Democratization of local government in Brazil : decentralisation and people's councils

This research studies two cases of implementation of alternative strategies for municipal government reform in Brazil, decentralisation and People's Councils. The aim is to answer the following general question: `Can decentralisation and People's Councils be a means for democratization of municipal government in Brazil?'. The hypothesis is that initiatives to reform Brazilian municipal governments face problems that are characteristic of the Brazilian political and administrative reality. These problems are considered obstacles for the development of those initiatives and accordingly, for democratization of municipal government in Brazil. After an introduction and outline in Chapter One, Chapter Two discusses four main theories concerning local government. Chapter Three discusses decentralisation and People's Councils are discussed in Chapter Four. Chapter Five presents a historical, political and economic overview of Brazil. Chapter Six deals with Brazilian Federalism and Municipal Government. The main aspects of the Municipal Government are presented as well as the development of municipal autonomy through the various Federal Constitutions and cases of People's Councils and decentralisation in municipalities in Brazil. Chapter Seven presents the political parties responsible for the initiatives, the PSDB (Brazilian Social Democratic Party) in the case of decentralisation, and the PT (Workers' Party) in the case of People's Councils. In Chapter Eight the research strategy and the data collection techniques are described. Chapters Nine and Ten present decentralisation implemented by the PSDB in Belo Horizonte, the Minas Gerais state capital and People's Councils introduced by the PT in the town of Ipatinga in the same state. Conclusions are presented in Chapter Eleven and include a comparison and discussion of the two cases. The thesis shows that these experiments with alternative strategies of local government face problems that are generally current in Brazilian political and administrative reality. Those problems are concerned with unwillingness to decentralise power, clientelism, low levels of participation of civil society and the `political' use of the structures implemented.

Subsidies, rent seeking and performance:being young, small or private in China

Entrepreneurs in emerging market economies operate in weak institutional contexts, which can imply different types of government. In some countries (e.g., Russia), the government is predatory, and the main risk faced by (successful) entrepreneurs relates to expropriation. In other countries (like China) this kind of risk is lower; nevertheless the government is intrusive, and the rules of the game remain fluid. The implication of the latter for entrepreneurs is that they are more likely to spend time and resources on influence (rent seeking) activities rather than on productive activities.We illustrate this type of government by focusing on the distribution of subsidies in China.We present a simple formalmodel that explores not only the direct effects of rent seeking for a company but also externalities under a situation of policy-generated uncertainty in the distribution of subsidies.We explore how these effects differ for the entrepreneurial sector (young, private and small companies) compared with other sectors. We posit that while the performance of private companies is more affected than the performance of state firms, the impact of government-induced uncertainty on young and small companies is actually less pronounced. Our empirical analysis, based on a unique large dataset of 2.4 million observations on Chinese companies, takes advantage of the regional and sectoral heterogeneity of China for empirical tests.