THE COMBAT OF CORRUPTION IN BRAZIL: THE EFFECTS OF PATH DEPENDENCE, INEQUALITY, AND INSTITUTIONAL DESIGN FLAWS

Since the transition to democracy, Brazil has experienced various corrup­tion scandals^[947] but also advanced an anti-corruption agenda, reformed and strengthened oversight and accountability institutions, and passed considerable legislation aimed at curbing corruption.^[948] Unlike such percep­tions and experienced-based indicators above, empirical data exhibit some relevant achievements in the rule of law over the last few decades: Brazil features, for example, one of the most professionalised bureaucracies in Latin America, whose civil servants are mostly hired after having passed very competitive and merit-based selection processes and integrate a public career with great benefits and incentives.^[949] There is also a web of accountability and oversight institutions that is comparatively robust in Latin America, such as the audit courts (Tribunais de Conta),^[950] the Federal Controller’s Office (Controladoria Geral da Unido, (CGU)),^[951] the Public Ministry (Ministerio Publico),³Â® the Federal Police^[952] [953] and a fairly independent judiciary^[954] and media,^[955] despite some setbacks in the last years.

These institutions have seen hefty improvements in their capacities over the democratic years, and those that existed before the transition to democ­racy were greatly empowered by the 1988 Constitution. Moreover, the production of a massive amount of legislation aimed at curbing corruption passed in Congress, largely inspired by the international experience, such as the anti-money laundering,^[956] anti-corruption (or clean company)^[957] and organised crime acts.^[958] These developments have positively reflected on some indicators. For instance, task-forces by the federal police increased from 236, in 2009, to 1,033, in 2018,^[959] even though such numbers have decreased under the Bolsonaro government;^[960] federal public servants who were punished increased from 110, in 2003, to 619 in 2018 (then decreasing to 491 in 2020);^[961] and blacklisted companies included in the National Register of Inapt and Suspended Companies (CEIS) increased from 237, in 2010, to 3,070, in 2017.^[962] Transparency has also improved: currently, 75 per cent of all data of the federal government is open to public access, as monitored by the Federal Controllers Office (CGU).^[963]

Naturally, professional public servants, greater institutional powers and capacities and a solid body of legislation tell only one side of the story.

In a country with such a severe level of inequality, any structural reform attacking self-reinforcing practices is costly and tends to backfire,^[966] so every step forward to strengthen the rule of law walks on thin ice. In addition to raising switching costs, inequality also thwarts the development of a network of formal and informal ancillary supporting institutions that are needed to produce a more democratic environment for the rule of law, where rights are enforced more equally and institutions and individuals find the incentives to comply with the law.^[967] Therefore, despite important developments in Brazil’s web of account­ability and oversight institutions as well as in its anti-corruption legislation, inequality not only reinforces some negative effects of path dependence but also raises additional barriers to the participation of new members in key sectors of social life, such as public services and public-private partnerships, and weakens civic and political engagement.^[968] In the private sector, it means, for instance, that companies that have not participated in corruption networks may find greater barriers to entering the market of public contracts or come across bureaucratic difficulties that are demanding of time or resources. Corruption becomes self­enforcing and increasingly difficult to combat, because the same companies and politicians find mutual benefits in such a partnership of no-competitiveness and impunity. Improvements in institutional capacities and mechanisms of democracy^[969] are hence just the tip of the iceberg of a very complex social and institutional fabric.

In addition, institutional design can also weaken efforts to curb corruption, sometimes only noticeable once institutions are examined through their interde­pendencies. Brazilian constitutionalism demonstrates this phenomenon of half full or half empty institutional capacities quite visibly. The 1988 Constitution and subsequent legislation endowed various institutions with enough powers and tools to curb corruption on several fronts, but, while some innovations may look quite impressive, they come nonetheless with specific design features that help lay the groundwork for backlash, weakening those institutional capacities. Over time, those institutions perform unsatisfactorily and fail to effectively chal­lenge those embedded and self-reinforcing practices. Even if some institutions look powerful by design and have the tools to combat corruption, their capaci­ties can be impaired when a key institution in the web performs poorly. Brazilian institutions suffer from what Timothy J Power and Matthew M Taylor point out as �weakness of individual institutions’ and �interdependence of component institutions in the web’.^[970]

Brazil’s powerful Public Ministry, both at federal and state levels, is a para­digmatic example: the 1988 Constitution significantly enhanced its institutional capacities and it �[represents] one of the most significant institutional innova­tions undertaken since Brazil’s redemocratization’.^[971] However, its members can use their vast discretion to advance their own ambitions,^[972] which is problem­atic due to the Public Ministry’s lack of vertical and horizontal accountability.^[973] Moreover, particularly in criminal investigations, the Public Ministry operates through a �triangular relationship’^[974] with the federal or state policies, which are more vulnerable to politicisation and corruption,^[975] and the judiciary, whose punishment rate in corruption cases is rather low.^[976] In the end, the Public Ministry itself may be powerful by design, but the same design creates barriers to more successfully fighting corruption.

The same reasoning applies to the judiciary. Brazil features one of the most independent judiciaries in Latin America,^[977] but burdensome procedural rules, a bottleneck of cases and a generous statute of limitations strongly affect its capacity to punish white-collar crimes, and specifically corruption. More seri­ously, the 1988 Constitution provides that �the law shall not exclude any injury or threat to a right from the consideration of the Judicial Power’,^[978] which, in other words, means that every case, regardless of its nature, can be the subject of review by the judiciary. Therefore, although Brazil has created a robust web of oversight and investigative institutions, it has nevertheless potentially granted the judiciary the last word for punishment. Even if there is an administrative punishment, for example, by one of the oversight institutions such as the Federal Audit Court (TCU), that decision can be easily brought to review by the judici­ary, which is far slower and less equipped with the necessary accounting and anti-corruption expertise. A judiciary that is excessively time-consuming or whose punishment rate is low will also have a deleterious effect on every other institution involved in such cases, even if they are greatly empowered to perform this task. Lack of independence, politicisation, underfunding and corruption, by the same token, can affect one or another institution in the web, thereby undermining the whole institutional capacity to combat corruption.

IV