Building on a previous analysis conducted in 1998 and similar MGI studies
undertaken in 16 other countries, MGI compared the performance of Brazil’s
economy with that of the US in eight sectors—agriculture, automotive, food
retailing, government, home construction, retail banking, steel, and
telecommunications. Together these sectors account for 37 percent of Brazilian
employment and 46 percent of the country’s GDP.
The new analysis makes clear that the chief culprit for Brazil’s underperformance has been its failure to boost growth in labor productivity—the primary determinant of a nation’s GDP per capita.
The research revealed that around one-third of the difference in productivity between Brazil and the US is due to structural factors inherent to Brazil’s stage of economic development, and these will work themselves out. What matters most are the remaining two-thirds of Brazil’s productivity gap. MGI found five primary barriers to raising productivity in Brazil: the large informal sector, macroeconomic factors hampering investment, regulatory constraints, inefficient public services and the country’s infrastructure.
While these barriers look formidable, the good news is that all of them can be tackled with the right policies, the research suggests. Read the full perspective (PDF - 396 KB)
The Hidden Dangers of the Informal Economy In between legitimate businesses and black market activity, there floats a segment of the economy where quasi-legal practices are the standard. Often ignored or explained away, the informal, or gray, economy can dampen productivity and undermine a nation's financial health. Read more
Productivity: The Key to an Accelerated Growth Path in Brazil Rapid growth can be reestablished with a policy effort focused on increasing productivity and enhancing competitive intensity. Read more
