The Institutional Construction of Post-1988 Austerity

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Social Policy Dismantling and De-democratization in Brazil

Abstract

Based on the theoretical-conceptual mobilization of the literature on public finance and policy dismantling, the objective of this chapter is to analyze the trajectory of the recent austerity reforms that negatively impacted the financing structure of the Brazilian State. Faced with the austerity scenario that began in 2015, and which was deepened with the impeachment of Dilma Rousseff in the following year, a complex liberal–conservative coalition erupted. From then on, it manifested a deep ideological commitment to the implementation of dismantling policies. The chapter highlights how the authoritarian populist government of Jair Bolsonaro sought to destroy the financing structure and the planning capacity of the Brazilian State by relying on fiscal austerity measures, promoting several cuts in public policies and social programs.

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Notes

  1. 1.

    Politicians who act in exchange for positions, funds, parliamentary amendments, prioritizing private interests over democracy and the collective. The current bloc of parliamentarians of the so-called Centrão is an elucidating example in this regard, as it controlled the budget in the Bolsonaro government.

  2. 2.

    This was the currency stabilization plan to control the inflationary acceleration inherited from the military dictatorship (1964–1985).

  3. 3.

    This law, created by Getúlio Vargas, promoted the regulation of labor relations in an unprecedented way, creating rights such as the work record booklet, working hours, vacations, minimum wage, weekly rest, among others.

  4. 4.

    According to these economists, such advances, which began in the second half of the 1980s, were impeded by the practices of the PT governments (2003–2016), which began to be described as “creative accounting.” This, in turn, constitutes a device of the government to postpone the transfer of funds from the National Treasury to public banks and administrative authorities, with the objective of paying social programs and subsidized loans.

  5. 5.

    This trend contrasts with the current scenario of the global coronavirus pandemic, in which the Bolsonaro government shied away from its traditional role in federal cooperation/coordination and in which the Federal Supreme Court (STF) began to decide in favor of governors and mayors, breaking with the tendency to judge in favor of the Union in federal disputes (Souza & Fontanelli, 2021).

  6. 6.

    Constitutional Amendment n. 93, from September 8, 2016, in addition to extending the DRU until 12/31/2023, increases from 20% to 30% the amount of federal tax revenue freely used for the payment of interest, charges and amortization of public debt (SALVADOR, 2020).

  7. 7.

    Dilma Rousseff’s impeachment petition, prepared by lawyers Hélio Bicudo, Miguel Reale Júnior, and Janaína Paschoal, was accepted by the president of the Chamber of Deputies, Eduardo Cunha. Dilma was unfairly accused of committing a crime of responsibility for issuing credit opening decrees without the approval of Congress and for “fiscal pedaling,” that is, the delay in the transfer of funds to Caixa Econômica Federal, Banco do Brasil, the National Bank for Economic and Social Development (BNDES), and the Severance Indemnity Fund (FGTS) for the payment of social programs such as the Family Allowance Program and My House, My Life, social benefits such as salary allowance and unemployment insurance, and agricultural subsidies.

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Correspondence to Carlos Eduardo Santos Pinho .

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Pinho, C.E.S. (2023). The Institutional Construction of Post-1988 Austerity. In: Fleury, S. (eds) Social Policy Dismantling and De-democratization in Brazil. Societies and Political Orders in Transition. Springer, Cham. https://doi.org/10.1007/978-3-031-35110-5_2

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