The book presents a vast list of contributions to the public policies agenda that might be implemented on the most diverse areas during the next decade. It brings the evolution of the production, employment and investment structures in Brazil between the second half of the 1990s and the 2000s decade. Discusses possible Brazilian GDP growth trajectories in the period of 2014-2030. Also proposes the creation of the National Productivity Commission (Comissão Nacional de Produtividade), with the purpose of contributing to the development of the social and environmental welfare state, through the promotion of efficiency, effectiveness and productivity in governmental and business activities. Furthermore, studies the conventional sources of infrastructure financing projects in Brazil and the international experience of public assets securitization as a tool for capitalizing the infrastructure projects from selected BRICS cases. The book briefly demonstrates the current stage of Brazilian education regarding its main indicators and challenges. It reviews the existing literature on the impacts of Brazilian social security on equity, efficiency (incentives) and macroeconomic stability, proposing reforms that increase the long-term fiscal solvency of Brazilian social security. Discusses possible regulatory actions of medical work and evaluates the remission of tax collection in health. Also traces an overview of the relationship between the minimum wage and the Brazilian labor market in the last decades. It verifies aspects relevant to the management of Brazilian biodiversity and the ecosystem services it provides, as well as its relationship with agriculture. Moreover, presents a reflection on the urban mobility situation in Brazil in the recent period, discussing aspects related to the construction of the National Urban Mobility Policy (Política Nacional de Mobilidade Urbana - PNMU) and the current distribution of modes of transportation in Brazilian cities. It analyzes the importance of different patterns of presidential governance in the trajectory of Brazilian development through an analysis of unilateral presidential acts. The book discusses the complementary role of civil society organizations (CSOs) in the public policy management cycle. It identifies new strategies to intensify the formation of partnerships for development by strengthening the institutionalization, in Brazil, of the International Cooperation and Development in a context of the post 2015 Agenda. It addresses Brazilian cooperation for international development, seeking to present elements for reflection and exploration of a public policy in formation and evaluates the Brazilian commercial policy, in its tariff, non-tariff and trade negotiations dimensions. Finally, brings a recent state initiative, in the legislative field, that meets the aspirations of the agriculture business (agrobusiness) for expanding the stock of land for private appropriation, within the framework of a land market whose operation has historically generated a highly concentrated pattern of property ownership.

Number of pages: 516

Volume 2. (Chapter 1. The post 2015 development agenda: the environmental issue in the context of sustainable development / José Feres, Eustáquio Reis - chapter 2. Biodiversity and ecosystemic services: a positive agenda for sustainable development / Júlio César Rome - chapter 3. Productive diversification as a way of making possible the sustainable development of family agriculture in Brazil / Regina Helena Rosa Sambuichi ... [et al.] - chapter 4. Challenges of the forest restoration chain for the implementation of the Law Brazil and the United States of America, in order to improve the quality of the Brazilian environmental policy, and to improve the quality of life in Brazil. The role of the IPEA in the construction of an urban environment: the role of the IPEA in urban construction The one of the mobility pact /. 8. Beyond My House My Life: a housing policy of social interest? / Cleandro Krause, Renato Balbim, Vicente Correia Lima Neto - cap. 9. Ten years of justice reforms: results and challenges / Alexandre Samy de Castro, Alexandre dos Santos Cunha - cap. 10. State Capacities and Public Policies: past, present, and future of governmental action for development / Alexandre de Ávila Gomide, Fabio de Sá e Silva, Roberto Rocha C. Pires - chapter. 11. Legislative production in post-1988: recent trends and challenges / Acir Almeida - chapter 12. Social participation: institutionalization and integration into the public policy cycle / Joana Luiza Oliveira Alencar - chapter 13. Patterns of presidential governance and Brazilian development / Antonio Lassance - chapter 14. Unequal public spending and regional federative arrangement in Brazil / Constantino Cronemberger Mendes, Paulo de Tarso Linhares, Roberto Pires Messenberg - chapter 15. The interaction between civil society organizations and the federal government: collaboration in public policies and possible regulatory improvements / Felix Lopez ... [et al.] - ch. 16. Evaluating the governance model of regulatory agencies / Lucia Helena Salgado, Eduardo Pedral Sampaio Fiuza - chapter 17. A brief note on long-term private financing and investments / Gabriel Godofredo Fiuza de Bragança - chapter 18. The challenge of public security in Brazil / Daniel Ricardo de Castro Cerqueira, Almir de Oliveira Junior, Helder Rogério Sant'ana Ferreira - chapter 19. Brazil and the global value chains / Renato Baumann, André Pineli - chapter 20. The functions of the armed forces and the directions of military power in Brazil / Rodrigo Fracalossi de Moraes, Edison Benedito da Silva Filho - chapter 21. Brazil and global partnership in the context of a post-2015 development agenda: trends and uncertainties / Guilherme de Oliveira Schmitz - chapter 22. The Brazilian cooperation for international development: elements for reflection and prospection of a public policy in formation / João Brígido Bezerra Lima, Rodrigo Pires de Campos, José Romero Pereira Júnior - chapter 23. The commercial policy of Brazil: current situation and proposed changes / Ivan Tiago Machado Oliveira, Marcelo José Braga Nonnenberg, Flávio Lyrio Carneiro.

The book presents a broad evidence based view of the causes and consequences of social security evasion, highlighting the role of each individual attributes  (as gender, family status, age, race, migratory status, schooling, activity sector and working time). The analysis of the social security evasion is done for the total of the private sector employees as well as for other working classes (employers, domestic workers, etc). Furthermore, the book presents an analysis of the spatial distribution of evasion by macro-region, unit of federation, city size and mesoregions, including a multivariate analysis to the same problem using logistic regressions. A diagnosis of the low social security revenue observed in Brazil is undertaken to discuss the incentives within the regulatory framework of Brazilian Social Security and labor legislations. Last but not least, in the light of the empirical evidence raised, the author make prescriptions for an increase in the coverage of the National Institute of Social Security. It is interesting to notice that this book was released in 2003, year of reversal in the expansion trend of workers that do not contribute with Social Security. Between 2003 and 2014 there was a strong formalization process in Brazilian labor market, which unfortunately have been abandoned with the economic crises. This reflection may also be helpful to feed the lively debate on social security reforms.

Number of pages: 326

Index of the book

Cap. 1 – Causes and consequences of social security evasion 

Cap. 2 – Non-contributing workers profile

Cap. 3 – Multivariated analysis of the non-contribution determinants

Cap. 4 – Diagnosis of the Social Security evasion structural causes 

Cap. 5 – Proposals and Conclusions
 

40 Million Workers Without Social Security

“The social security evasion rate increase from 53% in 1985 to 62% in 1999,
implying fiscal inconsistency and social hazard.”

Of the 64 million workers in the private sector, 39.5 million (62%) do not contribute to social security. The social security evasion rate in the poorest 20% of the population is of 96%, against 16% of the richest 20%, as shown by the table. In urban areas, in 1985, the evasion rate was of 39%; in 1999 it had reached 53%. The consequences of an increasing evasion rate are not only fiscal inconsistency, but also social hazard. The group without social security is particularly vulnerable to changes associated to work accidents, maternity, loss of a spouse, and old age. In these cases, the individuals should protect themselves for these eventualities, which is not the case among poorer workers.

The main challenge to social security faces is its own increase in breadth. Apart from demographic changes and provided benefits, the social security system’s financial situation aggravated itself in consequence of the vicious cycle between evasion and tax rates. On one hand, the labor market’s growing informality was instigated by increasing social burdens, but also by the dissociation of benefits to be granted. The result has been a reduction in the social security levy, which induces new increases in tax rates and more informality.

In the last decades, we have observed an increase in tax rates contributing to social security from firms as well from workers. The number of workers receiving between one and three minimum wages increased from 3% in the thirties to the current 8%. Employers felt this inflation even more, where tax rates went from 3% to 20%, during the same time interval.

The labor market’s behavior reveals as a distinct mark an increasing informality in work relation over the past few years. The proportion of self-employed in the work force has been presenting an increasing trend since 1986, currently reaching 23%. Similarly, the participation of employers without proper documentation has increased since 1989, presently reaching 11%.

It is possible to defend the existence of a causality relation between the two facts, that is, the observed increase in tax rates lead to an increasing informalization of labor relations. The Laffer curve—instrumental in the interaction analysis between the earning of inflationary tax and the inflation level, captures the final impact of various tax rates over the tributary collection. The idea is that the greater the tax rate, the smaller the tax collection base.

In the social security Laffer curve, we would today be on the right side. In this case, as in the case of hyperinflation, we would have an explosive situation based on informality.

Changes are necessary to reverse the ascending spiral between evasion and tax rates. These changes can allow the reduction of contribution tax rates without harming tax collection.

Policies – The way out of the social security trap involves the adoption of operational and structural measures. In the last group, there are changes in the incentives for contribution, through alterations in the social security and labor legislations. We explore two structural questions: the first is connected to the character of simple repartition—predominant in the Brazilian social security system: the fact that the employer does not receive a connection between the present contribution and granted benefits inhibits the contribution. The recent introduction of the social security factor aims at gradually and partially correcting this type of distortion.

In the labor legislation, there are already many synergies with social security to be explored. For example, labor rights are independent of the labor relation’s legal character. Informal employees have the prerogative of charging a posteriori their rights in the Labor Judiciary. As a result, firms honor the appropriate rights, bringing to the informal labor market a high effectiveness of these clauses. The cliché associated to this situation is the following: “there are more relations between informal employees and the CLT that the INSS expects.”

The INSS is a significant agent, and contrary to Orwell’s Big Brother, does not have eyes everywhere. In the microeconomic anonymity, firms and employees reach mutually advantageous agreements of the public money’s expenses. It is up to the state to reduce this arbitration space through changes in incentives to contribution, and thus concluding prizes, punishments, and the increase in the quantity of information within the system.

Among the operational measures, we find actions in the fiscalization area as well as in market areas (marketing, opening of fixed positions, etc.). These measures are easier to implement than the structural ones, since they do not involve constitutional changes, or even legal ones.

Recently, operational changes in the INSS were announced, which made it closer to its clientele. In the first place, these changes aim at improving contributions through the sending of messages with friendly explanations regarding the system’s functioning and with social security accounts’ statements. These statements will improve the fiscalization of employers in relation to their respective firms.

Another innovation in the creation of a lottery through the Caixa Econômica Federal among the contributors who are not in debt. These changes make turn the social security’s daily affairs better for the requisites of its potential clientele and more competitive in relation to private social security accounts.

Although the social security system has implemented measures to expand the system’s coverage, it is necessary to search for alternatives in order to provide more speed and sustainability in this process led by all sorts of resistance.

The study of measures to expand the coverage of the social security system is fundamental for social policies. Workers in informal functions will not have a way face the social risks of labor in the future, due to unfortunate causes that may affect their work capacity, such as old age itself. By not being affiliated to a system, today’s informal workers will generate high social costs in the future, as they will depend on family members, and consequently will diminish their increase and worsen their living conditions. By depending upon governmental social support services, they will harm contributors due to a reason that could be in part, avoided today.

* Extra Material - The Social Side of Reforms 
 

(The Book Download in Portuguese)

To say that the poor cannot take loans because they do not have collateral is the same as saying that man cannot fly because he has no wings." - Muhammad Yunus, Founder of Grameen Bank and 2006 Nobel Peace Laureate

Productive credit made widely available to the masses frees up the entrepreneurial spirit of low income populations. Anyone who wants to see large scale, profitable, and - better yet - sustainably managed micro-credit in action need not embark upon an exotic adventure. Just visit CrediAmigo. Although the program is little known to most Brazilians, even among policy makers, it rates as one of the best microlending initiatives worldwide, ranks second in number of customers in the Americas, and was recently elected the best microcredit initiative on the continent by MIXMarket, a major microfinance rating agency. CrediAmigo is linked to a federally owned bank, the Banco do Nordeste, and along the lines of Grameen Bank operates on a system of group solidarity, whereby communities put up collateral for loans instead of individuals. It supplies 60% of Brazil's microcredit and reports consistent profits that have increased on the order of 13 percent a year. Its customer base is built solidly on the bottom tiers of Brazil's social pyramid: informal enterprises including grocery stores, corner bars and even private schools. Most importantly, CrediAmigo is helping transform society. The probability that a borrower will rise out of poverty within 12 months of receiving a loan is 60%, while the chances of clients sliding into poverty are only 2%. And no one is getting a subsidy. The program generates profits of 50 reais (around $29) per year per client. Constant reinvention is a fundamental trend in microcredit. Grameen Bank itself went by the name of the Grameen Bank Experiment during its embryonic stage starting in 1977. The bank's founder, Muhammad Yunus, compares that initial phase to the Wright brothers' maiden flight in 1903.

In 2007, I had the opportunity to meet Wilbur Wright, who runs microcredit operations in Peru and Ecuador for the Inter-American Foundation, and also happens to be the homonymous great-grandson of the famed aviation pioneer. "I heard you're a descendant of the inventor of the airplane," I told him when we met. "Yes, I am," he responded, with pride. "I never knew Santos Dumont had flown that far," I teased him, a playful reference to Alberto Santos Dumont, the man we Brazilians know as the Father of Aviation (He flew the 14-Bis, a self-propelled airplane in 1906, while the Wright Brothers needed a catapult to launch the Wright Flyer at Kitty Hawk. But that's a matter for another article.) Santos Dumont's flight, aboard a self-propelled aircraft, is more in line with the idea of microcredit sustainability. Ceape, one of the first microcredit schemes in the developing world, started in 1972 in Pernambuco, in Brazil's Northeast, making it as a sort of the 14-Bis of microcredit. Launching new inventions is important, but making sure they spread and stay aloft over time is even more so. CrediAmigo's advantage lies in its capacity for mass replication. Just as Brazilian aircraft maker Embraer tapped the best spirit of the public sector and went on to soar in private hands, CrediAmigo has parlayed the strengths of both the government and the market into a winning formula. While Grameen Bank opens a branch in New York, CrediAmigo has been exported to Rio de Janeiro, so inverting the received wisdom that technology flows from the modern metropolis to the underdeveloped regions. The Brazilian Northeast bears a strong resemblance to Muhammad Yunus' Bangladesh, with a large population of the working poor most of whom must make ends meet in the informal economy. What is needed now is to take microcredit where it has never gone before, to the very poorest strata of society, without losing its way. CrediAmigo engages the productive sector in low-income cities through a network of credit agents motivated by market incentives. The fact that it never loses sight of the best international practices of alternative collateral mechanisms makes it uniquely capable of addressing poverty while also reaping high returns, and so guarantee its sustainability. The recent crisis in private sector microfinance in India, that so closely mirrors the subprime credit bubble that touched off the global financial collapse of 2008, will only serve to validate the public-private hybrid model employed by CrediAmigo. The beauty of microcredit is that it allows even the smallest entrepreneur to set sail in search of a better life. The poor should not be protected from markets; on the contrary, we should implement policies that offer them the tools and resources necessary to tap the market and prosper by it. Good microcredit does exactly that, avoiding the crippling rates of moneylenders without resorting to the crutch of market distorting subsidies. Fittingly, the most ferocious of marine predators inspire the moniker for the most unscrupulous fauna of finance: loan sharks. It's equally fitting that many microlenders have chosen to associate their brand with the sun, the universal symbol of solidarity. Banco Sol is Bolivia's large microcredit bank.

But especially in a post-crisis world, the best compass for micro lenders is neither the sun nor the sea, but the sage advice Daedalus gave to his eager son, Icarus. Fly strong and high enough to avoid the sea's crashing waves that would drench your wings but not so high as to melt the wax that hold the feathers together.

Number of pages: 375

Index of the book

Chapter 1 – Microcredit: theory and practice  

Chapter 2 – Empirical Methodology

Chapter 3 – Nano-entrepreneurs Portrait in Urban Northeast

Chapter 4 – Microcredit Determinants, guarantees and the mystery of capital

Chapter 5 – The Mystery of the Northeast

Chapter 6 – Microcredit and microentrepreneur performance

Chapter 7 – CrediAmigo: tupiniquim Grameen Bank

Chapter 8 – Additional Conditionalities for poverty alleviation: CrediAmigo’s clients case

Chapter 9 – Nanocredit and poverty alleviation

Chapter 10 – Personal Credit

Chapter 11 – Other financial modalities