Lula’s Prison Release Weakens Institutions in Brazil

Although the Supreme Court ruling, and Lula’s prison release, was an unfortunate setback to Brazil’s institutional credibility, citizens continue to demand anticorruption reforms

lula da silva
Brazil’s former president, Lula Da Silva. (Photo: Flickr)

By Hane Crevelari:

Recently, Brazil’s former president, Luiz Inácio Lula da Silva was released from prison after serving only 19 months of his 12-year-sentence for bribery, corruption, and money laundering. His release followed a federal supreme court ruling ending the mandatory imprisonment of criminals with pending appeals. The ruling should affect nearly 5,000 defendants, including 12 high-profile politicians charged through the famous Operação Lava Jato, a large-scale money laundering scheme and corruption investigation involving the state-controlled oil company Petrobras. As Lula walked out of jail on Friday, the strength of Brazilian institutions suffered a sad defeat.

Brazil’s institutions have long been plagued by corruption. In 2004, however, a series of corruption investigations on the country’s political elite begin to take place. This led to anticorruption reforms (demanded by the population) such as the Lei da Ficha Limpaa law implemented in 2010 that renders political candidates with criminal records ineligible to serve for eight years. Since then, Brazil’s Corruption Perception Index ranking fell from 69th to 105th out of 175 countries, an all-time record low.

Such reforms – which emerged from public outcry – significantly contributed to strengthen Brazil’s institutions. This is important because, as Douglass North put it, “institutions are humanly devised constraints that structure human interaction.” Weak institutions indicate a lack of rule of law and private property rights. Without institutions like these to facilitate human interaction, friction, uncertainty, and tension increase, and the right conditions for problems such as corruption emerge. Corruption, therefore, is not the reason behind weak institutions, but the result of them.

Lula’s release followed a series of protests in major capitals of Brazil, while members of the Partido dos Trabalhadores, Lula’s political party, celebrated. Those in agreement argued that the ruling is better aligned with the Constitution, which states that “no one shall be considered guilty until their case is fully adjudicated,” not leaving much room for interpretation.

Protesters, on the other hand, demanded the implementation of an amendment to the Constitution that would overrule the Supreme Court’s decision. The proposed amendment, called PEC 410/18, is already being discussed by the Champers of Deputies’ Constitution and Justice Committee. Those in favor of the amendment argued that allowing a defendant to remain free until he or she has exhausted all possible appeals promotes impunity in the country. Both sides argue that each action was politically motivated, with the Supreme Court’s ruling purposefully seeking Lula’s release and the PEC 410/18 seeking his imprisonment.

The worst consequence of the ruling, however, is the uncertainty and insecurity generated in Brazil’s institutions, especially in regard to its judiciary system. The new ruling incentivizes defendants to prolong court cases, especially if one is guilty. Criminal cases in Brazil already take years or even decades to resolve. That means individuals will seek other ways to rectify wrongs, whether formally or informally (which can be anything from violence to social punishment). As Donald J. Boudreaux put it, “pro-growth institutions are those that penalize or otherwise raise the costs of predatory behavior.” Lack of trust in the judicial system further weakens institutions, and weaker institutions imposes challenges to the country’s future prosperity.

Hope is not lost, however. Although the Supreme Court ruling, and Lula’s prison release, was an unfortunate setback to Brazil’s institutional credibility, citizens continue to demand anti-corruption reforms. At least these recent events have made people aware of the importance of such laws. That shows the power of ideas within a nation. Ideas have the power to change institutions, but institutions can also change ideas. Which one will prevail in this case is still uncertain.

Hane Crevelari, a native Brazilian, is an institute relations associate at Atlas Network and a graduate research assistant at George Mason University. The viewpoints expressed in this op-ed are entirely her own.

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