Productivity and political stability with policies should be firm .... rest would happen

• It is well-documented that productivity in human history is always tied to the economic liberty/opportunity afforded individuals. Societies that tamper with and over-regulate markets suffer declined productivity, societies that unleash the market and allow economic liberty prosper.

Prezado Professor Hess,

I am a frequent visitor to Brazil, where I have family and where I am a visiting professor at this moment, and find your question very relevant.

In Quebec, where I live and work at the Faculty of Medicine of the University of Montreal, we have many features of our society and economy that many countries now lack - political stability, a strong resource base, a talented and well-serviced population (affordable and accessible education, health care, social housing and social services). And yet, our productivity lags behind other Canadian provinces and other major advanced economies. A previous Premier of Quebec, Lucien Bouchard of the separatist and supposedly "socialist" Parti Québécois, criticized Quebec's economic productivity. Some of the reasons often invoked by the right include the very social safety net that creates stability for the working class and the middle class, that is, that the "nanny state" and welfare render the population subservient and "addicted to handouts." I don't share this view and would be loathe to see it exploited in Brazil (which is already happening in reaction to the socialist approach of Lula and Dilma).

Brazil, in my view, needs a greater safety net of social and human services, not fewer, yet I am not sure that this argument from the centre-left will hold for greater productivity.

My father and his friends in the engine of South American productivity in the State of São Paulo always said it was a question of "education" in Brazil. That was their polite way of talking about class and culture. Some subcultures in Brazil do not share the values of productivity of the paulistas and paulistanos. They have other values and worth and I respect that. On the other side of the coin, if I were living in Brazil, besides making my way in my profession for reasons of dignity and self-preservation, I would be red-hot angry at the systemic corruption on every level of the civil society that no one escapes! Everybody has their jeitinho - their little "fiddle" as Alfie put it in the famous English film about working-class stiffs in London's East End. I understand it, I get it, but it's frustrating and complicates daily life. I have had plenty of interactions at every level in Brazilian society. If you go to a government office, aside from the friendly smiles and the superficial and maddening tudo bom attitude, people simply do not have a sense of getting the job done and it's only by standing firm and insisting on getting a document in a timely way that you get anything done. I know this well as an Italian because Italy and Brazil are perpetual frontrunners in the administrative Olympics for government incompetence and corruption. And that goes across the political spectrum, across social classes, and across regions, even if they are expressed differently in each case.

To conclude, we may identify many factors, but in Brazil as elsewhere, you have to identify the core assumptions that lead to inefficiency and lack of productivity. My wager would be on systemic corruption, poor goal-orientation among major sectors of the population, and lack of human and social services, in that order.

Abraços e boas festas!

Vincenzo Di Nicola

Université de Montréal

The George Washington University

"systemic corruption, poor goal-orientation among major sectors of the population, and lack of human and social services..."

I was very interested in the answer by Dr. Di Nicola. (Seasons greetings, etc of course as well to all.)

He on the one hand identifies three major areas of obvious deficit very accurately and quite correctly makes the logical connection between those deficits and the lack of productivity in Quebec and yet does not follow through to a sound analysis of logical cause-effect. Are those causes of unproductivity or symptoms of it? I have never been to Brazil but have been to Quebec many times. My observation of the conditions in Quebec, which have deteriorated steadily since the 80s when I first visited, make for interesting juxtaposition against the conditions in Slovakia, a nation which I have also had opportunity to closely observe over roughly the same period of time and which has had an opposite experience. Conditions there have steadily improved. I would point out that it is logically self-evident that there is nothing inherently genetically wrong with Quebeckers in this regard (or Brazilians obviously). It took a great deal of industry and productivity to carve Quebec out of the ice and rock of that province in the first place.

"systemic corruption"

It has been the observation of many who have experienced first hand the "Nanny State" (aka "socialism") that centralization of power in the hands of an oligarchy breeds systemic corruption. One of the 20th century's leading members of the Soviet Academy of Sciences, a top flight mathematician and certainly one of the great analytical minds of our times, made the observation that Socialism, as a phenomenon of human government, breeds corruption and indeed amounts to an expression of Humanity's death wish. ("... one could regard the death of mankind as the final result to which the development of socialism leads." p.275 The Socialist Phenomenon, by Igor Shefarevich, available at http://robertlstephens.com/essays/shafarevich/001SocialistPhenomenon.html)

Conversely, decentralization of power, liberty, breeds better self-government and leads to a society in which individuals find incentive to take personal ownership of the moral and therefore economic and physical conditions of their existence. The truth of this is clear in the differing paths of Quebec (and the rest of Canada) and Slovakia (and the rest of the former East Bloc). One need only visit the restaurants of Slovakia to see the dramatic change. Restaurants under the former socialist regime were a joke, a place in which waiters spied on foreigners for the secret police apparatus and served loathesome food with scowls and oily smirking bows. Today Slovak restaurants offer a highly diverse sampling of regional cuisines at a very high level of both cooking and customer service.

"poor goal-orientation among major sectors of the population"

It is also a well-documented fact that goal orientations are directly related to incentives. A quick Google will pull up numerous academic studies in various fields of pedagogy and professional endeavor that prove the link. It is also a well-documented fact of history that a centralizing approach to institutions of government is one that disempowers individuals and reduces meaningful incentivization. In other words, there is a clear link between a socialist form of government, i.e. the "Nanny State" and as Dr. Di Nicola observes "poor goal-orientation".

"lack of human and social services"

I wonder whether what Dr. Di Nicola actually means by this is the lack of means. I have personally experienced the dismal condition of Quebec's health care system and the morass of bureaucracy that confronts anyone who wishes to partake of any of the other "benefits" offered by the government to its citizens. While I'm not aware of any academic studies along this line, it is my theory that wherever the secularist state has squashed and replaced the "human and social services" function of the church and thereby the local community, it has done so to the great detriment of said services. My only measure of comparison is the independence and resourcefulness of peoples who live completely by their own ingenuity (in extremely remote or undeveloped locations) and in tight community with each other in contrast with the dependence, alienation and apathy of those who live in a more "Nanny State" type of environment. The animated movie Wall-E comes to mind. I would be interested in any project that aims to empirically measure these factors along these lines to prove or disprove my theory.

I am Agree with Stephen Schoenhoff

WOW... Dr. Vincenzo,

Such a wonderful view you gave me.

Thank you very much.

In fact, Brazil and Italy fight against some of the same issues for a long time... I´ll read your answer some more times and look for some details before answering. You deserve that, as a friend and as an Italian/Quebecois/part-Brazilian citizen, if you permit me... ;)

Thank you very much, one more time. we´ll be in contact.

All my best wishes to you and all your family.

Hess

Well... Dear Stephen,

I was already impressed with the answer of Dr. Vincenzo, but you have enriched the perspectives in such a wonderful/technical way.

Thank you very much.

I am not able to answer you both right now, but I am happy to do that. You took an interesting look from outside Brazil, and it´s very important to my research.

Thank you very much, one more time.

We´ll be in contact.

All my best wishes to you and all your family.

Hess

Querido Professor Hess,

Once again, many thanks for this thread and your brief reply. I look forward to reading your thoughts in more detail on the social and economic situation in Brazil.

I strikes me now that I would have to read a lot of reports from what are to me obscure and uninteresting sources to really have a grasp of the realities of the Brazilian economy. The rub is that I don't take such reports from either international (e.g., IMF, World Bank, UN Development Program), regional (e.g., PAHO, InterAmerican Dialogue, MercoSur), or national agencies (e.g., Associação Comercial de São Paulo) on faith and the effort it takes to deconstruct them, track down their sources and decide for oneself is onerous. I have been a guest at the Associação Comercial de São Paulo and found it similar in its functions to the scientific associations I attend - a lot of pomp and ceremony where wonderful (or anguished) declarations are made, but at a very general level where the critical variables and key questions are buried in a mass of details.

All the best of the season and for peace and stability in the New Year!

Vincenzo Di Nicola

Université de Montréal

The George Washington University

Querido professor Di Nicola,

Thank you for your attention and kindness.

This is the best explanation that I´ve heard/read: " a lot of pomp and ceremony where wonderful (or anguished) declarations are made, but at a very general level where the critical variables and key questions are buried in a mass of details."

In a world (and a country) full of difficulties, it´s an anguishing spent time. It makes me nervous too, believe me! But someway - a good way - now I know that we share this anguish... and somehow, makes me feel better! I am sorry for that! ;)

As much as I can, it would be a pleasure to me to be your source about Brazil. I am 50 years old and - although I have traveled much - I lived here ever since. Count on me, if you think I can help.

All my best wishes to you and all of your family in 2018.

Prof. Hess

Thanks for your question Prof. Hess. I've never been to Brazil & do not know about the ground realities there, which can be known only to people who have been there for a long period of time & not just by reading about it from external sources. But since you addressed that question to me, I would respond to the second part of your question, about the situation in my country.

Yes, there is a Lack of productivity in India but it is not a universal phenomenon. The private sector has shown improved productivity with advances in technical education & technology. But the government sector, on general exhibits a lackadaisical approach & productivity is very low. Regarding reasons - red-tapism, systemic corruption, job-security & assured promotions & increments based on seniority, not on performance; are some of the main reasons. A blaring gap between formal education & real-world work is another important reason.

Regards & Happy 2018 !

Dear Dr. Hemlata,

Thanks for sharing your opinion.

And I know what you are saying, because in Brazil is not so different, especially that other factors supress merit and it cause so many distortions in productivity and societal behavior.

All my best wishes.

Prof. Hess

I side with Dr Stephen Schoenhoff

Thank you,dear Dr. Mutasem.

It´s going to help.

Best wishes.

Prof. Hess

Implementation of governance and policies

Regards,

Jahangir

Dear Dr Ghose,

It's always good to know your opinion. Tks for sharing your valuable thought.

I will pay attention to your words.

Best wishes.

Hess

Dear all fellows,

According to Nicholas Crafts (Warwick university):

An increase in multi-factor productivity (MFP) means that more output is obtained from the same set of inputs or equivalently that fewer inputs can be used to make the same amount of output. It sounds almost too good to be true. So how might this come about ?

Two obvious possibilities are, first, that new technology is adopted and, second, that inputs are utilized more efficiently. In turn, this may represent the availability of new knowledge or greater effort to take advantage of existing knowledge. And this tells us that increases in MFP will reflect the incentives that individuals face to create or use knowledge. To be sure, business managers do not strive to raise MFP. But they do seek to reduce costs, develop better products, and imitate cost-effective production processes introduced by their rivals. Success in these activities leads to higher MFP.

On the other hand, in some circumstances higher MFP may simply reflect measurement error − it really is too good to be true. Two particular types of error need to be guarded against. The first is failing to take into account all the relevant inputs and the second is incorrect quantification of the relative contributions of different inputs. MFP is necessarily calculated as an index number and both errors can be thought of as weighting problems in constructing an index of input use. An example of the first type of problem might be a failure to allow for differences in the quality of inputs while the second could arise when cost shares (the most natural way to weight inputs) do not accurately reflect relative importance because factors of production receive rents or give rise to spillovers.

Growth accounting is a well-established methodology for quantifying the proximate sources of output or labour productivity growth which addresses these issues, as we shall see, more or less successfully. A vast array of estimates are available which can be used to compare contributions to growth across countries or over time.

These are broken down into those

resulting from growth of factor inputs and that attributed to (residual) multi-factor productivity growth. The relative importance of the latter exhibits massive variation.

Lack of productivity in my country due to poor planning and non-specialized management

Dear Prof. Hess

According to the reality of some agricultural countries, the lack of develop long and short-term strategic plans for integrated pest management and the implementation of risk-prediction programs compounded the decline in productivity

I share the view of Dr. Ghose. Best regards

Very informative discussion

I would like to follow the discussion

Thank you very much for the kind insights, fellow scientists.

All the best for all of you.

Prof. A. Hess

Interesting

In this recent article and from the perspective of South Africa, I consider BRICS higher educational governance histories and population provision. I align these variables with GDP and extreme poverty.

Article Social Realist Ontology for Analysing BRICS Educational Gove...

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