The Flight of the Beetle:

Party Politics and the Decision-Making Process in the Cardoso Government

Eduardo Graeff
Sociologist, Master in Political Science from the University of So Paulo
Special Advisor to the Cabinet of the President of the Republic
The points of view expressed in this text are the exclusive responsibility of the
author, not reflecting, directly or indirectly, positions of the Brazilian
government.
Paper prepared for the
V Congress of the Brazilian Studies Association
Recife, Brazil
June 2000
Translated by Ted Goertzel
The beetle is an affront to the principles of engineering. With its heavy
carapace and peculiar wings, it should never been able to fly, but it does.
Awkwardly, but it flies.
Brazil in the 1990s is a case of the flight of the beetle. With all its economic
and social problems and the proverbial imperfection of its political institutions, it
would appear condemned to flail its wings helplessly until it collapsed in chronic
ungovernability. Nevertheless, beginning in 1994, it has managed to pull itself
together politically, control inflation, and carry out a reform agenda that
compares favorably with those of other "emerging" countries.
Both Brazilian political scientists and foreign Brazilianists have described the
poor functioning of Brazil's political institutions and its governability problems. 1
What follows, in general lines, is their diagnosis, with a few touches of personal
observation.
The political conditions which made the success of the Real Plan and the
advances of the Cardoso government's reform agenda have not been so fully
explored, I suppose because of the lack of adequate time for academic analysis.
Here I offer a contribution towards this analysis, more from the perspective of a
participant observer than that of a rusty political scientist.
***
The Brazilian party system is very fragmented. More than a dozen parties have
significant political and electoral weight. The three largest - PFL, PMDB and
PSDB - each has no more than one-fifth of the Chamber of Deputies (see the
Table). In addition to being fragmented, the system is characterized by a low
level of institutionalization: the parties generally have little influence over the
behavior of either their supporters or their elected representatives, especially on
the national level.
Composition of the Chamber of Deputies in May, 2000
1

Scott Mainwaring, Rethinking Party Systems in the Third Wave of Democratization (Stanford University
Press, 1999) is, probably, the academic work most up to date on this theme. It has original research,
intelligent analysis and a good balance of bibliography.

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Party

Delegatio
n
Government 389

76%

PFL

105

21%

PSDB

103

20%

PMDB

97

19%

PPB

46

10%

PTB

24

5%

Others

14

3%

124

24%

PT

61

12%

PDT

21

4%

Others

42

8%

TOTAL

513

100%

Opposition

The Brazilian party system is weak, first of all, because it is still developing: it
has not had time to root itself in society. Brazil urbanized and industrialized very
rapidly in the last century. The formation of modern parties, identified with the
urban electorate, was repeatedly cut off by authoritarian interventions. The
Vargas dictatorship kept Congress closed from 1937 to 1946. The military
government, from 1964 to 1985, did not close Congress but they controlled it by
canceling the mandates of representatives, opening and closing parties,
reshuffling party names, and twisting electoral rules.
Other factors coincided to retard the consolidation of parties and limit their
institutional weight. Brazil is a federation by law and in fact, significantly
decentralized and marked by sharp regional disparities. Local interests often
carry more weight in policy than do the kinds of ideological and class divisions
that articulate (or used to articulate) the great European political parties. An
individualist and patrimonialist tradition views the electoral mandate as a
personal sinecure rather than as a public function. Electoral legislation and party
rules privilege individualism, denying the parties effective means to control the
action of their elected representatives.
The system of proportional representation for the Chamber of Deputies has
had an especially disruptive effect on party life. In the system of open lists
adopted in Brazil, the number of votes obtained by individual candidates
determines their rank in the final list of candidates elected by the party. This
makes the competition between candidates of the same party fiercer than
competition between parties. One must be affiliated with a party to contest an
election - the law does not permit independent candidates - but the parties
generally have little to offer to their candidates, other than the opportunity to
register their candidacy and a few minutes of free time on radio and television.
To mount a competitive campaign, each candidate depends on his personal
network of supporters, including, typically, political bosses on the state level,
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mayors, businessmen, media representatives, churches, labor unions, important

professional groups such as physicians, lawyers, professors, police and public
servants.
It would be difficult under any hypothesis to impose strict party discipline on a
deputy elected under these conditions. To whom will he respond if the party line
conflicts with the interests of some important element in his personal network of
supporters? For this reason, as if this were not enough, the norms and customs
which regulate the internal functioning of the parties and the Legislature do not
facilitate the task of the party leadership.
By a legal disposition which is being questioned in court, but which continues
to be followed in practice, every deputy is a "born candidate" for reelection - he
has a guaranteed place on his party's list, even if he is in open conflict with the
majority of the party. On the other hand, it is easy for those who are dissatisfied
with their party to change parties on the even of the election. Those who for some
reason (usually related to regional disputes) do not fit in any of the big parties
have the option of the so-called "rental lists," micro-parties that serve as legal
umbrellas for these sharpshooters.
The internal rules of the Congress are exceptionally generous toward the small
parties in the allocation of administrative facilities and procedural prerogatives.
An absurd example: even someone who is the only representative of a party in
the Chamber has the right to speak as leader in order to "orientate his delegation"
in its voting. A more serious example: a procedure called "a motion to separate
the vote" allows the leader of any party to require the body to vote on a project
piece by piece, multiplying the number of votes necessary for final approval.
This is a powerful instrument for obstruction that can drastically limit the
majority's control of the legislative agenda. Why does the majority not eliminate
this internal rule? Because the majority - any majority - is a mosaic of parties,
regional factions and sectoral interests. In this mosaic, each part sees itself as a
minority, for which any veto power may be a significant trump card.
From the point of view of its political parties and its Congress, Brazil is an
extreme case of "consensual democracy," in which power is little centralized,
many forces have veto power, and relevant decisions require the agreement of
almost everyone.
It happens that the President of the Republic - an only he, among all the
elected officials - is elected by the majority of the Nation. The Constitution of
1988 reinforced this principle, requiring a second round of elections between the
two leading candidates, unless one of them obtained an absolute majority of the
votes in the first electoral round. For a typical voter, the presidential election has
a strong plebiscitary meaning. The personalist tradition in Brazilian political
culture is foreign to the division of powers: it finds it a strange idea that there
may be other legitimate parties with which the President must negotiate in order
to do that which he was elected to do.
The inconsistency between this view of the Presidential mandate as the
expression of a majoritarian plebiscite and the consensual logic of the Legislative
function is accentuated by two characteristics of the electoral system: the
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disproportionality in the representation of the states, and the pulverization of the

vote in metropolitan areas. The Constitution states that no state will have fewer
than eight nor more than seventy representatives in the Chamber. This favors the
smaller states in detriment to the others, and leaves the most populous state, So
Paulo, underrepresented. The number of inhabitants per deputy in So Paulo is
seventeen times higher than in the smallest state, Roraima. The open list system,
for its part, makes the state capitals and neighboring districts a sort of free
hunting ground for all the potential candidates in the state. In the interior, it is
more common to encounter electoral districts that are relatively closed, with one
or two dominant candidates. The pulverized vote in the capitals ends up electing
proportionately fewer representatives than the concentrated vote in the interior.
Ultimately, the most populous states and the large urban concentrations, which
are decisive in the election of a President, carry much less weight in the
composition of Congress.
The President may be tempted to invoke the plebiscitary expression of the
polls and the pressure of the streets against the eventual obstacles to his policies
in Congress. This was the pattern of Executive-Legislative conflict that
characterized the short trajectory of Brazil's first experience with mass
democracy, from 1946 to 1964.
Or the President can negotiate with Congress, which has been the case since
the restoration of democracy in 1985. In principle, he should not have
insuperable difficulties in obtaining the support of one or two of the large parties,
in addition to his own, in exchange for participation in the cabinet and
compromises with regard to government policies. In the current party
configuration, this type of coalition would give the government a majority in
both the House and the Senate - but a majority only in name. Due to the weak
control of the parties over their own delegations, in the hour of voting, especially
on controversial measures, one can count on a significant number of defections
motivated, most of the time, by dissatisfactions that have nothing to do with the
matter under discussion. Attracting more parties to the government's coalition is
one way of giving the government the breathing room necessary to compensate
for these defections, but at the cost of aggravating another difficulty: that of
harmonizing in Brasilia the factions that are adversaries on the state level. There
is always the option of guaranteeing the vote of congressmen by giving
concessions to the individual demands, which usually involve appointments to
positions of confidence and application of federal resources in their districts. The
risk is that this kind of bargaining can become the focus of Executive-Legislative
relationships, undermining both the weak control of the parties over their
representatives in Congress and the fiscal, administrative and political-moral
consistency of the government's action.
Social bases disrupted by urbanization, a weak party system, a Congress
deeply segmented by regional and sectoral interests, government struggling with
unstable party coalitions, the risk of paralysis in decisionmaking: this was the
diagnosis of Brazilian presidentialism at the beginning of the decade of the
1990s.

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Not only the political scientists, but the majority of the observers and
participants, began to doubt, at that time, whether the patient's evolvement would
conciliate democracy and governability. Brazil resented the failure of successive
inflation control plans over a five-year period, leaving a trail of economic
stagnation, administrative disorganization and exasperation in society.
Uncontrolled public spending and the bogging down of structural reforms
undermined, in the ultimate analysis, the legitimacy of both powers, Executive
and Legislative. Democracy was not the cause of the economic problems of the
country. Fiscal imbalance, internal and external debt, inflation reignited by the
indexing of prices and salaries, all this was an inheritance from the military
governments. But the civil governments also revealed themselves incapable of
producing solutions for these problems, or even to find ways to keep them from
getting worse.
***
The curve of inflation is the strongest evidence of the turn-around experienced
by Brazil in the Fernando Henrique Cardoso administration. Economic growth
was far from spectacular, but it was positive.2
The structural and institutional changes behind the brute economic facts are
impressive. In fewer than ten years, Brazil transformed itself from a closed
economy, almost autarchic, to an open economy. The account of foreign trade
doubled, from US$ 50 billions at the end of the 1980s to more than US$ 100
billion in 1998. The internal market also expanded with the increase of
consumption by salaried workers, especially the poorest ones, whose income was
strongly "taxed" by inflation. Local industry made up a good deal of its
backwardness in comparison to world standards, under pressure from imports,
stimulated by the increase in consumption, and pushed along by the strong
entrance of foreign capital and technology. Between 1991 and 1997, the total
productivity of all the factors in the Brazilian economy grew on average 3.3%
per year, well above the level of the OECD countries.
The state as entrepreneur, created by Vargas and expanded by the military
governments, finished leaving the metallurgical and petrochemical sectors, and
reduced drastically its direct presence in the infrastructure sectors, which were
opened to private national and foreign capital. There was a profound
restructuring of the financial sector, as much public as private. The state banks
(belonging to the state governments), which were an uncontrollable source of
expansion of public debt, were almost all privatized or closed. Social security
reform, still incomplete, decelerated expansion of the deficit of the National
Social Security Institute, - the public federal system which provides for the
retirement of private sector employees. The perspective now is for the deficit to
be stabilized within fifteen years. State regulatory agencies were created in the
2

From June of 1980 until the launching of the Real Plan in June of 1993, Brazil lived with an average
inflation of 1,110% a year. From July of 1994 until the present, the average inflation has been 14.6%
annually. This rate includes the inflationary effect of the exchange devaluation in January of 1999. The
accumulated inflation in 2000, from January to June, was 1.5%. The rate of growth of the Gross Domestic
Product went from an average of 1.4% a year from 1981 to 1992, to 3.5% a year from 1993 to 1998. It
was close to 1% in 1999, under the impact of the world financial crisis and the devaluation of the real. It
should return to a rate of 3.4% to 4% in 2000.

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privatized sectors, such as electrical energy and telecommunications, as well as

in sectors that were opened to competition, such as petroleum. The flexibilization
of the rules of employment for public servants made it possible to control costs
and to modernize personnel and management policies in the three levels of
government - federal, state and municipal. A new model of the state emerged,
focusing on regulation of markets, strategic coordination and the development
and universalization of social rights.
All these changes required the intense support of Congress. All of them
implied legislative changes. Many of them required constitutional amendments.
The Brazilian Constitution covers matters that in other countries are usually
regulated by sub constitutional legislation. Since it was promulgated, in 1988, it
has already suffered 32 amendments, of which 28 were passed since March 1994,
when a transitory constitutional measure was introduced to give fiscal support to
what became the Real Plan.
The Cardoso administration has exercised an unequivocal, but no absolute,
leadership over the legislative agenda. In five years, it suffered a few defeats in
Congress, in votes that involve reduction in social security benefits and
advantages given to public employees. But it managed to achieve approval for its
constitutional amendments by the necessary 3/5 votes in both the House and the
Senate in dozens of "separate votes." And it counted with a strong majority in
almost all the votes on legislation that did not require constitutional amendment.
There seems to be something outrageous in the distinct and long lasting
leadership of president Cardoso in the congressional arena, as contrasted with the
difficulties of past administrations. Cardoso's critics complain about a "steam
roller" when the government's majority mobilizes for important votings. They
question the legitimacy of the methods allegedly used for such mobilization: an
invisible machinery of distribution of positions and funds would secure the
government's control over the majority in Congress.
This vision makes an absurd of the paradigm of consensual democracy. It is as
if there were something inherently censurable about the taking of decision by a
majority, and by extension, about all distinctions between majority and minority
with respect to the exercise of power.
The idea of the "steam roller" propelled by positions and funds is, in any case,
very weak as an explanation of political process. Previous administrations were
more likely to see their leadership deteriorate than consolidate, allowing
individual bargaining to become the dominant tone of their relationship with
Congress. By contrast, the reforms conducted by the Cardoso government tightly
limited and continue to limit the margin for this kind of bargaining. The
privatization of the state enterprises took out of the hands of government
hundreds of positions that could have been, as they eventually were in the past,
filled by political patronage. The reform of federal financial institutions imposed
strict professionalization in their management. The management of governmental
programs in areas such as education, health, welfare and agrarian reform follows
the same road. The program of fiscal stability, which is managing to cut the
growth of public debt in relationship to GDP, leaves only a residual space for
"parochial amendments" - the transfer of federal resources for small works in
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districts indicated by Congressmen. To be this successful in the same terrain

where the previous administrations became bogged down, would require really
incredible gifts of prestidigitation.
What other factors, then, can explain the capacity of the Cardoso government
to obtain Congressional support for its policies despite the institutional
framework that created so many barriers to governability.
A simple explanation, but not a negligible one, emphasizes the personal role of
the President in the political process. In this view, Cardoso was successful, first,
because he undertook the reform agenda with more conviction and conducted it
with more ability than his predecessors. His style of exercise of power combined
the right doses of strategic obstinacy - going to the point of, in pursuit of
fundamental objectives, running risks that other politicians would have avoided and tactical flexibility - along with the apparently infinite patience in his
negotiations with Congress.3
Another explanation places emphasis on historical circumstances. The gravity
of the economic and political crisis broke the resistance of the politicians to
structural reform. At the same time, a consensus in favor of the reforms was
created in other segments of the Brazilian elites, including those in the
communications media, experts within the government bureaucracy, and business
leaders. The success of the Real Plan anointed Fernando Henrique Cardoso as the
political expression of this consensus and guaranteed him a decisive victory in
the first round of the presidential election. In turn, the consensus of the elites and
a strong popular mandate, taken together, gave the president an unprecedented
legitimacy to obtain reforms from the Congress.
The two lines of explanation are pertinent, but they can lead to a somewhat
hasty conclusion: that the success of the Cardoso government would be a
fortunate case of the right personality at the right place at the right time. If
nothing changes in the political institutions, the difficulties of marriage between
democracy and governability would be fated to reappear in the future, under less
exceptional circumstances.
The currency devaluation in January of 1999 appeared to foretell this scenario.
The popularity of the President fell, hit by the feeling of broken confidence - he
had just been reelected to defend the real - and by the losses of income resulting
from the devaluation. The turbulence of the financial markets gave evidence of
the risks of the opening of the economy, and revealed fissures in the consensus of
the elites in favor of structural reforms. In Congress, the opposition, which
always dismissed the macroeconomic stabilization policies as an imposition of
the "Washington Consensus," was reinforced - more in speeches than in votes, it
is true - by segments of the government coalition disquieted by the low
popularity of the President and with cuts in spending. In this scenario, many
analysts asked, not whether, but when the President would become a "lame
duck," putting in risk the continuity of the reform process.

See in this respect the biography of Fernando Henrique Cardoso by Ted Goertzel, Fernando Henrique
Cardoso Reinventing Democracy in Brazil (Lynne Rienner Publishers, 1999).

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But this scenario did not prove true. Although under fire, the government's
majority in Congress did not disperse nor was it paralyzed during the economic
crisis. More powerful was the fear of being held responsible by public opinion
for aggravating the crisis, and the calculation that the aggravation of the crisis
would only benefit the opposition. Both the opposition and government's reticent
allies lacked an alternative economic strategy, other than the reiteration of
criticism that had been made before the devaluation: specifically, that Brazil had
paid a very high and unnecessary price to maintain the value of the real against
the dollar. The President, precisely at the moment of greatest lack of confidence
in his authority, ran all the risks and showed more obstinacy than flexibility. Both
the President and the country had little margin for negotiation about the
additional fiscal effort required by the crisis. There was, therefore, determination
by the Executive branch and support by Congress for carrying out the necessary
fiscal adjustment, turning around the negative economic expectations of the
beginning of 1999, and keep up processing the items of structural reform that
were still on the Congressional agenda. In May of 2000, after a long and
exhausting public debate that exposed differences within the government
coalition, the readjustment of the minimum wage proposed by the Executive was
passed by 305 votes in the House - three fewer than the quorum needed for
constitutional amendments. The winning argument was that a major
readjustment, although desirable in every other respect, might jeopardize the
goals of fiscal adjustment, reduction of interest rates, and recuperation of
economic activity.
Pressure of circumstances once again? The idea that the political institutions
only react to crises, but are unable to anticipate them, has resonance in the
stereotype of Brazil as a country of improvisation, always "on the brink of the
abyss."
A sharper analysis of the political aftermath of the exchange devaluation could
lead, nevertheless, to another line of explanation: although the rules of the
political party game have not changed (except for the possibility of reelection of
the President, governors and mayors), there are signs of deeper changes in the
functioning of these institutions.
The government coalition kept united by the fear of aggravating the crisis, it is
true. But it did it in circumstances that were not present in 1994. First, the
coalition's different parties and factions had basically the same perception of the
risks and options of the crisis and placed their bets together, not on a new
economic plan, but on the continuity of the strategy under way, at a moment
when it faced sharp difficulties. The consensus around this strategy, although
under fire, not only maintained itself but separated itself from reliance of the
short-term popularity of the President and the Real Plan. The reactions of the
communications media, the business opinion leaders, the government
technobureaucracy and the political leaders themselves indicate - it is my
hypothesis - that this consensus came to be a more permanent and structural
expression of the ideological center of gravity of the national elites.
Secondly, the government forces kept a minimum of capacity to carry out
decision in Congress, even in face of the most critical dissatisfaction with the
8/9

presidential leadership. They were led to this by the lack of alternatives to the
government's economic strategy. But they also accomplished this for another
reason: because fifteen years of democratic leadership had distilled civic
leadership that, for better or worse, had learned to deal together with both the
benefits and responsibilities of power. This signifies - it is my second hypothesis
- the consolidation of a political center with the vocation for carrying out the
objectives of the ideological center of gravity staked out by the elites.
***
What future tendencies can we project, from this analysis, for the Brazilian
party system and Executive-Legislative relationships? Running the risk of being
roundly refuted by the forthcoming curve of history, I am going to sketch a
scenario.
Except in the eventuality of a catastrophic development in the world economy
(such as a "crash landing" in the United States and the consequent shock waves),
the basic consensus around the structural changes initiated by the Cardoso
government should be maintained. Today the debate in the government camp
concerns possible variants of changes: privatization by selling a controlling block
or by selling distributed shared? But the general direction of the changes is not
consistently questioned, even by the opposition. On this particular issue, the PT
(Workers' Party) has not been able to state clearly whether or not it would reverse
the privatizations already carried out.
Given this, the tendency for the consolidation of a new political center should
also be maintained. If it will continue to be expressed by the current coalition, if
in the future it may lead to mergers of parties, if it will contest the next
presidential elections with one or various candidates, if President Cardoso will
recover sufficient popularity to be able to conduct the succession process, none
of these things can be foreseen at this time. I would bet, under whichever
hypothesis, that it is within the field of this center that the options for power will
be defined in 2002.
Another foreseeable implication of this scenario: the discussion of political
reform will continue in the agenda but, as the perception of risks of
ungovernability is attenuated, it will tend to revolve around incremental
improvements in the present system. There will be little room for more ambitious
reform proposals, such as parliamentarism and mixed district voting.
The PSDB [Cardoso's Brazilian Social Democratic Party], since its founding
in 1988, was the party which most strongly fought for parliamentarism and which
has defended electoral reform. An irony of history: as the party of President
Cardoso, and the core of the governing coalition, the PSDB may be helping to
prove that such an awkward political system was, in the last analysis, capable of
carrying Brazil somewhere.

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