Although it is not always clear, the reason for the existence of economics as a specific field of scientific knowledge is to investigate the path of prosperity of countries. This was Adam Smith’s primary concern when he published the classic book The Wealth of Nations in 1967, and it remains a major concern of modern scientific advocates, such as Robert SolowRobert Lucas, Paul Romer and Daron Acemoglu.
There is now an extensive literature able to diagnose the factors that lead a country to break (or not) the middle income horizon and become a high income country. In the recent past, over a few decades, some authors have proposed the so-called convergence hypothesis. Roughly speaking, the convergence hypothesis assumes a country is at the per capita income frontier and that the tendency of countries below these limits will be to join it. Recently, empirical evidence has shown that there is no convergence in per capita income of the poorest countries with that of the rich. On the contrary, there was disagreement.
Brazil, for several decades, was seen as a promising country in this aspect. Nearly five decades of long economic growth, between the 1930s and the 1980s, gave great hope that in the future, we could position ourselves among the developed countries. This, however, has stalled, despite the validated economic, social and institutional progress since the 1990s.
It should be noted here these developments. Brazil has done part of the work necessary to achieve higher incomes: 1 – It has become an industrialized and diversified economy. 2 – has become an urban community; 3 – has become a stable country in macroeconomic terms, despite short-term financial and monetary frictions; 4 – Implementation of one of the largest programs of integration and social assistance in the world, in addition to the universalization of public services.
Despite all efforts, the country has not been able to break the middle income bracket. Even worse, the 2000s began, according to the World Bank, with a per capita income of $15,000 per year and ended in 2020 with $14,800. The US economy, our convergence point, jumped from $49,800 to $63,600 in the same period.
Returning to the literature, in endogenous growth models such as Paul Romer’s, the policy of scientific and technological development plays a crucial role in determining the success or failure of countries in convergence with high-income countries. This was the effort of South Korea, whose government currently, according to UNESCO, spends about 4.5% of its GDP on science and technology. The government of China is making a big effort, allocating 2.1% of GDP, or the United States, spending 2.8%, while Brazil invests 1.1% in the same address.
Although financial constraints illustrate the difficulties, Brazil needs to make an effort to at least double its spending on science and technology in the coming years, or else it will continue to accumulate lost decades into the future.
Articles published jointly do not reflect the opinion of the newspaper. His publication serves the purpose of stimulating debate on Brazilian and global problems and reflects the different directions of contemporary thought.
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