Changing social contracts: Beliefs and dissipative inclusion in Brazil

Lee Alston, Marcus Melo, Bernardo Mueller and Carlos Pereira

Journal of Comparative Economics, 2013, vol. 41, issue 1, 48-65

Abstract: We link a model of inequality and redistribution where multiple steady states can emerge, to the recent literature on beliefs, and argue that changes in beliefs may shift the equilibrium over time. We present evidence that beliefs are typically very stable over time, yet argue that Brazil has recently undergone a dramatic shift in beliefs which we show is associated with a change in the country’s social contract in the past thirty years. The transition from one social contract to another has taken place through a process which we call ‘dissipative inclusion’, where redistribution and social inclusion are effectively achieved but accompanied by distortions, inefficiencies and rent dissipation.

Keywords: Inequality; Redistribution; Social Contract; Beliefs, Brazil (search for similar items in EconPapers)
JEL-codes: O10 O43 P51 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: CHANGING SOCIAL CONTRACTS: BELIEFS ANDDISSIPATIVE INCLUSION IN BRAZIL (2014)
Working Paper: Changing Social Contracts: Beliefs and Dissipative Inclusion in Brazil (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:41:y:2013:i:1:p:48-65

DOI: 10.1016/j.jce.2013.01.006

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