Chapter 11 - The Fundamental Cause of the Emergence of Relative Backwardness

Abstract

This chapter relies on the distinction between proximate and fundamental causes of economic growth and development to stress the fundamental causes in the Brazilian case. A slightly adjusted model from that presented by Acemoglu et al. (2005) is proposed, which introduces a role for social conflicts as an ultimate cause of growth. This small change can turn the original model upside down, as it allows social conflicts to become the major fundamental driving determinant of growth and development, rather than institutions. The latter then become only a transmission mechanism for the impact of the outcome of social conflicts, as postulated in this hypothesis.