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Visiting professor analyzes Brazilian political climate

| Tuesday, September 2, 2014

As Brazil prepares for its Oct. 5 presidential election, the Kellogg Institute welcomed Marcus Melo yesterday, professor of political science at the Federal University of Pernambuco in Brazil, to discuss his preliminary analysis of the country’s increasingly visible popular political discontent.

“My point is that Brazil seems to be at the verge of something important — there’s something big going on here,” Melo said. “There’s this massive extractive capacity in the political system here, and this has generated all sorts of reactions.”

Melo focused his discussion on one particular reaction, “the rise of [the citizen as a] dissatisfied or disgruntled customer.”

Presidential hopefuls blame Brazil’s social unrest at least in part on current institutions, but other factors like public attitude contribute to the changing political landscape, Melo said.

“Political malaise in Brazil is not primarily a problem of dysfunctional institutions, although there is clearly some institutional sources of frustration,” he said. “There are also a number of factors that are non-institutional … [which] should require more attention than the literature or even the public discussion has recognized.”

“Civic cynicism is, at the bottom, a root cause of much of the discontent in Brazil,” Melo said.  “These days, we find taxi drivers talking about taxes being very high, and that was completely unheard of in Brazil … and now, this is pretty common.”

Melo described how, in more than 800 cities across the country, illuminated signs outside of businesses show current levels of taxation, which has in a sense translated the issue of taxes into the language of the people.

“There is this thought that Brazil has incredibly high prices, everything has outrageous prices, so everybody talks about that — so they don’t talk about taxes, you know? But they talk about the prices being too high,” he said.

When taxes are interpreted as prices, they suddenly enter into everyday conversation, Melo said. The coalitions behind the taxes have piqued public interest too — governmental corruption is second only to healthcare as a concern of the average citizen, although increased government spending has led to social improvement, he said.

“All the social spending categories have been growing at almost 3 percent a year,” Melo said. This has generated “very impressive outcomes in terms of reducing inequality and poverty. … In fact, social spending has never been at the current level, meaning the poor have never had it so good in terms of transfers and so on.”

Brazil is witnessing the emergence of “a new fiscal, social contract where people would be prepared to be taxed in exchange for services,” Melo said, but the current exchange rate is highly unpalatable. Brazil already has “a tax burden higher than the U.S., closer to [that of] the U.K.,” but the government continues to raise taxes, he said.

“I personally predict that there will be, for the first time, massive low turnout [at the upcoming election],” Melo said. “I personally know people, who have always voted, who have said, ‘This time, I will not vote.’”

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