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

1. Motivation Evidence Interpretation Conclusions The Brazilian Protests of June 2013 An Economist’s View Matheus Albergaria de Magalh˜ es a Programa de Educacao Tutorial (PET-Economia) ¸˜ Universidade Federal do Esp´rito Santo (UFES) ı 05 de Fevereiro de 2014 Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

2. Motivation Evidence S ECTIONS Motivation Evidence Interpretation Conclusions References Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 Interpretation Conclusions References

3. Motivation Evidence Interpretation Conclusions References M OTIVATION My goals today: Describe some of the main facts that took place in Brazil during the month of June 2013. Invite Students, Academics and Policy Makers for an open debate. Ilustrate how Economics can provide an interesting interpretation for the observed facts. Propose future research and policy agenda for related themes. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

4. Motivation Evidence Interpretation Conclusions References M OTIVATION Question 1: why are we here? 1. University: best place for this kind of discussion (open access; free debate of ideas; etc.). 2. Students and Professors at UFES: some of you had an active role in the protests. 3. This Generation: you will be society’s main decision-makers in the future (politicians, businessmen, enterpreneurs, etc.). Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

5. Motivation Evidence Interpretation Conclusions M OTIVATION 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. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

6. Motivation Evidence Interpretation Conclusions M OTIVATION 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? Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

7. Motivation Evidence M OTIVATION Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 Interpretation Conclusions References

8. Motivation Evidence Interpretation Conclusions References M OTIVATION Advantages of my approach: 1. Hindsight. 2. Economic Intuition. 3. Images can tell an interesting and compelling story. Disadvantages: 1. Economism (narrow view). 2. Inability to formulate a theory or model which is able to ﬁt the facts. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

9. Motivation Evidence Interpretation Conclusions E VIDENCE Google Trends, 2004-2014 (Weekly Data) Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

10. Motivation Evidence Interpretation Conclusions E VIDENCE Google Trends - World Search for the term “Protests” Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

11. Motivation Evidence Interpretation Conclusions E VIDENCE Twitter - Tweets containing the term “Rolezinhos”, 2014 Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

12. Motivation Evidence Interpretation Conclusions E VIDENCE Twitter - Tweets containing the term “Rolezinhos”, 2014 Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

13. Motivation Evidence E VIDENCE Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 Interpretation Conclusions References

93. Motivation Evidence Interpretation Conclusions References I NTERPRETATION 1968: Biologist Garret Hardin published a paper in Science (Hardin 1968). The paper’s title: “The Tragedy of the Commons”. Common Resources: non-exclusive, but rival. Classic Examples: 1. Commonly owned land in England in the ﬁfteenth century. 2. Animal Species Extinction. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

94. Motivation Evidence Interpretation Conclusions I NTERPRETATION Garret Hardin (1915-2003) Author of the Paper ”The Tragedy of the Commons”, Science (1968) Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

95. Motivation Evidence Interpretation Conclusions References I NTERPRETATION June 2013: I performed a classroom experiment, testing for the Tragedy of the Commons. Experiment’s Goal: students (divided in groups) should try to share a common resource (2 Mentos packages). At the end of the experiment, only one group of students had most Mentos (cooperation lasted for 3 periods, only). Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

96. Motivation Evidence Interpretation I NTERPRETATION Mentos ”The Fresh Maker” Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 Conclusions References

97. Motivation Evidence Interpretation Conclusions I NTERPRETATION Classroom Experiment Results - ”Tragedy of the Commons” Public Sector Economics, FUCAPE Business School, June 2013 Rounds Round 1 Round 2 Round 3 Round 4 Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 # Mentos 8 6 8 0 Result Cooperation Cooperation Cooperation Tragedy of the Commons References

98. Motivation Evidence Interpretation Conclusions I NTERPRETATION Question: what does the “Tragedy of the Commons”tell us? Common resources, when explored in individualistic and predatory ways, can lead to inneﬁcient aggregate outcomes. Alert: we should start considering the common linkages between individual decisions and aggregate outcomes. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

99. Motivation Evidence Interpretation Conclusions References I NTERPRETATION Question: is there any possible way to avoid the “Tragedy of the Commons”? According to some economists, the answer is YES. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

100. Motivation Evidence Interpretation Conclusions I NTERPRETATION Elinor Ostrom (1933-2012) Nobel Memorial Prize in Economic Sciences, 2009 Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

101. Motivation Evidence Interpretation Conclusions References I NTERPRETATION Prerequisites for Cooperation: 1. Existence of clear rules to identify who is a member of the group. 2. Rules deﬁning permissible and forbidden actions. 3. A system of penalties for violation of the above rules must be clear and understood by all parties. 4. A good system to detect cheating must be in place. 5. Available information to prospective users. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

102. Motivation Evidence Interpretation Conclusions References 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 Nalebuff 2008, p.97) Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

103. Motivation Evidence Interpretation Conclusions References C ONCLUSIONS A Final Question: where do we go from here? 1. Build a multidisciplinary approach focused on understanding common demands and compromises derived from the protests. 2. Identify causes and consequences of corruption (we – society and economists – know very little about it). 3. Demand more transparency from Public Sector’s policies and outcomes (open the ’Black Box’). 4. Use ﬁeld and laboratory experiments to uncover politician’s and decision-makers’ true preferences and attitudes. Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

104. Motivation Evidence Interpretation Conclusions References C ONCLUSIONS Economists: need to start applying economic rationale to conﬂicting situations more often; see Economics as a broad Social Science. Students, Academics and Policy Makers: start an open and multidisciplinary debate related to the protests; organize a knowledge network related to such themes. Society: modify the way we see our country and ourselves; build a collective identity (Magalh˜ es 2013a,b). a Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

105. Motivation Evidence Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 Interpretation Conclusions References

106. Motivation Evidence Interpretation Conclusions References R EFERENCES DIXIT, A.K.; NALEBUFF, B.J. The Art of Strategy: a game theorist’s guide 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. Esp´rito Santo S.A. Book Manuscript, Jan.2013, ı 130p. (2013a). ˜ MAGALHAES, M.A. Esp´rito Santo S.A. Opening Lecture, Quarto ı Encontro de Economia do Esp´rito Santo (IV EEES), Nov.2013, 43p. ı (2013b). Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

107. Motivation Evidence Interpretation Conclusions Images’ Sources: www.google.com/imghp www.grupomaquina.com www.viniciusmatos.com.br g1.globo.com/brasil/protestos-2013/infografico/platb Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

108. Motivation Evidence Interpretation Conclusions Special Thanks To... Arthur C. Quintanilha & Jo˜ o Vitor Andr´ (IJSN) (Graphs’ Layout). a e Marcos G. Quiles (UNIFESP) (Twitter Maps). Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013 References

109. Motivation Evidence Interpretation Conclusions References Thank You Matheus Albergaria de Magalh˜ es a matheus.albergaria.magalhaes@gmail.com http://www.sites.google.com/site/malbergariademagalhaes Matheus Albergaria de Magalh˜ es a The Brazilian Protests of June 2013

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

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

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