RaboResearch - Economic Research

Democracy, Brazilian style

Economic Report


Brazil’s political system generally makes it difficult and time-consuming to implement far-reaching reforms. Furthermore, the system seems to be affected by a lot of patronage and corrupt practices. In this report we explain why this is the case.

Short history

Between 1822, when the country became independent, and 1889, Brazil was a constitutional monarchy. Afterwards, the country was ruled alternately by democratic and authoritarian governments. The last period of authoritarian government took place when the military was in power and ran from 1964 to 1985. Since the end of military rule, Brazil has been governed democratically. A National Congress elected in 1986 drafted a new Constitution that was formally put in place in 1988.

Since the return of democracy, Brazil has been able to implement a number of important economic reforms, such as ending hyperinflation, privatizing a substantial number of state companies and ending state-level deficit spending (Armijo e.a., 2006). Furthermore, in 2002 power was transferred peacefully to a left-wing party, the Workers Party, that had opposed the existing political and economic order. Brazil’s democratization process has thus been successful. Nonetheless, the Brazilian system is widely seen as a system in which reforms can only be implemented very slowly. This is related to a number of features (Armijo e.a., 2006).

Institutional set-up

First, Brazil has a presidential system, which creates the possibility of divided government. The president has a lot of power in Brazil, as he or she has the discretionary power to release or deny public money to fund projects, a powerful executive decree authority and extensive veto powers. Second, Brazil has a bicameral legislature, consisting of a Chamber of deputies (lower house) and a Senate, whereby both bodies have a significant amount of power. Third, the 1988 Constitution is rather detailed[1]. Reforms therefore often require amendments to the Constitution, which can only be realized when both of the houses of Congress have approved the amendments by full majorities twice.

Fourth, Brazil has a federal system, which gives regions substantial power. The 1988 Constitution gave states a strong fiscal resource base. The power of regions is also boosted by the fact that small states are overrepresented in the Chamber of deputies and that each state (and the Federal district of Brasilia) has 3 seats in the Senate. Fifth, there is no threshold for a party to be represented in Congress. Sixth, Brazil has a system of open list proportional representation, which means that the order of election on a party list is determined directly by the number of votes each candidate receives. This increases the power of individual congressmen against that of the political parties to which they belong.

Partially thanks to the open list proportional representation and the absence of a party threshold, the Brazilian Congress is extremely fragmented. At the 2010 general elections, 21 parties were voted into the 513 seat Chamber of deputies and 15 into the 81 seat Senate[2]. Furthermore, the level of party affiliation of members of congress is often quite low and parties may move from the opposition to the government and vice versa during a presidency (the first typically happens during the first years of a government, the latter when elections are approaching, Hiroi 2013).

As a result, a Brazilian president needs a large number of parties to build a coalition. For example, the coalition that Dilma Rousseff formed when she took power in 2011 consisted of no less than 10 parties. The political fragmentation explains why reforms, in particular those that require amendments of the Constitution, can only be slowly be implemented.

Figure 1: Chamber of Deputies
Figure 1: Chamber of DeputiesSource: Wikipedia, 2010 elections (government = orange/brown, opposition = blue)
Figure 2: Trust in politicians
Figure 2: Trust in politiciansSource: Global Competitiveness Report 2013-14


[1] See Amrijo e.a., 2006: “The populist 1988 Constitution is ridiculously detailed, requiring Constitutional amendments to reform such minutiae as the formula for calculating civil service pensions.”

[2] The system also encourages the practice of using vote-pullers, such as the singer and clown Tiririca, who got 1.3m votes in 2010 with slogans such as “What does a federal deputy do? I don't know, but vote for me and I'll find out.”(Economist, 28 Septemer 2013). This allowed not only Tiririca himself, but also three other members of his party to enter Congress.


While all the characteristics listed above create checks and balances on power, they tend to make decision-making difficult and time-consuming. As a result, the typical way for a Brazilian government to build a coalition is by granting parties specific ministries and government projects, which allows parties to benefit from patronage. This can partially explain why there are no less than 24 ministers and more than ten other cabinet members, and why government spending and waste are relatively high. What is more, in more rural (poorer) areas, local elites, in many cases specific families, often have a tight grip on state and city governments. As the income of these groups to a large extent comes from the federal government or, through de facto inter-state redistribution, richer states, instead of the local population, these elites do not have strong incentives to govern well.

The need for the government to buy support of legislators often leads to corruption. This partially explains why one-third of Congressmen face criminal allegations. The most common allegations are vote-buying, bribery or embezzlement. However, there are also congressmen who are faced with investigations of drug trafficking and murder. One member is said to have murdered his political rival and dismembered him by chainsaw (Der Spiegel, 2013). The judicial means to combat corruption are rather limited, as only the Supreme Court can try congressmen.


In late 2013, Brazil’s Supreme Court ruled that several high ranking members of the Lula government (2003-2010) who were convicted for their involvement in the so-called mensalão scandal, a vote-buying scheme, should soon start to serve their prison terms. Several members, among them Lula's former chief of staff, Jose Dirceu, surrendered themselves and are now in jail. As it is very unusual for Brazilian politicians to go to jail, these latest developments may signal that the political culture is slowly changing.

Meanwhile, the Brazilian population seems to have been less willing to tolerate corruption and government waste, while trust in politicians is very low (see figure 2). This became clear in June and July 2013, when there were large scale protests in Brazil. While these started as demonstrations against public transport fare hike, they soon got a much broader focus. Corruption and waste were one of the most pressing concerns of the people participating in the protests.

However, the institutional reforms that could help to reduce corruption and waste and increase the effectiveness of Brazil’s political system are difficult to implement, as changing the institutions would often not be in the interests of the politicians that have to approve these reforms.



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