Crony capitalism systems—in which those close to political policymakers receive favors allowing them to earn returns far above market value—are a fundamental feature of the economies of Latin America. Haber and his expert contributors draw from case studies in Mexico, Brazil, and other countries around the world to examine the causes and consequences of cronyism.

Crony capitalism systems?in which those close to political policymakers receive favors allowing them to earn returns far above market value?are a fundamental feature of the economies of Latin America. Haber and his expert contributors draw from case studies in Mexico, Brazil, and other countries around the world to examine the causes and consequences of cronyism.

Crony capitalism systems--in which those close to political policymakers receive favors allowing them to earn returns far above market value--are a fundamental feature of the economies of Latin America. Haber and his expert contributors draw from case studies in Mexico, Brazil, and other countries around the world to examine the causes and consequences of cronyism.

Researchers in international development have long argued that the high costs of doing business harms prosperity in developing countries, a claim that invites the question of why governments impose these costs and why societies fail to enact reforms reducing them. This book seeks to answer the question by looking at the case of Brazil, a large and highly unequal economy riddled with state-imposed transaction costs. By delving into the political dynamics underlying a costly business environment, this book provides the reader with novel insights into crony capitalism and inequality. It argues that the root cause of a costly business environment is the collusion between political actors, bureaucrats and business insiders. Politicians and bureaucrats relish their discretion over rules and policies as a power resource, since they can increase or decrease the costs of doing business faced by firms and sectors. Business insiders collude with government agents to access the loopholes that decrease the cost of doing business, thus gaining a competitive edge over outsiders. This gives the insiders weaker preferences for reforms that could decrease the overall cost of doing business. By pursuing their self-interest, these actors create a low-level equilibrium that perpetuates crony capitalism and inequality to the detriment of overall prosperity. The book makes its case with a sophisticated combination of formal modeling, quantitative analyses and in-depth case studies of tax policy and of the pharmaceutical and agricultural sectors in Brazil. Observers have declared the need for reforms that improve the business environment in developing countries for a long time. However, the findings presented in this book suggest they might have underestimated the challenge ahead. Scholars and policy-makers in international development, business politics and political economy will be interested in the innovative perspective of this book.

This classic work remains one of the most incisive contributions to dependency theory in the Latin American context. While agreeing with other dependency theorists that underdevelopment on the Latin America periphery was structurally connected to the accumulation of capital in the advanced economies at the core of the global capitalist system, Furtado went further and argued that the very idea of development in the periphery is a myth, deceiving countries into focusing on narrow economic factors such as the rate of investment and the volume of exports to the detriment of their human well-being. Moreover, the costs of development in terms of environmental destruction would be catastrophic for the planet: the idea that the poor in Latin America and elsewhere might someday enjoy the livelihoods of today’s rich people is unrealizable in practice, and any attempt to generalize the lifestyles of the world’s well-off would lead to the collapse of civilization. Adhering to the ideas of development and progress is not only misleading: it is also a form of cultural domination that stifles creativity and blocks the imagination of alternative life forms that would be better aligned to the conditions of life in Latin America and elsewhere. This prescient analysis of economic development and underdevelopment in Latin America retains its relevance today and will be of interest to anyone concerned with issues of political economy and culture in the Global South, as well as students and scholars in political economy, development studies, Latin American Studies and critical theory.

Crony Capitalism in India provides a comprehensive and scholarly examination of the important topic of crony capitalism, filling an important gap in the market. Bringing together experts from various backgrounds, it addresses the key underpinnings of this complex and multifarious issue. Given the emergent nature of the Indian economy, this book provides important information for decision makers in both government and business to help establish a robust institutional framework that is so desperately needed both in India and globally.

Latin America suffered a profound state crisis in the 1980s, which prompted not only the wave of macroeconomic and deregulation reforms known as the Washington Consensus, but also a wide variety of institutional or 'second generation' reforms. 'The State of State Reform in Latin America' reviews and assesses the outcomes of these less studied institutional reforms. This book examines four major areas of institutional reform: a. political institutions and the state organization; b. fiscal institutions, such as budget, tax and decentralization institutions; c. public institutions in charge of sectoral economic policies (financial, industrial, and infrastructure); and d. social sector institutions (pensions, social protection, and education). In each of these areas, the authors summarize the reform objectives, describe and measure their scope, assess the main outcomes, and identify the obstacles for implementation, especially those of an institutional nature.