Gatekeepers of prosperity : how the state and business block the path towards functioning market economies in Developing countries

A well-functioning market economy is crucial for prosperity. However, there is considerable variation across countries in the cost of doing business. This invites the question of why governments impose these costs and why societies fail to enact reforms reducing them. This thesis seeks to solve this question by looking at the case of Brazil, a large economy riddled with state imposed transaction costs. It argues that the existence of a healthy business environment is analogous to the provision of a public good. The lack of it reflects an equilibrium where actors fail to coordinate. In this suboptimal equilibrium, political agents use discretion over transaction costs as a power resource. Business insiders nurture relationships with these agents, accessing low transaction costs and gaining a competitive edge over the outsiders. As such, insiders have weaker preferences for reforms that could decrease the overall cost of doing business.

Name thesis:degree_name

Doctoral

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Political Science

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2019

Author dc:creator

• Limoeiro, Danilo Rocha,1982-

Advisor dc:contributor.advisor

• Ben Ross Schneider.

• Political Science.

Statement dc:rights

• MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

https://hdl.handle.net/1721.1/123617

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/123617