The most liberal places to do business in Brazil

. Dec 27, 2019
business brazil Photo: Thiago Leite

A decade ago, a running joke in Brazilian politics was to say that if you put all the Brazilian liberals together in one place, they couldn’t fill a camper van. But little by little, liberal ideas—for policymaking and business practices—have gained ground. Since 2007, at least 26 liberal think tanks have set up shop, advocating for less state intervention in the Brazilian economy.

And so far, it has worked.

According to data from the Mackenzie Economic Freedom Center, Brazilian states have become more liberal, imposing fewer business regulations. The think tank adopted the same methodology used by Canadian public policy think tank the Fraser Institute in its “Economic Freedom of North America” report.

</p> <p>The index considers three aspects: government spending, tax systems, and job market freedom, generating an index that goes from zero (no economic freedom) to 10 (total freedom). Between 2014 and 2017, only four states saw their index decrease: Mato Grosso, Mato Grosso do Sul, Piauí, and Tocantins. However, all 27 states improved their scores between 2016 and 2017. Scores fall in years of recession, as a drop in state administrations&#8217; revenues can deeply impact the business environment.</p> <p>&#8220;Our position in the world ranking is very low and the state index serves as a reflection of the situation of Brazilian states in terms of which are less active in promoting economic freedom. The best-placed states in the ranking cannot be treated as being detached from Brazil as a whole, but as those who came out better in the snapshot we took as part of the study,&#8221; said Vladimir Maciel, who coordinated the study.</p> <div class="flourish-embed" data-src="story/152897"></div><script src=""></script> <div class="flourish-embed" data-src="visualisation/1127045"></div><script src=""></script> <h2>Politics: are Brazilian liberals liberal?</h2> <p>In the 1990s, &#8220;liberal&#8221; was almost a slur in Brazilian politics. Former President Fernando Henrique Cardoso, who championed several reforms liberalizing the Brazilian economy in the 1990s, took offense when his opponents called him &#8220;neo-liberal.&#8221; But <a href="">liberalism is now part of the mainstream</a>—having become the word du jour among conservatives, who now gladly call themselves liberals.</p> <p>Many, however, cherrypick the areas in which they are, in fact, liberal. João Amoêdo, a 2018 presidential candidate who championed the banner of liberalism, calls himself &#8220;liberal in economics, while conservative in social issues.&#8221; For political scientist Claudio Couto, &#8220;[many self-proclaimed liberals have] beliefs that tend to change according to what’s most convenient for them at the time.&#8221;</p> <p>But economist Joel Pinheiro takes another view. &#8220;We can&#8217;t force people to adopt a complete package of an idea, having to defend total freedom in all instances. In the end, it is impossible for someone to be 100 percent consistent and pure in adopting any belief system.&#8221; He adds: &#8220;The test to check if someone is a true liberal is whether they defend strong institutions that impose limits on the concentration of power, while cultivating individual liberties and defending pluralism in society.&#8221;

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