Suppose a state that has done the right thing, such as the World Bank has established a basic law, held a non-distortionary policy environment, including macroeconomic stability, invested in basic social services and infrastructure, protection to vulnerable groups and defended the environment. Suppose a state achieved through aggressive policies and reforms, controlling inflation, lower interest rates to acceptable levels, lower unemployment levels understandable, open its economy, privatize nationalized companies or monopolizing unnecessarily infrastructure construction, the provision of much of public-area data services, social services and other goods and services that are inefficient, creating a vital institutional base, strong and not arbitrary, protect, properly, public order after having made peace with insurgent groups, protect property, to end economic insecurity at home (avoiding poverty in old age through pension systems, helping to cope with catastrophic illnesses through health insurance and providing assistance in case of job loss with unemployment insurance), control corruption, greater citizen participation in many of the democratic bodies and, finally, to achieve close the wide gap between what is expected of him and his own ability to respond timely, accommodating, as has said the World Bank itself, its functions to its capacity. I mean imagine a state that distils optimism and attractive for investment. Well, do you? Now imagine what would happen next.

Faced with such efficiency and such a condition is no exaggeration to predict a massive influx of foreign investment. Nor does it seem strange that domestic investors, instead of producing jobs and development in foreign countries to bring back his talk. Then the market takes over optimism. The effervescent enthusiasm and turns does envisions, for the near future, the rapid growth between 7 or 8% annually. Interest rates down, having a lot of money into banks to lend, why not fire the luxury goods consumption and necessary. The consumer has money to import and spend. That makes the state increase its tax revenues on consumption and imports. And as the state always has a tendency to spend all their income and then some, of course will increase public spending and the economy will show abundant. But, as the village idiot “of that kind are not so much!” It is expected that after a few years, three or four things to change. The public debt and enjoy their “durables” begin to be cautious in their spending. The economy, unable to continue growing and with a significant deficit in the trade balance, start your boomerang effect. And when it foresees a troubled economy, investments decrease, interest rates rise, state tax revenue is decreasing and the deficit begins to increase, why the state decides to fund its budget with more loans to international banks begin to impede or deny, given the distrust of the markets. The domestic and foreign investors are afraid and begin to draw his talk again. Interest rates continue to rise, inflation gallops joyfully unemployment makes the rounds that, in short, the economy goes into recession. The government, being seriously damaged their income, and can cut government spending, investment in the sector first and then in operation, another tax reform proposes to raise taxes, makes strenuous efforts to control evasion and pursuit of its contributors necessarily intervene to save the depositors of failed banks and, expensively, too, that another company save a substantial settlement. The recession becomes critical. And for critical situations are the most common solutions shock measures. The country now than we imagine will be a victim of the sharp devaluation of the stringent fiscal adjustment plans, the paralysis of their investments, massive layoffs, wage adjustments below the rate of inflation and everything else. And of course the country will recover

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