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Corruption in Brazil: from Sarney to Lula

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Eduardo Graeff says that corruption is like a termite that gnaws at both legs of Brazilian democracy: the rule of law and clean, legitimate elections. It is estimated that roughly 2% of Brazil's GDP is lost to corruption, but this doesn't include the fact that the GDP might be much larger if corruption didn't inhibit entrepreneurialism and competitive growth. Graeff documents a sorry history from Sarney and Collor through the Franco, Cardoso and Lula governments. As a former top official of the Cardoso government, one might be skeptical of his judgment that the Cardoso was significantly better than the others. But he documents his arguments, and the Cardoso administration was exceptional in many ways. He is cautious in his criticism of the Lula government, but no exaggeration is needed. He also specifies the institutional developments that have improved Brazil's ability to fight corruption, and gives the Lula government credit where credit is due in this regard. This is the definitive factual work, in English or in Portuguese, on this critical topic. Readers seeking a more theoretical analysis, and who can read Portuguese, should consult Fernando Henrique Cardoso and Marcílio Marques Moreira, editors, Cultura das Transgressões no Brasil. São Paulo: Saraiva, 2008. For more on the problems in the Workers' Party and the Lula government, I recommendThe Transformation of the Workers' Party in Brazil, 1989-2009 as well as my own book, Brazil's Lula: The Most Popular Politician on Earth

Eduardo Graeff's book gives a more or less sequential overview of the scandals that have marked the governments from Sarney to Lula. As a Tucano (a member of the PSDB), he goes a bit easy on the Fernando Henrique Cardoso administration and is less forgiving of Lula. It would be interesting to hear Graeff's response to the recent book Privataria Tucana. This new book is a current best seller in Brazil and purportedly reveals the misdeeds of the Cardoso administration. Given Brazil's deeply rooted statist mentality, there is a lot of resentment against privatizing state held enterprises. At some point, a more objective historical analysis of Vale and the telephone company sell off will be an interesting read if it can be done in a summary fashion. One of the problems of the journalistic and academic studies on Brazilian corruption is the lack of a better theoretical framework. Graeff cites Raymundo Faoro, Brazilian patrimonialism and the deep rooted habit of private appropriation of public resources. However, more needs to be done including a look at the functional role of corruption and jeitinho in Brazilian culture. Often to get things done, one has to have the competence to find the expedient loopholes. The bureaucratic structure is so heavy and complex that it is virtually impossible to go by the book all of the time. So virtually everyone in Brazil's civil society considers themselves fools if they obey the structure or somewhat "marginal" if they don't.

Anyone who has run a business in Brazil knows that an auditor can "find" a multitude of errors which warrant penalties. Corruption, some petty and some major, thus can become something of an escape valve.

Brazil's growth and transformation requires building better institutions. It also means a strong press. Brazil is building and the press contributes but there are still distortions caused by disinformation and monopolies.

Graeff's book is interesting but probably is a better read in Portuguese. The translation is somewhat "googlesque" and deserved a better editing job.