07/11/2013 11:14 am ET Updated Sep 10, 2013

More Than 20 Cents: The Politics of Change in Brazil

Last month, Brazilians took to the streets demanding more from their government. The massive demonstrations were sparked on June 13 by what was widely seen as the excessive use of force to repress a small group that had been protesting against a 20-cent increase in bus fare in Sao Paulo state (roughly $0.09). Some protesters viewed media coverage as dismissive and biased, which further fueled popular anger, especially against media giant TV Globo. [Note: most sources are in English, but this and some others are in Portuguese.]

Bus fares have since been reduced in cities across Brazil, but the protests were never just about bus fare. They were about public services, corruption, and the framework of Brazil's democratic system. All three are intertwined. The protests have since calmed, but it is unlikely that they are finished.

Professor Andre Singer, a political scientist at Sao Paulo University, argues that it was not the poorest Brazilians that took to the streets. Many of the initial protesters came from the ranks of the established middle class: young, more conservative, and urban. These protesters were soon joined by what he refers to as the "new proletariat," young people who are not solidly middle class but who have employment due to the policies of "Lulism," a reference to former President Luiz Inacio Lula da Silva.

Since the Plano Real of 1994 stabilized the country's currency and brought inflation under control, Brazil has started to achieve its long-latent potential. A commodities boom, combined with the sound fiscal and monetary policies of President Fernando Henrique Cardoso (1995-2002), many of which were continued by President Lula, enabled the Brazilian economy to grow rapidly, reaching 7.5 percent GDP growth in 2010. Under current President Dilma Rousseff, who Lula endorsed as his successor, Brazil's economy has slowed, growing only 0.9 percent in 2012, after 2.7 percent growth in 2011.

Explanations for the recent downturn are complex; fluctuations in commodities prices and exchange rates, lower Chinese demand for raw materials, and higher inflation are among the culprits. Nevertheless, unemployment is still at record lows, the Brazilian middle class now constitutes more than half of the population, and economic growth has regained steam this year. The protests cannot be explained by economic issues alone.

Moises Naim argues that the protests reflect the growing expectations of a citizenry that has seen its fortunes recently improve. Nancy Birdsall, Christian Meyer, and others have echoed this sentiment. It is because Brazilian society is wealthier that its people see the potential for more improvements, they argue. On a more visceral level, Brazilians took to the streets in such large numbers because they are fed up.

Brazilian society struggles with violence, whether perpetrated by gangs, common criminals, or the police. There are enormous wealth disparities between the poor and the country's elite, though the middle class continues to grow and inequality is dropping as measured by the Gini Index. Brazilians want better public safety, health care, education, and transportation. They see a great deal of money being spent on World Cup and Olympic preparations, and they wonder if it could be better used to improve their daily lives. They also reasonably suspect that public funds are being funneled off by corrupt officials and business leaders.

Corruption has long been a routine part of Brazilian life, especially in politics. Indeed, according to a Transparency International report released on July 8, fully 81 percent of Brazilians view political parties as "corrupt" or "very corrupt," as reported by O Estado de Sao Paulo on July 9. This is why many protesters eschewed political parties, typically admonishing those who attempted to raise the standard of one party or another, shouting "no parties!" One of the report's authors, Alejandro Salas, noted that Brazilians blame corruption for poor public services. "People made a direct connection between corruption and the quality of life that they have," Salas said.

Lula was an expert deal-maker who managed a broad coalition led by his own Workers' Party (PT), which is no small task in a country that typically has about 25 political parties. Though he didn't create Brazil's culture of corruption, Lula's governing coalition benefited from it.

One major scandal was the vote-buying scheme known as "Mensalao," which was revealed in 2005. As Veja magazine explains, PT used public money to purchase the votes of federal representatives at an average cost of 30,000 reais per official per month (roughly $14,000). In December 2012, after a trial that lasted four-and-a-half months, the Supreme Federal Court (STF) found 25 of 38 defendants guilty, handing down sentences that were more severe than initially expected. In April, an investigation was opened against Lula regarding his potential involvement in the scheme.

Those found guilty in the Mensalao scandal have yet to go to prison, pending appeals. Brazil has a history of corrupt officials not actually having to serve prison time, even if convicted. However, Representative Natan Donadon was recently sent to prison after having been convicted on corruption charges over two years ago, making him the first representative to serve jail time by order of the STF since 1988. Many protesters have demanded that the STF carry out the Mensalao prison sentences.

Corruption scandals marred the first year of Dilma's presidency. Between June 2011 and February 2012, seven Brazilian ministers resigned or were forced to resign over corruption allegations, six of whom were carry-overs from Lula's administration. One of them was Sports Minister Orlando Silva, who was in charge of World Cup and Olympic preparations. Dilma has had far less tolerance for corruption than Lula, but it is too entrenched in Brazil for one president to clean it up. The situation appears to be improving, but the historic impunity of the ruling elite, even as some blatantly steal public funds, has left many Brazilians fuming.

Aside from corruption, another source of friction is the ongoing effort to improve Brazil's institutions. Brazil's current constitution was adopted in 1988, soon after the 1964-1985 military dictatorship fell. As such, it is not surprising that the structure of Brazil's democratic system is still in flux.

For example, Brazil's House of Representatives (Camara de Deputados) on June 25 voted down a proposed constitutional amendment to alter the powers of the Public Prosecutors Office (Ministerio Publico). Protesters and others had harshly criticized the amendment (known as PEC-37), which would have limited the office's ability to investigate criminal offenses, thereby increasing the relative power of the state and federal police, forces traditionally known for corruption. It is perhaps unsurprising that PEC-37 was initially proposed by a police attache, Representative Lourival Mendes. President of the House Henrique Eduardo Alves said that the lack of unanimous agreement on the text of the amendment led to its overwhelming defeat, but party leaders plan to redraft it at some point. The vote had been moved up due to the protests.

One major critique of the system is the way representatives (deputados) are elected, which is unique and complicated, and which leaves ample space for skewed representation and, of course, corruption. At the height of the protests, Dilma proposed a constituent assembly to amend the constitution in an effort to change the byzantine "open list" proportional representation system and to make representatives more accountable. She soon backed off amid criticism from the judiciary and the Brazilian Bar Association (OAB) that a constituent assembly is designed for drafting a new constitution, not merely amending it.

She is now proposing a plebiscite, which would put a series of questions to a popular vote. After the vote, the legislature would write the necessary laws to reflect the results. A plebiscite is different from a referendum, which many in Brazil's Congress are proposing instead. In a referendum, the legislature writes the laws first and then voters either approve or disapprove. However, some opposition lawmakers are opposed to both a plebiscite and a referendum, arguing that bills already being debated by the legislature are sufficient to address concerns about the electoral system. On July 9, Congress ruled out the possibility of quick action that would put changes in place before the 2014 presidential election, in a rebuke to Dilma and PT. A decision on how to proceed is expected soon.

Thus, in addition to dealing with poor public services and rampant corruption, Brazilians are still tweaking the constitutional and legal framework of their democratic system. What united Brazil's protesters is an impatient feeling that their country can be better. The difficult questions about how to make it reality remain to be answered. Absent noticeable progress, Brazilians will likely take to the streets again soon.