Talk is cheap
One of the constants as the current crisis has speed along is the large discrepancy between the perceptions of external investors and international press and the domestic debate and press coverage. Very often they seem to be reporting about paralell worlds: one with dark undertones, talk about impeachment and a new denounce every single day; other a much rosier picture, where a most excellent minister of finance holds his place, economic policies are sound and, despite all the noise, things have been going quite well.
Why are these views so different? I’ve been in Brazil for over a week now, so I can now venture to propose an explanation. The perceptions in Brazil are different because (the informed) people here actually listens once in a while what politicians have to say, while the external public tend to concentrate on observable actions. So it is easy to get a more positive view about the Brazilian government: stop listening to whatever its representatives are saying.
Which view is more correct? In (normal) political science, we tend to pay much more attention to observed behavior that impressions or expressions. The reason is simple: talk is cheap. Politicians tell you what they think you want to hear. And that’s probably not very close to any sort of “truth”.
So, we take a position closer to the one of the “external observer”. We infer politicians preferences by their actions and judge policies by their outcomes. We try to stay away from the sound and fury of the news*, and concentrate on long run patterns, build toy models, and always think “what would a rational actor do?”.
The downside of it is that we have very few specific recommendations, nor discourses about current events. No matter how erroneous so called “analysts” views can be, decision makers seem to take into account what they think (at least judging by the amount of money spent on them.) So the information must be valuable, right? Not necessarily. But this is a topic of another post.