From Brazil

with Vincent Bevins and guests


Vincent Bevins é colaborador do jornal britânico 'Financial Times' e correspondente no Brasil do 'Los Angeles Times'. Escrito em inglês, blog aborda principais acontecimentos do Brasil sob o olhar de um estrangeiro.



Corruption – it’s the private sector

Por Vincent Bevins


Corruption isn’t mostly about politicians. In its present form, it means that powerful companies dominate Brazil. Above, what corruption looks like.

In Brazil, one simple image of corruption is often dominant:  some politician, usually an overweight middle-aged man, grabs money from the public coffers, stuffs it into a big sack, and takes off to spend it in Miami or some tacky São Paulo nightclub. The politician gets rich, and the taxpayer gets poorer.

But this is an overwhelmingly one-sided view of what corruption is, as an excellent column from Kenneth Maxwell points out, and neglects the larger role that hugely profitable companies play in the schemes in order to screw over the Brazilian people.

[Este texto foi traduzido em Novembro de 2014. Para ler em Português, clique aqui.]

Corruption in its concrete form these days involves actors in the private sector, “free market” players, paying off public officials to avoid regulation, taxes, or get away with exploiting consumers, workers, and the public. These corporations are getting more out of it than the politicians, or they wouldn’t be doing it.

The recent spate of scandals to emerge – much bigger than the “mensalão” case dominating the country’s media for a decade – confirms this model of corruption. The R$500m “ISS Mafia” scandal allegedly involved public officials delivering favors in return for big payouts from construction companies and banks. The “Trensalão” involved foreign companies forming a cartel in a bid to provide horrid public transportation in São Paulo. And if we find out, as expected, that this World Cup was riddled with corruption, it will have been construction companies paying off politicians, who then allowed the corporations to get rich, trample on health and safety guidelines, perhaps leading to deaths, and maybe – just maybe – embarrass the country as they drag  their feet on stadium deadlines.

The simple rules of the market are proof that the private sector gets more out of this than the fat-cat politicians. Since these companies are maximizing profits, they wouldn’t be paying the bribes if they didn’t get more in return. The politician is the tool, or the part of the state dominated by economic power, and the company is the real winner.

Though slightly more complicated than a comic-book villain politician raiding the public purse, this is how corruption really affects our daily lives. If you want to see evidence of corruption in São Paulo, you can take a look at Paulo Maluf‘s bank accounts, sure. Or you can just walk around the city, and take in what it feels like to be in an urban environment where every square inch of public space was sold off to build a high-rise apartment building, where public transportation is an insult, and where you constantly are invited into one more godawful shopping mall.

This is not because some politician got rich. It’s because some corporation got to walk all over the city in exchange for a payout.

Or check your phone bill and your bank statement, and see how much you got screwed this time. Try calling them up, and see how eager they are to help. In this case, we have no evidence of direct ‘corruption’, but they do break all kinds of laws, and get away with it.

Of course, in “advanced” democracies like the United States, the “corruption” of the state works through legal channels. Corporations give untold sums to political campaigns, and the rest of us are left wondering afterwards if perhaps that will influence the way we are governed. But at the very least, this process is relatively transparent.

In Brazil, there is an ideological consequence to the over-simplified view of corruption, and it serves to reinforce a view that has been common amongst certain policymakers and undergraduate economics students since the 1980s. That is: that the state is bad, it always messes up or steals, and we need to get rid of it wherever possible. But looking at corruption in its real form could lead to something closer to the opposite conclusion. The government we vote for and pay taxes to can easily be dominated by private companies, who then go on to dominate us. We need the government to be strong, reliable, and responsive,  so they can hold the companies back.

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