Changing social contracts: Beliefs and dissipative inclusion in Brazil

► We highlight the possibility that changes in beliefs prompt countries to change their mix of inequality and redistribution. ► We provide data that shows that beliefs and social contracts tend to be stable over time in most countries. ► We argue and provide evidence that Brazil has undergone a dramatic shift in social contract since 1985. ► We introduce the concept of 'inclusive dissipation' to represent the process through which Brazil has adopted that, though inclusive, also generate inefficiencies and distortions.