It’s been a rough week for Brazilian President Dilma Rousseff. Last week, reports surfaced that the man in charge of Brazil’s mint had his hand in the till. The FT reports:
The government is investigating allegations that the head of
the national mint… was taking kickbacks from the institution’s
suppliers… Denucci was being investigated by the Federal Police for transferring $25m to offshore entities in the British Virgin Islands that were controlled by him and his daughter. The money was allegedly the result of kickbacks he charged to two suppliers.
Earlier this month, Mario Negromonte, Dilma’s minister for cities, unexpectedly quit as well—his departure was supposedly part of a long-planned cabinet reshuffle, but it was conspicuous because it came in the wake of numerous allegations of corruption in the Brazilian press.The departures of Negromonte—the eighth minister to be sacked since Dilma took power in 2010—and Denucci are part of a sea change in Brazil, a country that ranked a shameful 73rd on the 2011 World Corruption Index, neck to neck with China (75th).Dilma has been vocally criticized for purging her cabinet with such ferocity because she has been flouting Brazil’s longstanding political tradition of divvying up cabinet positions in proportion to parties’ electoral strength. Dilma’s cabinet consists mainly of technocrats from her own party, the Workers’ Party (PT), whereas the ministers who have resigned have belonged to other parties, such Party for a Democratic Brazil (PMBD), an organization more like a national federation of political machines and rent seekers than anything else. The purges have led to tensions within parliament, with opposition parties threatening legislative repercussions in Congress.Many have been skeptical that Dilma’s housecleaning can genuinely reform the horse-trading and deeply-entrenched system that reigns in Brasilia. Some hope and others fear that the political fallout from the resignations will mean Dilma’s agenda will be blocked by a vindictive Congress. But Dilma may not be boxed in; at this point, much of her agenda does not require congressional approval.Eight resignations at the top of the Brazilian political system will not eradicate the corruption that pervades the core of Brazilian politics overnight. Still, as ex-Brazilian president Fernando Henrique Cardoso has put it, Dilma has broken with some key assumptions about politics in Brazil. Her predecessor, Lula, often acted as if an acceptance of corruption was a necessary condition of politics. Dilma seems to be trying something new.Countries are complicated places, especially big ones like Brazil. It’s not clear how successful Dilma’s war on business as usual will be. In some ways, her preference for a strong state with a major role in national development could end up reinforcing rather than reducing the rent-seeking behavior that has done so much to shape the politics of Brazil. Corruption isn’t just the result of wrongdoing by bad individual actors; it is the inevitable byproduct of a situation in which government ministries have too much power over the private economy.The rise of countries like Brazil and India will depend a great deal on the extent to which corruption is kept in check. It will be hard in both countries; the political system that must achieve reform is shaped in large part by the very interests and institutions reformers must now seek to change.