‘Marry a widow’: populism and autonomous agencies – 02/12/2023 – Marcus Melo

The populist critique of representative democracy has a long pedigree on the right and left. Those who act between the people and the governments are its target: the checks and balances, independent regulatory agencies, Central Banks, Supreme Courts, supranational institutions (European Union) etc. All in the name of an illiberal majoritarianism and a supposed democratic deficit. It is expressed in the recurring questioning about who would have elected the holders of these institutions.

Finally, all the agents that oppose or limit the majority expression of the popular will, which the populist leader would supposedly embody. The leader is a symbol and is defined by what he is, not by what he does. There is no room in these models for democratic accountability: punishing and rewarding the performance of populist leaders would be a contradiction in terms. If they fail, it is because occult forces impede their action.

The recent imbroglio involving Lula and the president of the Central Bank is part of this broader dynamic and it did not start now: it is a pattern. In 2003, Lula attacked the regulatory agencies created during the FHC government and promised to change the role of the agencies. “Brazil was outsourced. The agencies run the country.” According to him, assuming the government was like “marrying a widow”: with time, “maniacs and defects” that were not known before are discovered. And he threatened: “all this [as decisões tomadas pelas agências sem interferência do governo] will be changed, but that it takes time to change”.

Failed.

Lula repeatedly attacked the then president of Anatel, who resigned from office a year before the end of his term. The government’s attack was concerted: Dilma, then minister, interfered in Aneel. The agencies’ neutralization strategy involved, in many cases, the non-appointment of boards, which were lacking in reaching the necessary quorum for decisions, as we show in the article co-authored with colleagues, Political interference and regulatory resilience, published in Governance and Regulation, 2019.

In the work, we demonstrate —with robust empirical evidence— that the attacks did not manage to change regulatory governance in the country: institutionality proved to be resilient. (The same happened under Bolsonaro when Anvisa was the object of attacks by the president). The source of resilience is the country’s broader political-institutional framework that has ensured credibility to existing sectoral arrangements. Is it probably much ado about nothing? Yes, but there is a yellow alert: a tortoise creating councils that deflate regulatory agencies. Is Lula 3 doubling down in a context in which he is clearly a minority in Congress?

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