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- Herausgeber: John Wiley & Sons
- Kategorie: Geisteswissenschaft
- Sprache: Englisch
Once deemed a “dysfunctional” democracy with a “feckless” set of political institutions and a “drunk” economy, today’s Brazil has undergone a complete reversal of fortune. Now in its third decade of democracy, the economy is blossoming and large-scale development projects are underway, including the exploitation of massive, off-shore oil reserves, a nationwide effort to modernize infrastructure, and preparations for the hosting of the 2014 World Cup and the 2016 Olympics. Inequality and poverty are reducing and even Brazil’s political institutions are more governable and are producing a higher-quality democracy than most observers once thought possible.
Alfred P. Montero’s timely and wide-ranging book explores Brazil’s amazing “turnaround” - from improvements to the working of its political institutions and judiciary, to the renewal of economic growth, the advent of innovative social policy, and the emergence of a new foreign policy agenda. Unpacking both overly optimistic as well as pessimistic views of Brazilian politics and development, Montero offers illuminating insights into the country’s transformation and its increasing significance on the international stage.
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Veröffentlichungsjahr: 2014
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Table of Contents
Dedication
Title page
Copyright page
Tables and Figures
Tables
Figures
Abbreviations
CHAPTER ONE: A Reversal of Fortune?
The Purpose of the Book
Explaining Change in a Multidimensional/Multi-Arena Polity
Persisting Tendencies in Brazilian Democracy
The Plan of the Book
CHAPTER TWO: Democracy and Economy from Bust to Boom
Democracy's First Decade
The Long Reform Process
The Expanded Policy Agenda
CHAPTER THREE: Improving Governability
Macro-Political Institutional Design and Governability: From Pessimism to Optimism
Coalitional Presidentialism
Political Parties and Ideological Convergence of the Political Class
CHAPTER FOUR: Accountability, Participation, and Good Governance
Elite Accountability
Government Responsiveness
Voting and the Electorate
Popular Participation
CHAPTER FIVE: The Renewed Developmental State
The Differences between ISI-Focused Developmentalism and Post-1985 Developmentalism
Implementing Developmentalism in a Neoliberal Era
CHAPTER SIX: Welfare and Class Mobility
Structures of Poverty and Inequality
Social Policy
CHAPTER SEVEN: Brazilian Foreign Policy
Foreign Policy between the Cardoso and PT Presidencies
Foreign Economic Policy
The Internationalization of Economic Influence
Foreign Security Policy
Environmental Politics and Foreign Policy
CHAPTER EIGHT: Prospects for the New Brazil
The Macro-Economic Policy Consensus
Developmentalism and Industrial Policy
Social Policy Innovation
Coalitional Presidentialism
Internationalization
The Significance of the Brazilian Turnaround for Democratic Development in Comparative Perspective
References
Index
To my wife, Mar, and our children, Diana and David
Copyright © Alfred Montero 2014
The right of Alfred Montero to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.
First published in 2014 by Polity Press
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ISBN-13: 978-0-7456-6164-3
ISBN-13: 978-0-7456-6165-0 (pb)
ISBN-13: 978-0-7456-8110-8 (epub)
ISBN-13: 978-0-7456-8109-2 (mobi)
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Fig. 3.1 first appeared as “Shifting Ideological Positions, 1990–2009” in “Elite Preferences in a Consolidating Democracy: The Brazilian Legislative Surveys, 1990–2009,” by Timothy J. Power and Cesar Zucco, Jr. Latin American Politics and Society 54:4 (Winter 2012): 1–27. Used with permission.
Tables and Figures
Tables
2.1 Revenues by level of government, 1991–2005
3.1 Provisional measures by administration
3.2 Presidential–legislative coalition characteristics, 1988–2012
4.1 Citizens' views of the most serious problems facing Brazil, 2006–2010
4.2 Characteristics of the electorate, 1982–2010
4.3 Average electoral volatility in Latin America, 1978–2000
5.1 Top sectors receiving BNDES loans, 2005–2011
5.2 Largest BNDES loans, 2002–2011
6.1 Mean household income, Gini coefficients, and poverty rates, 1981–2009
7.1 The largest multinational Brazilian companies, by total sales, 2011
Figures
2.1 Annual inflation rates, 1985–2011
2.2 Total public debt as a percentage of GDP, 1991–2012
2.3 Total foreign currency reserves, 1995–2012
2.4 Trade balance, 1995–2011
3.1 Ideological positions of the Brazilian parties, 1990–2009
3.2 Sani–Sartori ideological distances, 1990–2009
4.1 Partisan preferences of the electorate, 1987–2010
5.1 All BNDES disbursements as a percentage of GDP, 1999–2011
5.2 All BNDES disbursements, 1999–2011
5.3 FNDCT financing, 1971–2012
5.4 Gross fixed capital formation and GDP growth, 1990–2011
5.5 BNDES disbursements as a percentage of GFCF, 1990–2011
6.1 Percentage of the economically active population with carteiras assinadas, 2001–2009
6.2 Distribution of Bolsa Família transfers, 2006
7.1 The direction of Brazilian exports as a percentage of total exports, 1990–2011
7.2 The origin of Brazilian imports as a percentage of total imports, 1990–2011
7.3 Foreign direct investment flows, 1990–2011
Abbreviations
CHAPTER ONE
A Reversal of Fortune?
Brazil has always been a study in contrasts – a puzzle of contradictions that lends truth to legendary composer Tom Jobim's famous line “Brazil is not for beginners.” As the world's sixth largest economy (just ahead of the United Kingdom) and the fourth largest democracy by population, Brazil is a country of continental size with world-class ambitions. At the same time, its economic and political development is fraught with difficulties that have on occasion made observers wonder if the country would ever meet its own expectations. Any visitor to Brazil, especially to the major cities of São Paulo and Rio de Janeiro, will notice the country's most obvious problems: inequality and poverty. Despite its modern cityscapes and advanced technology, as well as the sophistication of its educated middle and upper classes, as many as 60 percent of the country's citizens are poor. The distribution of wealth is tremendously unequal, even though the country has remained a democracy since 1985. To use one traditional indicator of inequality – the ownership of arable land – 1.6 percent of farms control 43.8 percent of all land for agriculture.1 Such statistics underscore that Brazil is a country of sharp contrasts, a democracy with uneven distribution of wealth and income, and a developing, industrial economy of immense potential, but burdened by equally immense social obligations to its poorest citizens.
After enduring twenty-one years of military-led, authoritarian rule from 1964 until 1985, Brazil enjoyed a transition to democracy that raised hopes that fundamental political and socio-economic changes were around the corner. Yet, during the first ten years of this new democracy, the country seemed to veer off course. The first democratic government, known as the “New Republic,” came to be headed by José Sarney, a friend of the outgoing military governments. Sarney's rise was a result of a series of unfortunate events – notably, the failure of democratic forces to install direct elections for the first president and then the death of the indirectly elected Tancredo Neves on the eve of his inauguration. Sarney's coming to power reflected a transition to democracy that was designed to produce less than fundamental change. To the disappointment of Brazilians who thirsted for a return to democracy, the new president was to be elected through an electoral college, specifically the national congress elected in 1986. The new political class of the early democratic period did not differ much from the figures that participated in the semi-open congress sanctioned by the armed forces between 1965 and 1985. The economy of the New Republic would prove even more disappointing. Shortly after Sarney's government had tempered inflation during its first year in office, price instability returned, generating inflationary and, periodically, hyperinflationary spirals reaching more than 50 percent per month during the next nine years. Sarney's successor, Fernando Collor (1990–2), proved spectacularly even less successful. Not only did his efforts to curb inflation fail, but he was found to have engaged in corruption and was impeached before he could serve out his term.
The travails of the first ten years of democracy in Brazil generated sustained and unflinching criticism from observers of the country's political system and economic policies. Scholars such as Scott Mainwaring described its democratic institutions as “feckless,” while others went so far as to call them “pathological.”2 Economic policy fared no better with critics. During the early 1990s, Rudiger Dornbusch, a well-known macro-economist from the International Monetary Fund (IMF), called the Brazilian economy “drunk” and likely to suffer a “putsch,” which was rumored during the summer of 1993 to be in the planning stages (Amaral, Kingstone, and Krieckhaus 2008: 140).3 The hyperinflationary context inspired some observers to compare the “New Republic” to the fragile democracy of Weimar Germany (cf. Fritsch and Franco 1993: 10–11). If Dornbusch's comment about a coming putsch did not carry so much resonance in 1993, the comparison would have seemed ridiculous. Yet, after two unsuccessful presidencies and as many as seven failed anti-inflation plans, Brazilian political-economic institutions appeared incorrigibly dysfunctional. The developmental state, which had forged an impressive period of industrialization during the 1940s through the 1970s, was described by neoliberal observers as obsolete and exhausted, while more sympathetic voices opined that it had become overly fragmented and internally incoherent, making a return to the halcyon days of high growth with statism a fantasy (Weyland 1998). Even public security seemed to be eroding rapidly, a sense that was underscored by the slaughter of eight street children in front of the Candelária Cathedral in Rio de Janeiro by off-duty police and hired gunmen on July 23, 1993.
This author visited Brazil during the North American summer/Brazilian winter of 1993, and, at the time, it was easy to feel that rumors of a coup against the government of Itamar Franco and the massacre at the Candelária Cathedral represented the moment that democratic Brazil was touching bottom. But, just ten years after observers such as Mainwaring and Dornbusch issued their pessimistic assessments of Brazil, the country seemed to have engineered a rather stunning turnaround. Fueled by a commodity boom and a growing domestic market, economic growth picked up, averaging 4.5 percent between 2004 and 2010 with relatively low inflation. Brazil's economic success in the past decade has been so acute that the country has become a capital exporter. By 2009, it was on the US Treasury Department's list of the largest foreign government holders of American sovereign debt. As of January 2013, Brazil is number four on the list, with US$253 billion, just behind all oil exporters, Japan, and China.4 The social implications of this new economic status were evident by the middle of the decade, when observers began to note that Brazil was enjoying falling poverty rates and improving measures of income equality.
These tendencies, albeit slowed due to declining growth throughout much of the world after 2009, continued through the writing of this book, so one might say with some degree of confidence that Brazil has turned an important corner. Despite its fragmentation, with numerous major parties and the dominance of personalistic rather than programmatic organizations, Brazil's political system has become more governable since the “feckless” label was first applied. Indeed, at no other time in its history has the country been able to enjoy for so long growth, lower inequality, lower poverty, and stable, democratic government. Brazil's success in recent years can even be compared with China's and in terms that place it ahead of that country. For example, Marcelo Neri (2009: 229) has made this argument with reference not only to high levels of growth but also to declining inequality and a strengthening democracy in Brazil, whereas China's growth has coincided with increasing inequality and the continuation of authoritarianism. Properly understanding the dimensions and the causes of this stunning reversal of fortune – which I refer to as “the Brazilian turnaround” – is the subject of this book.
Brazil's success in recent years continues to have its detractors. Concerning the country's economic performance, the chief criticism is that aggregate growth is too dependent upon sustainable increases in demand for commodities and higher prices for these exports. Not only is this dependency not sustainable, since commodity booms by definition end with busts, but the overall pattern of development based on such exports is itself a kind of regressive specialization that can only take resources and policy attention away from industry. So some scholars have seen the commodity export economy as a symptom of a larger “de-industrialization” of Brazil (Santana 2012: 217).
Although concerns about the sustainability of commodity booms are warranted, Brazil's turnaround is hardly due exclusively to economic factors, nor is its improved economic performance completely dependent on a commodity boom. Most of its economic expansion since 2002 has been the result of growth in aggregate demand in the domestic market, not in international demand for soy, iron ore, and other resource-based commodity exports, and that owes much to income-enhancing social programs that have boosted the expansion of household consumption (Santana 2012; Singer 2012: 179–80). Export growth has itself been driven by non-commodity exports, including consumer durables and manufactured inputs that have composed a growing share of the export bundle since 1998 (Suzigan, Negri, and Silva 2007; Almeida 2011). A central finding of this book is that social and economic policies have created the conditions for the turnaround even when economic fundamentals did not privilege a positive outcome.
A more compelling and justified concern about the turnaround is that it has done less for the quality of Brazil's democracy than it has for social and economic development. Even after enjoying democratic freedoms for twenty-seven years, surpassing the time of military rule, Brazilian citizens in various surveys continue to report, and in shockingly large proportions, a disappointment with democracy. Just about half of all respondents to the annual Latinobarómetro surveys report an appreciable level of dissatisfaction with the way democracy works in Brazil, and a fifth of those polled entertain the idea that an authoritarian regime might be preferable.5 Brazilians express regularly their opinions between elections, engaging in protests such as those that stunned the political class in June 2013. Hundreds of thousands of protesters in several cities manifested against a litany of concerns: high transport costs, corruption, not enough spending on schools and hospitals, and too much spending on soccer stadiums in preparation for the 2014 World Cup and the 2016 Summer Olympic Games. These attitudes reflect what much scholarship on Brazil sees as the persisting contradictions between the existence of liberal democratic institutions and the continuation of clientelistic and oligarchical forms of doing politics (Ames 1994; Hagopian 1996; Bezerra 1999). Even as formal institutions governing the accountability of elites have hardened, clientelism and patronage politics continue to be the lifeblood of how politics are practiced and how policy is shaped. And, despite periodic corruption scandals, fundamental and lasting institutional reforms are too infrequently pursued and are inadequate even when they are implemented. So regular Brazilians tend to be realists in seeing politics as a game for insiders and democracy as something that benefits those who are already on the inside. Ironically, as the economy and social welfare have improved during the last decade and a half, citizens have raised more and more concerns about democracy and the political class.
These concerns have merit, but they do not diminish the overall impression that the Brazil of today is very different from the one that was mired in political and economic crisis for ten years following the transition to democracy. The turnaround is more than a commodity boom, and, despite the problems of popular disaffection with democracy, democratic institutions work better today than they did even a few years after the transition. Of course, no turnaround of the scale engineered by Brazil is possible without some shortcomings. And the shortcomings do beg the question of how profound and sustainable the changes have been. Are the improvements to governability, patterns of economic growth, social inequality, and poverty simply ephemeral and skin-deep, or are they everlasting and substantial? Scholars embracing optimistic and pessimistic lenses on Brazil have debated back and forth throughout the democratic period. While the pessimists had the upper hand during the first ten years, the last fifteen have witnessed a stunning reversal in favor of more optimistic views. This author prefers a more cautiously optimistic perspective and a careful analytical approach that takes into account the insights produced by contending views of Brazilian democracy and economic and social development.
The Purpose of the Book
This book is focused on explaining Brazil's turnaround on three dimensions: governability, good policy (also known as good policy governance), and the quality of democracy. These are large, multilevel concepts that require a look at an array of indicators. But each can be understood as hinging on certain core questions. Governability asks to what extent the policy-making process works efficiently and effectively to generate legislative change. The key word is “process,” as this concept is less concerned with the effects of policy or the quality of voting and elite accountability. Governability asks how political leaders and their organizations cooperate (or not) to make policy. The main venues for the governability of the political system are the presidency and the legislature, but also relations between the federal government and the states and cities. Major scholars of Brazilian political institutions such as Scott Mainwaring (1999), David Samuels (2003b), and Barry Ames (2001) have produced excellent work on the inability of political parties, the executive and the legislature, and the federal system to govern the policy-making process effectively. Their central claims are that political organizations in Brazil are typically vacuous, driven by personalist leaders focused on the distribution of material rewards for themselves and for their associates, with little devotion to programmatic government or even consistent ideology. The opposite view has gained more traction since the mid-1990s given improved conditions since the presidency of Fernando Henrique Cardoso. More scholars of Brazilian political institutions have come forth to contest the pervasive view of the party system as “feckless” and the legislative process as mired in personalism and clientelism (e.g., Figueiredo and Limongi 1999; Lyne 2005; Hagopian, Gervasoni, and Morães 2009). This debate has coincided with more empirical evidence showing that the capacity of major political actors to forge compromise has improved, making this the first dimension of the turnaround.
Improved governability has made possible the diffusion of new policy ideas that address major goals of socio-economic and institutional change. A centerpiece of the turnaround has been the capacity of major political actors to develop and implement economic and social policies, many of them innovative, which have, over time, changed fundamentally the development of Brazil's democracy. I refer to this dimension of the turnaround as good policy governance, or simply good policy, to differentiate it more neatly from governability. New industrial policies associated with the National Development Bank (Banco Nacional de Desenvolvimento Econômico e Social, BNDES) and poverty-alleviating conditional cash transfers are among the most notable in recent years. But even more fundamental has been Brazil's commitment to price stability under Cardoso's Real Plan (Plano Real), which ended bouts of hyperinflation in 1994, and numerous efforts to stave off a fiscal crisis through stopgap legislation during the 1990s that limited subnational debt and capped spending on the civil service. Most notably, the commitment to macro-economic orthodoxy has not contradicted efforts to improve social distribution. Of course, these policy achievements have not been perfect, but they have gone far enough to reinforce and even take advantage of the improvements in governability noted by scholars of political institutions. The subsequent chapters focus on the most prominent of these, noting how they have generated substantial changes in social and economic development in contemporary Brazil. As a whole, the impression one has is that the Brazilian political system has generated meaningful policy changes during the democratic period, although much is left to do in key areas.
The final dimension of the turnaround is the quality of democracy. One of the indicators of improvements in governability and policy-making is that scholars have moved away from more fundamental questions on whether the Brazilian political system could function democratically to the issue of the quality of its democracy. The quality of democracy focuses on the accountability of elites to one another and to the electorate, the effectiveness of the vote in exercising oversight on the political class, and the responsiveness of government to the will of the people (Levine and Molina 2011; Diamond and Morlino 2004). Of these aspects, the accountability of elites to citizens, defined as the answerability of these representatives to the public for institutionally inappropriate or illegal actions, is the core of democratic quality. Elite accountability also reflects the responsiveness of governments to popular preferences and the participation of citizens in the political process. Like governability, the quality of democracy is concerned with process, but it addresses arenas that move well beyond the realm of political society (i.e., the relations between the presidency and the congress, and the behavior of political parties) to encompass the judiciary, elections and campaigns, popular participation by groups and non-governmental organizations, and official institutions that are responsible for the oversight of the political class and the bureaucracy. It is regarding the quality of democracy that the Brazilian turnaround has produced its most ambiguous results. Since this is a multidimensional concept, it is possible to break it down in subsequent chapters and analyze the areas in which democracy has advanced notably and areas that have seen much less improvement.
The three dimensions of governability, good policy, and the quality of democracy are the objects of study in this book. In that sense they are treated as “dependent variables” in the chapters that follow. How have these dimensions changed in Brazil to produce the turnaround? This question implies that the three dimensions have correlated with larger improvements in economic performance and social development, making them “independent variables” as well. Ultimately, in trying to explain changes of such broad scale, causes and consequences can mix, but understanding causal sequences requires that we unpack these relationships carefully. It also requires that the takeaway lessons from the analysis be highlighted clearly.
I make several recurring claims that are supported in the chapters that follow. Each of these claims elaborates further on the causal description of improved governability, good policy, and enhanced democratic quality to identify specific factors and conditions that animated these dimensions of the turnaround and made them possible, including how change on one dimension affected the others.
My first claim is that the direction of change on governability, good policy, and democratic quality has been towards improvement since 1993–4, but it has been uneven and contradictory in certain areas. The political system is far more predictable and routinized than it was during the first decade of democracy. But the reasons for improved governability are in tension with other aspects of the political system that are intended to strengthen the quality of democracy, especially elite accountability, the responsiveness of government, and the quality of the vote. Regarding good policy, improvements in areas of economic and social policy are genuine, especially since the advent of inflation control under the Real Plan. Yet while innovative policy-making in areas such as economic and social reform may make governments popular, they also deflect responsibility for not addressing other nagging problems, such as the need to make the economy more efficient or the need to reform the political system to reduce the use of patronage in the creation of legislative alliances. Another caveat of the turnaround, referred to above, is that the improvements to the quality of democracy have been the most difficult to engineer and maintain. Despite stronger forms of oversight of elites, voters and civil society as a whole remain too disconnected from the political class to exert the kinds of consistent pressure a more vibrant democracy requires. This partly explains periodic and unexpected outbursts of protests such as those that captured the attention of the world in 2013. The persistence of clientelism, pro-incumbent bias, and the occasional corruption scandal are some of the indicators that suggest that the turnaround has proven weakest on the dimension of Brazilian democracy's overall quality.
My second claim is that political governability and policy-making have improved in particular due to the fact that the ideological polarization of the past has largely faded from the scene. After 1994, Brazil's democracy matured in ways that reduced the differences between right and left that once ended what the historian Thomas Skidmore called the country's “experiment with democracy” in the period 1945–64 (Skidmore 1967). The ideological convergence of right and left has been the foundation for moderate approaches to economic and social policy-making under the presidencies of the post-1993 period. These presidents – Fernando Henrique Cardoso (1994–2003), Luiz Inácio Lula da Silva (2003–10), and Dilma Rousseff (2010–present) – are key protagonists in the narrative of the Brazilian turnaround. Cardoso and Lula, both prominent representatives of different currents of the opposition to military rule during the transition to democracy, are the most important leaders of two major parties, the Brazilian Social Democratic Party (Partido da Social Democracia Brasileira, PSDB) and the Workers' Party (Partido dos Trabalhadores, PT), respectively, whose rivalry has come to shape the Brazilian political system for the last twenty years. Yet, despite hard-fought and often viscerally negative campaigns during electoral cycles, Brazil has enjoyed a tremendous amount of continuity in the framing of macro-economic, industrial, and social policy across these governments. This continuity has undergirded both sustained governability and good policy, making further improvements possible. Notably, both Cardoso's and Lula's commitment to macro-economic orthodoxy has coincided sustainably with the pursuit of an increasingly more robust distributionist social policy. Once again, this should not be taken to mean that Brazil's problems will all be solved inevitably, but it is clear that a foundation was created by the resolution of governability problems, especially after 1994, that allowed some policy solutions and institutional changes to occur that have proven sufficient for generating substantial improvements to the country's social and economic development.
In virtually all of the dimensions on which the turnaround may be judged, institutional changes have created the conditions for further adaptation and innovation. Scholars of institutional change refer to this process as one of “layering” (Mahoney and Thelen 2010). Layering refers to the development of incremental changes in formal and informal rules, norms, and practices that in the aggregate set the stage for larger, transformative shifts. At times changes have been “punctuated” due to the advent of a corruption scandal, an economic crisis, or a sudden turn in an election. But more frequently, in the causal narrative told in this book, change has happened slowly and through gradual, but progressive, alterations in policy and political strategies. The result has been improvements in governability, policy outcomes, and democratic quality. But a central finding of this study is that these changes have occurred within the parameters of a great deal of continuity concerning the frameworks of policy-making. Despite the rivalry of the PSDB and the PT, the Brazilian political class has not been riven by ideological conflicts over the fundamentals of the political economy or the extent to which social welfare distribution should be taken. It is crucially in this context that institutional layering has produced a pattern of change that is best described as progressive policy continuity, where policy innovations and improvements have followed on earlier iterations of reform.
A third claim I make in this book concerns how judgments about Brazilian politics have changed due to shifting contexts over time. As I note above, many of the more pessimistic, initial views of the country have been proven wrong, compelling observers to ask why these analyses were off target. Of course, not all of the analytical assumptions and findings of these pessimistic views were wrong and not all of the more optimistic rejoinders have been right or unproblematic. Some of the negative assessments remain relevant for understanding the limitations of inter-branch relations, the party system, and the web of accountability. The third claim is that both approaches have proven to have merit, but that has been clear only when sufficient time has passed to assess their explanatory power. All too often, scholars of Brazil have produced focused and well-supported propositions about political institutions and socio-economic change that have seemed plausible at one point, only to find that their relevance for understanding change has become obsolete with the passage of time. Brazil is, as Timothy Power has put it, “a late bloomer” (2010b). This book attempts to evaluate which propositions have stood the test of time but also which have been able to travel between different arenas of the Brazilian polity, to explain change in multiple domains of policy-making and politics. The next sections explain the methodological orientations of the study.
Explaining Change in a Multidimensional/Multi-Arena Polity
Demonstrating the substantive claims I discuss above requires that this study set out a number of methodological principles. The most important defining the present study is the adoption of a holistic approach, one that takes into account the multidimensional and multi-arena aspects of democratic Brazil's political-economic system.6 The working assumption is that a focused analysis on any one area – congress, the presidency, the bureaucracy, or civil society – cannot render a sufficient explanation for the turnaround on the three dimensions of governability, policy governance, and the quality of democracy. Only explanations that employ what Ragin (1987) calls “multiple conjunctural causation” may provide a realistic account for these aspects. For example, the enhanced governability of the political system after 1994 involves an understanding of not only presidential-legislative relations but elements of democratic quality, such as the strengthening of auditing institutions, prosecutorial agencies, and the courts, not to mention the broader context in favor of governability created by a sequence of political-economic reforms. A related methodological concern is that causal relations in a multidimensional and multi-arena setting are not always positive or linear. One of the insights of this study is that the three dependent variables do not rely on the very same causes. What is good for policy governance may not work to help democratic quality. What is good for governability may limit more effective and innovative policy-making as well as democratic quality. The advent of democracy in 1985 did not resolve these tensions; indeed, it made them more apparent. These processes all have non-linear relationships, with not all good things going together. Seeing the whole requires multilevel and longitudinal analysis, what Pierson (2004) calls a perspective on the “meso-institutional.” A meso-institutional approach emphasizes the interactions that occur between institutions – how changes in one can elicit changes in others.
All of this stands as an important corrective to much of the current scholarship on Brazilian politics. Institutional arguments in particular have been most prone to indulging in a laser-like focus on how particular rules create incentives for certain forms of behavior. An example explored in chapter 3 is the view that the rules of the electoral system shape the relative strength of the party system and the choices made by members of the political class in the congress and the presidency. Although such arguments based on clearly defined and operationalized variables offer straightforward and testable propositions, the payoff from such a focus has rarely proven sufficient for understanding the non-linear and meso-institutional ways in which a change in the rules affect the polity. One example is how improved governability between the presidency and the legislature has weakened other accountability mechanisms such as congressional committees of public inquiry, which are now less likely to investigate cases of malfeasance if they must target politicians in the pro-government coalition. Only by taking several steps back and understanding how multiple dimensions of democratic behaviors and institutions interrelate can one appreciate the aggregate effects on democratic quality.
Another important aspect of adopting a broader analytical perspective is that we can understand how different dimensions of the economy and the polity affect one another. Taking a “political-economic” approach allows us to understand causes that are infrequently isolated to political institutions or to economic changes but that rely on the interaction between these two major spheres. Too often, Brazil has been analyzed from the standpoint of trying to understand governability, with little reference to political-economic conditions. Sometimes economic reforms have been the focus, but market conditions and international factors have been ignored, while seemingly more proximate institutional causes such as the organization of the party system have received pride of place. Such analysis is vulnerable to several methodological problems, most obviously errors of spuriousness and omitted variable bias. In virtually all of the areas in which governability, good policy, and democratic quality have changed, the political-economic context has been an important source of this change. For example, it is difficult to imagine how the Brazilian state could have adapted to the need for market-sustaining policies along with developmentalist interventions without the macro-economic reforms that eliminated hyperinflation during the mid-1990s. Nor would have political governability or elite accountability, and particularly fiscal accountability, improved as they did without the end of runaway inflation.
A holistic approach also makes clear that the relevant causes are not just the proximate ones, especially when the level of analysis deals with macro-political and macro-economic changes. Structural and historical causes matter, even if they do not determine outcomes directly. Therefore, a holistic approach requires the analysis of both distal and proximal causes. One example explored in this book of the attention to structural causes is the evolution of Brazil's developmentalist economy. Despite the advent of macro-economic instability during the first decade of democracy, Brazil's leaders eschewed the pursuit of the same orthodox stabilization and structural adjustment policies practiced in Mexico and Argentina during the 1980s and 1990s and in Chile during the 1970s. Such policies would have downsized the state by privatizing and liquidating many of the public firms and agencies that played key roles in the statist period. Instead, the Brazilian economy became liberalized slowly by the reduction of tariffs and selective privatization. This process preserved many of the institutions and policies associated with the developmentalist period. Presently, these agencies, and especially the national development bank, public utilities, and state-controlled firms, play a proximate role in generating higher levels of private investment and growth.
We need to approach these effects with a careful eye to the incremental nature of change but also to the sequencing of institutional layering. Brazilian democracy has rarely produced radical change in a short period of time – say, in the context of a single presidential administration. Instead, the pattern has been incremental, with each government achieving a handful of significant reforms but failing to enact broad-based changes in the form of one bill or a series of bills. So, while the Collor administration was a prime example of legislative failure and poor relations between the presidency and the congress, his government consolidated the liberalizing and privatizing reforms initiated under his predecessor, Sarney. More important, such actions, while seemingly limited at the time, had a tremendous impact on subsequent reforms and institutional changes. Cardoso's Real Plan represented a marked change from the past failures of inflation control, but less heralded policies on land reform and social welfare provided a foundation for future innovation and qualitative improvements. Lula's presidency benefited fundamentally from the macro-economic, fiscal, and social policies established by Cardoso's eight years in power. Based on this, Lula was able to engage in expansive policies in industrial promotion, infrastructure, and the welfare state. The Brazilian political class changed fundamentally during the almost thirty years of democracy, moderating many of the erstwhile cleavages between right and left and statist and anti-statist that bedeviled the governments of the first decade of democracy. Without this ideological convergence, it would have been difficult to envision the rise to the presidency of the formerly avowed socialist Lula da Silva or his succession by a former guerrilla who was tortured by the military, Dilma Rousseff.
Many of the weaknesses of prominent approaches to Brazilian politics arrived at conclusions about the country's democracy based on a relatively short period of observation. When broader historical contexts are considered, or just when sufficient amounts of time have passed, the misconceptions and limitations of these analyses become more apparent. One prominent example is what happened to the largely pessimistic views of democratic institutions in the period 1985–94. Both comparisons between the earlier democratic period of 1945 to 1964 and the improved governability of presidential–legislative relations after 1994 revealed that many of these pessimistic interpretations had overclaimed the dangers by relying too heavily on theoretical intuitions about democratic institutions inspired by insights taken from studies of American politics. The chief lesson for the analysis in this book is that attention to more particular historical and multidimensional contexts produces more reliable analyses when trying to understand a complicated country such as Brazil. Therefore, the current study will emphasize, whenever relevant, the meso-institutional context, the ties between the political and the economic, the distinct contributions of distal and proximal causes, and historical sequencing.
This analysis does not embrace complexity for its own sake, nor does it abandon the attempt to be parsimonious. The complexity can be managed if the holistic approach is firmly grounded in a careful periodization, which is provided in chapter 2. The delimited focus of the current project is also simplifying. This study is intended primarily to describe and explain the dimensions of the turnaround in Brazil, not to outline and test a particular explanatory theory. I appreciate and justify the analytical apparatus of the holistic approach for its use value. Applying the analytical framework in a broader comparative perspective to ascertain its utility to other countries is beyond the scope of the current project. This study seeks to make a contribution to the understanding of Brazil, with the comparative scope limited to how the country has changed since the transition to democracy in 1985.
Persisting Tendencies in Brazilian Democracy
No experienced observer of Brazilian democracy can make substantive claims without caveats. Those made above concerning the overall positive nature of the turnaround on governability, policy, and the quality of democracy are tempered by partial contradictions and limitations, most of which will be noted specifically in the chapters that follow. But it is also important to draw more general caveats regarding dimensions of Brazilian politics that have changed less quickly or have not changed at all despite the turnaround. Brazil never experienced a social revolution, so it is not surprising that many of the erstwhile tendencies of its past continued into the democratic period. Most fundamentally, Brazil remains a highly unequal society. The powerful maintain, as they have since the country's independence from Portugal in 1822, privileged access to authority and economic resources. This was manifested not only in formal institutions but in social structures and understandings that are most consequentially reflected in the way that the political class controls and uses the formal apparatus of the state.
If there is a meta-framework for understanding Brazilian political history it is the centrality of the state. The federal and subnational bureaucracy composes a multidimensional arena for political actors to acquire and dispense public resources and favors to cultivate allies and gain greater authority and even personal wealth. Patronage, defined as the dispensing of jobs, public contracts, access to public services, and fiscal and regulatory protections, has been long understood by classic thinkers of Brazilian politics such as Raymundo Faoro, in his Os donos do poder (1958), and, more recently, Marcos Otávio Bezerra, in his Em nome das “bases” (1999), as the currency of politics. Yet this currency is only useful if there are “markets” in which its value is respected. Such markets exist as networks among members of the political class and business who exchange favors (troca de favores) to maintain or gain power. The structure of the state facilitates these exchanges by remaining fragmented and penetrable by societal interests (Weyland 1996).
These networks also connect subaltern classes, the members of which are well understood as “clients” to powerful “patrons.” The traditional depiction of these unequal and hierarchical relations of patron–client ties was done best by Victor Nunes Leal (1976), who describes repressive social and political relations in the countryside in which landed elites, known as “colonels” (coronéis), employ poor peasants to work the land and use their dependency to manage their political choices at the ballot box or keep them from voting in the first place. Generations of scholars of Brazil have extended and modernized this logic of coronelismo to understand clientele networks that have long since moved from their rural and parochial foundations to extend into the urban and modern system of political-economic domination (Hagopian 1996; Bezerra 1999; Weyland 1996; Vilaça and Albuquerque 1988). In this way, urban workers and the poor become dependent on the material incentives incumbent politicians may dispense to “buy” their votes. In a similar way, political bosses control the behavior of lesser politicians, who depend on the largesse of governments controlled by these patrons so that they might garner the patronage they need to buy support for themselves.
The strategic use of patronage within and between clientele networks forms the basis for what Faoro saw as the historical legacy of Portuguese colonialism: the patrimonial state. Patrimonial politics exists where members of the political class view the state as their own personal property – where they dispense it legally or quasi-legally in the form of “pork-barrel politics” by appropriating funds for constituents and bailiwicks or illegally through corruption. The patrimonial state extends the oligarchical tendencies of Brazilian politics even into the democratic period by causing the state not to act in the public's interest but to provide an arena and an apparatus for protecting the interests of elites over those of the citizenry.
Democracy would seem to provide an antidote for this historical tendency in Brazilian politics, but clientelism has survived because of the weakness of electoral and legal forms of elite accountability coupled with persisting social and economic inequalities. Even as scholars now consider the possibilities that Brazil has staged a reversal of its political and economic fortune, observers are divided on how deep these changes go. For example, despite the expansion of opportunities for citizens to participate in politics and the emergence of greater oversight by official institutions, vote-buying is a pervasive weakness of Brazilian democracy. Political bosses, usually at a local level, are able to extract promises from voters that they will support their candidates and, in what has become a typical low-intensity tactic, require that voters publicly declare their allegiance by wearing or showing candidate and party propaganda in their neighborhoods. Such forms of “declared choice” exert an ex ante guarantee that some voters have committed to a candidate with the promise of a reward following the election (Nichter 2009). These tendencies, if they persist and remain significant, undermine the competitiveness and quality of elections, strengthening incumbency bias that is well known in Brazilian politics as governismo.
Patronage is more valuable and immediately implementable for some politicians more than others. In Brazilian politics, political executives (i.e., presidents, governors, and mayors) are particularly privileged because they dispense patronage and are more likely to receive the credit for its distribution or use. Federal, state, and municipal legislators broker patronage from executives and employ it to attract support from constituents but more often from the private sector that largely bankrolls political campaigns (Samuels 2002). The electoral system is one determinant of these inequalities. Executives are easily identifiable by voters, who must select one winner in either a first-round or a run-off contest. The positions that the winners take are offices with direct power over the implementation of budget items. Federal and state legislators, on the other hand, struggle to differentiate themselves from the pack, as they run in multi-member districts in which votes are pooled across the entire state. And they assume offices that do not offer them the opportunity to claim credit for all of the “pork” that they bring back, since other incumbents claim the benefits as well. Comparatively, this makes presidents, governors, and mayors the hubs of Brazilian politics while legislators are the spokes.
These orientations in favor of patronage politics, clientelism, and executive bias are persisting elements of Brazilian politics that have by no means been removed from the country's democracy during the turnaround. Such tendencies have been and continue to be the foundation for pessimistic assessments of Brazilian politics. But what separates the most pessimistic views from more cautiously optimistic ones is the degree to which these persisting tendencies are seen as immovable and noxious for democracy. One of the lessons taken from the present study is that overly pessimistic analyses of Brazilian politics and economy have often proceeded from premises that did not fit Brazil. This is, in fact, an old debate, encompassing not only the disciplines of political science and economics but also literature and culture. The literary critic Roberto Schwarz famously argued that liberal democratic standards applied in their schematic form to Brazil were “misplaced ideas” (Schwarz 1992). He posited that, in Brazilian history, the main elements of democratic politics – elite accountability, competitive elections, the quality of the vote – have always been enmeshed in ambiguity, compromise, and informal, sometimes highly personalized understandings that discomfit some scholars of democracy. In Schwarz's formulation, it is not the norms of clientelism, governismo, and the informal, temporary suspension of rules known as the jeito brasileiro (the “Brazilian way”) that must be swept away and displaced by (imported) democratic norms, but the latter that must develop in the context of a political and civil society that has long operated according to these erstwhile logics. The present study embraces this point of view by underscoring the problematic nature of these persisting tendencies but without ignoring how democratic and advanced capitalist forms are still possible in their presence. Indeed, the implicit argument here is that the scholarship on the post-1985 democracy must understand how these persisting elements of Brazilian politics and society have coexisted and evolved with the improvements of governability, policy governance, and democratic quality reflected in the turnaround since 1994. Perhaps the most inconvenient fact for studies of democracy and good government in Brazil is the reality of improved performance in a context in which many of the old ways of doing politics have remained firmly rooted. It is in this way that we can claim improvements to governability and policy governance that may come at a cost to democratic quality.
The Plan of the Book
The effort of the current project to analyze the turnaround by understanding change in the multidimensional Brazilian polity is organized with thematic areas. Implicit in all of the work in subsequent chapters is the premise that Brazilian democracy has experienced change imbedded in a particular periodization. Indeed, this is the organizing principle of the turnaround idea: that the first decade fed pessimistic claims about the new democracy while subsequent years reversed these conclusions and suggested that more positive change was possible. The main causal mechanisms of this study show how ideological moderation, improved governability – despite the continuation of clientelism and patronage politics – and the progressive continuity of policy fed the prospects for a turnaround and made it possible. These processes were temporally sequenced. Understanding the sequence and how it favored the turnaround is a primary analytical frame. So chapter 2 outlines the periodization and the main political actors, institutions, and processes that are analyzed in the subsequent chapters. It demonstrates that the periodization of the Brazilian turnaround relies heavily on the strategic choices of two presidents in particular – Cardoso and Lula. Both made use of favorable political and macro-economic conditions, and most importantly, when conditions were not so favorable, both opted for pragmatic choices that embraced ideological moderation and the progressive continuity of policy.
Chapter 3 addresses why governability improved during the democratic period despite early, highly pessimistic views of the prospects for Brazil's new democracy. It profiles the transition from overly pessimistic to more optimistic views among scholars and then to the consolidation of a meta-frame for the evolution of macro-political institutions – the advent of “coalitional presidentialism” (presidencialismo de coalizão). Premised on the sharing of power between the presidency and the legislature, coalitional presidential scholars believe that they have developed the best understanding for the improved governability of Brazilian policy-making. But a number of underexplored and contradictory tendencies bedevil coalitional presidentialism, including the reliance on patronage politics and the weakness of programmatic parties. The scholarship is divided by seemingly intractable differences in interpretation of the same evidence. The chapter unpacks these deficiencies and provides a balance of perspectives to appreciate what we have learned about Brazil's improved governability. It addresses the need for further work across arenas of the Brazilian polity, linking this chapter to the subsequent ones on democratic quality, renewed developmentalism, and social welfare policy-making. Finally, it explores some underanalyzed aspects of political parties and the ideological convergence of the political class. These areas, I argue, provide a basis for understanding how the groundwork was laid not only for improved governability but also for advances in democratic quality and good governance. Yet, for all of the attention that the macro-political has received in the scholarship of Brazil, it has proven insufficient for understanding the turnaround.
Chapter 4 moves beyond the governability of Brazilian democracy to address its quality, and specifically along the lines of elite accountability, government responsiveness, voting and the electorate, and participation. I find that these dimensions have not all improved together, though there has been enough change to suggest that Brazilian democracy today is of greater quality than that which inspired pessimistic critiques during the first ten years after the transition. The chapter makes a related claim that the evolution of democratic quality along these four dimensions continues to suffer from contradictions. The emergence of stronger checks and balances, for example, has been undermined by the continuation of the troca de favores system, whch underwrites coalitional presidentialism and also determines how responsive government is to the electorate and how much popular participation can affect the decisions made by elites. The ineffectuality of partisanship and ideological orientations among the electorate weakens ties that would otherwise bind political representatives to their constituencies and force them to adhere to their policy preferences rather than those of influential campaign benefactors and entrenched policy interests. And yet, Brazil enjoys today a more robust “web of accountability” linking auditing, investigatory, prosecutorial, and policing institutions along with a more vibrant array of civil society organizations exerting oversight than it did in 1985. Follow-through remains weak, but there is sufficient evidence of progressive continuity through reforms across governments to conclude that there will be opportunities for further enhancement of democratic quality and political citizenship.
Chapter 5 unpacks the role that developmentalist policy-making played in the economic growth trajectory of the 2000s. Beginning with the transition to democracy, I argue that Brazil never pursued a bona fide “neoliberal” adjustment process but embraced a progressive continuity of developmentalism during the 1990s and 2000s. Where market-oriented reforms were implemented, such as tariff reductions, deregulation, and privatization, these policies were shaped by strategic concerns for improving the competitiveness of domestic industries by enhancing their internationalization and technological adaptability. Far from rolling the state back, the Brazilians made state intervention in the market a fulcrum of the new development policy, utilizing erstwhile statist organizations such as the National Development Bank (BNDES) to channel long-term finance and strategic investments in infrastructure and energy to underwrite and make the most of the expansion of the 2000s. The chapter not only challenges pessimistic views of the Brazilian state's capacity for continuing a developmentalist policy, it also explains why the economic turnaround is more than the “commodity boom” of the 2000s. Once again, progressive policy and institutional changes sustained pragmatic responses that were neither wholly statist nor neoliberal, but that supported a pro-business strategy balanced on both the advantages of Brazil's large domestic market and its new opportunities for exploiting its global reach.
Chapter 6 examines the innovation and impressive scope of new social policies, especially since 1994, as key factors in the reduction of poverty and inequality in Brazil. But, as with the quality of democracy, different dimensions contradict one another, undermining the potential to see more fundamental and widespread improvements. I argue in this chapter that, while the turnaround has been very real in welfare policy-making, especially as it regards non-contributory cash transfers to the poor and other income-supporting policies that have reduced inequality as well as poverty, Brazilian social welfare still maintains pension, health, and education policies that favor the more privileged. The presidents of the turnaround have not sought more transformational social policies that distribute income and land ownership on a scale that would address these structural inequalities. Rather, the social welfare agenda follows a trajectory of progressive but marginal changes that will help the very poor while addressing some issues of access and quality of education and healthcare for most Brazilians, all the while preserving the resources and privileged access of the more well-to-do.
It is in the area of foreign policy, the subject of chapter 7, that the turnaround has experienced its most ambiguous effects. In large part, Brazil's foreign policy remains a work in progress, still not guided by a clear understanding of the country's emerging economic and political importance in the world, but not entirely unaware that the conditions exist for a more assertive and even nationalist diplomacy in economic and security affairs. As the importance of Brazil's trade with other emerging large economies such as China and India place it in that company and simultaneously make it a determinant of these countries' influence in the world, policy elites and scholars struggle for ways of understanding the trajectory of Brazilian foreign policy. The chapter argues that several trends are evident, among them the increasing role of the presidency rather than the Foreign Ministry in foreign policy-making and the continued embrace of reciprocal multilateralism tempered by an emerging, aggrandizing self-image of the country's potential that has at times placed it against the United States and incited the ire of its neighbors. Foreign policy is the last area in which the turnaround is being registered, as policy-makers continue to make sense of the changes Brazil has experienced since the mid-1990s but without signs that they are reaching a consensus in the foreign policy community. The lack of such a consensus means that, for the short to medium term, Brazilian foreign policy will remain reactive. Yet, over the long haul, it will need to become a factor in consolidating the positive aspects of the turnaround by engineering more strategic relations with like-minded democracies in the developed and developing worlds.
Given that this book is dedicated to the study of Brazil in great depth, there is little space to explore the comparative aspects of the turnaround. What does Brazil's turnaround, albeit with its attendant contradictions and inconsistencies, mean for the study of political, economic, and social change among countries of the developing world? How are the lessons of Brazil's mature and consolidated, though still flawed, democracy applicable to other countries? How are the experiences of new democracies elsewhere applicable to it? Chapter 8 provides some answers based on understanding the turnaround in a comparative perspective. One of the distinct advantages of a holistic approach is that it lays bare the contradictions among improved governability, policy governance, and democratic quality, especially when these are analyzed in a periodization. The narrative of Brazil's reversal of fortunes challenges the conventional wisdom that economic and social development should sustain and even enhance democratization. Despite a first decade and a half of economic crisis and social dislocation, democracy survived and even improved in key areas such as governability and policy governance. The Brazilian turnaround is characterized by non-linear relationships that belie the notion of a positive correlation between socio-economic change and democratization. As I will show, democratic quality has improved in some areas, only to take a step back in others even as the country experienced economic growth with greater equity and less poverty. “All good things do not go together” is an appropriate mantra for understanding the Brazilian turnaround.
Notes
1 A similar trend in the concentration of ownership of assets has occurred in the industrial sector. See Amann and Baer (2009: 38–9).
2 Noted political scientist Barry Ames wished to use the term “pathological” to describe Brazilian democracy in his 2001 book The Deadlock of Brazilian Democracy.
3 Dornbusch's comments were extraordinarily pessimistic, if not dismissive, of Brazil: “When will Brazil stop being drunk?” And the answer is … maybe after Carnival! Or after the putsch or whichever comes first. You can't dismiss that Brazil, of all countries, will have a putsch. It's like Russia: large, inward-looking, with fantastic economic problems and a total unwillingness of the existing political system to do something about it.” See Dornbusch (1993).
4 See Treasury Department/Federal Reserve, “Major Foreign Holders of Treasury Securities,” www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt (accessed April 1, 2013).
5 See “The Democratic Routine,” The Economist, December 2, 2010.
6 Arguments for multi-arena analysis of Brazilian politics can be found in several places, including the study of political parties and the legislature (e.g., Pereira and Mueller 2003, 2004), federalism and decentralization (e.g., Montero 2004), foreign policy (e.g., Cason and Power 2009), voters' retrospective evaluations of politicians (e.g., Rennó 2011), and the quality of democracy (Weyland 2005).
CHAPTER TWO
Democracy and Economy from Bust to Boom
Brazilian democracy after 1985 progressed through distinct phases. Each of these saw advances and continued challenges to governability, policy-making, and the quality of democracy. The transition to democracy produced a regime that was flawed from the beginning, requiring adjustments and reform in subsequent years. Indeed, the reform process became the centerpiece of the democratic period, and it remains the focus of much thinking concerning the pathways of Brazilian politics. Governability, good policy, and democratic quality are each a function in one way or another of how the reform process has proceeded and what there is still left for the political class to do.
The political history of the reform process is organized in this chapter based on three periods.1
