The missing social contract
Luiz Carlos Bresser-Pereira and Yoshiaki Nakano
Chapter 2 of Ducatenzeiler, Graciela and Philip Oxhorn, eds. (1998) What Kind of Democracy? What Kind of Market? Latin America in the Age of Neoliberalism. Filadélfia: Penn State University Press: 21-41.
Abstract. According to conventional wisdom economic problems in developing countries are originated in politicians' populist behavior. This is just part of the truth. Incompetent policymaking is another major explanation. Developing countries, particularly the Latin American ones, have been living abnormal times since 1980. It is in such moments that it becomes evident the absence of a true social contract derived from huge income inequalities. Targeted social policies are often presented as a strategy to overcome the political support gap. An alternative is to have a national project of development coupled with competent economic and political reforms aiming to build state capacity and promote the permanent reduction in income inequalities.