Abstract
Conventional wisdom asserts that Brazilian governors are extraordinarily powerful—even more powerful than any national president. In the late 1990s and early 2000s, each of Brazil’s states had set up independent regulatory agencies. These agencies play a crucial role in the Brazilian administrative state in the wake of the privatization of utilities and of roads. They are mandated to set tariffs, set standards, monitor compliance to regulatory rules, and grant permissions and concessions. They represent important potential constraints to executive branch discretion. The degree of autonomy these agencies possess varies from state to state. This raises a puzzle for theories of Brazilian politics and a good test of principal-agent theories of bureaucratic delegation: If governors’ power is truly constant across Brazil’s states, we should not see variation in bureaucratic autonomy. In fact, we should have seen resistance to agency autonomy in each and every state, that is, we expect fairly low and constant degrees of delegation of power to regulatory agencies.
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Notes
These themes are also highly relevant for the discussion of the emergence of an independent judiciary discussed in chapter 3. See, for example, Keith E. Whittington, “Legislative Sanctions and the Strategic Environment of Judicial Review,” International Journal of Constitutional Law 1 (3) (2003); Georg Vanberg, “Establishing and Maintaining Judicial Independence,” in The Oxford Handbook of Law and Politics, ed. Keith E. Whittington and Daniel Kelemen (Oxford: Oxford University Press, 2008);
R. Chavez, J. Ferejohn, and B. Weingast, “A Theory of the Politically Independent Judiciary” (paper presented at the Annual Meeting of the American Political Science Association, Philadelphia, 2003);
J. M. Ramseyer and E. Rasmusen, Measuring Judicial Independence: The Political Economy of Judging in Japan (Chicago: University of Chicago Press,2003).
A related argument builds on the notion of credibility. Independent institutions that result from great delegation reflect the degree to which the executive and or the legislative seek to bind their hands in order to acquire credibility. See B. Levy and P. Spiller, Regulations, Institutions and Commitment: Comparative Studies of Telecommunications (Cambridge: Cambridge University Press, 1996); P. Spiller and E. Tiller, “Decision Costs and the Strategic Design of Administrative Process and Judicial Review,” Journal of Legal Studies 26 (2) (1997); B. Mueller and C. Pereira, “Credibility and the Design of Regulatory Agencies in Brazil,” Brazilian Journal of Political Economy 22 (3) (2002). Thus by delegating powers to independent regulatory agencies or to central banks, the executive (or both) gains because by doing so it assures third parties (e.g., investors and market operators) that it will not be able to intervene in the market (lowering interest rates or administratively expropriating investors after privatization through lower tariffs). In this argument, delegation typically involves an intertemporal choice: By relinquishing short-term interests, political actors can benefit in the long run. Different degrees of credibility or reputational problems are expected to lead to different levels of delegation.
As Cheibub (2007) argues, chief executives are the formateur of coalitions and where they enjoy extensive powers the equilibrium outcomes in the coalition formation game is primarily dependent on the ability of the President to offer pork and portfolio participation to coalition partners. Other relevant factors affecting their equilibrium include the distribution of preferences in the policy space, the reversion outcome, and the expected future electoral chances of the other parties. J. Cheibub, Presidentialism, Parliamentarism and Democracy (Cambridge: Cambridge University Press, 2007).
Although governors are the dominant players at the subnational level, the same picture seems no longer accurate at the national level as used to be claimed by the “hyperpresidentialism” interpretation of Brazilian politics (F. L. Abrucio, Os Barões da Federação: Os Governadores e a redemocratização brasileira (São Paulo: Editora Hucitec, 2002). In fact, the national executive throughout most of the last decade has been able to have its agenda implemented by recentralizing the political game.
There is no evidence that state loyalties by legislators undermine party lines or create trouble for the executive (Jose A. Cheibub, A. Figueiredo, and F. Limongi, Presidential Agenda Power and Decision-Making in Presidential Regimes: Governors and Political Parties in the Brazilian Congress (Boston: American Political Science Association, 2002).
Given that the econometric exercises are based on 26–27 observations only, their results should be interpreted as suggestive, but far from definitive. However, the fact that we found significant results with so few observations is noteworthy and encouraging. The results are robust to the use of a Censored regression model (Tobit) to correct for estimation errors resulting from the fact that the data for autonomy is an index normalized between zero and one. See W. Greene, Econometric Analysis, 6th ed. (New Jersey: Prentice-Hall, 2008), 869–881.
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© 2013 Marcus André Melo and Carlos Pereira
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Melo, M.A., Pereira, C. (2013). Coalition Governments and Independent Regulatory Agencies in the Brazilian States. In: Making Brazil Work. Studies of the Americas. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137310842_5
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DOI: https://doi.org/10.1057/9781137310842_5
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