Less concentration of power in local elites increases development, says study – 01/27/2024 – Market

Reducing the concentration of political power in the hands of local elites plays an important role in boosting long-term economic development, points out a study carried out based on historical data from Brazilian municipalities.

Cities previously dominated by one or more family dynasties and which were poorer in the 1940s reached the 2000s with better economic and social performance than municipalities with a similar profile, but where the local dispute was already more dispersed.

The turnaround is directly related to changes that weakened political oligopolies, altered the balance of forces and increased competition at the electoral level.

According to the authors, these transformations improved local governance and, consequently, indicators of per capita income, infant mortality and literacy.

The research was conducted by researchers Claudio Ferraz, professor at the University of British Columbia and PUC-Rio, Frederico Finan, professor at the University of California at Berkeley, and Monica Martinez-Bravo, professor at the Center for Monetary and Financial Studies in Madrid (Spain). ).

In a context in which family dynasties still exercise great power of influence in regions of Brazil, the study provides evidence of how municipalities and their citizens tend to remain poorer when the same groups dominate the local political scene.

Ferraz explains that, under the rule of one or a few families, political competition is greatly reduced, since their descendants can use the clan’s political capital to be elected, to the detriment of a dispute based on characteristics or skills — which generates “unfair competition”.

“The second issue is that, within the family, it is selecting [o candidato] in a universe of much lower quality. It’s one in five people, for example, not society as a whole. On average, it will be much worse,” he says.

To support their arguments, the group started by surveying the names of mayors who led Brazilian municipalities between the 1940s and 2000.

Amidst the difficulty of retrieving older records, especially in smaller cities, economists managed to complete the information for three Brazilian states: Ceará, Minas Gerais and Paraíba.

The next step was to map the local dynasties, based on the family surname, and the degree of dominance or alternation in each municipality in the pre-dictatorship period.

The information was cross-referenced with socioeconomic data from the respective cities. The effort to complete the work took place over a decade.

“When we started the work, the hypothesis was persistence. Places that back then, in the 1940s-1950s, had a lot of concentration of political power would be places where we would continue to see local colonelism, concentration and, consequently, less economic development “, says Ferraz.

“The big surprise is that we didn’t find this. In several of these places with a lot of concentration, despite being poorer initially, in the long term we had a reversal. They became richer”, he says.

The explanation for the turnaround comes from reforms promoted by the military dictatorship. In the article, the researchers emphasize that it is not a question of characterizing as positive a period marked by cases of corruption, torture and restriction of rights, but of discussing factors that explain the political and economic transformation of municipalities.

The military government continued to hold municipal elections, in what the authors classify as an attempt to sustain a “democratic appearance”, but changed local structures through reforms.

The primary interest was not to increase competition, but rather to place names trusted by the military in charge of city halls and weaken traditional families. This would facilitate the imposition of the national development policy —with import substitution and modernization of agriculture—, which faced resistance from the “colonels”, especially in rural and poorer municipalities.

In the two-party system, formed only by Arena (pro-military government) and MDB (opposition), allowing the candidacy of representatives of these families on an opposition ticket carried a great risk of defeat for the dictatorship’s candidate, since local groups still exerted great influence on the political scene.

To overcome this obstacle, the military launched a sub-legend system, which allowed more than one candidate per party. The person with the most votes within the winning party became mayor.

In this design, members of the local elite contested elections under the Arena umbrella, which diluted their political strength and paved the way for greater competition.

“The subtitle system promoted intra-party competition, and unintentionally this increased political competition, allowing the entry of new players. We argue that it was unintentional, it was an indirect product”, says Ferraz.

Although the subtitle system was in force at the national level, researchers found evidence that it was more intensely used in municipalities that were initially more politically concentrated.

In the study, economists sought to establish a measure of family reelection. In the pre-dictatorship period, the probability of the same clan being in power was high in places where there was a greater concentration.

To ensure that the institutional change promoted by the military regime is a consistent explanation for the result of greater economic development, the researchers employed a methodology that compares the trajectory of municipalities with similar socioeconomic characteristics in 1940, but which had different degrees of political concentration.

“[Analisamos] Places that had similar literacy rate trajectories. It is only when the political regime changes that, in places where [o poder político] was more concentrated, increases the rate in relation to the [município] which was not concentrated”, says Ferraz.

According to him, these results were also found for income, wages in agriculture and farm value (approximate measures of local agricultural activity).

In the researcher’s assessment, understanding how institutional changes can affect political competition and improve the delivery of public services remains a relevant agenda, although there is still unexplored terrain, such as the dominance exercised by these families over Congress.