Brazil’s Corruption Holds Back Economic Freedom

COMMENTARY International Economies

Brazil’s Corruption Holds Back Economic Freedom

Dec 5, 2012 1 min read

Former Research Fellow For Economic Freedom and Growth

James M. Roberts' primary responsibility was to edit the Rule of Law and Monetary Freedom sections of Index of Economic Freedom.

Fresh charges of corruption are shaking up the Workers Party of Brazilian President Dilma Rousseff, as The Wall Street Journalreported last week. Reforms are long overdue.

The most recent “Rosegate” scandal stems from official charges brought by the Federal Police (Brazil’s version of the FBI) after an investigation of the involvement of an aide to former President Luiz Inácio Lula da Silva in a cash-for-influence scheme. The investigation was prompted “because a government worker who said he had accepted around $50,000 to help a firm win a contract blew the whistle.”

Heritage’s 2012 Index of Economic Freedom reports that corruption is often an obstacle to investment in Brazil and hinders the daily operations of companies, both Brazilian and foreign-owned.

In 2010, corruption investigations of politicians from opposition and government-coalition parties resulted in prison sentences for two governors. Since then, even higher-profile scandals have come to light. Between June and September 2011, President Rousseff lost five cabinet-level officials. None face criminal charges, but four left after allegations of corruption were levied against them.

In November 2012, José Dirceu, Lula’s one-time chief of staff, was sentenced to nearly 11 years in prison after being convicted for a scheme to buy votes in Brazil’s legislature and other corruption charges.

Let’s hope that these prosecutions are a sign of stronger and more mature judicial institutions in Brazil that are committed to maintaining the rule of law for all rather than just protecting the powerful, the privileged, and the politically favored.

This piece originally appeared in The Daily Signal