The Brazilian government overspends – and poorly so, according to a recent report published by the World Bank. The study was commissioned by the federal administration itself and suggests a series of cuts in federal programs that would represent savings of up to 8.3 percent of the country’s GDP.
The report, “A fair adjustment: An analysis of the efficiency and equity of spending public in Brazil,” analyzed eight areas of public spending in Brazil. It graded them based on three criteria: how much of the federal budget they make up; how efficient they are; and how much they contribute to reducing Brazil’s levels of inequality.
The report’s conclusions are not flattering for the country. While Brazil has “consistently” increased public spending – to the point of jeopardizing the country’s solvency – inequality has remained stable over the years. Brazil’s fiscal deficit has reached 8 percent of the GDP, and its public debt went from 51.5 percent of the GDP in 2012 to 73 percent this year.
“The needed adjustment of public finances poses a big challenge to the country: it must be prepared to ensure a socially equitable adjustment. We have detected that several programs run by the Brazilian government are quite inefficient and that instead of reducing inequality, they help increase it,” explains Antonio Nucifora, the World Bank chief economist for Brazil and the report’s primary author.
We’ve broken down some of the report’s key findings:
Federal civil servants
The study shows that Brazil’s problem is not necessarily