The Brazilian Protests of June 2013: an economist's view

Motivation Evidence Interpretation Conclusions References

The Brazilian Protests of June 2013An Economist’s View

Matheus Albergaria de Magalhaes

Programa de Educacao Tutorial (PET-Economia)

Universidade Federal do Espırito Santo (UFES)

05 de Fevereiro de 2014

The Brazilian Protests of June 2013

SECTIONS

Motivation

Evidence

Interpretation

Conclusions

References

MOTIVATION

My goals today:

I Describe some of the main facts that took place in Brazilduring the month of June 2013.

I Invite Students, Academics and Policy Makers for an opendebate.

I Ilustrate how Economics can provide an interestinginterpretation for the observed facts.

I Propose future research and policy agenda for relatedthemes.

MOTIVATION

Question 1: why are we here?

1. University: best place for this kind of discussion (openaccess; free debate of ideas; etc.).

2. Students and Professors at UFES: some of you had anactive role in the protests.

3. This Generation: you will be society’s main decision-makersin the future (politicians, businessmen, enterpreneurs, etc.).

MOTIVATION

Question 2: why do we care?

A few reasons:

1. Protests stopped the country in some occasions.

2. Growing intolerance with certain types of societal abuse(e.g., corruption).

3. Elections will take place in November, 2014.

4. Need to establish long-run priorities.

5. We are talking about our society’s future, after all.

MOTIVATION

My Proposal

1. I will present very simple evidence this time.

2. We will look at maps and pictures from the protests.

3. Why is this relevant?

MOTIVATION

I Advantages of my approach:

1. Hindsight.

2. Economic Intuition.

3. Images can tell an interesting and compelling story.

I Disadvantages:

1. Economism (narrow view).

2. Inability to formulate a theory or model which is able to fitthe facts.

EVIDENCE

Google Trends, 2004-2014 (Weekly Data)

EVIDENCE

Google Trends - World Search for the term “Protests”

EVIDENCE

Twitter - Tweets containing the term “Rolezinhos”, 2014

EVIDENCE

Twitter - Tweets containing the term “Rolezinhos”, 2014

EVIDENCE

INTERPRETATION

I 1968: Biologist Garret Hardin published a paper in Science(Hardin 1968).

I The paper’s title: “The Tragedy of the Commons”.

I Common Resources: non-exclusive, but rival.

I Classic Examples:

1. Commonly owned land in England in the fifteenth century.

2. Animal Species Extinction.

INTERPRETATION

Garret Hardin (1915-2003)Author of the Paper ”The Tragedy of the Commons”, Science (1968)

INTERPRETATION

I June 2013: I performed a classroom experiment, testing forthe Tragedy of the Commons.

I Experiment’s Goal: students (divided in groups) shouldtry to share a common resource (2 Mentos packages).

I At the end of the experiment, only one group of studentshad most Mentos (cooperation lasted for 3 periods, only).

INTERPRETATION

Mentos”The Fresh Maker”

INTERPRETATION

Classroom Experiment Results - ”Tragedy of the Commons”Public Sector Economics, FUCAPE Business School, June 2013

Rounds # Mentos ResultRound 1 8 CooperationRound 2 6 CooperationRound 3 8 CooperationRound 4 0 Tragedy of the Commons

INTERPRETATION

I Question: what does the “Tragedy of the Commons”tellus?

I Common resources, when explored in individualistic andpredatory ways, can lead to inneficient aggregate outcomes.

I Alert: we should start considering the common linkagesbetween individual decisions and aggregate outcomes.

INTERPRETATION

I Question: is there any possible way to avoid the “Tragedyof the Commons”?

I According to some economists, the answer is YES.

INTERPRETATION

Elinor Ostrom (1933-2012)Nobel Memorial Prize in Economic Sciences, 2009

INTERPRETATION

I Prerequisites for Cooperation:

1. Existence of clear rules to identify who is a member of thegroup.

2. Rules defining permissible and forbidden actions.

3. A system of penalties for violation of the above rules must beclear and understood by all parties.

4. A good system to detect cheating must be in place.

5. Available information to prospective users.

A word of caution by Ostrom and her collaborators:

”The dilemma never fully disappears, even in the best operating systems (...)No amount of monitoring or sanctioning reduces the temptation to zero.Instead of thinking of overcoming or conquering tragedies of the commons,effective governance systems cope better than others. (Dixit and Nalebuff2008, p.97)

CONCLUSIONS

A Final Question: where do we go from here?

1. Build a multidisciplinary approach focused onunderstanding common demands and compromises derivedfrom the protests.

2. Identify causes and consequences of corruption (we – societyand economists – know very little about it).

3. Demand more transparency from Public Sector’s policiesand outcomes (open the ’Black Box’).

4. Use field and laboratory experiments to uncover politician’sand decision-makers’ true preferences and attitudes.

CONCLUSIONS

I Economists: need to start applying economic rationale toconflicting situations more often; see Economics as a broadSocial Science.

I Students, Academics and Policy Makers: start an openand multidisciplinary debate related to the protests;organize a knowledge network related to such themes.

I Society: modify the way we see our country and ourselves;build a collective identity (Magalhaes 2013a,b).

REFERENCES

DIXIT, A.K.; NALEBUFF, B.J. The Art of Strategy: a game theorist’sguide to success in business and life. New York: W.W. Norton &Company, 2008.

HARDIN, G. The tragedy of the commons. Science, New Series, v.162,n.3859, p.1243-1248, Dec.1968.

MAGALHAES, M.A. Espırito Santo S.A. Book Manuscript, Jan.2013,130p. (2013a).

MAGALHAES, M.A. Espırito Santo S.A. Opening Lecture, QuartoEncontro de Economia do Espırito Santo (IV EEES), Nov.2013, 43p.(2013b).

Images’ Sources:

www.google.com/imghp

www.grupomaquina.com

www.viniciusmatos.com.br

g1.globo.com/brasil/protestos-2013/infografico/platb

Special Thanks To...

Arthur C. Quintanilha & Joao Vitor Andre (IJSN) (Graphs’ Layout).

Marcos G. Quiles (UNIFESP) (Twitter Maps).

Thank YouMatheus Albergaria de Magalhaes

matheus.albergaria.magalhaes@gmail.com

http://www.sites.google.com/site/malbergariademagalhaes

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