Brazil in Transition

Lee J. Alston is the Ostrom Chair, professor of economics and law, and director of the Ostrom Workshop at Indiana University, as well as research associate at the NBER. Marcus Andre Melo is professor of political science at the Federal University of Pernambuco, Brazil. Bernardo Mueller is professor of economics at the University of Brasilia. Carlos Pereira is professor of political science at the Brazilian School of Administration at the Getulio Vargas Foundation, Rio de Janeiro.

• List of Illustrations xi List of Tables xiii Preface xv Abbreviations xvii Part I. An Overview of Brazil in Transition: Beliefs, Leadership, and Institutional Change 1 Chapter 1. Introduction 3 Economic Development and Critical Transitions 3 Brazil: This Time for Real? 7 A Sketch of the Conceptual Framework 14 Analytical Narratives and Economic Development 16 Road Map for the Book 19 Chapter 2. A Conceptual Dynamic for Understanding Development 24 Beliefs, Leadership, Dominant Network, and Windows of Opportunity 24 Difference in Difference in Changing Beliefs 28 Overview of Dominant Network, Beliefs, and Institutions in Brazil from 1964 to 2014 33 1964-1984 33 1985-1993 36 1994-2014 38 Summary 39 Part II. Introduction to the Case Study of Brazil, 1964-2014 41 Identifying Beliefs 45 Appendix: A Primer on the Brazilian Political System 50 Chapter 3. From Disorder to Growth and Back: The Military Regime (1964-1984) 54 From Chaos to a Short Period of Order 54 From Order to Unsustainable Growth 59 The Miracle Fades 64 Back to Disorder 67 The Decline of Developmentalism 70 Chapter 4. Transition to Democracy and the Belief in Social Inclusion (1985-1993) 71 A New Belief Emerges 71 The Transition to Democracy 72 Codifying Beliefs: The Constitution of 1988 76 The Constitution-Making Process 78 The Constitution's Delegation of Powers to the President 87 Back to Uncertainty and Chaos 90 Failures of the Brazilian Economic Plans before the Real 91 The Collor Government: Great Hope, Huge Disappointment 93 Chapter 5. Cardoso Seizes a Window of Opportunity (1993-2002) 97 The Real Plan 99 Early Institutional Deepening: Constitutional Amendments 103 Coalition Management under Cardoso 107 Asserting Fiscal Control over States 108 Staying the Course against the Early Opposition to the Real Plan 110 Sustaining Stability in the Face of External Shocks 116 Cardoso's Second Term: Combining Macro Orthodoxy with Social Inclusion 117 The Reassertion of Presidential Fiscal Authority 119 Conclusions 120 Chapter 6. Deepening Beliefs and Institutional Change (2002-2014) 122 The Uncertain Transition 122 Continuity in Change 126 Deepening the Social Contract 128 Checks and Balances vs. Strong Presidential Powers 138 The New Economic Matrix and Dilma's Policy Switch 150 Beliefs? Really? ... Really! 154 The Messy Process of Dissipative Inclusion 161 Conclusion 165 Part III. A General Inductive Framework for Understandin Critical Transitions 169 Chapter 7. A Conceptual Framework for Understanding Critical Transitions 171 Understanding Critical Transitions 172 How Does Our Framework Fit in the Literature? 173 The Building Blocks of Our Conceptual Framework 176 Windows of Opportunity 176 Dominant Network 177 Beliefs 180 Leadership 186 Institutions 189 Economic and Political Outcomes 190 Dynamics 191 Argentina: An Illustrative Use of the Framework 199 The Camelot Years: 1912-1930 200 Electoral Fraud and the Rise of Peron: 1930-1946 201 Instability Is the Rule: Oscillations between Populism and Military Rule: 1946-Present 204 Concluding Remarks 207 Chapter 8. Conclusion 209 Better and Worse at the Same Time 210 Assessing the Framework 214 Brazil and the Critical Transition 216 Afterword 221 References 227 Index 243

"Brazil is the world's sixth-largest economy and fifth-largest nation, and its transformation has long piqued the interest of scholars and observers. In this engaging book, Alston and his Brazilian colleagues Melo, Mueller, and Pereira examine this transformation by asking how Brazil became an emerging power during the 20th century... Brazil in Transition is a valuable contribution to the understanding of why nations develop and the struggles they face in the process."--Choice "Brazil in Transition is an intriguing book that holds the reader's attention throughout."--Leonardo Weller, EH.net