Corruption and Business in Brazil

It is well known that Brazil does not have a stellar ranking for clean business dealings.  Oftentimes, newcomers are confused by what seems to be obscure maneuvers.  The figure of the Brazilian expediter or “despachante” has an almost folkloric character.  If you want to renew your driver’s license, register a newly purchased property or get a customs release, you will probably meet and sometimes use the services of this expert.  Typically, the professional despachante is well versed in both the formal law as related to say customs but also, due to his day to day labor,  has friends and contacts that help move the process along.  Is this corruption?  Not usually, but you need to on the look out for questionable or dubious requests, as well as unreal promises.  The bureaucratic and patrimonial traditions inherited from the Portuguese and perfected over hundreds of years by the Brazilians are extremely sophisticated.  Convoluted and complex requirements, regulations and “catch-22s” abound.  In a traditional and person based, relationship based society, the despachante or expediter performs a valuable function.  As society modernizes and becomes more complex, the demands for equal treatment and transparency come into conflict with norms,  regulations, and instructions that initially set out to protect society but often resulted in the defense of specific groups, sometimes private, with their particular interests. The need to bend or break rules in this system opened the doors to opportunities for corrupt practices.

During the military governments, press censorship and the containment of civil society also contributed to untoward practices.  Dishonest deals could be made and often they would not come to light.  Currently, the past decade of economic stabilization and relatively rapid growth also created (some might say necessitated) new and irresistible demands to get things accomplished outside the strictures and formalities of the dense legal and bureaucratic systems.  Newly minted members of Congress and new entrants into the state bureaucracy seized opportunities with only the slightest of moral qualms and justifications.  Much money breeds much temptation.  This is not only a Brazilian problem and certainly seems to by equally present on Wall Street, especially in the absence of weak oversight.

Brazil’s institutional structure is improving gradually.  The growing middle class values fairness, openness and honest dealings.  So there is much frustration but also demands for improvements.  Does it happen overnight.  No it takes a long time and consistent work and pressure.  We sense we know where to go but perfection can be the enemy of the good.


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