Ran unsuccessfully in 1989, 1994, 1998; won in 2002 and reelected in                             2006

Political system is federal republic

            Executive with president

            Bicameral

            Multiparty system, elections are by open-list proportional representation.

The Brazilian Empires (1822-1889)

Portuguese colony

                        Independence declared peacefully by prince regent who became emperor                                    1822

Authority centralized in emperor

                        Acted as moderating power between branches of government and landed                                    oligarchy

            Many features of representative democracy, but in practice dominated by elites

The Old Republic (1889-1930)

Empire ended peacefully in 1889

                        Ended by demise of slavery and rise of republicanism

                        Britain’s ban of slave trade, Brazil’s abolitionist movement, growth of                             coffee economy eroded slavery as an institution

            Emergence of republic by landowning coffee oligarchy

The 1930 Revolution

Great Depression upset economic and political base of Old Republic

                        Worker demonstrations and Brazilian Communist Party challenged                                  legitimacy of government

head of “revolutionary government” after disputed presidential     campaign

                        Crushed middle class and popular dissent

                        State-led industrialization

                        Controlled regional governments

participation through state created and regulated unions                            and associations

                                   State arbitrates all conflicts

Led by armed forces and key civilian allies

                        Repressive

            All political parties abolished and replaced with National Renovation Alliance     (ARENA) and Brazilian Democratic Movement (MDB)

                        Legislated through institutional decrees

                        Reinforced state interventionism with great success

Efforts of military to keep elections indirect controlled failed

Increasing business criticism led to gradual process of democratization “abertura”

                        Opposition made steady gains

Input from states, labor groups, workers

                        Guaranteed many social and political rights but left vestiges of corporatist                                   past

began privatization, deregulation, opening of markets

                        Failed to solve inflation

                        Impeached in 1992 for bribery and influence peddling

After September 11, 2001

Crisis of confidence in Brazil

            Embittered relationship with US                  

            Election of Lula reflected social issues> security

                        Challenges for Lula (reforms, corruption) but approval ratings remain high

8^th (soon to be 5^th) largest economy in the world

                        New creditor (2008)

                        Investment grade status (2009)

                        Energy independent (2007)

                        And poverty alleviation

The Fiscal System

Brazilian tax collection weak

            Informal economy up to 1/3 of GDP

            Constitution of 1988 decentralized fiscal structure

                        States & municipalities racked up debt        

                        Key reforms (Fiscal Responsibility Law of 2000 by FHC), but problems                          remain (compliance, large civil service, VAT, sales tax)

FHC’s Plano Real successful

Anchored real to dollar and allowed

                        Overvalued real led to rising trade deficit

                        Currency crises of the 1990s reached

                        Brazil, leading to devaluation, but no hyperinflation & public debt                                               declining

High level of expenditures but mediocre welfare state

                        Poorest are in the large informal sector, thus ineligible

                        Corruption, clientelism and waste rampant

                        More people collect than contribute

                        Aging population

Agrarian Reform

Landownership remains highly concentrated in few hands

            Land invasions by landless peasant movements in 1980s and 1990s

                        Movemento dos trabalhadores Rurais Sem Terra (MST)

            FHC expropriated unproductive estates