Elections and Economic Turbulence in Brazil: Candidates, Voters, and Investors

Spanakos, Anthony Peter; Rennó, Lúcio

doi:10.1111/j.1548-2456.2006.tb00363.x

Cited by 13 publications

(12 citation statements)

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“…Spanakos and Renno (2006) make this claim in their study of economic and financial responses to electoral periods in Brazil (2006). Similarly, Starr (1999) argues that Argentine economy adjusted better than that of Mexico in 1994-1995, because the former "operated in a relatively certain electoral environment," whereas the coalition supporting the latter was diverse and unable to find consensus (p. 204).…”

Section: Uncertaintymentioning

confidence: 96%

Speak Clearly and Carry a Big Stock of Dollar Reserves

Spanakos

Rennó

2009

Comparative Political Studies

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Partisan theories of political economy expect that bondholders will panic with the election of a left-wing presidential candidate. The latter seems to be what happened in Brazil in the 2002 presidential elections. However, quantitative analysis of perceptions of sovereign credit risk in Argentine, Brazilian, Mexican, and Venezuelan presidential elections from 1994 until 2007 shows no real evidence of a link between partisanship and perceptions of risk, even if the left-right divide is further broken down into left, center-left, centerright, right. Instead, international and domestic economic fundamentals have a stronger influence on risk evaluations. Qualitative analysis of the individual presidential elections shows the importance of policy uncertainty in explaining why certain electoral periods seemed more critical than others and how bondholders select between multiple equilibria. This research helps shift political analysis away from partisanship and more in the direction of policies and articulation.

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Section: Uncertaintymentioning

confidence: 96%

Speak Clearly and Carry a Big Stock of Dollar Reserves

Spanakos

Rennó

2009

Comparative Political Studies

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“…9 Yet, things changed after the 1998 Russian crisis, which severely undermined investors' confidence in all emerging markets. In Brazil, the absence of decisive fiscal adjustment and the uncertainty surrounding the October 1998 presidential elections worked to further erode external credibility (Martínez and Santiso 2003;Spanakos and Renno 2006). As the Central Bank lost reserves and markets lost trust in the government's ability to defend the peg, IMF assistance was sought.…”

Section: Market Constraintsmentioning

confidence: 99%

“…17 The evolution of voters' intentions in the run up to the 1994 elections shows that, while Lula led comfortably in the polls during the first half of the year, intentions shifted decisively after the introduction of the Real Plan in July 1994. See Spanakos and Renno (2006). goals of monetary and exchange rate policy after the collapse of the exchange rate peg.…”

Section: Domestic Politicsmentioning

confidence: 99%

“…Capital markets were particularly concerned with the radical discourse of Partido dos Trabalhadores (PT) candidate Lula da Silva (Spanakos and Renno 2006;Coes 2009). The ensuing confidence crisis led to a significant depreciation of the currency, which led to an increase in inflation and a subsequent revision of the formal targets (IMF 2009).…”

Section: Monetary and Exchange Rate Policy In Brazilmentioning

confidence: 99%

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Markets, Politics, and Learning: Explaining Monetary Policy Innovations in Brazil

Gomez-Mera

2011

St Comp Int Dev

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An increasing number of developing and emerging economies have adopted an inflation targeting framework for monetary policy during the last two decades. This article investigates the politics of inflation targeting by focusing on the case of Brazil. I argue that the decision to implement an inflation targeting system in 1999 did not only reflect the concerns of political leaders with maintaining electoral support and external credibility. In addition, the choice of this new policy approach was informed by a shift in the technical consensus among Brazilian economists about the most effective way to tame inflationary pressures in a context of high capital mobility. The shift to inflation targeting thus reflected a process of social learning among technical elites, facilitated not only by the failure of the previous policy but also by the successful experience of other inflation targeting countries. Moreover, the evidence presented here suggests that, as the first country to adopt inflation targets in the context of an IMF-supported program, Brazil became a test case and a natural experiment for the redefinition of IMF conditionality and surveillance mechanisms. The paper thus sheds light on a process of reciprocal learning, whereby the IMF not only contributed to collective learning but also learned from the Brazilian case, subsequently becoming an active promoter of inflation targeting among developing countries.

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“…However, in his fourth run for the presidency, Lula released the Carta ao Povo Brasileiro in June 2002, which soberly laid out a rationale for leaving most reforms intact and maintaining the basic lines of macroeconomic policy (Spanakos and Rennó 2006). Acknowledging that the "turbulence of financial markets" had tied Brazil's hands, Lula agreed to continue infl ation targeting and lent his support to the fi nal International Monetary Fund (IMF) agreement that Cardoso had negotiated in August 2002, which aimed to bolster the real by requiring Brazil to run a primary fi scal surplus of 3.75 percent of GDP (Barros, Baer, and Pio 2003).…”

Section: Macroeconomic Managementmentioning

confidence: 99%

Brazilian Democracy as a Late Bloomer: Reevaluating the Regime in the Cardoso-Lula Era

Power¹

2010

Latin American Research Review

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This article reviews the state of Brazilian democracy at the close of the Cardoso-Lula era. Brazil has now completed a quarter century of competitive politics, the longest democratic period in the country's history. Although evaluations of the regime's prospects were often pessimistic in the 1985-1993 period, the performance of democracy improved markedly after the Plano Real stabilization plan in the mid-1990s, which was followed by signifi cant policy achievements under presidents Fernando Henrique Cardoso (Party of Brazilian Social Democracy, or PSDB) and Luiz Inácio Lula da Silva (Workers' Party, or PT). Since 1995, the axis of national politics has turned on the competition between the PSDB and allies versus the PT and allies. Under this emerging bicoalitional architecture, several key policy domains have been objects of consensus between the two camps, which has led to major policy advances; however, certain policy areas remain outside the zone of consensus and pose enduring challenges. Despite the improving quality of democracy, the mass public continues to display a surprisingly high level of indifference to the regime type.After twenty-one years of military dictatorship, Brazil became a political democracy on March 15, 1985. 1 As the age of democracy passes the quarter century mark, interpretations of the regime are noticeably more positive than they were in the early posttransition years. In the late 1980s , and several anonymous reviewers for comments on an earlier draft of this article.

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Elections and Economic Turbulence in Brazil: Candidates, Voters, and Investors

Cited by 13 publications

References 14 publications

Speak Clearly and Carry a Big Stock of Dollar Reserves

Speak Clearly and Carry a Big Stock of Dollar Reserves

Markets, Politics, and Learning: Explaining Monetary Policy Innovations in Brazil

Brazilian Democracy as a Late Bloomer: Reevaluating the Regime in the Cardoso-Lula Era

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