BRAZIL AND ITS LONGSTANDING STRUGGLE WITH SOCIAL INEQUALITY

Inequality impacts on the resilience of a democratic regime. Przeworski, Alvarez, Cheibub and Limongi, in their Democracy and Development: Political Institutions and Well-Being in the World, 1950-1990, concluded that �it appears that democracies are less stable in societies that are more unequal to begin with, in societies in which household income inequality increases, and in societies in which labour receives a lower share of value added in manufacturing’.^[147] Brazil has been a democracy since 1985 and it is undeniable that the Brazilians’ welfare has improved over those years.

Though still marked by inefficiency and underfunding, Brazil has advanced policies to help overcome poverty, such as universal health care, public educa­tion, a rather protective labour law, an ample social security system, and social programmes such as Bolsa Familia, a successful conditional cash transfer programme.^[153] The 1988 Constitution, which resulted from a �set of fragmented political and ideological projects from various sectors of society’,^[154] is an impor­tant example of a constitutional project seeking to enhance democracy, strengthen the rule of law and combat poverty.

However, democratic legislation, institutions, and policies, though represent­ing important elements for the rule of law, struggle in a society used to coping with the typical hurdles of social inequality. An unequal society is disruptive for coordinating conflicting interests and �[exacerbates] the distributive trade-offs among individuals’.^[159] The consequences for the rule of law are many. Without proper coordination, individuals do not feel assured that they will be better-off by following the rules nor do they truly believe that the legal and institutional frameworks are aimed at benefitting them instead of some privileged social groups. They also feel less empowered because many are deemed second-class individuals, who are not able to claim their rights nor present any significant leverage in negotiations that could lower the distributive injustice of their labour force.^[160] Less coordination also implies less reciprocity. An unequal society tends to see the law not as �an instrument of social organization and pacification’,^[161] but rather as a barrier to their own interests. �The result is that the state is negli­gent with the invisible, violent and arbitrary toward the moral outcasts, and docile and friendly towards the privileged that place themselves above the law.’^[162]

Most current and influential studies on Brazil’s social inequality have shown two seemingly contradictory routes.

The data on income inequality are staggering. Marcelo Medeiros, Pedro Ferreira de Souza and Fabio Avila de Castro have provided outstanding empiri­cal studies on its dynamics. By concentrating their analyses on the top richest through income tax tabulations, their conclusions are less optimistic than other studies that have focused on household surveys. Such a methodology has the benefit of more accurately assessing the capital flow that household surveys can barely collect and has proven highly convergent with other empirical tabula- tions.^[163] Their impactful paper The Upper Top of Income Distribution in Brazil: First Estimates with Income Data and a Comparison with Household Surveys (2GG6-2G12)^[164] has raised some of the most interesting debates on inequality in the country as they concluded that �income data reveals the concentration at the top that is substantially greater than other sources and, in general terms, remained stable in the period examined’.^[165] The underlying argument, which Medeiros had previously pointed out,^[166] is that that only by focusing on the rich­est is the real inequality in Brazil effectively disclosed.

Pedro Ferreira de Souza wrote the prizewinning book Uma Historia da Desigualdade: A Concentrafdo de Renda entre os Ricos no Brasil 1926-2G13 (A History of Inequality: The Income Concentration among the Richest in Brazil 1926-2013) and his conclusions are breathtaking. Based on income tax tabulations, Brazil has endured few periods of lower inequality, but they were rapidly reversed, normally coinciding with the collapse of democracy or more liberal regimes.^[167] More interestingly, though the 1988 Constitution has enhanced Brazil’s democratic credentials and provided a more robust safety net for the poorest, it has not represented the equality booster that the literature normally claims.^[168] In fact, it has kept virtually unchanged a set of privileges and benefits for the richest as a bargaining chip during constitution-making and afterwards.

The numbers on income inequality are indeed appalling. Ferreira de Souza’s findings reveal that, from 1926 to 2015, �on average, the share of total income received by the top 1 per cent was about 24 per cent’.^[173] This number remained quite unchanged despite some steep and structural changes in the country.^[174] Whenever there was a critical juncture - normally coinciding with the country’s political cycles^[175] - the level of inequality oscillated, and, if it decreased slightly, it regained its former level shortly afterwards.^[176] Such numbers show that, for example, in 2013, the 0.1 per cent, 1 per cent, 5 per cent, and 10 per cent rich­est received 11 per cent, 24 per cent, 42 per cent and 53 per cent of the national income, respectively.^[177] Briefly, the �bottom 90 per cent’ share less than 50 per cent of the national income. Brazil did not endure the �Great Egalitarian Levelling’ observed in other currently more equal countries after the traumatic events of the twentieth century, like the Great Depression and the World Wars.^[178]

Instead, Brazil, which was already slightly more unequal before those events, merely experienced a �mild levelling’, which was later reversed.^[179] This phenom­enon helps explain why Brazil lags behind in equality,^[180] only competing, among those with available data, with Argentina, Colombia, South Africa, and, more recently, the United States.^[181]

In truth, there has never been a long-term trend towards income equality in Brazil,^[182] even though some redistribution reaching the �bottom 90 per cent’ has taken place - and this is why the Gini coefficient shows a decline over the years.^[183] In this respect, there is some space for optimism.

The 1988 Constitution has not really affected the top richest, who could take advantage of inertial effects and entrench their interests in the new constitu­tional framework. However, it provided a net protection that has benefitted many Brazilians. Marta Arretche, a leading Brazilian scholar on the subject, argues that this difficulty in assessing inequality lies in the perception that �inequality reduction is the result of a combination of factors, which means that any mono- causal theory of the phenomena cannot capture its encompassing dynamics’.^[187] Her thesis is quite straightforward: democratisation and the new constitutional order in Brazil have reduced inequality, interpreted according to such a �combi­nation of factors’ that go beyond income and �its sheer monetary dimension’.^[188] Despite her claim that Brazil has also experienced a systematic decline in income inequality since 1989^[189] - which may not hold up when confronted with Ferreira de Souza’s thesis^[190] - her emphasis on inequality embracing a �combination of factors’ is crucial for understanding the impact of inequality on the rule of law through a set of other key variables. Income inequality certainly matters for the rule of law, but so do the levels of poverty, welfare and public access to social benefits and services, which have undeniably improved over the country’s years of democratic life.

Arretche’s argument is that the �inclusion of outsiders’ gained momentum in the early 1990s through a growing access to a vast array of social benefits �de-linked from income and social background’.^[191] Based particularly on the demographic censuses by the Brazilian Institute of Geography and Statistics (IBGE) between 1960 and 2010, she and other prominent scholars^[192] examined distinct variables (level of education, female fertility rate, market labour, social policies such as health care and social security, infant mortality, life expectancy, female and racial inclusion, religious pluralism, electoral transparency and participation, etc) and concluded that Brazilians’ living standards have indeed improved despite the still �many unacceptable inequalities’.^[193] Democracy has played a role for the �shift in the history of inequality in Brazil’, but what has since visibly changed is that the country has gradually implemented long-term policies aimed at including the �outsiders’ and some major shifts in individu­als’ behaviours (higher women’s entry in labour market and education, for example).^[194]

For the rule of law, it certainly matters that the �bottom 90 per cent’ receive greater public protection, and, though such a change has not really altered the mean level of income inequality, better life conditions tend to engender stronger social compliance to the institutional framework and lead to more effective coordination of conflicting interests. The �inclusion of outsiders’^[195] by enforc­ing social rights also implies that these individuals will exert and claim their individual rights, many of which do not demand monetary redistribution, with more positive outcomes. Therefore, inequality, in such multiple dimensions, has declined, but there are still various gaps that place Brazil in a humiliating position in comparison to other democracies. There have been improvements in access to education,^[196] political participation^[197] and civil society engagement,^[198] but the levels of racial and gender inequality,^[199] regional disparities and the quality and reach of public services are still very disturbing,^[200] let alone the aforementioned high income inequality. The changes, in some areas, have been �dramatic’, but inequality has also proven very resilient.^[201]

The quality of the rule of law in Brazil is not properly understood without exploring further the particular effects of inequality in such distinct dimensions. The support for democracy, the trust in democratic institutions, and the level of civil education on the rule of law are all intimately associated with how social inclusion has taken place. Brazil is a young democracy whose previous political crises have not largely disturbed the data of income inequality, especially for the richest citizens, but democracy and incremental public policies targeting the worst-off have positively impacted the quality of the rule of law in Brazil.

III.