CPI increases cost of supporting Lira – 04/23/2023 – Marcus Melo

A well-established empirical regularity in political science is that there is a negativity bias in political life. Political actors are less concerned with claiming credit for beneficial actions than with denying blame for events with negative consequences. Bias is associated with greater salience of costs in relation to benefits in individual decision-making processes.

In a recent experimental study, Joshua Robison demonstrated that blame-shifting strategies are much less effective when counter narratives are offered for negative events, compared with cases where they are not offered, controlling for the degree of credibility of the sources (and whether they are independent or partisan).

These findings are useful for thinking about the current government. Lula began his mandate anticipating the transfer, to the president of the Central Bank, of responsibility for the expected poor performance of the economy, due to the very unfavorable context both from the domestic and international fiscal point of view (due to the increase in fuel and food prices, interest rates and others). At first glance, the strategy is counterintuitive: after all, the expected sequence of the political spending cycle is first austerity, then expansion. This inversion is due to factors such as the small margin of victory in the elections, the polarization and the size of the opposition. People fear a popular uprising if the economy collapses. Dilma’s experience of austerity and that of several Latin American presidents —especially the economic collapse of Alberto Fernández, in Argentina— weighs heavily.

Lula gained an exceptional political bonus: the assault on the Praça dos Três Poderes, which created incentives for him to double his bet on the international level. As I have argued here, Lula expected to pick the easy fruits to pick in foreign policy and assumed that the game would already be won on the domestic front. The situation has become very complicated on both fronts: instead of assigning blame, Lula is now having to explain himself.

The release of images of the invasion of the presidential palace turned the bonus into a liability and strongly impacted the “Blame Game”, in Christopher Hood’s expression. The first effect is that they provided an opportunity for the opposition to mobilize a counterargument. The CPI will be the arena where the blame game will take place. The second effect is that the relative value of Arthur Lira’s superblock support has risen a lot: what is the price to be paid for it to control the CPI in favor of the government?

None of this is surprising: Lira offered a legislative shield to Bolsonaro in a similarly vulnerable situation. Winter came sooner than expected.

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