Brazilian Democracy on the Brink
After years of corruption scandals, economic malaise, and deepening political polarization, Brazilians have lost faith in the promise of democracy, and could soon elect a dangerous authoritarian to the presidency. Before going to the polls on October 7, Brazilians should understand exactly what a vote for Jair Bolsonaro would mean for the future of their country.
Justice or Democracy in Brazil?
Brazilian authorities have banned former President Luiz Inácio Lula da Silva from running for reelection, owing to a corruption conviction. Unfortunately, this strict interpretation of a statute Lula himself signed could open the way for an election result that ultimately subverts the rule of law – and takes democracy down with it.
MEXICO CITY – Brazil’s upcoming presidential election – its ninth since the restoration of democracy in 1985 – will take place against a bleak background, and not just because the National Museum in Rio de Janeiro was recently destroyed in a fire, or even because the economic recovery is faltering. With myriad judicial and corruption scandals distorting the electoral process, there is now a growing disconnect between justice and democracy.
The question of which will prevail has already received a partial response. In the wake of the Operation Car Wash (Operação Lava Jato) corruption scandal – which, since breaking in 2014, has rocked Brazil’s political class, business sector, and judicial system – former Brazilian President Luiz Inácio Lula da Silva was convicted of corruption. With his case still under appeal, he now languishes in a prison cell serving a 12-year sentence.
Nonetheless, Lula, who remains Brazil’s most popular politician, wants to run for president. Earlier this month, electoral authorities decided that he could not, because of Brazil’s “clean slate” law – signed by Lula himself during his second term – which prohibits anyone with an upheld conviction for corruption from seeking public office. A large segment of the Brazilian public supported the decision to keep Lula out of the race.
Yet there are still plenty of Brazilians – and foreign observers, including me – who harbor serious doubts, for two key reasons. First, Lula is in prison for a relatively trivial offense (at least for now), and he was convicted by a lower court. Striking the frontrunner from the ballot for relatively minor misdeeds relating to a highly politicized case is an excessive and dubious maneuver that is likely to disappoint and even enrage the millions of Brazilians who still venerate Lula.
Second, as a practical matter, keeping Lula off the ballot increases the odds that Jair Bolsonaro – a former paratrooper known for his homophobic, sexist, racist, and quasi-fascist stances – will prevail.
To be sure, while Bolsonaro was the front-runner before the final decision on Lula’s eligibility, subsequent polls indicated that, in the expected run-off vote, Bolsonaro would be defeated easily by most other candidates. But everything changed on September 6, when Bolsonaro was the victim of a failed assassination attempt that forced him to suspend his campaign for several weeks. He underwent several operations, barely survived, and benefited from a surge of sympathy. Today, some polls have him securing over 30% of the vote in the first round, more than twice that of other candidates.
As for Lula, he now has little choice but to throw his support behind his running mate, Fernando Haddad, who has served as mayor of São Paulo and education minister. But while Lula’s support has boosted Haddad’s standing – he is now roughly tied with most of the other contenders – he remains well behind Bolsonaro in the polls.
Of course, it is possible that the situation will change drastically in the second-round run-off. In France in 2002 and 2017, the right-wing candidates – Jean-Marie Le Pen and Marine Le Pen, respectively – were soundly defeated when voters rallied behind their second-round opponents. Indeed, Jacques Chirac in 2002 and Emmanuel Macron in 2017 each received the support of practically everyone on the initial ballot, across the political spectrum, because none was willing to allow a xenophobic candidate to win the presidency.
But there is no guarantee that Brazilians will rally around Bolsonaro’s opponent in the same way, or that his advantage in the first round will not be too great to be overcome in the run-off. In either scenario, Brazil would end up with an extremist president who has praised the military dictatorship of the 1960s and 1970s, because the only candidate who could have beaten him was struck from the ballot. Brazilian democracy could be destroyed because justice was upheld.
In an ideal world, justice and democracy always go hand in hand. But in the real world, we have to make tough calls, considering what we are willing to sacrifice for the greater good. For Brazil today, that means asking whether enforcing a strict interpretation of the law and punishing anyone who engages in corrupt practices is worth inviting a potential threat to democracy.
Many distinguished Brazilians with impeccable democratic credentials, such as Lula’s predecessor, Fernando Henrique Cardoso, argue that the law must be respected at all costs. This is not an easy argument to dismiss, especially given the possibility that Bolsonaro could still lose the election – a win-win outcome.
But the risks created by adhering to this approach cannot be dismissed, either. From Hungary and Poland to Italy and Germany, not to mention the United States, extreme right-wing, authoritarian, populist, and anti-establishment political forces have gained power – or at least increased their influence over the government – by participating in democratic elections. Once in power, they subvert democratic institutions. In Hungary, for example, Prime Minister Viktor Orbán has taken advantage of his party’s parliamentary majority to stack the courts with loyalists, seize control of public media, and amend the constitution to weaken his opponents.
Against this background, we must ask ourselves a question that has no easy answer: To what extent should democrats – progressives and conservatives alike – bend the rules in order to protect democracy and the rule of law from those who seek to subvert it?
If it were up to me, I would have permitted Lula to participate in the upcoming election, thereby ensuring that Brazil’s democracy is safe from Bolsonaro. Plenty of people who are just as committed to democracy as I am might disagree. In any case, we can now only hope that Brazil’s newfound commitment to upholding the rule of law will not end up subverting it – and taking democracy down with it.
Brazil’s Populist Temptation
After a series of disastrous governments, October’s general election will give Brazilians a chance to chart a new course for their country. But with populist politicians leading in the polls, the country may instead be headed for a period of prolonged social, political, and economic turmoil.
SÃO PAULO – Latin America’s largest economy is in the midst of a prolonged political crisis, aggravated by the appeal of populism. Like a drug, populism has attracted Brazilians with fanciful promises of higher living standards and enhanced well-being. But, for 16 years, the country’s populist presidents have presided over record-high unemployment, skyrocketing budget deficits, a return to poverty for millions, and the worst economic recession in a century.
Populists have also left a legacy of corruption. The “Operation Car Wash” scandal exposed a huge cast of dishonest politicians, criminal civil servants, and shady business leaders – all of whom enriched themselves by stealing from the state.
One might assume that Brazilians, after enduring so many governance disasters, would be eager for change. We will find out if that’s true in October, when voters head to the polls for a critically important general election. For now, however, Brazil appears unwilling to kick its populist habit. On the contrary, populism has never been stronger.
In 1994 and 1998, Brazilians chose as their president Fernando Henrique Cardoso, who rid the country of hyperinflation, reformed state institutions, and put Brazil on the path to stable, democratic governance. Yet in every general election since, populists have been returned to power. This period of dominance ended only after President Dilma Rousseff was impeached and removed from office in 2016, following allegations that she had manipulated the federal budget to hide economic problems. Then, in April 2018, her predecessor and mentor, Luiz Inácio Lula da Silva, was arrested because of his involvement in the Car Wash case.
Astonishingly, this malfeasance is not hurting the current crop of populist candidates. Opinion polls show that the still-jailed Lula is leading the race, followed by a rabidly populist Congressman and former army officer, Jair Bolsonaro, who proposes only crude – and often vicious – solutions to Brazil’s complex problems. (One of Bolsonaro’s more outrageous proposals is to give people guns to fight off violence.)
The only reform candidate with any chance of winning is Geraldo Alckmin, a former governor of São Paulo. Alckmin has vowed to slash spending, open up the economy, privatize state companies, and clean up the messy legal and regulatory thicket that has prevented investment in critical infrastructure like ports, roads, and railways. And, with a Churchillian platform of “blood, toil, tears, and sweat,” he is not shying away from the painful reforms that Brazil so desperately needs – like overhauling the pension system, simplifying the tax code, and restoring accountability to the political process.
Needless to say, not all of Alckmin’s ideas appeal to an electorate addicted to state benefits, privileges, and sinecures. But Alckmin believes that people will come to their senses in October and choose a president who has the experience, competence, and moral character to guide the country’s return to prosperity. He often cites French President Emmanuel Macron as an example of a leader who won by telling voters the truth.
There are certainly those who share Alckmin’s pragmatism; but Brazil’s electorate is leaning the other way. By promising “change” and blaming the usual scapegoats, populist candidates have been playing to people’s anger over corruption, violence, unemployment, and low wages. For Bolsonaro, the way forward is not only a relaxation of gun laws, but also the introduction of military-like moral codes and a purge of “leftist ideas” from schools.
Other candidates are no less divisive. Ciro Gomes, a former governor of Ceará state, has frightened the business community by suggesting he would resurrect an unpopular tax on financial transactions – known as the CPMF – and rescind a recently approved labor law that has helped lower liabilities for companies that fire workers. Lula simply says that his return – if he is in fact allowed to run – would yield the type of job creation and growth that accompanied his previous tenure.
The only woman in the presidential race, Marina Silva, is an environmental activist and former senator who has sought to position herself as an alternative to populist candidates and the center-right Alckmin. But, with an esoteric platform largely devoid of details, it is difficult to envision how she would implement the unpopular reforms that the next president will have to undertake.
The October election will set Brazil’s course for the next decade. The question now is whether Brazilians will vote with their guts or with their heads. A gut vote would deepen Brazil’s social, political, and economic turmoil, as the grip of populism transforms an already ailing country into a terminal patient.
But if reason prevails, Brazil can thrive once again. Reforms will strengthen the economy, and political stability and effective governance – the antidote to democratic malaise – will offer a viable alternative to the pull of populism. Alckmin is correct: emulating France’s political reinvention is a better option than returning to the past. One can only hope that Brazilians agree.
How to Fix Brazil’s Economy
Brazil’s future hinges on the implementation of smart, gradual, and coherent economic reforms that facilitate productivity growth and put the country on the path toward fiscal sustainability. Whoever wins the upcoming election has a responsibility to address that imperative.
SÃO PAULO – Brazil is approaching its most consequential election since the end of military rule more than three decades ago. But while the country’s politics are plagued by dysfunction, the election’s outcome will hinge on the next government’s economic reform agenda.
One of Brazil’s most serious economic challenges is anemic productivity growth, which has been undermining the country’s growth potential. With output per employee increasing by just 0.7% per year, on average, since the mid-1990s, more than half of per capita income growth over the last two decades has resulted from an increase in the share of the economically active population. But that engine of income growth will soon stall, owing to rapid population aging.
Weak productivity growth partly reflects a lack of trade openness, which limits Brazilian firms’ access to foreign inputs and technologies, as well as barriers to effective domestic competition. Moreover, weak logistics infrastructure, differentiated state tax regimes, and subsidies to specific firms enable less efficient companies to survive and retain resources, lowering average productivity.
To address this, policymakers must support the private sector by strengthening the adoption and diffusion of advanced technologies, rather than by offering compensation for high internal costs. Moreover, the business environment should be made more favorable for entrepreneurs, including through reform of the complex and imbalanced tax system.
Increased infrastructure investment is also needed, as is reform of financial intermediation, so that financing terms are better aligned with investment projects. And the quality of education and the formation of human capital could benefit from less rigid allocation of public resources and more experience-sharing among states and municipalities, some of which have made progress using measures that could be applied elsewhere.
Brazil also needs significant fiscal adjustment. Even as productivity and economic-growth potential have increased at a snail’s pace, real (inflation-adjusted) public spending has risen sharply. Public expenditure increased from less than 30% of GDP in the 1980s to about 40% in 2017, including 68% growth from 2006 to 2017. And yet public investment (including in infrastructure) has declined, amounting to less than 0.7% of GDP last year.
With tax revenues affected by the decline in GDP in 2015-2016 and the subsequent fragile macroeconomic recovery, the primary budget balance, relative to GDP, deteriorated by more than four percentage points. This caused public debt to rise from 54% of GDP in 2012 to 74% in 2017.
To address skyrocketing debt, in 2016, Brazil approved a constitutional amendment imposing a ceiling on public spending for the next 20 years. If the authorities manage to adhere to this rule – or combine spending cuts with tax revenues to obtain an improvement of 0.6% of GDP per year in the public-sector primary balance – the trajectory of public debt could become sustainable again within a decade. The key to success, of course, will be smart spending cuts.
The World Bank, where I am an executive director, has already identified areas where such cuts can be made: social security, public-sector payrolls, and subsidies and tax exemptions. By easing the strain on the public budget, spending cuts in these areas could even create space for other, more productive types of public expenditure.
Crucially, such cuts would have only minimal consequences for poorer Brazilians. In fact, when it comes to tax reform, there are steps that could not only contribute to improving the business environment, but also help to reduce the social inequities embedded in the current system.
In the quest to improve productivity and achieve fiscal rebalancing, Brazil’s leaders must also reform public-sector governance. As it stands, the provision of public services in a wide range of areas – including health, education, violence, infrastructure, transportation and logistics, and the management of water resources – is highly inefficient.
The reasons are wide-ranging. Brazil suffers from an excess of rules, which contribute to budget rigidity; fragmentation of service delivery; poor planning, monitoring, and evaluation of projects and policies; a lack of positive performance incentives for public-sector workers; the judicialization of policymaking; and an increasingly risk-averse bureaucracy.
Brazil thus needs to improve policy consistency, from planning through execution of programs and projects, and focus more on monitoring and evaluating results. Better coordination between the public and private sectors would also improve the capacity of public expenditure to contribute more to improving socioeconomic outcomes.
Brazil’s future hinges on the implementation of smart, gradual, and coherent economic reforms that facilitate productivity growth and put the country on the path toward fiscal sustainability. Whoever wins the upcoming election has a responsibility to address that imperative.
RIO DE JANEIRO – With Brazil’s presidential and state elections just days away, the country’s citizens are frustrated, disillusioned, and angry. Many are taking to the streets, disgusted by years of cynical politics, breathtaking corruption, economic stagnation, and obscene levels of crime. Although roughly 85% of Brazil’s 147 million voters agree that the country is heading in the wrong direction, they are more polarized than ever, both online and offline. These deepening divisions threaten to squeeze the life out of democracy in South America’s largest country.
Not since the restoration of democracy in 1985 has a Brazilian election been so contentious and unpredictable. At stake is the presidency, but also positions for 27 state governors, 54 senators and nearly 1,600 elected officials. Although 69% of Brazilians have faith in democracy, more than half admit they would “go along” with a non-democratic government so long as it “solved problems.” Despite efforts by a new generation of young leaders working to restore faith in democracy, Brazilians are ranked as the least trusting and most pessimistic people in Latin America today. And now, the rise of digital propaganda and fake news is making a bad situation much worse.
Still, the suffocation of Brazilian democracy is not inevitable. While hard to imagine at the moment, its revival will require a combination of foresight, self-awareness, humility, and the courage to confront seemingly insurmountable class and racial divisions, and even rifts within families.
Among the crop of presidential candidates in this cycle, a few thrive on division, while most – including Marina Silva, the only woman in the race – advocate a middle ground. Unfortunately, the populists are ascendant, and the pragmatists have struggled to break through. Opinion polls suggest that the election will most likely come down to a second-round contest between the ultra-right-wing populist Jair Bolsonaro and the left-wing Workers’ Party candidate Fernando Haddad, a former São Paulo mayor.
Despite spending 27 years in government, Bolsonaro is campaigning as a “drain the swamp” outsider. With the blessing of former President Luiz Inácio Lula da Silva, the jailed ex-leader of the Workers’ Party, Haddad is promising to restore economic prosperity. Although at least a third of Brazilians appear to be rallying around Bolsonaro, an even greater share of the electorate, including a growing coalition of women, adamantly opposes him.
Bolsonaro has gained a surprisingly wide, and in some cases fanatical, following. Some of his base – 60% of whom are men aged 16-34 – share his worldview. Many Brazilians, including women, also like his “tough on crime” message. And many of the country’s business elite see Bolsonaro – along with his running-mate, the retired army general Hamilton Mourão, and his Chicago School financial adviser, Paulo Guedes – as a bulwark against the return of the Workers’ Party.
It would be naive to dismiss Bolsonaro as a “useful idiot” for the conservative establishment. His turn to economic liberalism flies in the face of a long record of support for state-driven development. And, like US President Donald Trump, Turkish President Recep Tayyip Erdoğan, Philippine President Rodrigo Duterte, and Hungarian Prime Minister Viktor Orbán, Bolsonaro is an expert at sowing division. Following the populist playbook, he portrays Brazilian society as comprising two homogeneous and antagonistic groups: the “real people” and the “elites.” As Steven Levitsky and Daniel Ziblatt of Harvard University have shown, this attack on “mutual toleration” strikes at the foundation of democracy.
Brazil’s three major political parties also share blame for the country’s deepening divisions. Faced with mounting corruption scandals, both Lula and former President Dilma Rousseff, also of the Workers’ Party, routinely invoked us-versus-them rhetoric. They dismissed damning evidence unearthed during the “Operation Car Wash” investigations as an elitist conspiracy against a popularly elected government. The country’s other two main parties, meanwhile, confirmed Workers’ Party supporters’ fears when they voted to impeach Rousseff in August 2016. What Workers’ Party loyalists described as an illegal coup reinforced Brazil’s divisions. The new government was itself soon ensnared in corruption scandals, and its popularity plummeted.
For almost three decades, first as a city councilor and then as a congressman, Bolsonaro waited in the wings for precisely this moment. Promising “clean government” and “law and order,” and casting himself as the champion of the military and police, he has the credentials to lead an authoritarian backlash. Bolsonaro has repeatedly supported the military dictatorship that reigned from 1964 to 1985, when the government tortured and murdered its opponents. As far back as 1999, he called for the National Congress to be shuttered, and lamented that the dictatorship had not killed 30,000 more people, starting with former Brazilian President Fernando Henrique Cardoso.
Moreover, in a country with the world’s highest number of police killings, Bolsonaro has openly supported expanding official impunity, saying that police who kill “bandits” should be awarded medals, not penalized. Despite soaring gun violence and 45,000 firearm-related homicides in 2018, he objects to all gun regulation and is the only candidate calling for repeal of the country’s Disarmament Statute, which is credited with saving more than 160,000 lives. And in a country that already has more than 725,000 people in jail, he wants to reduce the age of criminal liability from 18 to 16 – or even 14 – and, not surprisingly, wants to restore the death penalty.
Having secured support from several influential evangelical leaders, Bolsonaro also supports religious interference in public life. Last year, Bolsonaro declared that Brazil is a Christian country; that there is no such thing as a secular state; and that those who disagree should leave or bow to the majority. He also adamantly opposes gay marriage, condones hate speech against LGBTQ people, and has been sanctioned no fewer than 30 times since 1991 by the Brazilian Bar Association for racism, xenophobia, and homophobia. In 2011, he said that he would rather have a dead son than a gay one.
Bolsonaro also routinely taunts women about rape and expresses misogynist views. He once told a female fellow legislator, “I wouldn’t rape you because you don’t deserve it,” and he is on record calling a female journalist a “whore.” Furthermore, Bolsonaro is openly hostile toward Afro-Brazilian communities, indigenous populations, and members of landless movements, whom he has described as terrorists.
Lastly, Bolsonaro fundamentally rejects climate science and favors Brazil’s withdrawal from the 2015 Paris climate agreement, claiming that climate change is a “fable” and nothing more than a “globalist conspiracy.” Brazil’s Congress, unlike the US Senate, actually ratified the Paris agreement, making withdrawal less likely. Even so, Bolsonaro and his three eldest sons – all of them elected officials – regularly describe global warming as a fraud.
Bolsonaro is frequently characterized as a comical character or a “Tropical Trump.” But if one takes his record at face value, it should be clear that his candidacy is no laughing matter. Like Trump, he is more a symptom of division than a cause. Like Trump, he has said he will reject the election’s outcome if he does not win. But he is also potentially more destructive than Trump, and Brazil’s democracy is much younger and more fragile than that of the United States. He was not considered a serious contender until quite recently – just as few saw Trump coming until it was too late.
This commentary is written in the author's personal capacity.