A rupture with Brazil's culture of cordiality

After a six hour trip from Rio de Janeiro to Belo Horizonte, our bus crawled at a snail’s pace as we winded our way to the terminal. The problem wasn’t traffic; the problem was that the bus driver kept stopping to let passengers off at the side of the road, in contravention of the rules. Unable to say ‘no’ to half a dozen or so glib entreaties, the driver delayed us and everyone else.

This typifies the famous culture of cordiality in Brazil. Cordiality can be a mark of chivalry, but it can also be a foil for a culture in which conflict is studiously avoided.

Brazilians don’t do well with conflict.

Filipe Sobral of Brazil’s Fundação Getúlio Vargas University and Dean Bisseling of the University of Amsterdam analyzed teams of Dutch and Brazilian professionals to test responses to "emotional and task conflict."Brazilians saw conflict as having significantly undermined their team performance and overall satisfaction, whereas it had no such effect on the Dutch.

Conflict avoidance has its costs. This is particularly true in politics, where vigorous inter-branch and inter-party competition-cum-conflict can have a healthful effect on institutional accountability.

A culture of cordiality involves not giving offense, and a desire not to offend can lead to accommodation- uneven applications of the rule of law and a reluctance to force critical reforms forward by confronting vested interests.

The Mensalão trial

In many ways, Brazil’s ongoing Mensalão Trial (see "Brazil’s ‘trial of the Century" ) represents a dramatic rupture with this institutional tradition, a culture in which the political elite rarely if ever convict and sanction those of their own kind.

The trial centers on a political vote buying and money laundering scheme involving more than 35 defendants - bank executives, legislators, even former President Luiz Inácio Lula da Silva’s Chief of Staff. The Mensalão itself - big monthly payments to legislators in exchange for votes - is an expression of the culture of cordiality: unwilling to assume the bully pulpit and shame legislators into yielding votes for the government’s mandate, the President’s men opted for the quiet consent won of bribery.

My fellow political scientists, legal scholars, and the public at large are incredulous and overjoyed at what is currently happening. They marvel as the Brazilian Supreme Court affirms the country’s growing institutional maturity, one conviction at a time, one after the other. Only two of ten defendants have so far avoided convictions, many of which mandate years in prison. Even bigger fish are expected to follow in the weeks ahead.

The trial marks a dividing line between two Brazils - the Brazil where political wrongdoing results in political accommodation and trials that "end in pizza"(termina em pizza), as the national saying goes - and a fairer, more principled Brazil where crime finally results in justice.

The need for greater ruptures

The hope is that more ruptures with the Brazil of old might follow, and not just within the justice system. Reforms are needed and, virtually by definition, reforms imply face-offs with vested interests that jeopardise cordial status quo arrangements.

The principal challenge here is that both Presidents Lula da Silva and Dilma Rousseff have not distinguished themselves as reformers. They are purveyors of ‘programmes’ - large infrastructure and social programmes that have easily won the approval of Congress. Lula and Dilma had the excellent economic fortune of being able to afford programmes that made their governments look good.

Granted, both Lula and Dilma have also introduced important laws, such as the freedom of information law approved earlier this year. But as every seasoned politician knows, it’s usually easier to gain consent for a new law or program than it is to reform an old one, especially sclerotic tax, labor, pension, and political-electoral institutions.

Such reforms, however, are the only way Brazil will truly have a chance to advance as a democracy and modern economy.

The example of tax reform

Brazil tax system is badly in need of reform. Brazil holds the unenviable position of having the highest tax-to-GDP ratio in the Americas, at approximately 35 percent of GDP, and comparatively little to show for it.

Contentious tax reforms are needed, which will inevitably involve disagreements at the federal state, and municipal levels of government. Given that Brazil is currently collecting record taxes, leaders have delayed the inevitable and the easy cordiality of business-as-usual holds fast.

Yet two elements make Brazil’s tax system particularly problematic, making the need for reform especially urgent. First, Brazil ranks 150th out of 183 countries when it comes to the ease of paying taxes, according to the World Bank’s latest "Doing Business " rankings. Taxes are so demanding that accountants spend months every year paying and reporting to authorities. This is bad for business and bad for doing business in Brazil. 



Second, Brazil’s tax burden is overwhelmingly regressive and opaque; most of the country’s taxes come from indirect taxes on goods and services that are not made visible to the consumer. Taxation by stealth is not only wholly undemocratic, but value-added taxes fall harder on the poor.

The lower classes consume proportionately higher percentages of their take-home pay on goods laden with indirect taxes; and since most Brazilians make relatively meager wages (annual per capita income is just over $12,000), the government tax-take overwhelmingly comes from the country’s lower strata.

Thus the Brazilian government can brag all it likes about its ‘targeted poverty alleviation’ programmes, such as Bolsa Familia, but until tough tax reforms are hammered out in Congress, Brazil’s tax structure will continue to work at cross-purposes with its efforts to alleviate poverty and inequality.

Tax reform is only one of many enormous challenges that lie ahead. But Brazilians have reason to be hopeful. The culture of cordiality and accommodation that has insulated the political elite - a culture that has historically defaulted to an iniquitous laissez-faire rather than facing the difficult confrontations of due-process - is currently witnessing a historic rupture in the form of Brazil’s Mensalão Trial.

The hope is that courageous face-offs carry over to other aspects of Brazilian public policy and governmental behavior.

Gregory Michener is Assistant Professor of political science and administration at the Fundaçao Getulio Vargas (EBAPE) in Rio de Janeiro.