Source: Tietê Paraná Development Agency - 06/08/2009

One of the serious obstacles to Brazilian development is the role played by Governments and public administration, especially when the management mechanisms do not consider the changes underway.

The redefinition of the government's role in several countries, including Brazil, is part of the secular evolution of public administration.

In the Patrimonial Public Administration, predominant until the advent of the Industrial Revolution, the State and its apparatus was an indistinct extension of the power of the sovereign, his family and the nobility. In the Bureaucratic Administration, the management of the State is incorporated into career officials, for the impartial execution of the policies of the governors elected by the people. However, the state bureaucracy tends to perpetuate itself and to constitute an end in itself, fixing itself on formalistic control procedures that make the achievement of efficiency unfeasible.

The patrimonialist practice is materialized in bureaucratic governments that reward their employees with automatic mechanisms such as stability, length of service, the volume of resources and the number of people they manage according to their position in the hierarchy. In this way, these employees maintain their jobs based on vitality, untouchability and irreversible time.

Such mechanisms end up enabling the construction of corporate empires, which strive to ensure greater participation in budgets with immutable advantages. The result of this process is the plastering of the administration via regulatory and compulsory mechanisms that make modern public management inflexible.

In a world of accelerated technological changes and in a competitive globalization process, where formal employment is replaced by the concept of employability, new social demands arise that demand greater flexibility in public management, which imposes an entrepreneurial management, focused on economic and social promotion. to satisfy the needs of citizens, through the application of parameters of managerial optimization and effectiveness (efficiency + effectiveness), which characterizes “management by results”.

An “entrepreneurial government”, as the concept notes, seeks to use resources in new ways, to maximize productivity and efficiency. In the context of the inefficiency and excessive growth of the bureaucratic Fiscal State, Peter Drucker warned, in 1989, “that almost all developed countries, turned to an income distribution through tax policy, had already reached the limit of prohibitive tax burden”, besides of which, due to the effects of the so-called “silent fiscal rebellion” (informality, tax evasion, etc.), there is a general reduction in the tax revenue itself and not an increase.

Drucker found that, according to Pareto's Law, it is not the increase in the tax burden that distributes income, but the increase in productivity. Vilfredo Pareto a scholar of income distribution, the author of what is now known as the Pareto Law, concluded that the government is unable to effectively modify the distribution of income.

He claims that it is only marginally influenced by local customs and values, being determined by the productivity of an economy. Therefore, the less productive the economy, the greater the income inequality and the more productive, the less the inequality.

Entrepreneurial management, therefore, advocates a return to the purpose of taxes to create revenues with minimal side-effects to apply them in promoting productivity as the only way to generate wealth, distribute income and correct social inequalities. Unlike the Bureaucratic Administration, which is fixed in formal controls, which concentrates excessively on inputs, resources, entrepreneurial management emphasizes control over the application of resources and the respective results.

The concept of entrepreneurial government is recent and its scope is part of entities focused on the management of economic activities such as energy, telecommunications, etc., in which it is easier to identify economic benefits, expanding progressively.

One of the main instruments of this new posture of entrepreneurial public management is the Management Contracts, which express a new form of relationship between the Government and its organizations and entities, aiming at the best interest of society. Legally, the Management Contract is an agreement signed between the government and a state organization in order to achieve certain objectives in a given period.

The Management Contracts mainly aim at the precise definition of objectives that the public administrator must obtain in his unit, ensure the autonomy and flexibility of the administrator in the management of human, material and financial resources to obtain the contracted purposes and, finally, the control and accountability of the results obtained.

Finally, entrepreneurial public management proposes an alternative mechanism that is the association of the public sector with the private sector in response to the solution of the inflexibilities of the public sector. Public-private partnerships are modern mechanisms for shared management where the public preserves its functionality in meeting social demands and the private allocates profitable resources with efficient and effective management regulated by contractual mechanisms of duties and rights between the parties seeking to do more and spend any less.

Demanding a new posture by the Brazilian state with the adoption of entrepreneurial management is a fundamental requirement to achieve development as a way of incorporating Brazil into the group of developed nations.

Without this, we will continue to have the highest tax burden on the planet, but we will be trapped, for example, in an education without focus and quality, in the bottlenecks of infrastructure and definitely removed from the productivity increases provided by innovation and technology.

So, with poor development!

Paulo de Tarso Pinheiro Machado, Economist and Technical Director of Pólo - RS Development Agency and Agenda 2020.