Rio and the Reds: The Comando Vermelho, Organized Crime and Brazil’s Economic Ascent [Student’s Paper Series]

Brazil’s growing status as a potential world power cannot obscure the characteristics of its other reality: that of a country with vast inequalities and high crime rates. The Comando Vermelho, the most prominent organized crime syndicate in Rio de Janeiro, besieges the beauty and charm that attracts tourists to this city. The CV arose not only as a product of the political dictatorship of the seventies, but also of the disenfranchised urban poor crammed into Rio’s favela slums. Today, the CV presents a powerful challenge to the State’s control of parts of Rio territory. As Brazil’s soft power projection grows, it is seriously challenged by its capacity to eliminate organized crime. Economic growth is not sufficient to destroy a deeply embedded organization like the CV. In fact, Brazil’s success may yet further retrench the CV’s activities. Culpability for organized crime cannot be merely limited to the gangs, but must also be shared among the willing consumers, among whom can be found educated and elite members of society, as well as the impoverished and desperate. The Brazilian government needs a top-down response addressing the schism between rich and poor. However, Brazil’s citizens must also take responsibility and forge a bottom-up response to the drug- and corruption-riddled elements of its most respected members of society. Brazil must target reform across public health, housing, education and above all, law enforcement. Without such changes, Brazil will remain a two-track democracy. Rio’s wealthy will still be able to revel in the city’s beauty albeit from behind armored cars and fortified mansions, while the city’s poor will yield – either as victims or perpetrators – to the desperate measures of organized crime.

Essays on the political economy of trade policy and economic *development

This dissertation studies the political economy of trade policy in a developing country, namely Turkey, under different economic and political regimes. The research analyzes the effects of these different regimes on the import structure, the trade policy and the industrialization process in Turkey and derives implications for aggregate welfare. ^ In the second chapter, the effects of trade liberalization policies on import demand are examined. Using disaggregated industry-level data, import demand elasticities for various sectors have been computed, analyzed under different economic regimes, and compared with those of developed countries. The results are statistically significant and reliable, and conform to the predictions of economic theory. Estimation of these elasticities is also a necessary ingredient for the third chapter of the dissertation. ^ The third chapter examines the predictions of the state-of-the-art “Protection For Sale” model of Grossman and Helpman (1994). Employing advanced econometric methods and a unique data set, strong support is found for the fundamental predictions of the model in the context of Turkey. Specifically, the government is found to attach a much higher weight to social welfare than to political contributions. This weight is higher under the democratic regime than under the dictatorship, a result potentially of interest to all researchers in the area of political economy. ^ The fourth chapter looks at the effects of industry concentration and import price shocks on protection, promotion and the choice of policy instruments in Turkey. In this context, it examines and finds support for the predictions of some well-known models in the literature. ^