The political economy of corruption in Brazil

Abstract

RESUMOEste artigo é a primeira parte de uma pesquisa sobre corrupção no Brasil e é teórico. Apesar disso, ele fornece uma interpretação econômica da corrupção usando o Brasil como um estudo de caso. O objetivo principal desta pesquisa é aplicar algumas ferramentas microeconômicas para entender a "grande corrupção". Mostraremos que a corrupção não é simplesmente um tipo de crime. De fato, ela é uma atividade econômica ordinária que surge em alguns ambientes institucionais. Primeiramente, serão descritos alguns casos de corrupção no Brasil. Veremos que a democracia, por si só, não assegura o controle da corrupção. Em segundo lugar, será apresentada uma visão geral de alguns casos de mudanças institucionais que aumentaram o controle sobre a corrupção em algumas economias ocidentais. Argumentaremos que a corrupção, seu controle e sua ilegalidade dependem da evolução institucional. Em terceiro lugar, será explicado como alguns modelos econômicos poderiam ser adotados para um entendimento melhor da corrupção. Finalmente, será apresentado um modelo de múltiplo-ego aplicado ao agente público (político ou burocrata), cujo comportamento é restrito exogenamente pelas instituições e sistemas de pay-off. ABSTRACT This article is the first part of a research on corruption in Brazil and it is theoretical. Despite this, it provides an economic interpretation of corruption using Brazil as a case study. The main objective of this research is to apply some microeconomic tools to understand the "big corruption". However, I am going to show that corruption is not simply a kind of crime. Rather, it is an ordinary economic activity that arises in some institutional environments. Firstly, some corruption cases in Brazil will be described. This article is aimed at showing that democracy itself does not ensure control over corruption. Secondly, I am going to do a very brief survey of institutional changes and controls over corruption in some Western Societies in which I am going to argue that corruption, its control and its illegality depend on institutional evolution by streamlining the constitutional and institutional framework. Thirdly, I am going to explain how some economic models could be adopted for a better understanding of corruption. Finally, I will present a multiple-self model applied to the public agent (politician and bureaucrat) constrained by institutions and pay-off systems.PALAVRAS-CHAVE Corrupção, Brasil, caçador de renda, escolha social, economia política.

Transparency to Reduce Corruption?

“…Systematic corruption makes it impossible to establish and maintain national and international rules, being one of the main reasons for the low development in some countries. According to Silva (1999), longterm costs associated with corrupt activities reduces the efficiency of both private and public organizations. It is estimated that more than USD 1000 billion is paid out in bribes each year worldwide (Nussbaum, 2004).…”

“…Business transparency increases the probability of discovering a corrupt action. Fighting against corruption is only a part of a broader effort called institutional adjustment (Klitgaard, 1998;Silva, 1999).…”

“…However, the average behavior involves small-and large-scale corruption that goes from not respecting traffic lights to the use of public monies for political campaigns (Silva, 1999). Silva (1999) has argued that corruption is not only a type of crime, but rather an ordinary economic activity that arises in some institutional environments and becomes very dangerous to democracy itself. In Brazil, political corruption produces an undesirable outcome of the increasing pessimism of the population regarding the future.…”

“…Some agencies of the federal control system are the Controladoria Geral da Uniao -CGU (Federal General Advocacy), whose function is to investigate suspicious cases of corruption and defend the Federation against any corrupt operation; the Tribunal de Contas da Uniao -TCU (Federal Audit Court), which has the power to sue and punish people involved in corruption. Silva (1999) believes that notwithstanding the Federal Systems to control the corruption, among the various identified and judged corruption cases, only a few are punished and this punishment is seldom executed. Silva (1999) also emphasizes that corruption in Brazil has an endemic characteristic and it occurs due to the incapacity to follow up on the expenditures in all budgetary units.…”

“…Silva (1999) believes that notwithstanding the Federal Systems to control the corruption, among the various identified and judged corruption cases, only a few are punished and this punishment is seldom executed. Silva (1999) also emphasizes that corruption in Brazil has an endemic characteristic and it occurs due to the incapacity to follow up on the expenditures in all budgetary units. Political corruption has damaged the fundamental democratic institutions: The Legislative (Congress) and the Judiciary.…”