Fixing Brazil

A piece in Foreign Affairs looks at how to fix Brazil, “Brazil has rarely had it so bad. The country’s economy has col­lapsed: since 2013, its unemployment rate has nearly doubled, to more than 11 percent, and last year its GDP shrank by 3.8 per­cent, the largest contraction in a quarter century. Petrobras, Brazil’s semipublic oil giant, has lost around 85 percent of its value since 2008, thanks to declining commodity prices and its role in a massive corruption scandal. The Zika virus has infected thousands of Brazilians, exposing the frailty of the country’s health system. And despite the billions of dollars Brasília poured into the 2014 World Cup and this year’s Olympic Games, those events have done little to improve the national mood or upgrade the country’s urban infrastructure. Meanwhile, many of Brazil’s long-standing problems have proved stubbornly persistent: half of all Brazilians still lack access to basic sanitation, 35 million of them lack access to clean water, and in 2014, the country suffered nearly 60,000 homicides. But Brazil’s biggest problems today are political. Things first came to a boil in the summer of 2013, when the police clashed with students protesting bus and subway fare hikes in São Paulo. Within days, some 1.5 million people took to the streets of Brazil’s big cities to protest a wider set of problems, including the government’s wasteful spending (to the tune of some $3.6 billion) on the construction and refurbishment of a dozen stadiums for the World Cup. In the months that followed, when Brazilian President Dilma Rousseff appeared on television to soothe the unrest, Brazilians across the country drowned out her voice by rattling pots and pans from their balconies. In October 2014, after promising to increase public spending and bring down unemployment, Rousseff managed to win reelection by a thin margin. But she quickly backtracked on her major pledges, announcing a plan to cut state spend­ing and rein in inflation. The public’s anger mounted”.

He writes that the coalition led by Rousseff’s party collapsed with impeachment proceedings against her that were later successful. He adds that Brazil’s constitution allows the president powers to break gridlock between executive and legislature through decree as well as “dislodge pending legislation from congres­sional committees, force Congress to vote on urgent measures, and veto bills in part or in whole. Those powers have long helped Brazil’s presidents avoid deadlock and pass many needed reforms. It would be a mistake, however, to assume that Brazilian presidents are all-powerful. To the contrary: their ability to avoid gridlock comes at a high price. Because Brazil’s Congress has more than two dozen political parties, it’s nearly impossible for a single one to win a majority. That forces Brazil’s presidents to form coalitions in order to govern effectively. And that’s where the problems start. Brazil’s political parties lack coherent ideological agendas; instead, they are loosely knit alliances whose members have no qualms about forming or dissolving coalitions at any time”.

The author goes on to mention how “Brazil’s electoral rules allow candidates to switch parties relatively easily, undermining any chance of ideological unity within coalitions. And candidates are elected to Congress based not on the number of votes they receive individually but on the total number their party pulls in. That creates an incentive for politicians to change allegiances on a regular basis: jumping ship for a party led by a popular candidate can often boost less popular aspirants to office (or keep them there). Brazilian politicians thus tend to ride on the coattails of powerful allies instead of focusing on party loyalty, ideological consistency, or the details of policy”.

He also cites numerous inefficiencies, which pale “in comparison to the other big problem engendered by Brazil’s flawed political rules: endemic corruption. In many cases, the pork and patronage doled out by presidents prove insufficient to win Congress’ support; presidents therefore often sweeten the pot by allowing legislators to appoint their allies to plum jobs in Brazil’s powerful state-owned companies and regulatory agencies. Once in these posts, the new officials gain a say over which companies will receive lucrative government contracts. And many of them have proved all too happy to make those decisions based on bribes, which they then share with their patrons in Congress”.

He goes on to mention that “Unlikely as it may seem, Brazil’s current troubles might just have a silver lining: business as usual has become so costly that many Brazilians have finally accepted that the system has to change. Operation Car Wash has laid bare the misdeeds of the country’s political class, and for the first time, dozens of politicians and business leaders have gone to jail. In the past, officials were able to shrug off corruption investigations by relying on a lenient justice system, a weak congressional ethics committee, and a public that seemed inured to graft. That is no longer possible. The judges, investigators, and prosecutors running Operation Car Wash represent a new generation of civil servants, with new values, and they are using a new set of rules and tactics, including the threat of serious sentences and the carrot of leniency deals, to break the silence that politicians and businesspeople have maintained for decades. Just as important, according to public opinion research by the polling group Datafolha, most Brazilians now believe that corruption is their country’s biggest problem. And whereas the protests in 2013 were mostly about irrational government spending, more recently, Brazilians have taken to the streets specifically to protest official corruption. For all his shortcomings, Temer seems to understand the need for change. He is pushing for Brazil’s first-ever cap on public spending, a measure that would limit government expenditures to current levels for the next 20 years, thereby forcing interest groups to compete for a fixed amount of resources instead of pushing for tax hikes or bigger deficits. He has introduced measures that will allow the government to reward efficient bureaucrats across the vast expanse of the Brazilian state. And crucially, he has raised the possibility of constitutional reforms that would reduce the number of political parties and restrict their ability to merge their electoral lists. Both measures would make it easier to get things done in Congress without graft”.

He goes on to suggest that “In short, lawmakers must rewrite the rules of the game so that elected officials stop working only for their backers and start focusing on good governance for the majority of the population. Academics, policymakers, and pundits have offered a number of ideas for how they might do so. One radical proposal would have Brazil drop its presidential system in favor of a parliamentary one akin to the United Kingdom’s. By fusing Congress and the executive, that change would make legislators directly responsible for the success or failure of the government, and since lawmakers would be threatened with fresh elections if they challenged the government’s major decisions, such a reform might reduce corrupt dealmaking and encourage the development of stronger political parties. Other experts have argued for a semi-presidential system, in which a prime minister accountable to the legislature conducts day-to-day politics and a president retains the power to dissolve parliament and call new elections. Shifting to such a system could make lawmakers more accountable for the results of policy decisions while preserving the president’s status as a national figurehead. Yet another proposal would keep Brazil’s current presidential system intact but reduce the number of existing parties to between six and eight and push them to commit to coherent policy platforms, in part by abandoning the open-list proportional representation that defines today’s electoral system”.

He concludes “It is too early to say which of these proposals would be most effective. What is certain, however, is that Brazil’s political system will remain dysfunctional until the country’s president and legislators can work together effectively—in the name of party platforms, not clientelistic bargains. To get there, Brazil must reduce the number of parties in Congress and empower them to discipline their own members. Operation Car Wash, Rousseff’s impeachment, and the overall economic decline have created an opportunity for Brazil to pursue just this kind of reform. Now the country’s politicians must seize the rare opening these cascading crises have afforded them”.