Unequal federalism and regional inequalities: the case of the coffee policies in Brazil

Abstract

This work has as its main objective to discuss the nature of Brazilian Federalism and makes considerations on the origins and deepening of regional inequalities in Brazil. The approach of the work is the consideration that, from the perspective of spatial development, the interference of the Central Government in the economy may follow, in principle, four courses of action. First, the state may interfere in the free play of the market by directing its actions to counteract the automatic operation of the market forces, in order to prevent the trend towards increasing spatial inequality; second the state may adopt a neutral position, leaving market forces to follow their natural course; third, the state may pursue a course of action consistent with the natural trend of the market forces, but without biasing the allocative process; and fourth, the state, finally, may interfere in the free play of the market forces, in such a way as to distort the market‐price mechanism in the wrong direction – and thus, at variance with the precepts of market economic efficiency, without, however, pursuing any objective related to social justice or spatial equity. By analysing the Brazilian federalism in the light of these four possible forms of government actions, the work attempts to unveil the dominant nature of the Brazilian Central Government policies and their spatial implications, in critical moments of the history of the country.