The Impact of Government Policy on Brazil Economic Miracle’s Failure

Abstract

From 1968 to 1973, Brazil experienced unprecedented economic growth thanks to the reform policies in the political and economic spherespolicies of the military government. However, after 1974, due to changes in the domestic and international environment and multiple subjective and objective reasons, coupled with the impact of the global oil crisis, Brazil’s economy gradually declined. And after 1980, it entered what was known as the "lost decade". The article analyzes the policy-level causes of Brazil's economic miracle recession in a comparative manner, using data from the statistical yearbooks obtained from the Brazilian National Institute of Geography and Statistics (INEGI) for the period 1970 to 1980. The analysis shows that a large part of the reason for the gradual decline of the Brazilian economic miracle came from the policies implemented by the Brazilian government during this period, such as debt development strategy, industrial-based industrial structure, trade protection and state intervention. The article further notes that the late decline of Brazil's economic miracle is precisely due to its policy nature of short-term overdraft and unsustainability. By inference, if a country implements policies during economic transition that are not based on its own national conditions, ignoring its own resource advantages, focusing on economic development and neglecting social and livelihood protection it may repeat the bad consequences of the policy backlash suffered by Brazil.Through the compilation and analysis of data, the article explores and summarizes the deep-seated reasons behind the decline of Brazil's economic miracle from the policy level, and provides lessons for other countries to learn in the process of developing their own economies.