Corruption in Brazil...

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Brazil has often been a bellwether of Latin American political currents. It exemplified French-style authoritarian positivism in the early 20th century, centrally planned industrialization in the 1960s and 1970s, and democracy in the 1980s. (It was not, however, one of the leading nations in the so-called free market reform wave of the 1990s). Lula’s demise is now strengthening the more radical left, which has been quick to blame what is happening on the President’s “betrayal” of his Marxist origins. The rest of the Latin American left is watching.

Widespread corruption in underdeveloped countries is a symptom of the cost of the law and the weakness of the legal framework. If laws are burdensome and costly to follow, and there is no reliable system for enforcing contracts, corruption becomes a sort of insurance policy. As legal scholar Richard Posner has written, “nepotism, clientelism, and bribery become substitutes for contract when the enforcement of contract is undependable”. Over an extended period of time, corruption becomes a culture.