Privatize (almost) everything | Opinion

The privatization of Correios has opened an emotional debate about whether the decision to sell the state-owned company was right or wrong, reminiscent of the number of people who hate private involvement in public policy issues – two out of three Brazilians (67%) who oppose it – privatization – despite the fact That history shows the good experience we have on this subject.

When we talk about this, it is always good to remember that economist and lawyer Elena Landau highlights Article 173 of the Constitution, which defines the exceptional nature of the Brazilian state’s participation in the direct exploration of economic activity.

Thus, it is primarily up to the private sector to implement, and the public sector to design the best possible model of regulation and inspection.

From this perspective we need to analyze the scenario.

On the other hand, at the end of the aforementioned provision, criteria were established for the direct participation of the state – in matters of national security and related public interest.

Obviously, it is difficult to determine what corresponds to the latter criterion, and this varies according to political leanings, but the Brazilian picture is far from plausible. According to the Bulletin of Federal Government Companies, prepared by the Ministry of Economy, the union includes 187 companies.

Which country has 187 strategic areas to make it legitimate to set up many companies in the public sector?

For information, a 2015 OECD report shows that Argentina and Colombia have, respectively, 59 and 39 federal state-owned companies, and developed economies such as Germany and France, 71 and 51. The US and UK had 16 companies each. A very interesting study analyzed the performance of 102 companies that left state management and moved to the private sector between 1987 and 2000. It concluded that they became more efficient after privatization. In particular, there has been an increase in profitability and operating efficiency.

However, it should be noted that the opposite path also exists in the world, where the private initiative model was not successful and there was a re-nationalization of sectors.

The idea is not to get into Manichaeism that everything from the public sector is bad and things from the private sector are perfect, or vice versa, to put everything that comes from the private sector under suspicion. On the contrary, it is intended to rationalize the debate and consider the constitution and available data.

Although there is no perfect model for the number of state-owned enterprises and their participation in the development of the country, we need to determine what is really strategic. It is also necessary to recognize that the bloated state model has not been (and cannot be) successful.

We need to monitor the paths that have led countries to growth, with lean and effective management able to regulate sectors through simple, objective and clear rules, so that they can develop and achieve growth for society.

Irapuã Santana – Subscribe | art

by Irapuã Santana