Corporatism in Brazil has deep historical roots, dating back to the colonial and imperial period
The discussion about Brazil’s economic growth, reflected in the increase in citizens’ average income, often ignores structural issues that affect the country’s sustainable development. One of these issues is corporatism, which permeates the relationship between the State and economic sectors, influencing the reforms necessary for a true transformation of the country’s economic and social structures. Recently, the tax reform proposed by the National Congress brought to light debates about special treatment for various sectors, revealing the persistence of corporatist practices that can perpetuate social inequalities and maintain the ‘conservative spirit’ in the country’s economic and social structures.
Corporatism in Brazil has deep historical roots, dating back to the colonial and imperial period. During this period, agricultural corporatism exerted enormous pressure on the Brazilian government, to the point of practically maintaining the same political-social structure in the country as in the colonial period. Many of these agricultural corporatists still exercise power today, however, they face competition from other sectors, such as the industrial sector. This peculiar aspect is even reported by sociologist Florestan Fernandes, in his book “The Bourgeois Revolution in Brazil”, where Florestan states that the country has undergone a ‘conservative modernization’, which shows that practices such as corporatism, drive the maintenance of current social structures.
In Brazil in 2024, corporatism manifests itself in different ways, but we can analyze it from the perspective of the proposedin particular the Complementary Law Project (PLP) 68/2024, brought to light the demand for differentiated treatments for various sectors of the economy, such as agriculture, health and the environment. During the public hearings, representatives from different segments requested tax exemptions and reductions, highlighting the need for special treatment to guarantee the supposed competitiveness and sustainability of their activities.
The National Confederation of Agriculture and Livestock (CNA) argued that taxation on food must be adjusted to avoid rising prices and inflation. Likewise, the health sector defended clarity in tax exemptions for home care services, fearing that the reform would increase the tax burden by 17 percentage points.
These requests highlight the struggle of sectors for benefits that, although they may seem necessary for the survival of certain sectors, reinforce corporatist practices. By privileging certain groups to the detriment of a universal and inclusive approach, the reform may consolidate a model that favors the interests of the few rather than promoting equitable growth.
As a result, special treatment for sectors of the economy, as requested in the tax reform, could have a cascading effect that worsens economic inequality. When one sector is favored with exemptions or reductions, other sectors may be burdened with the need to make up for this lost revenue. Thus, instead of promoting a fairer business environment, the reform could result in a cycle of favoritism that perpetuates corporatism.
The example of the environmental sector is emblematic. The pressure for zero rates for recycling activities, such as tire retreading, reflects the sector’s fight for more favorable tax conditions in order to promote more sustainable practices. It is clear that more sustainable practices are commendable, however, this approach can divert the focus from a broader tax reform that benefits all citizens and encourages environmental practices without resorting to sectoral privileges.
The formulation of strong and inclusive institutions, as stated by Nobel laureate in Economics, Daron Acemoglu, in his book “Why do nations fail?”, is the result of a system that strengthens democracy, the rule of law and, above all, an environment business that is fair and inclusive for everyone. With a tax reform that suffers from attacks from the old Brazilian corporatism, it is difficult to imagine that the country will have significant changes in its political, economic and social structures, which reinforces the character of ‘conservative changes’, as Florestan Fernandes once said.
*Kayque Lazzarini He is an International Relations student at FECAP and has a degree in Economic Sciences from FACESP/FECAP. Currently, he works as leader of the Livres movement in the state of São Paulo.
This publication is a partnership between Jovem Pan and Livres
is a non-profit civil association that brings together activists and liberal academics committed to public policies to expand freedom of choice
*This text does not necessarily reflect the opinion of Jovem Pan.
