Brazil is one of the largest federal states in the world and one of the oldest, dating from 1889. The country started off with a unitary central authority as a colony, and later as a monarchy when it became independent from Portugal in 1824. It was turned into a federation when it became a republic in 1889. Since then, Brazil has oscillated between centralising military dictators and authoritarian regimes, and decentralising liberal governments. When democracy was restored in 1985 after two decades of the last military dictatorship, Brazil became a federal republic under the constitution of 1988, the seventh since independence.
Empowerment of municipalities
Brazilian federalism is unique since it has recognised and included municipalities as integral entities of the federal structure. The municipalities are invested with some of the traditional powers usually granted to states in federalism. Brazil’s municipalities enjoy independent and coequal status unlike in other federal countries where the states control the local bodies.
Brazil is a federation of 26 states and the 5,564 municipalities plus the federal district of Brasilia. The states have their own constitution while the municipalities have ‘organic laws’.
The municipalities, whose populations range from a few thousand to many millions, have considerable autonomous powers and resources. The World Bank in its 1990 report ‘The new fiscal federalism in Brazil’ has commented that municipalities have more money than they need while the federal government’s revenues fall short of its spending needs. The municipalities are empowered to take decisions in many important areas, such as territorial management, land development, environment, local taxation and industrialisation.
How federalism works
Brazil is an example of a more ‘robust federalism’ in comparison to other federal countries of the world in the extent of decentralisation. Few federal countries give such a large share of the total tax revenue to the states and municipalities. The state governors have lot of power and clout vis-a vis the federal government in certain tax and expenditure functions. After having suffered from the centralised military dictatorship in the past, those who drafted the 1988 constitution seems to have opted for decentralisation which creates more powerful local leaders to balance any strong and ambitious president. Governors and mayors of wealthy states and cities compete with the federal president for power and resources. In a reversal of power in most places, Itamar Franco, who was President of Brazil in 1992-95, later became the governor of the state of Minas Gerais in 1999-2003 and kept challenging his successor in Brasilia.
A larger objective of such greater decentralisation is to bring the government closer to the people. This has served well the young democracy of Brazil.
The Brazilian structure is often described as ‘cooperative Federalism’ since the management of the distribution of powers and responsibilities of the federal system is based on the assumption of cooperation between the three federal entities: central, state and municipal authorities.
The bicameral national legislature – Federal Senate (the upper house) and the Chamber of Deputies (the lower house) – reflects the federal spirit of the constitution. Each state, big or small, is represented equally in the Federal Senate by three senators elected by popular ballot for a term of eight years directly from the states. The number of seats in the Chamber of Deputies is distributed according to the population in each state. In order to balance the larger and smaller states there is a stipulation that the states should have a minimum of eight deputies and ceiling of 70. In India every state gets representation in the Lok Sabha in proportion to its population as per census figures and there is no ceiling on number of representatives from a particular state.
Perhaps Brazil can afford to be decentralised since its population of 200 million is largely homogenus – they speak just one language, follow one religion and the country does not face any centrifugal forces.
Although the Brazilian federal system has served the country well so far, it is still a work in progress and in just 30 years of existence, is far from mature. There are many challenges and flaws in the system.
- The excessive emphasis on decentralisation in the model of cooperative federalism without defined distribution of responsibilities is a source of tensions. When states or municipalities do not carry out their responsibilities, there is no adequate mechanism for the federal authorities to remedy the situation.
- The structure of the revenue-sharing system, as happens in India, is unbalanced and is frequently challenged. In any case it has not helped adequately to address regional and income disparities.
- Because of the huge clout provided to states and municipalities, political parties are fragmented: the national parties have become like a federation of state parties and the Congress ‘an assembly of states’. Federal legislators give more importance to local interests than national concerns, hobbling and complicating the federal government’s functioning and priorities.
Relevance of Brazilian experience for India
India does not have the luxury of being as decentralised as Brazil’s federation because of our vast diversity in languages, religions, ethnic groups and more importantly, history of separatist tendencies. Prime Minister Modi, who advocates a ‘cooperative federalism’ can learn from the downside of Brazil’s excessive decentralisation which has lead to a concentration of powers in the hands of provincial and local leaders leading to a fractured national outlook.
More positively, India can study the empowerment of Brazilian municipalities and especially the “participatory budgeting” system successfully pioneered by the municipality of Porto Alegre, in southern Brazil, which Aam Admi party’s Arvind Kejriwal alluded to while espousing the idea of Swaraj or self-rule. Kejriwal spoke about his belief in devolution of power to the common man through “mohalla sabhas” that will be legally empowered to take decisions and gave the example of Porto Alegre to illustrate the workability of his idea. About 50, 000 of the total population of 1.5 million people in Porto Alegre, participate in the budget allocation of the $200 million annual fund for construction and services. Citizen prioritise projects and decide how public money is to be spent. This system has been praised by the World Bank and the Workers Party has won three consecutive municipal elections in Porto Alegre, which stands out against a record of well-known electoral failures of comparable leftist municipal administrations across Latin America.
The Indian Ministry of External affairs can learn from the Brazilian foreign ministry’s interaction with regional authorities. The ministry has six offices in the major cities and regions of Brazil, which act as two-way communication points with state and municipal authorities as well as with civil society. These are headed mostly by ambassador-level officers, who seek the views of local leaders on issues of regional integration such as Mercosur and external trade. India’s Ministry of External Affairs has recently expanded the number of Passport Offices from the previous 37 to 77, but these are headed by junior level officers and are unable to serve a larger bridging role as the Brazilian diplomats do.
In the context of the agenda of cooperative federalism advocated by PM Modi, it would be worthwhile for India to study the Brazilian experience and adopt those features which are suitable for Indian conditions.
Ambassador Viswanathan is Distinguished Fellow, Latin America Studies, Gateway House. He is the former Indian Ambassador to Argentina, Uruguay, Paraguay and Venezuela, and Consul General in Sao Paulo.
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