Brazil’s Election: Seeing Triple

...four Krustys!

…four Krustys!

At work on Monday, I hosted an event with BrazilWorks director Mark Langevin where he spoke on the platforms of the three top candidates in October’s presidential election. The talk was useful in highlighting some if the important differences between the candidates, but was also illuminating because it demonstrated just how similar their platforms all are. All three favor an important role for the state in the economy, particularly in industrial policy, none is particularly enthusiastic about liberalizing the country’s protectionist trade regime, and all are vague about the contours of the fiscal adjustment they’d likely have to undertake once in office. This presents two problems for Brazil; one immediate and the other more structural.

Having three candidates whose platforms vary mostly on the margins or simply in tone is not necessarily a bad thing; it can be indicative of a broad national consensus about the direction the country should go. One could argue that this was the case in 2002, when Luiz Ignacio Lula da Silva and José Serra were running on a platform of continuity with the policy framework instituted by Fernando Henrique Cardoso. However, in 2002, the sentiment was that Brazil had found the right policy mix and that the best route forward was building on what Cardoso had started. The arguments were over more ancillary policies and the rhetorical emphasis of each candidate.

That is not the case this year. Brazilians and non-Brazilian observers alike seem to agree that the country needs a change. To be fair, the change Brazilians seem to be looking for is poorly defined and is exemplified by the protests in June 2013, which expressed Brazilians’ broad disillusionment with the state of things in their country, but was unable to coalesce around many concrete proposals. Considering that there is a strong, if amorphous desire for a change in the country, it would be encouraging to see more variety in the platforms. Instead, what you mainly see is a bit of tinkering with Dilma’s governing philosophy by her and her two opponents, former Lula minister Marina Silva and Aecio Neves a senator from Minas Gerais. Considering Brazil’s economy is already stagnating, inflation is persistently at or above the Central Bank’s ceiling and China, the engine of the spurt of growth during the Lula years, is settling into a slower-growth equilibrium, this seems wholly insufficient for the situation, yet Brazilians have no alternative.

The threat in the longer term for Brazil is that the Workers Party (PT) becomes a political force that effectively gobbles up the center and center left of the country, leaving the opposition to form as an awkward coalition of far left and right—a coalition that would have difficulty forming coherent policy alternatives and would be inherently unstable. It would also be electorally unviable, acting more as a rump opposition and transferring the real competition for government into the PT. This has been one of the legacies of peronismo in Argentina, where many of the most important power struggles in the country happen within peronismo instead of between the various political parties, limiting democratic accountability. Silva and Dilma—the two frontrunners—both were members of the Lula administration, and Silva, while having left the PT, doesn’t differ with the PT on many policies. In effect, this is an election that could end in a runoff between the PT and a dissident PT, not a major clash of different governing philosophies.

I was recently discussing Darren Acemoglu and James Robinson’s Why Nations Fail with a Brazilian professor. He said that he liked the book, but felt that the chapter that dealt with Brazil was overly optimistic and that whatever improvement Brazilian institutions had made since the end of the dictatorship was being undone. I am less pessimistic, but as Brazil approaches this election needing fresh ideas and no candidates presenting them, while the two candidates most likely to win have both come from the same party (and the Lula administration), it’s difficult to imagine the country taking a big step forward in the next presidential term. Moreover, it’s increasingly possible to imagine a scenario where the only viable candidates in future elections are from the PT or are dissident PT members. That would point toward a degradation in the quality of Brazil’s institutions and an empowering of the most destructive tendencies in the Brazilian political system.