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NEWSPAPERS ACROSS THE WORLD were positively ecstatic when Luiz Inácio "Lula" da Silva assumed the presidency of Brazil in early 2003. Following a campaign pregnant with ambiguous plans of high growth and low inflation, the da Silva government-in-waiting was careful to support monetary tightening and trade liberalization. Although many investors and the country's elites were concerned about the commitment of the da Silva government to the liberal developmental model that predecessor Fernando Henrique Cardoso had supported, once in office President da Silva has clearly prioritized inflation over growth. This has been a pleasant surprise to those who recall that only a few years earlier da Silva's party sponsored a referendum on a debt moratorium, or a decade and a half earlier when da Silva announced his interest in establishing a socialist government in Brazil.
Though a minority within da Silva's Workers' Party (PT) has voiced their criticism of the direction of the first center-left administration since the end of the dictatorship (1985), the PT has been able to count on the consistent support of its coalition of left and center-left parties. Additionally, since many of the policies of the da Silva government differ little from those of the center-right opposition (the PSDB-PFL and sometimes the PMDB), there is virtually no programmatic opposition to the government's developmental model.
This may seem odd, since the PT government was the staunch antiliberalization, pro-state-led growth political party. It perpetually opposed any cuts in fiscal spending and worker benefits. But the PT is coming to terms with the same issues that the social democratic PSDB had to deal with during the first Cardoso presidency: that is, how to maintain macroeconomic stability without abandoning the idea of social development. With the endorsement of the da Silva government, the liberal state model can be considered to be accepted as legitimate by the broadest coalition of political elites (barring some fringe elements). This does not mean, however, that there are not differences between how a smaller and more efficient state should function, where it should invest, and, particularly, in the political structure that will be most beneficial to Brazil. The readings reviewed in this section seek to address some of these questions.
One of the t s in Brazilian political economy literature is its popularization. Countless books are produced each year which are either collections of op-ed pieces penned by some prominent public intellectual or some semi-entry level explanation for why Brazil functions, but not as well as it could. Of the former group, Maria da Conceicão Tavares Destruicão não criadora (item #bi2002001534#) and Mailson da Nóbrega's O Brasil em transformacão (item #bi2002001516#) are good examples. These two books collect short pieces from newspaper columns of public intellectuals in which they either criticize or praise government policy. An interesting example of the introduction to Brazilian development approach is Carlos Thomas Lopes' Brazil at a Crossroads (item #bi2003004881#) which aims for a pragmatic vision of how Brazil can best exploit its competitive advantages. This approach, one following Harvard Business School models and the idea that Brazil needs more MBAs and fewer PhDs seems largely influenced by Stephen Kanitz's opinion pieces in the weekly Veja.
In recent years, political culture has come back into its own in political science and it is fitting that it should play a role in studies of political economy. Both Goldstein's "Business governance in Brazil and South Africa" (item #bi2002001440#) and Eakin's Tropical Capitalism (item #bi2003004896#) explore the role of culture in the development of the culture, governance and performance of business and subnational government, respectively. Eakin also makes a compelling case, through his study of Belo Horizonte, of the value of case study and comparative analyses of second-tier capital cities.
Many of the works reviewed examine how institutions shape actor preferences and behavior. The most classic of these studies is that of the rational politician and the political business cycle. This is a well-trod path in Brazilian political economy particularly since growth has been so clearly linked to citizen support for government in Brazilian postwar history. Contemporary political economy research pushes these arguments beyond simply the growth-inflation divide, by examining voter selection of candidates and the role of federalism in government debt dynamics. Barga Camargos' "A economia e voto" (item #bi2003002479#) focuses on the 1998 presidential election to test whether voters make their decisions based on retrospective or prospective reasons and to what extent voters identify with political parties. Meneguin and Burgarin's "A reeleicão e política fiscal" (item #bi2002005349#) examines whether re-election has led incumbent politicians to opportunistic behavior. Lopreato's historical study "O endividamento dos governos estaduais nos anos 90" (item #bi2002001725#) provides good background for why politicians in the late 1990s behaved more responsibly.
Despite the emphasis on the rationality of voters and politicians or the broad consensus in the practical world over the model of development that Brazil should follow, the traditional subject of critical political economy can also be seen. Cappa's "A política econômica dos anos 90" (item #bi2002001417#) is an example of this. In it, the author presents and exposes how the "neoliberal" model has led to economic stagnation and increased vulnerability (something that was echoed by many critics during the 2002 presidential campaign). Though Conceicão Tavares' book is more popular than academic, it easily fits within this tradition of critical political economy. The difficulty is that, while these critical studies are often accurate and very telling, they propose no viable alternative and they do not adequately explain why such a flawed model was chosen in the first place.
Although political participation and social movements are normally subjects for political science rather than political economy, in Brazil, particularly as a result of the participatory budgets, it is easy to see the overlap. Pelaez and Schmidt's "A difusão does OGM no Brazil" (item #bi2002004597#) and de Souza's "El presupuesto participativo" (item #bi2003000396#) examine how political participation contributes to the development of democracy. The former shows how and why NGOs in Rio Grande do Sul opposed the use of genetically modified organisms (this struggle continues) while the latter explains how the participatory budget initiates a more democratic reality for the majority of citizens.
Perhaps the most interesting aspect of political economy research in Brazil is that it is very much in between a phase in which discussion over liberalization was polarized and a period in which research has become increasingly pragmatic and analytic, mirroring the changes in the PT and Brazilian politics as a whole. Tavares de Alemida's "La política de la privatización de las telecomunicaciones en Brasil" (item #bi2002001450#) is emblematic of this shift as its emphasis is not on stressing the benefits of liberalizations but on how the reform process is effected by veto players and veto points. Another example is Loureiro's "Instituciões, política e ajuste fiscal" (item #bi2002005676#), a comparative piece which challenges the importance of government structure as an indicator for success of fiscal adjustment.
Most of the research for the work reviewed in this section was produced before the conversion of the PT and its assumption of the presidency. Nevertheless, it seems that the overall trends towards pragmatism and acceptance of the neoliberal development model that appear in the academic literature have preceded such changes in government and society.