off international competition and made it easier for the Brazilian business elite to make money. But it cost the rest of Brazil dearly. Segments of the economy remained woefully under-invested. Products produced by monopoly or oligopoly firms reflected poor quality, and lacked innovation, and efficiency. They were often more expensive, or unavailable. Another recollection of Carolina’s is how people used to buy telephones as investments– they were so difficult to come by.

In the early 1990s the economy opened up and Brazilian firms began to thrive in the face of competition. Competition has done good things for Brazil, although the country still refuses to compete on a number of levels. This drivel–self-evident to some–hopes to make a point about enclaves that have not been subject to international competition. The market example is the best heuristic to convey a point I want to make about the academic sector.

I have faced numerous non-tariff barriers in setting-up a career in Brazil. The validation of my degree (last post) has been an expensive and time-consuming exercise in bureaucracy. Frustrating as it is, it has provided me with a delicious opportunity to wax philosophical about what would prompt a developing country to set up barriers against advanced-degree holders. Is not the secret of a country’s success to cultivate and lure-in the best minds? Has not the U.S.’ economic success over the last century been predicated on attracting and incubating the most dynamic innovators from around the world? Why would Brazil not want to recruit innovation and expertise?

Protectionism. Protection against what? Protection against having to compete. Simply put, a loser’s strategy. Brazil is ready to compete and would benefit from competition, but still clings to the complacency afforded by protectionism.

The next enclave to be opened up is the public service itself. When government information cannot be accessed by the public, public servants can afford to act  incompetent and corrupt. When information is public, government performance suddenly becomes public–invariably leading to better performance. The access to public information law currently awaiting approval in the Senate need be acted on.

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