Brazil rises in position in the International Property Rights Index of 2017

09/01/2017

Clayton Vinicius Pegoraro de Araújo, Elton Duarte Batalha, Ricardo de Abreu Barbosa


The Mackenzie Center of Economic Freedom is a representative of the Property Rights Alliance in Brazil and last July the 2017 version of the International Property Rights Index. The publication of international data on respect for property rights points Brazil in a medium position, a fact that leads to reflection on the national reality and the effects that the consideration of the aforementioned legal aspect produces on the economic development of the country.

In 2017, Brazil ranked 58th in the international ranking of the International Property Rights Index (IRPI). This was the result of a 127-country study conducted by the Property Rights Alliance (PRA), a non-governmental organization that has dedicated itself to protecting property rights around the world.

Brazil, which in 2016 was in the 64th position, has reason to celebrate its new placement in the IRPI of 2017, but there is still much to be done to bring the country closer to the levels of respect for private property found in places like New Zealand (1st place), Australia (10th place), Canada (11th place) and even Latin American countries such as Chile (28th place) and Uruguay (36th place).

The criteria used in the study take into account several factors, including: independence of the Judiciary, respect for the laws, political stability, anti-corruption, systems of registration and protection of physical property rights, credit granting systems, protection systems patents and the fight against piracy. These elements are divided into three areas: the right to physical property; right to intellectual property; and political stability and the rule of law.

The comparison with other countries in South America may lead to some conclusions. Venezuela, a country that for more than a decade has a populist tendency with a marked lack of respect for legal security, including expropriations, occupies the last place in the ranking in relation to Latin America and the penultimate in the world. On the other hand, Chile, the best placed in the region, opted for a political path diametrically opposed to the Venezuelan choice, emphasizing the stability and maintenance of the contracts.

It is undeniable that there is a strong correlation between institutional environment in the political and legal fields and the economic development of a country. The analysis of the ranking shows that the notion of democracy is not dear to the poorer nations. The lack of effective rule of law, with a reasonably simple understanding tax system, facilitated and independent forms of access to credit for the political connection of productive agents with the government, adequate labor legislation, respect for human dignity and consideration of fundamental rights , as in the case of property rights, tends to produce an environment hostile to capital and, consequently, deleterious effects on the economy, discouraging entrepreneurship.

Differently from the widespread idea, the creation of inadequate investment space should not be a concern only of affluent people, since the main consequences of such a panorama affect mainly the poorest. Without investment, the economy is not dynamic enough to create jobs for the population. Consequently, there is a decrease in taxes collection, which means that the State does not have the resources to adequately satisfy the services to be performed. In a context of economic retraction, the effects will be felt first by those whose livelihoods are directly linked to the vigor of the economy, precisely the poorest, dispossessed of land and capital and therefore dependent on their own labor for survival. Fighting for better living conditions for the disadvantaged does not mean destroying the wealth of the most favored, but on the contrary means using their affluence in favor of those through a legal and economic environment that facilitates the country's growth.

Currently, Brazil goes through a moment of institutional reform, in which several aspects have been brought to the fore. After the revision of the labor legislation in July 2017, the social security, tax and political fields are on the agenda for restructuring in the coming months, in order to create a legal framework adequate to the resumption of the country's economic development. Having prepared the ground for the Law, it will be up to the Economy to throw the seeds necessary for the national wealth to thrive.

It is important to point out that the Federal Constitution (CF), 1988, has, among its foundations, "the dignity of the human person" and "the social values ​​of work and free enterprise" (Article 1, III and IV). The fundamental objectives of Article 3 include: "building a free, fair and united society", "guaranteeing national development", "eradicating poverty and marginalization and reducing social and regional inequalities", and the good of all "without any form of discrimination. In order to fulfill these goals, it is essential to respect fundamental rights, including the right to property (Article 5, XXII, CF).

Another issue, for example, that can not be ignored is the idea brought in the spirit of the Land Statute (Law 4,504 / 64), regarding the notion of ownership and its social function, as well as the access to all, in accordance with Article 2, of said legislative text. In closer analysis, this is a subjective concept and depends on extensive interpretation by the operators of the Law, so that it can give meaning to the term. In this context, there is a predominance of this terminology and its consequent use, to the detriment of freedom of initiative and competition, both of which are provided in article 170 of the Federal Constitution (1988).

In short, the right to property in Brazil, although it takes place within the framework of the Constitution, demands legal structure that will protect it more effectively, creating better investment conditions and, consequently, greater economic growth. Only in this way will the objectives and foundations of the Greater Text be concretized, providing a dignified life for Brazilians, based on the promotion of free initiative and the development of personality through work.