Analysis of the effects of privatization in Brazil in the period 1980-1990

Abstract

The main objective of this paper is to analyze whether the effects brought about by the privatization process that took place in Brazil in the 1990s were short-term or long-term. For this, the methodology adopted was the model of Giambiagi and Pinheiro (1992) to evaluate the temporary effect and the permanent effect corresponds to the present value of the total fiscal adjustment, in addition to the analysis of the behavior of the revenue and investment variables of state-owned companies during the decade from the 1980s to the beginning of the 1990s. The first part of the research focuses on an analysis of the economic situation from the 1970s onwards, presenting the national Privatization Program and the results of privatizations in Brazil, according to the vision of authors who have dedicated themselves to the topic. Subsequently, the mathematical explanation of the present value of the fiscal adjustment is given and the study of the income and investment variables with the evaluation of the goodwill at-tributed on the sale of state-owned companies is given. Based on the analyzed data, the present research indicates that the privatization process in Brazil did not have a permanent, long-term effect. The results suggest that the effect of privatization in the country was only temporary.