Brazil, R&D and the role of clusters

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declining during the next years to forecast 3.7%. It is assumed that policy continuity will facilitate a modest recovery with trends in the global economy. Brazil’s reduced external vulnerability should help the domestic economy to cope with the global economic downturn. CORRUPTION Corruption has been a problem among emerging economic giants for a long time across several industries and points of interaction with the State. Usually, within a specific individual economy, the intensity of corruption may vary by region, industry and type of interaction with the government, among other factors. In a bureaucratic society with low wages for public servants, there is always someone who accepts something to make things move smoother or close the eyes in case of some wrong-doing. A study done by the World Bank shows, among a lot of other things in 160 countries, that there is an existence with strong ties between corruption and low social indexes. The CPI Score of a country or territory published by Transparency International indicates the degree of public sector corruption as perceived by business people and country analysts, and ranges between 10 (highly clean) and 0 (highly corrupt). In 2008, the corruption perception index, ranked countries of interest as following below. Brazil scored in 2008 a better position than for example India or Russia. Corruption Perception Index: Country Rank Country/Territory CPI Score 2008 Page 5 of 40 Standard Deviation Confidence Intervals 14 Norway 7.9 0.6 7.5 – 8.3 6 72 China 3.6 1.1 3.1 – 4.3 9 80 Brazil 3.5 0.6 3.2 – 4.0 7 85 India 3.4 0.3 3.2 – 3.6 10 147 Russia 2.1 0.6 1.9 – 2.5 8 Source: www.transparency.org Surveys Used For Brazil, the costs of corruption are big. One study found that in districts with fewer than 450,000 inhabitants – 90% of the total – a tenth of the money transferred by the Federal Government was globed up by graft.
There are specific manifestations of corruption. According to the 2003 Global Competitiveness Report Indices of Bribery and Corruption, there are 18 factors that have a bearing on corruption, such as distorting government subsidies, efficiency of legal framework and transparency of government policymaking. Executive Opinion Survey scale goes from 1 (common problem) to 7 (never an issue) and Brazil scores poorly when it considers Bribery in government policymaking. The survey indicates that there are differences in perceived corruption form the perspective of small, medium and large Brazilian companies. The coordinates reflect the percentages of businesses acknowledging the need to make payments to get things done. Whereas the small and medium sized companies in Brazil perceive a higher than average burden of corruption, the overall burden of corruption is higher than problems relating to officials interpretation of regulations and to business licensing. This suggests that companies face more traps in the operational stage than in the initial start up phase of running a business. Also, official’s unpredictability only partly explains bribery. It is interesting to mention that selected industries are also perceived different when it comes to level/presence of corruption. Manifestations of Corruption – 18 factors - Brazil: Perceived Corruption and Firms´ Size – Brazil: Index Code Index Code: Bribery and related GCR indices 17 5 1 7 14 3 8 2 12 6 16 15 0 1 2 3 4 5 6 Index Value 1 - Distortive government subsidies 10 - Bribery in public utilities 2 - Judicial independence 11 - Bribery in tax collection 3 - Efficiency of legal framework 12 - Bribery in public contacts 4 - Property rights 13 - Bribery in loan applications 5 - Burden of regulation 14 - Bribery in government policymaking 6 - Transparency of govt. Policymaking 15 - Bribery in judicial decisions 7 - Favouritism in govt. Decisions 16 - Business costs or corruption 8 - Cost of organized crime 17 - Public trust in politicians 9 - Bribery in exports and imports 18 - Ethical behaviour of firms 18 4 9 13 11 10 Source: Executive Opinion Survey in World Economic Forum: The Global competitiveness Report (Oxford University Press 2003) Page 6 of 40 Firm size 1 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 Percentage of statements re corruption
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