Brazil in Focus

The rewards and risks of conservativism

by Carlos Pereira

When an aircraft reaches cruising altitude, at 10 to 15 thousand meters, we all may kick back and relax as the plane switches to auto-pilot. Not only can we loosen our seatbelts in anticipation of smooth flying ahead, but also count on the aircraft's instruments to automatically bank and turn and correct for any turbulence that may await us. Likewise, countries charting a path to development also face intense periods of change and reform, not least during liftoff, when demands on national attention and energy are highest. And yet these are precisely windows of opportunity, rare moments in history when a nation may recast its institutions to chart a new political and economic course. If structural reforms are successful and deliver stability, the country soon cruises into autopilot, after which only small adjustments are required.

Consider Brazilian constitutional reform. A quick comparison of the constitutional initiatives introduced by recent Brazilian presidents offers clues to the strategies of these leaders and their varying appetites for change. As the graphic below indicates, Fernando Henrique Cardoso came to office in a reformist flurry, introducing no less than 17 amendments in his first year of office, in 1995. Call it the Big Bang of post-1988 constitutional reform. That year alone, Brazil's lawmakers fielded half of the total of 35 amendments introduced under the entire Cardoso mandate (1995-2002), and almost 30% of those presented in the quarter century since democracy returned, from 1989 to 2011.

However, the data also show that that the Executive branch's reformist impulse have cooled considerably in the last nine years, with only nine constitutional initiatives penned by the government of Luiz Inácio Lula da Silva, and just two in the first year of the Dilma government. Have constitutional reforms lost their centrality in the Brazilian political agenda? What to say of the many analysts who conclude that Brazil's continued rise depends vitally on urgent reforms of taxes, labor laws, education, pensions, public health and infrastructure, to name a few?

Source: www.planalto.gov.br

The fact is, implementing structural changes is difficult for any government because the results - which rarely pay off in the short run - generate uncertainty over potential benefits and infrequently exact losses on a particular segment of society or interest group. From the political point of view, it is always easier and more attractive to include and incorporate, even in a scattered and inefficient manner, than it is to cut back or impose sacrifices upon one group or another. Perhaps this explains the apparent paradox of leftist groups, such as the Partido dos Trabalhadores (Workers Party), which clamor for sweeping change when they are on the political opposition but grow conservative and switch to auto-pilot once in power. This is not to say that institutional conservatism is for the worst. Thanks to continuity from the Cardoso administration, the Lula government poverty deepened policies to reduce inequality, preserve macro-economic stability, and create jobs in the formal sector.

Nor is it surprising that sticking to a conservative strategy has reaped considerable political rewards. Consider that Lula ended his second term with record popularity, while his successor has done even better, surpassing Lula's ratings after just one year in office. Nonetheless, that strategy can create serious problems for Brazil. No one disputes that Latin America's powerhouse has taken off. But neither has Brazil reached cruising altitude yet. And as any aviation manual will tell you, it's on the way up when the risks of accident are highest.

Carlos Pereira is a professor at the Getulio Vargas Foundation's School of Public and Business Administration (EBAPE/FGV). This article was adapted from a piece published on Feb. 22, in Valor Econômico. Translation by Roman Gautam