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Political Institutions, Policymaking Processes and Policy Outcomes in Brazil

Author

Listed:
  • Bernardo Mueller
  • Carlos Pereira
  • Marcus André Melo
  • Lee J. Alston
Abstract
We found that the driving force behind policies in Brazil is the strong set of powers given to the President by the Constitution of 1988. To have strong powers does not mean unbridled powers. Several institutions constrain and check the power of the President, in particular the legislature, the judiciary, the public prosecutors, the auditing office, state governors and the Constitution itself. The electorate of Brazil holds the President accountable for economic growth, inflation and unemployment. Because of the electoral connection, and perhaps reputational effects, presidents in Brazil have a strong incentive to pursue stable fiscal and monetary policies as their first priority. At least for the past ten years, and particularly in the new administration of Lula, executive power has been aimed at pushing policy towards macro orthodoxy. Although orthodoxy may not lead to short-term growth, international financial markets provide additional incentives for discipline, as deviations are instantly punished, with unfavorable consequences that are readily recognized by the electorate. Achieving stable macro policies required constitutional amendments as well as considerable legislation. To attain their goals, the past administrations (Cardoso and Lula in particular) used their property rights over pork to trade for policy changes. The rationale for members of Congress to exchange votes on policy for pork is that the electorates reward or punish members of Congress based on the degree to which pork lands in their district. With the exception of the devaluation of 1999, macro policy has become more stable over time. We categorize macro policies in Brazil as `stable but adaptable. `

Suggested Citation

  • Bernardo Mueller & Carlos Pereira & Marcus André Melo & Lee J. Alston, 2006. "Political Institutions, Policymaking Processes and Policy Outcomes in Brazil," Research Department Publications 3199, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:3199
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    References listed on IDEAS

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    11. repec:idb:brikps:80588 is not listed on IDEAS
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    Cited by:

    1. Lee J. Alston & Bernardo Mueller, 2007. "Legal Reserve Requirements in Brazilian Forests: Path Dependent Evolution of De Facto Legislation," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 8(4), pages 25-53.
    2. Bernardo Mueller & Lee Alston & Carlos Pereira & Marcus Melo, 2008. "The Choices Governors Make: The Roles of Checks and Balances and Political Competition," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807181549410, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Morón, Eduardo & Sanborn, Cynthia, 2006. "The Pitfalls of Policymaking in Peru: Actors, Institutions and Rules of the Game," IDB Publications (Working Papers) 3369, Inter-American Development Bank.
    4. Lee J. Alston & Gary D. Libecap & Bernardo Mueller, 2010. "Interest Groups, Information Manipulation in the Media, and Public Policy: The Case of the Landless Peasants Movement in Brazil," NBER Working Papers 15865, National Bureau of Economic Research, Inc.
    5. Carlos Scartascini, 2007. "Determinantes institucionales de transacciones políticas," Research Department Publications 4484, Inter-American Development Bank, Research Department.
    6. Scartascini, Carlos, 2007. "The Institutional Determinants of Political Transactions," IDB Publications (Working Papers) 1961, Inter-American Development Bank.
    7. Eduardo Morón & Cynthia Sanborn, 2006. "Los escollos del diseño de políticas en Perú: actores, instituciones y las reglas del juego," Research Department Publications 3203, Inter-American Development Bank, Research Department.

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