Fiscal adjustment and social policy: Lisbon sees a ‘false dilemma’ and highlights a lack of program evaluation
In an interview with Times Brasil, economist Marcos Lisboa says that spending without measuring results helps explain part of the imbalance in public accounts.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM TIMES BRASIL · 2 MIN
For economist Marcos Lisboa, former president of Insper, the dispute between fiscal responsibility and social spending is based on a mistaken framework. In an interview with Times Brasil, he states that the opposition between fiscal adjustment and social policy is a “false dilemma” and that the country has a fiscal problem precisely because it neglects the social issue.
According to Times Brasil, Lisbon maintains that part of the imbalance in public accounts comes from the lack of evaluation of the effectiveness of state programs. In his reading, the discussion should move away from the debate about how much to spend and move on to the question of whether each policy delivers what it promises.
According to the interview, the government creates new policies and increases spending without sufficient mechanisms to measure results. Lisbon also points out that there is a lack of instruments to correct programs that do not meet their objectives, which leaves expenditure without a clear adjustment method.
What is at stake is the design of fiscal policy itself. If the expansion of spending is not accompanied by an evaluation, the discussion about cuts and social programs tends to get stuck in ideological positions, and not in verifiable results.
The interview does not provide numbers or projections about the size of the imbalance, nor does it detail specific programs. This text is therefore limited to the economist's statements, without adding data that is not included in the investigation.
What changes for the investor
For those who follow interest rates, the dollar and the stock market, the central point is the trajectory of public accounts. If new spending grows without a checking mechanism, the market may look more cautiously at fiscal sustainability, and this reading usually weighs on assets sensitive to interest and exchange rates. An agenda that combines adjustment with evaluation of results would, in theory, tend to reduce this uncertainty. The interview does not indicate concrete government measures and does not allow us to predict price behavior.
Automatically translated from Portuguese.
