Development Projects,Models of Capitalism,and Political Regimes in Brazil,1988–2021

The 1988 Constitution and the Promarket Reforms (1990–2002)

The 1988 Constitution constitutes the framework for the institutional architecture of citizenship and the democratic transformation of the state and society. It also creates a system of social protections inspired by the values that lie at the heart of the social welfare state (a model that is seen in past and present European social democracies). These protections include universality, social security, and the law as opposed to others such as focalization, social safety, and welfarism. Its fundamental traits include a highly decentralized system and a decision-making process that incorporates a federal system and a society organized around areas of political participation. This process creates new intergovernmental relations and changes the relationship between the state and social actors (Fagnani, 2017; Fleury, 2014).

The sociologist Florestan Fernandes offers a more skeptical analysis in his study of the political/institutional context behind the transition from authoritarianism to democracy. According to him, when the “New Republic” was being constructed, the dominance of the Partido do Movimento Democrático Brasileiro (Brazilian Democratic Movement—PMDB) was decisive regarding the adoption of an electoral college. It was in this way that it acted as a “party of order.” He further argues that the supremacy of the conservative parties (the Partido Democrático Social, the Partido da Frente Liberal, the Partido do Movimento Democrático Brasileiro, and the Partido Trabalhista Brasileiro) was geared toward carrying out the agenda of private interests. The 1987 constituent assembly that preceded the promulgation of the 1988 Constitution represented an unequal balance of power. Conservative parties dominated this assembly to the detriment of political groups that represented Brazilian workers (the Partido dos Trabalhadores, the Central Única dos Trabalhadores, and the Confederação Geral dos Trabalhadores). This conservative pact represented a shift toward an ultraconservative and counterrevolutionary orientation by the bourgeoisie that allowed it to exert its political power using authoritarian methods (Fernandes, 1989).

On the one hand, there was an effort at political redemocratization that included policies to reduce the social debt incurred as part of the authoritarian national developmentalism of the military dictatorship (1964–1985). On the other hand, Brazil’s weakened financial system, the foreign debt crisis, hyperinflation, and the haphazard way in which liberalizing policies were implemented limited the ability of the state to rectify the situation (Pinho, 2019; 2020). According to Fleury (2014: 22), “In other words, there were two concurrent movements going in opposite directions: one expressed by the macroeconomic adjustment measures and the other by demands for assuring social rights and institutionalizing the [welfare state].”

After the failure of various monetary stabilization plans implemented by the José Sarney government (1985–1989), the Fernando Collor de Mello government did not follow the logic of “coalition presidentialism.” Unable to navigate between the different fragmented political parties and interests that occupied Congress, officials in Collor de Mello’s government could not form the majority coalition that was necessary to govern effectively (Abranches, 2018). This experiment was an inauspicious and disastrous beginning to an era of promarket reforms and ill-fated monetary stabilization policies such as Collor Plans 1 and 2. These policies deprived many middle-class families of their savings and undermined the concept of private property (Pinho, 2019). At the cost of destabilizing Brazil’s bureaucracy, the Collor de Mello government carried out an administrative restructuring that involved the modernization of the state, economic adjustments, deregulation, privatization, and liberalization of the Brazilian economy. This restructuring led to the removal of 112,000 civil servants, including officials from lower levels in the public sector and those who held commissions and high-level advisory positions (Diniz and Boschi, 2014; Lima Jr., 2014).

The contradictions between neoliberalism and democracy became apparent during the Collor and Fernando Henrique Cardoso (1995–2002) governments. These contradictions were largely the result of dependence on the revision of provisional measures by Congress. These efforts were thwarted in September 2001, near the end of Cardoso’s second term, with the ratification of Constitutional Amendment 32/2001, which prevented the reintroduction of these measures within the same legislative session (a year). According to Pessanha (2002), during Cardoso’s two terms in office, 5,036 provisional measures were issued (65.9 per month) compared with 363 for Itamar Franco, 70 for Collor, and 22 for Sarney.

Cardoso relied on a political coalition that enabled him to “reform the state” with a managerial, entrepreneurial, and decentralized approach, seeking to overcome the bureaucracy of the civil service that was typical of the national developmentalism practiced by past governments such as that of Getúlio Vargas. He himself had been minister of the interior under Franco when the 1994 Real Plan for countering hyperinflation and ensuring macroeconomic stabilization was implemented. Under Cardoso, the government minimized the role of the state in the economy. In addition, it undertook administrative reforms that included more flexibility in economic stabilization policies, dismissal for lack of performance, an end to isonomy and the Uniform Administrative Law, and modification of the social security system. It even passed an amendment of the law on reelection (Boschi and Lima, 2002; Diniz and Boschi, 2014; Lima Jr., 2014).

Brazilian industrialists were negatively affected by these liberalizing reforms and appeared to be frustrated with the changes that they entailed, among them high interest rates, uncontrolled liberalization of the economy, the overvaluation of the real, the denationalization of many Brazilian industries, and deindustrialization. Two anchors were used to stabilize Brazil’s currency, the stock exchange and high exchange rates. The first anchor tied the real to the dollar. Constant assistance from the Central Bank was necessary to keep the real at an artificially low level, and assistance came at a high cost for the currency. The second anchor maintained exchange rates that were much higher than the global average, and this caused the federal public debt to increase exponentially. In order to compensate for the costs of implementing the Real Plan, large numbers of federal assets were privatized in places such as Vale do Rio Doce, and 40 percent of the federal assets in Petrobras were privatized, along with government stocks in Light São Paulo e Rio and all of the country’s telephone companies, petrochemical plants, and steelworks. The government ended up spending US$109 billion to cover recurrent costs and interest payments alone. When it eventually ran out of assets to sell, the expenses and interest payments continued to pile up (Araújo, 2017).

During the 1990s, the government adopted liberalizing measures that went hand in hand with the main ideology of the time: the financialization of the economy. This ideology imposed structural obstacles to industry, public investment, and the expansion of social policies. Integrating Brazil into a global financial system required not only opening up its economy but also reducing the amount of regulation of capital flows. This created the conditions for a mass accumulation of wealth that altered the behavior of bankers, entrepreneurs, and financial speculators alike. These liberalizing measures established an economic model that was favorable to the interests of the large banking corporations that had lost their inflationary profits as a result of the Real Plan. When a drop in inflation led to monetary stabilization policies, one of the measures taken by the state was swapping the concept of “hyperinflation” for “hyperinterest” based on the Central Bank’s activities (Bruno, 2015). This measure was a violation of the 1988 Constitution, which stated in Article 192 (later removed) that real interest could not exceed 12 percent per year.

The government attached considerable importance to the credibility and confidence that were promoted by risk-rating agencies and international financial investors. This led to the private appropriation of public policies by large financial groups that reaped significant profits from the increase in the public debt. In 1999, a proposal to amend the constitution (PEC 53/1999, later known as Constitutional Amendment 40/2003) removed several paragraphs from Article 192 in the 1988 Constitution that regulated the national financial system. As a result, investment in government bonds that were paid for with taxpayer money suddenly became more profitable to intermediaries and financial agents. This sudden profitability of government bonds was detrimental to investment in public policies and infrastructure that sought to diversify Brazil’s production structure and boost the country’s economy (Bruno, 2015; Corrêa, Lemos, and Feijo, 2017; Dowbor, 2017).

Development Projects and State-Directed Capitalism in the New Democratic Developmentalism

In 2002, pressure from the global financial system, fears of an increase in inflation, noncompliance with contracts, and the rise in the public debt compelled Luiz Inácio Lula da Silva and the Partido dos Trabalhadores (Workers’ Party—PT) to release their “Letter to the Brazilian People” during the presidential election. In this document, they expressed their support for a macroeconomic policy that rested on three principles: a system of inflation targets, a floating exchange rate, and a primary surplus. Despite the high degree of macroeconomic instability that year, Lula won the election thanks to a coalition composed of workers, unions, social movements, and industrialists that were dissatisfied with the austerity policies implemented by Cardoso’s governments (Pinho, 2019; 2021).

Once he took office, President Lula adopted a restrained macroeconomic policy that proposed raising the goal of the primary surplus for the public sector from 3.75 percent in 2003 to 4.25 percent of Brazil’s gross domestic product (GDP). This was a testament to the hegemony of the three principles of the PT’s economic program, which became known as the tripé rígido (rigid tripod) (Ianoni, 2018). Two economic approaches clashed at the end of Lula’s first term: neoliberalism and developmentalism. By 2006 the latter had become hegemonic. Flexibility of macroeconomic policies was causally linked with a social developmentalist coalition based on the interests of the productive sector (industrialists, agribusiness owners, and workers), but this coalition did not represent a break with fiscal orthodoxy. Flexibility in the tripod reached its height during this period. Although it led to important changes in the economy, it proved ineffective in strengthening manufacturing industry in an age of globalization (Ianoni, 2018).

In the first decade of the twenty-first century, a developmentalist agenda was clearly beginning to take shape. This agenda was composed of directives identified in 2004–2006 and strengthened during Lula’s second term. The implementation of the 2004–2007 multiyear plan, “A Brazil for Everyone: Sustainable Growth, Employment, and Social Inclusion,” was based on a framework composed of a number of public policies: credit expansion, valuation of the minimum wage, increase of formal employment, wide-ranging social policies such as the Bolsa Família (or Family Stipend) and consigned credit, a more assertive industrial policy, environmentally sustainable growth and the reduction of regional disparities, and strengthening of the role in the economy of the Banco Nacional de Desenvolvimento Econômico e Social (National Bank for Economic and Social Development—BNDES). This coincided with the Growth Acceleration Plan of 2007 and the productive development policy of the following year. As far as fiscal policy was concerned, there was a withdrawal of investment by the Union (Brazil’s political/administrative apparatus) based on calculations of the primary surplus target. This same process began to be applied to planned investment in the Growth Acceleration Plan after July 2009. In 2007, despite its efforts to promote public investment, the Lula government also initiated a series of tax breaks to encourage private investment and develop a mass consumer market (Diniz, 2016).

In 2010 Lula’s chief of staff, Dilma Rousseff, was elected president. After an initial fiscal adjustment in 2011, she reinforced this developmentalist shift in the government’s macroeconomic policy with a vigorous fiscal policy that awarded large subsidies and tax breaks to Brazilian industrialists. With the goal of promoting more investment in the productive sector via industrialization policies (Boschi and Pinho, 2019a), she implemented the controversial new macroeconomic matrix, which sought to counter past rentier policies and reduce the negative impact on the economy of the 2008 global financial crisis. It was based on the following interventionist measures: reducing interest, relying heavily on the BNDES for reindustrialization, tax breaks, reforming the power sector, devaluating the real, monitoring capital flows, and promoting domestic production through government purchases. In contrast to Lula, Rousseff sought to eliminate the rentierism that viewed the public debt as simply an instrument for accumulating capital (Bastos, 2017; Carvalho, 2018; Pinho, 2019; Singer, 2018).

Significant changes in the global economic system following the 2008 financial crisis prevented a convergence of interests between different levels of Brazil’s bourgeoisie. Its economic policies during Dilma Rousseff’s first term had had mixed results and led to a cyclical slowdown of the economy and growing dissatisfaction among the country’s business owners, who complained about the large amount of invoicing they were required to produce in order to pay their workers. Thus, even though one of the goals of Rousseff’s macroeconomic policy was to support Brazilian businesses and entrepreneurs, it ended up having the opposite effect by turning them against the government’s interventionist policies (Bastos, 2017; Singer, 2018). As a result, a group of business owners formed a “single, bourgeois front” in 2013 that adopted a neoliberal platform and opposed the Rousseff government’s “developmentalist experiment” (Singer, 2018: 39). This platform promoted cuts in public spending and the reform of Brazil’s labor and welfare policies. The measures that were previously demanded by industrialists (such as reducing interest rates and payroll tax exemption) did not have the desired effect and instead created a profound distrust of Rousseff’s economic policies among business owners and entrepreneurs.

Shunned by Brazil’s industrialists, Rousseff dismissed the unconventional economist Guido Mantega from his post as minister of the interior and replaced him with the traditional economist Joaquim Levy in a desperate attempt to please the rentier coalition that had opposed her during her presidential campaign in 2014. After Mantega’s dismissal, she launched a bold fiscal and monetary adjustment that included cutting government spending and raising interest rates (Boschi and Pinho, 2019a; 2019b; Carvalho, 2018; Pinho, 2019; 2021; Singer, 2018). Despite this shift, many of Brazil’s unconventional economists saw Dilma Rousseff’s policies as not developmentalist enough because of their focus on private instead of public investment during a time when household debt and the acquisition of consumer durables had reached their peak. According to Laura Carvalho (2018), the 2011–2014 period marked the end of a cycle of expansion of public investment in infrastructure. It was replaced with an agenda of tax reductions, concessions, and other incentives for the private sector that caused a severe decline in revenue just as the annual cost of tax waivers (R$140 billion in 2010) rose to R$250 billion in 2014. Regardless of the tax breaks that were put in place during this period, the cost of these policies rose from R$45.5 billion in 2012 to R$74.8 billion in 2013 and R$101.3 billion in 2014, amounting to 1.8 percent of the GDP (Carvalho, 2018).

In addition to the collapse of its political/entrepreneurial support base, the turn toward a traditional economic orientation, the deterioration of public accounts, the loss of credibility of the government’s macroeconomic policies, and a combination of other causal mechanisms led to the end of the new democratic developmentalism, the expansion of austerity policies (Pinho, 2019), and a phase of democratic backsliding that is still under way. First, Rousseff’s fiscal adjustment came at the cost of her support base and generated unemployment and a decline in revenue in 2014–2015. Secondly, it made her presidency extremely unpopular in the eyes of many Brazilians. Thirdly, a Congress emerged from the 2014 elections that was the “most conservative of any in the post-1964 period” (O Estado de São Paulo, 2014). This shift to the right was followed by a decline in the number of seats (from 86 to 46) held by unions and their allies in Congress. The data collected by the Inter-Union Department for Congressional Assistance show that the Congress elected in 2014 reflected “a party shakeup and a shift toward a liberal economic and socially conservative orientation that represents a step back when it comes to human rights and environmental issues” (DIAP, 2014: 13).

Fourthly, Congress’s conservative orientation served to embolden an “ultraliberal counteraudience” that manifested itself in social media networks and in the impeachment protests against Dilma Rousseff. This “counteraudience” consisted of young liberal university students and professors who shared an identity centered on a radical defense of the free market as the foundation for social and economic organization. Although they were not socially oppressed, they nonetheless saw themselves as marginalized in the public sphere (Rocha, 2019).

Lastly, the implementation of the Lava Jato (Car Wash) operation, an investigation of corruption launched by the Federal Police in Rio de Janeiro in 2014, had catastrophic effects on the economy. It disrupted industrial policies that sought to strengthen production chains relating to oil, gas, infrastructure, and shipbuilding. It also created an opportunity for many officials to practice a “justicialism of exception” (Boschi and Pinho, 2019a: 305)— the collusion of politics and justice previously seen in the authoritarian policies of Juan Perón in Argentina during the 1940s and 1950s. This economic downturn had serious effects on Petrobras and Pre-Salt operations in Brazil and their ability to attract global investors. It also had a negative impact on the creation of parafiscal resources used to finance Brazil’s educational, scientific, and technological infrastructure (Bastos, 2017).

The 2016 Coup, Austerity, and Democratic Decay

In line with contemporary democratic political theory, Wanderley Guilherme dos Santos (2017: 180) describes the Brazilian “parliamentary coup” as a tacit agreement between officials in Brazil’s legislative and judicial systems. It involved systematically sabotaging presidential actions in order to disrupt income distribution policies and create a “coalition that would support a conservative power grab.” After Rousseff’s impeachment, Brazil went through an unprecedented process of destabilization with regard to constitutionally protected social rights, the radicalization of neoliberal reforms from the 1990s, and the resurgence of authoritarianism in the government (Boschi and Pinho, 2019a; 2019b; Fleury and Pinho, 2019; Pinho, 2021).

In carrying out the PMDB’s austerity program, Michel Temer gained approval for his labor reforms even when they interfered with his own reforms of Brazil’s welfare state. They created disruptions of regulatory institutions with regard to labor and the implementation of CLT/1943 and Constitutional Amendment 95/2016, compelling policy makers to pursue drastic budget cuts and criminalize social policies by capping public primary spending. The fluctuation for this spending was set at 20 years according to the inflation index used at the time, and the result was a reduction in Brazil’s budget per capita. This emergency measure was a clear violation of Article 6 of Chapter 2 of the 1988 Constitution, which states that education, health, work, transport, security, welfare, food, housing, leisure, maternity and child protection, and aid to the poor are social rights that must be protected.

According to a study conducted by the Instituto de Pesquisa Econômica Aplicada (Institute for Applied Economic Research—IPEA), during the first year in which these policies were implemented the new fiscal regime allotted only R$79 billion instead of the usual R$85 billion necessary to sustain Brazil’s social protection policies—an 8 percent reduction. At this rate, the cuts in the financing of those policies by 2036 will amount to 54 percent, around R$868 billion (Paiva et al., 2016). In addition to ignoring past countercyclical policies aimed at bolstering public investment and aggregated demand, these austerity measures were put in place during a period (2015–2016) that was witnessing a severe recession. The GDP declined by 7.2 percent (Valor Econômico, 2017) and then suffered a slow recovery. During the first year of Jair Bolsonaro’s term, the number of people waiting for support from the Bolsa Família rose from zero to 494,229 families (O Globo, 2020). This sudden increase was part of a pattern that has intensified to this day. After a cycle (2003–2014) of growth and social inclusion, these austerity policies represented a shift toward the radical liberal/traditional policies typical of the Old Republic (1889–1930).

Jair Bolsonaro waged a radicalized electoral campaign that was based on fake news and an ambiguous political platform. He came to power with the aid of “epistemic communities in support of fiscal austerity” (Pinho, 2021)—a powerful liberal/conservative coalition composed of media oligopolies, agribusiness owners, industrialists, traditional economists, liberal organizations, and sections of the middle and upper classes that had helped impeach Dilma Rousseff. Bolsonaro awarded considerable decision-making powers to his minister of the economy, Paulo Guedes, who had a doctorate from the University of Chicago and was one of the economists who supported Augusto Pinochet’s austerity policies in Chile during the country’s military dictatorship (1973–1990).

Despite Bolsonaro’s inability to coordinate and manage a congressional majority, his welfare reforms were approved thanks to the support of Congress in establishing and negotiating the country’s economic policy. These reforms raised the contribution time and minimum age and reduced welfare benefits to the minimal thresholds established by the government. Thus the austerity agenda of the Bolsonaro government united the political/economic elites and served as a warning to the financial market that fiscal balance and cuts in public spending would be necessary to save the economy. During the third year of a turbulent term that witnessed the catastrophic management of the COVID-19 pandemic and a massive drop in his popularity, Bolsonaro became a prisoner of the Centrão (Core), a bloc of self-interested political parties and politicians lacking any clear ideological program or agenda. Made up of congresspeople whose only desire was for political positions, public funds, and amendments, it has supported every Brazilian government since redemocratization regardless of political orientation.

In terms of the principle of including participatory practices in public policy making, this framework is contradictory to that of the new democratic developmentalism. During the period between 2002 and 2010, modes of interaction between the state and society were established that encouraged the democratization of public policies and promoted social participation as a method for managing areas such as social protection, infrastructure, the environment, and economic development (IPEA, 2012: 3). Participatory and deliberative practices coincided with the emergence of new actors in the management of public policies. This combination enhanced political representation and strengthened Brazil’s democratic system (Pogrebinschi and Santos, 2011). In contrast to the state’s tradition of bureaucratic isolation (Nunes, 2003), the Lula government established a dialogue with civil society, unions, and social movements, and this dialogue intensified under the PT governments. Despite Rousseff’s centralizing tendencies, preference for isolation, and distaste for negotiations, there was more dialogue under Rousseff than under Temer. Temer’s government did not establish the mechanisms with which to consult civil society regarding the implementation of its austerity measures.

The decline of participatory policies began with the congressional resistance to Decree 8,243 of May 23, 2014 (Miguel, 2019), which established the National Policy for Social Participation “with the goal of strengthening and defining democratic mechanisms and institutions and [encouraging] joint action between the federal civil service and civil society” (Presidência da República, 2014). In a decision that characterized his first 100 days in office, Bolsonaro issued Decree 9,759/2019, which abolished the managing councils, participatory institutions, and conferences that previously had helped formulate public policies. However, the Supreme Court formed a majority to suspend the decree that extinguishes councils (Congresso em Foco, 2019).

This suggests that Jair Bolsonaro’s election was part of a worldwide phenomenon characterized by the emergence of autocratic leaders who seek to undermine democratic institutions from within. However, while individual rights continue to be respected to a degree, citizens/constituents of this type of political system suffer a considerable decline in the amount of influence they can exert on public policies. Social inequality can have an impact on the way a democracy functions (Miguel, 2014). Bolsonaro’s radical constituents view Brazil’s military dictatorship and Institutional Act 5 (issued to solidify the military’s position in the government through the repression of political rights) with nostalgia. They also show a clear disdain for democratic institutions such as Congress, the Supreme Court, and the Superior Electoral Court. Bolsonaro himself has tried to undermine these institutions through private means. He has also infringed upon the rights of religious and ethnic minorities. His actions are characteristic of an “illiberal democracy,” a democracy without rights (Mounk, 2019). The state under Bolsonaro distanced itself from the sociologist Peter Evans’s (2014) “twenty-first century developmentalist state,” in which deliberative and participatory institutions are constructed while allowing business interests to act independently.

The question of the causal mechanisms that link austerity policies with the recent decline in Brazilian democracy requires a complex response. The goal here is to explore the historically comprehensive relationship between political regimes, coalitions, and public policies based on the following factors:

1. The decision of the defeated Partido da Social Democracia Brasileira (Brazilian Social Democracy Party—PSDB) candidate Aécio Neves to challenge the 2014 election results. Neves, who was supported by the president of Brazil’s Chamber of Deputies, Eduardo Cunha, pursued a “bombshell agenda” that included outsourcing labor, making it difficult for the government to implement its fiscal adjustments, and approving the petition to impeach Dilma Rousseff written by the legal experts Janaina Paschoal and Miguel Reale Jr. This hostile legislative environment served to exacerbate the political instability and gridlock that already existed within Congress.

2. The election in 2014 of a Congress with the most conservative orientation of any Congress in the post-1964 period and the election in 2018 of a Congress with a similar conservative orientation. Both Congresses had promarket platforms and were composed of evangelicals, landowners, arms manufacturers, and elements of the extreme right that opposed human rights, environmental policies, women, black Brazilians, quilombolas (descendants of Brazilian slaves who had sought refuge in fugitive slave communities known as quilombos), indigenous peoples, the LGBTQIA+ community, universal social policies, and labor regulation. The dominance of right-wing actors in Brazil’s Congress coincided with a sharp decline in the number of seats held by unions and lobbyists who represented the interests of Brazilian workers.

3. Dilma Rousseff’s granting of substantial subsidies and tax breaks to business. These policies ruined the public accounts, failed to generate new jobs, and led many Brazilians to lose faith in macroeconomic policy. As a result, Michel Temer, Jair Bolsonaro, and his minister of the economy, Paulo Guedes, argued that austerity was the only path forward in order for the Brazilian state to avoid fiscal insolvency. These austerity measures reduced the size of public banks such as the Banco do Brasil, the Caixa Econômica Federal, and the BNDES and limited investment in infrastructure.

4. The shift toward neoliberal policies during Dilma Rousseff’s second term, a desperate attempt to gain the support of business and attract financial capital that led to cuts in public policies, a rise in unemployment, a drop in revenue, and growing discontent among the poorer sectors of the electorate. These factors shook the foundations of Rousseff’s popularity and cost her her support base. Shattered hopes and disillusionment among the electorate caused many Brazilians to cast their votes for Bolsonaro. A proponent of violent rhetoric against political parties, traditional politicians, the “communist left,” and representative democracy, he promised to resist the dissolution of the traditional family, restore the economy, and preserve the free market, meritocracy, and private property.

5. The failure of the developmentalist governments to propose any effective public policies for reducing violence and improving public security. Bolsonaro filled this void with a demagogic discourse that revealed his intent to repress his political enemies, persecute religious and ethnic minorities, and rebuild Brazil’s arsenal.

6. The Petrobras corruption scandal, which in addition to disrupting the production chain for petroleum, gas, civil engineering, infrastructure, shipbuilding, and the GDP delegitimized the state’s policies for the productive sector and its role as a provider of public services. This helped in spreading an antipolitics rhetoric promoting the idea that the market was not only efficient and virtuous but also immune to corruption.

7. The suppression of Luiz Inácio Lula da Silva’s political rights, which had a considerable impact on the results and legitimacy of the 2018 presidential election. Banning Lula from independently launching his candidacy was a clear violation of republican rules for democratic electoral competition. Cleared of all Lava Jato accusations, Lula won the 2022 election against Bolsonaro but in the face of several antidemocratic acts, vigils by Bolsonaro supporters in front of armed forces barracks calling for a military coup, roadblocks across the country, vandalism, and use of firearms by scammers.

8. The widespread exposure in the digital media of the 2013 protests, the diverse platform of which stemmed as much from their opposition to the government’s raising bus fares as from their effort to fight corruption. The mobilization of the upper and middle classes in 2015–2016 in favor of the Lava Jato operation, the impeachment of Dilma Rousseff, and the involvement of the military demonstrate the seriousness of the political crisis and the significance of the increase in conservatism in the country. The radical protests (many of them attended by Bolsonaro himself) supporting Institutional Act 5, military intervention, closing down Congress and the Supreme Court, and eliminating the Superior Electoral Court and the electoral court system took place during the pandemic and were characterized by their aggression toward health officials, journalists, and the press.

9. The crucial role of the military in undermining Lula’s candidacy, helping Bolsonaro get elected, and occupying important posts in his government. It led to the broad militarization of ministries and key positions in the public bureaucracy and state enterprises. The appointment of a general, General Walter Braga Netto, as chief of staff had not happened since Golbery do Couto e Silva left the post in 1981 during the military dictatorship. For the first time since redemocratization, the armed forces are extending their role in Brazil’s political and administrative institutions, actively attacking the various branches of the government), praising the 1964 military dictatorship, and delivering cryptic speeches against the democratic regime (Folha de São Paulo, 2021). General Eduardo Villas Bôas had a fundamental role in this process as commander of the army (2015–2019). On the eve of the habeas corpus ruling that allowed Lula to run for president, he threatened the Supreme Court on Twitter. Soon after this incident, he was sent to prison for 580 days. Despite this, a period of veiled military activism followed the publication of the final report of the National Truth Commission, its main figure being a general, Sérgio Etchegoyen, the leader of the recently created Gabinete de Segurança Institucional (Cabinet of Institutional Security—GSI). Bolsonaro himself recognized the fundamental role Villas Bôas had played in his victory, and the general considered Bolsonaro’s election the beginning of a new era.

10. The central role of the mainstream press in the emphatic defense of austerity reforms and the criminalization of political activity. This biased coverage heightened the disdain for political representation that allowed Bolsonaro to assume power. In an article that served as his mea culpa, Pedro Cafardo (2020), the former executive editor of Valor Econômico, argued that the elites (judges, attorney generals, industrialists, agribusiness owners, financial investors, and churches) knew what electing Bolsonaro would mean when they went to the polls. According to him, journalists could not “escape their responsibilities” and “should have looked more closely at what they wrote in the recent past.”

11. The pressure that was brought to bear on the rule of law and the legal process and the systematic attempts of Bolsonaro to undermine the independence of executive institutions of control such as the Federal Police, the Public Prosecutor’s Office, the judiciary, the Attorney General’s Office, and the Solicitor General’s Office were intended to save members of his family involved in corruption scandals or connected to militias (the armed groups formed paralegally by Brazilian police officers and others to fight drug trafficking and maintain order).

The recent efforts to derail Brazil’s democracy are due as much to politics as to a perspective centered on development and a model of predatory capitalism that destroys social rights. They are motivated by a reactionary ideology that seeks to dismantle institutions built during the post-1988 period. The powerful coalition that supports Bolsonaro is made up of sectors of Brazil’s industrialists, agribusiness owners, arms manufacturers, and evangelical churches. One of its leaders is the media owner Edir Macedo, ranked 177 on Forbes’s (2019: 110) list of billionaires with a net worth of R$1.41 billion. Bolsonaro’s supporters look down on minority rights, oppose state regulation, and adhere to a ultraliberal capitalism that represses social rights. This is evident in the phrase used by the former environment minister Ricardo Salles during a ministerial meeting on April 22, 2020 (Folha de São Paulo, 2020), “[We should] keep taking advantage of this unique opportunity [and] continue to change and simplify every rule and regulation [we come across].”

Here one can see the synergy that exists between moral conservatism, reactionary politics, economic ultraliberalism, political authoritarianism, and disdain for democratic institutions. The empirical data systematized in this article support the following conclusions with regard to the Bolsonaro government: As seen through his words and deeds, Bolsonaro refuses to play by the democratic rules of the game. He denies the legitimacy of his rivals. He encourages and is flippant about the use of violence to goad his captive electorate into attacking his opponents and others who defend democracy, and he is willing to curtail the civil liberties of his adversaries, especially those in the press (Levitsky and Ziblatt, 2018). The challenge that confronts Brazilians today is uniting the democratic forces in defense of a young and embattled Brazilian democracy.

Final Thoughts

Combining a theoretical/conceptual model with an empirical analysis, I have examined the causes of the various phases of development projects and models of capitalism and their relationship to events that had a significant impact on Brazil’s political regime. The 2016 coup and Bolsonaro’s election as president inaugurated a model of ultraliberal capitalism that reduces public participation in the development of policy and constantly attacks democratic institutions. This reality contradicts the established argument of various scholars that there was no chance of an institutional crisis in Brazil—that “Brazil’s democracy had been consolidated” (Bresser-Pereira, 2014: 374). The evidence in this study points to the idea that Brazil is undergoing profound institutional change and an abrupt transition from a model of coordinated, democratic, and regulated capitalism to a model of capitalism that is more radical, ultraliberal, antidemocratic, and intent on destroying social rights (Boschi and Pinho, 2019a). The new model of capitalism is isolated from economic and political institutions and has not the slightest regard for democracy and its representative, participatory, and governing institutions. The terms “ultraliberal,” “antidemocratic,” and “radical” in this article are observations based on an analytic reinterpretation the purpose of which is to bring to light the authoritarian features of the government’s current economic measures that are less well known to the Brazilian public.

The model of capitalism under Bolsonaro qualifies as ultraliberal capitalism in that it seeks to intensify a neoliberal agenda that dates from the 1990s. A case in point is the new fiscal regime, an emergency measure that is unlike anything seen elsewhere in the world today. It is antidemocratic in that it refuses to allow public scrutiny of the decision making that underlies its austerity measures and disregards constitutional principles of social participation and the monitoring of public policies. It is radical in the haste, depth, and reach with which it has been carried out by political and economic elites with ties to globalized financial interests. This socially destructive model of capitalism is based on state regulation that either violates or eliminates constitutional protections.

In contrast, the privatizing governments were heavily interventionist and made significant contributions toward increasing the national debt. Through the broad use of provisional measures, the Collor de Mello and Cardoso governments sought to bury the national-developmentalist and institutional legacy of the Vargas era. By pursuing these promarket reforms, they only deepened the contradictions between capitalism and democracy. The Lula da Silva and Dilma Rousseff governments not only oversaw a process of unprecedented economic growth that included more opportunities for social inclusion, expansion of the domestic market, and mass consumption but also formed a coalition of the most archaic, parasitic, and conservative segments of Brazil’s political economy that initiated the construction of a national popular democracy. After having practically put an end to extreme poverty in Brazil and allowing the country to reach a prominent position on the international stage, this model of development and its project for national development were discarded after the 2016 coup. The rise of Bolsonaro included austerity measures, a decline in social indicators (such as unemployment, extreme poverty, and hunger), the militarization of state institutions, the dismantling of public policies that had a successful track record, and the vilification of democracy through systemic attacks on the freedom of the press and republican institutions.