Brazilian Development: This Time for Real?

Wirtschaftswachstum; Strukturwandel; Wirtschaftliche Anpassung; Brasilien

Pork for Policy: Executive and Legislative Exchange in Brazil

The Brazilian Constitution of 1988 gave relatively strong powers to the President. We model and test Executive-Legislative relations in Brazil and demonstrate that Presidents have used pork as a political currency to exchange for votes on policy reforms. In particular Presidents Cardoso and Lula have used pork to exchange for amendments to the Constitution. Without policy reforms Brazil would have had greater difficulty meeting their debt obligations. The logic for the exchange of pork for policy reform is that Presidents typically have greater electoral incentives than members of Congress to care about economic growth, economic opportunity, income equality and price stabilization. Members of Congress generally care more about redistributing gains to their constituents. Given the differences in preferences and the relative powers of each, the Legislative and Executive benefit by exploiting the gains from trade.

De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers

We present a general model of the interaction between settlement and the emergence of de facto property rights on frontiers prior to governments establishing and enforcing de jure property rights. Settlers have an incentive to establish de facto property rights to avoid the dissipation associated with open access conditions. The potential rent associated with more exclusivity drives the “demand’ for commons arrangements. As the potential rental stream from land increases due to enhanced scarcity there is a greater demand for more exclusivity beyond what can be sustained with commons arrangements. In some instances claimants will petition the government for de jure property rights to their claims – formal titles. In other instances it may be cheaper to acquire titles through fraudulent means. To the extent that governments supply property rights to those with first possession, land conflict will generally be minimal, though there may be political protests. But, governments face differing political constituencies and may not allocate de jure rights to the current claimants. Moreover, governments may assign de jure rights but not be willing to enforce the rights. This may generate potential or actual conflict over land depending on the violence potentials held by the de facto and de jure land claimants. We examine land settlement and land conflict on the frontiers of Australia, the U.S. and Brazil. We are particularly interested in examining the emergence, sustainability, and collapse of commons arrangements in specific historical contexts. Our analysis indicates that the emergence of demand driven de facto property rights arrangements was relatively peaceful in Australia and the U.S. where claimants had reasons to organize collectively. The settlement process in Brazil was more prone to conflict because agriculture required fewer collective activities and as a result claimants resorted to periodic violent self-enforcement. In all three cases the movement from de facto to de jure property rights led to potential or actual conflict because of insufficient government enforcement.property rights, Australia, Brazil, United States

Social Reformers and Regulation: The Prohibition of Cigarettes in the U.S. and Canada

The apogee of anti-smoking legislation in North America was reached early in the last century. In 1903, the Canadian Parliament passed a resolution prohibiting the manufacture, importation, and sale of cigarettes. Around the same time, fifteen states in the United States banned the sale of cigarettes and thirty-five states considered prohibitory legislation. In both the United States and Canada, prohibition was part of a broad political, economic, and social coalition termed the Progressive Movement. Cigarette prohibition was special interest regulation, though not of the usual narrow neoclassical genre; it was the means by which a group of crusaders sought to alter the behavior of a much larger segment of the population. The opponents of cigarette regulation were cigarette smokers and the more organized cigarette lobby. An active Progressive Movement was the necessary condition for generating interest in prohibition, while the anti-prohibition forces played a more significant role later in the legislative process. The moral reformers' succeeded when they faced little opposition because few constituents smoked and/or no jobs were at stake because there was no cigarette industry. In other words, reform is easy when you are preaching to the converted.

The Determinants and Impact of Property Rights: Land Titles on the Brazilian Frontier

This paper provides new empirical results regarding the demand and supply of title, its impact on land value, and its effects on agricultural investment on Brazilian frontiers. We use survey data from 1992 and 1993 from the state of Par  with data on the characteristics of the settlers, land tenure, land agencies involved, land values, and investment. We then turn to census data from the Brazilian agricultural census from 1940 through 1985, with observations at the municipio (county) level to examine the development of property rights to land in the southern state of Paran  during the agricultural boom between 1940 and 1970 and in the Amazon state of Par  during the period of rapid migration to the region after 1970. By examining frontiers we can follow the rise in land values, the increase in the demand for title, and the response of government. The empirical findings support the predictions of the theory regarding the effects of title and investment on land value, the role of expected change in value on demand for title, and the contribution of title in promoting investment. Governments, however, have not exactly followed the predictions of the analytical framework in supplying title. Political and bureaucratic factors play an important role in the government response to demands for title. This result suggests that researchers must pay special attention to the complex political process by which property rights are assigned in studying the emergence of tenure institutions.

Who Should Govern Congress? Access to Power and the Salary Grab of 1873

We examine the politics of the %u201CSalary Grab%u201D of 1873, legislation that increased congressional salaries retroactively by 50 percent. A group of New England and Midwestern elites opposed the Salary Grab, along with congressional franking and patronage-based civil service appointments, as part of reform effort to reshape %u201Cwho should govern Congress.%u201D Our analyses of congressional voting confirm the existence of this non-party elite coalition. While these elites lost many legislative battles in the short-run, their efforts kept reform on the legislative agenda throughout the late-nineteenth century and ultimately set the stage for the Progressive movement in the early-twentieth century.

Political Institutions, Policymaking Processes and Policy Outcomes in Brazil

We found that the driving force behind policies in Brazil is the strong set of powers given to the President by the Constitution of 1988. To have strong powers does not mean unbridled powers. Several institutions constrain and check the power of the President, in particular the legislature, the judiciary, the public prosecutors, the auditing office, state governors and the Constitution itself. The electorate of Brazil holds the President accountable for economic growth, inflation and unemployment. Because of the electoral connection, and perhaps reputational effects, presidents in Brazil have a strong incentive to pursue stable fiscal and monetary policies as their first priority. At least for the past ten years, and particularly in the new administration of Lula, executive power has been aimed at pushing policy towards macro orthodoxy. Although orthodoxy may not lead to short-term growth, international financial markets provide additional incentives for discipline, as deviations are instantly punished, with unfavorable consequences that are readily recognized by the electorate. Achieving stable macro policies required constitutional amendments as well as considerable legislation. To attain their goals, the past administrations (Cardoso and Lula in particular) used their property rights over pork to trade for policy changes. The rationale for members of Congress to exchange votes on policy for pork is that the electorates reward or punish members of Congress based on the degree to which pork lands in their district. With the exception of the devaluation of 1999, macro policy has become more stable over time. We categorize macro policies in Brazil as `stable but adaptable. `

Argentina\u27s Abandonment of the Rule of Law and Its Aftermath

In this Essay we show how, in the last sixty years, political and economic instability in Argentina have been accompanied by judicial instability. As a consequence, Argentina lacks adherence to the rule of law with deleterious effects on domestic business and foreign investment. We contend that in order to reach sustainable growth, Argentina has to solve this institutional problem. Otherwise, economic growth can surge in the short run but it will be unsustainable in the long run