Competitive Federalism and Distributive Conflict in Democratic Brazil

Given the weakness of Brazil’s political parties, the fragmentation of the federal congress, and the historical influence of the governors, we should not expect much change in the highly decentralized configuration of Brazilian federalism. Despite the absence of political reform, or any other change in the political institutions of Brazilian democracy, President Fernando Henrique Cardoso (1994-2002) has engineered ad hoc and stopgap fiscal re-centralization. I argue that explaining this process requires moving beyond a focus on political institutions. This paper analyzes the politics of decentralization in Brazil as a process of distributive conflict between presidents and governors. I argue that this conflict is shaped by path dependent factors (enduring interjurisdictional rivalries) and it is played out in two arenas: the executive-legislative and intergovernmental (executive-governors). As a result of enabling legislation and presidential strategy during the 1990s, bargaining leverage shifted to the presidency before and during the Cardoso administration. This shift allowed Cardoso’s administration to exert notable controls over subnational fiscal policy. 1The evolution of Brazilian federalism has continued to create both possibilities an