Bernardo Mueller

Titles, Conflict, and Land Use: The Development of Property Rights and Land Reform on the Brazilian Amazon Frontier

The Amazon, the worlds largest rain forest, is the last frontier in Brazil. The settlement of large and small farmers, squatters, miners, and loggers in this frontier during the past thirty years has given rise to violent conflicts over land as well as environmental duress. Titles, Conflict, and Land Use examines the institutional development involved in the process of land use and ownership in the Amazon and shows how this phenomenon affects the behavior of the economic actors. It explores the way in which the absence of well-defined property rights in the Amazon has led to both economic and social problems, including lost investment opportunities, high costs in protecting claims, and violence. The relationship between land reform and violence is given special attention. The book offers an important application of the New Institutional Economics by examining a rare instance where institutional change can be empirically observed. This allows the authors to study property rights as they emerge and evolve and to analyze the effects of Amazon development on the economy. In doing so they illustrate well the point that often the evolution of economic institutions will not lead to efficient outcomes. This book will be important not only to economists but also to Latin Americanists, political scientists, anthropologists, and scholars in disciplines concerned with the environment. Lee Alston is Professor of Economics, University of Illinois, and Research Associate for the National Bureau of Economic Research. Gary Libecap is Professor of Economics and Law, University of Arizona, and Research Associate for the National Bureau of Economic Research. Bernardo Mueller is Assistant Professor, Universidade de Brasilia.

Strategic Behavior in a Coalition-Based Presidential System: Executive-Legislative Relations in the Budgetary Process in Brazil

In Brazil the executive has exclusive rights to initiate the annual budget. Legislators have the right to amend the bill; but only if those amendments are compatible with the multi-year budget plan elaborated by the executive as well as with the law on budgetary guidelines. Moreover, congress may not authorize expenditures that exceed the budgetary revenue. It is also the executive, who is entitled to determine which amendment will really be appropriated, as the appropriation is contingent on the availability of resources in the national treasury. This paper argues that those rules not only restrict congressional action, but also enable the president to preserve at low costs its coalition inside Congress. It shows strong evidence that the Brazilian President rewards those legislators who most vote for his interests by executing their individual amendments to the annual budget and, equally, punishes those who vote less by not executing their individual amendments.

THE COST OF GOVERNING Strategic Behavior of the President and Legislators in Brazil's Budgetary Process

Several characteristics of a political system have been identified as increasing the cost of governing, such as presidentialism, federalism, an open list with proportional representation, a multiparty system, and coalition governments. Although Brazil suffers from all of these “pathologies,” the authors argue that other characteristics of the Brazilian system have the opposite effect and allow high levels of governability at low cost. In particular, the authors examine the role of legislators’ amendments to the budget, which provide the executive a low-cost means of obtaining support. The authors provide evidence that the Brazilian president routinely uses his or her powers to reward and punish legislators for supporting or opposing his or her interests in Congress. Although legislators have a limited role in the budgetary process, that role can have important electoral consequences for their political careers.

A Model of Rural Conflict: Violence and Land Reform Policy in Brazil

In this paper we analyze the underlying determinants of rural land conflicts in Brazil involving squatters, landowners, the federal government, the courts and INCRA, the land reform agency. We present a model where squatters and landowners strategically choose to engage in violence to advance their aims. Landowners use violence as a means of increasing the likelihood of successful eviction of squatters, and squatters use violence to increase the probability that the farm will be expropriated in their favor as part of the government?s land reform program. We test the model?s predictions using state-level data for Brazil for 22 states from 1988 through 1995 that we have assembled. The tests reveal that the government?s land reform policy, which is based on expropriation and settlement projects, paradoxically may be encouraging both of the major antagonists to engage in more violence, rather than reducing conflicts. If true, the existing land reform policy should be reconsidered because it is in conflict with the government?s efforts to reduce violent land disputes.

Uma teoria da preponderância do Poder Executivo: o sistema de comissões no Legislativo brasileiro

The objective of the article is to analyze the Brazilian House committee system, using rational choice theories developed originally to analyze the U.S. Congress (distributive, informational and majority party). The article starts by noting that despite the preponderance of the Executive over the Legislative agenda, the committees do appear to play an active role in congressional decision-making. The existence and functioning of the committees is initially analyzed using the distributive theory. Although this theory did provide some explanation for the working of the committee system in Brazil, this was not deemed sufficient, therefore the paper turned to the informational theory. The Gilligan and Krehbiel model (1997) was adapted to the specificity of the Brazilian Congress, generating hypotheses that are tested using data from the legislatures of 1995 to 1998. The results of a probit analysis on the choice of whether or not to discharge a given committee provide empirical evidence that the committees do in fact have, at least in part, an informational role.

Property Rights and the State

Property rights determine the incentives for resource use. Property rights consist of the set of formal and informal rights to use and transfer resources. Property rights range from open access to a fully specified set of private rights. By open access we mean that anyone can use the asset regardless o fh ow their use affects the use of others. A full set of private rights consists of the following: 1) the right to use the asset in any manner that the user wishes, generall yw ith the caveat that such use does not interfere with someone else’s property right; 2) the right to exclude others from the use of the same asset; 3) the right to derive income from the asset; 4) the right to sell the asset; and 5) the right to bequeath the asset to someone of your choice. In between open access and private property rights are a host of commons arrangements. Commons arrangements differ from open access in several respects. Under a commons arrangement onl yas e lect group is allowed access to the asset and the use rights of individuals using the asset may be circumscribed. For example, a societal group, e.g., a village, trib eo rhomeowner’s association, may allow its members to place cattle i na common pasture but limit the number of cattle that any member may put on the commons. One rol eo f the state i st odefine, interpret and enforce property rights. Definintion of property rights is a legislative function of the state. Interpretation of property rights i sa judicia lf unction of the state. Enforcement of property rights i sap o lice function of the state. All three functions entail costs an df or this reason some rights may be left by the state as open access. Moreover, many assets have multiple dimensions an di t is costly for the state to define property rights over all valuable dimensions and costly for the state to enforce property rights over all dimensions. As such, some attributes may be either de jure or de facto left as open access. Individual sa nd groups have incentives to expropriate the use rights over attributes that the state leaves as open access. In many situations individuals or groups use violence as a strategy to capture property rights. From the vantage point of societies, violence is wasteful and can be a motivating force for the state to enforce property rights. Violence or threats of violence may also resul tw hen the state attempts to redistribute property rights.

Land, property rights and privatization in Brazil

The settlement of the Amazon has attracted considerable attention due to its environmental and economic consequences. It is, however, not an entirely new phenomena, but the last stage of a long process of frontier settlement which started in other regions almost 500 years ago. The section on privatization of land describes the historical process through which land was occupied in Brazil and identifies a pattern which has been repeated in each new frontier region involving the interrelationships between land prices, property rights and agricultural investment. This pattern has recurred in the Amazon frontier, whose settlement ever since the sixties has been directly influenced by governmental policy. Land policy in the Amazon examines governmental policy and some of its consequences with emphasis on the supply of property rights in land. As has been the case throughout Brazilian history, land policy in the Amazon has rarely achieved its objectives. This has occurred not only because of the difficulties in enforcing and monitoring policy, but also to a lack of understanding of the role of property rights and other forces which shape incentives for the use and disposal of land. Property Rights in the Amazon shows how the lack of secure property rights in land has been connected to many of the problems which have arisen throughout the settlement of the Amazon.

Political Institutions, Policymaking Processes and Policy Outcomes in Brazil

We found that the driving force behind policies in Brazil is the strong set of powers given to the President by the Constitution of 1988. To have strong powers does not mean unbridled powers. Several institutions constrain and check the power of the President, in particular the legislature, the judiciary, the public prosecutors, the auditing office, state governors and the Constitution itself. The electorate of Brazil holds the President accountable for economic growth, inflation and unemployment. Because of the electoral connection, and perhaps reputational effects, presidents in Brazil have a strong incentive to pursue stable fiscal and monetary policies as their first priority. At least for the past ten years, and particularly in the new administration of Lula, executive power has been aimed at pushing policy towards macro orthodoxy. Although orthodoxy may not lead to short-term growth, international financial markets provide additional incentives for discipline, as deviations are instantly punished, with unfavorable consequences that are readily recognized by the electorate. Achieving stable macro policies required constitutional amendments as well as considerable legislation. To attain their goals, the past administrations (Cardoso and Lula in particular) used their property rights over pork to trade for policy changes. The rationale for members of Congress to exchange votes on policy for pork is that the electorates reward or punish members of Congress based on the degree to which pork lands in their district. With the exception of the devaluation of 1999, macro policy has become more stable over time. We categorize macro policies in Brazil as `stable but adaptable. `

Regulatory governance in infrastructure industries: assessment and measurement of Brazilian regulators

The objective of this report is twofold: to provide a comprehensive assessment of the state of regulatory governance in infrastructure industries in Brazil and to suggest possible indicators for future monitoring. After the introduction, Section 2 sets up the analytical framework for the report, identifying key components of regulatory governance, namely, autonomy (political and financial), procedures for decision making, instruments (including personnel), and accountability. Section 3 assesses each of these components in practice, reporting the results of a survey with 21 regulatory agencies in Brazil, which was designed and implemented by the research team in 2005. Section 4 measures regulatory governance based on three related indexes, ranks the Brazilian regulators among themselves, and compares the proposed indexes with two other indicators available in the literature. Section 5 presents the conclusions.

A theory of executive dominance of congressional politics: the committee system in the Brazilian chamber of deputies

This article analyses the Brazilian Chamber of Deputies committee system using rational choice theories developed originally for the US Congress. We suggest that pure versions of these theories are unable to explain Brazilian committee politics, and point out the necessity of building a specific theory that takes into account key institutional characteristics which give the Brazilian Executive considerable power to control the legislative process to assure outcomes consistent with presidential preferences. We demonstrate that committees in Brazil operate to some degree as agents of the executive. For this reason, we call it the Theory of Executive Dominance. Bernardo Mueller is a member of the department of economics at the universidade de brasilia. Carlos Pereira is a member of the fiocruz foundation, cândido mendes university and visiting professor in the department of economics at the university of sao paulo Previous versions of this paper were presented at the 3rd Annual Conference of the Internationa...This article analyses the Brazilian Chamber of Deputies committee system using rational choice theories developed originally for the US Congress. We suggest that pure versions of these theories are unable to explain Brazilian committee politics, and point out the necessity of building a specific theory that takes into account key institutional characteristics which give the Brazilian Executive considerable power to control the legislative process to assure outcomes consistent with presidential preferences. We demonstrate that committees in Brazil operate to some degree as agents of the executive. For this reason, we call it the Theory of Executive Dominance. Bernardo Mueller is a member of the department of economics at the universidade de brasília. Carlos Pereira is a member of the fiocruz foundation, cândido mendes university and visiting professor in the department of economics at the university of são paulo Previous versions of this paper were presented at the 3rd Annual Conference of the International Society for the New Institutional Economics, Washington 16–18 September 1999 and at the XXIII Brazilian Social Science Association Annual Conference, Caxambu, 19–23 October 1999.