Brazil’s Corruption: Not going away any time soon

Brazilians protest Temer’s new labor law

When charges against former Brazilian president Dilma Rousseff resulted in her removal from office, protests throughout the country led many within the mainstream media to speculate that widespread public intolerance of corrupt behaviour would usher in a new public morality. Surely, such a demonstration of public anger against corruption would alert the country’s politicians to the fact that appropriation of the public treasury for personal gain would no longer be tolerated. Unhappily, this was naïve thinking as recent events so clearly demonstrate.

Temer Hangs onto Power—How is this Possible?

On October 25th, current President Michel Temer, who now has a 3 percent approval rating, survived a vote in Congress intended to to put him on trial for obstruction of justice and operating a criminal organization. Prosecutors claim the government is run like a criminal operation with government officials and party leaders buying votes, selling appointments, and taking kickbacks for lucrative government contracts. Temer, who escaped two earlier similar votes in congress, is believed to have been one of the creators of a massive bribery scheme involving the funneling of funds from state-run institutions such as Petrobras and the Brazilian Lottery into the pockets of politicians and government officials. The evidence appears to be overwhelming; it includes video footage of one of Temer’s close aids receiving bags stuffed with money and a recording of Temer himself listening to top Brazilian businessman brag about bribes paid to judges and others.

Brazilians protest Temer’s neoliberal policies

One might expect Temer to be cast from power given that his sins are so much worse than Rousseff’s. Doubly so because his austerity measures and reforms reducing labor protection are deeply unpopular. However, his resiliency in power demonstrates that past practices die hard, and those who pursue them relentlessly have the best chance of political survival. Among the methods Temer used to ensure congressional support for the recent vote preventing him from going to trial were the following: He reduced fines for environmental crimes to ensure support from the country’s powerful agriculture caucus in congress, which holds more than 200 seats in the lower house. He also released BR$2.2b ($680m) in funds for spending in congressional districts in the month leading up to the vote. The fact that a majority of Brazil’s federal politicians are themselves under investigation for corruption further predisposes them to stalling investigations into corruption.

Why there are no Widespread Anti-corruption Protests against Temer

There are few public demonstrations against Temer’s corrupt behavior—nothing on the scale that occurred during the months leading up to Rousseff’s removal from power. This is probably because the majority of these earlier protests involved right-wing organizations backing Temer’s reforms. These groups are no longer in the streets, suggesting that the so-called widespread Brazilian public concern about corruption is closely linked to who is currently identified as corrupt. One interpretation claims that the organizations that had earlier protested corruption now fear that protest against Temer’s corrupt behavior will strengthen political support for current left-wing presidential candidate and former president, Luiz Inacio Lula da Silva. Lula is currently leading in the polls.

In all of this, Temer has retained the support of the country’s private sector and the financial markets. Meanwhile, the government’s austerity measures have hit the poor much harder than better off Brazilians. Markets and business, of course, do not care about the poor; but one would expect them to care about the high level of corruption—a signal that resources are being misallocated and an indication that public confidence in the political class and in political institutions is likely to erode even further. The consequences of the latter are never pretty: the rise of authoritarian leadership, likely to wreak even greater havoc on the economy. Let us hope that corruption charges do not block Lula’s run for the presidency, because he is probably the country’s best hope under these very difficult circumstances.

Mitigating Corruption: No Easy Fix

As I have discussed in an earlier post, corruption in countries like Brazil arises from underlying processes that are probably not fixable by the passage of laws and the establishment of accountability institutions. This type of widespread corruption arises in contexts of severe power inequalities, deep political polarization, and in situations where there is the absence of a society-wide distributive settlement. The stakes are high and the means of achieving compromises almost non-existent. In such a situation maintaining power means keeping powerful economic interests onside. It also means securing political coalitions through means other than policy compromises. Both of these realities make bribery, kickbacks, and other nefarious practices irresistible ways to get things done and maintain political power. Corruption in Brazil, and many other places, is integral to the political process. Mitigating it involves addressing its underlying root causes.