US and Brazil federalism are both similar decentralized federal constitutions
Harvard Journal, 2007
[9/15, “Federalism and Decentralization”, (Author unknown) http://ksghome.harvard.edu/~pnorris/Acrobat/Driving%20Democracy/Chapter%207.pdf]
Decentralized federal constitutions are characterized by fairly autonomous provinces and a weak central authority in the powers granted to the executive and national parliament. The Brazilian and American versions both exemplify cases with strong regional states and a relatively weak central government. In the American model, when coming together states voluntarily pooled their sovereignty and designed a constitution to protect their rights against encroachments by the central government, and hence to limited majority rule.44 In the US Senate, each state is equally weighted, with two members per state, whether California or Nebraska, irrespective of the size of their electorate. The powers of the US Senate are also roughly counterbalanced by the House of Representatives. The US-model of federalism therefore limits the powers of the executive and the popular branch of the legislature. The Brazilian constitution also illustrates this model with a political system combining a fragmented multiparty system with personalistic and undisciplined parties, the separation of executive-legislative powers, and vigorous state federalism. 45 As a result of divided government and the weaknesses of parties, Brazilian democracy has frequently experienced legislative-executive stalemate and policymaking logjams, generating what has been termed ‘deadlocked democracy’, or a crisis of governability.46
Brazil’s federal system borrows heavily from the US
CQ Press, 2008
[‘Politics in Latin America,’ The Politics of Governing: A Comparative Introduction http://www.cqpress.com/cs/graham/chap9/study.asp]
Brazil and Mexico also borrowed heavily from the constitutional model of the United States to establish their own federal republics, with presidential systems of government based on the principle of separation of powers. Consequently, while studying chapter 9, the reader should bear in mind several interesting questions that have important consequences for the comparative study of political systems. First, how have the similarities and differences of the constitutions of Brazil, Mexico, and the United States influenced politics in the three countries? Second, how has economic development influenced politics in the three countries? And finally, how have shifts in the global economy influenced both society within the three countries and interactions among these important neighbors in the Western Hemisphere?
Brazilian Federalism Bad: Economy
A) Brazil federalism sustains high interest rates and causes a decline in industrial production
Souza, Professor in the Department of Finance and Public Policies, 2008
[Federal University of Bahia, Celina, June, http://www.bndes.gov.br/clientes/federativo/bf_bancos/e0001211.pdf , Journal of Federalism]
At this point it is important to describe the federal government’s fiscal and economic agendas, especially after the election of Fernando Henrique Cardoso. Cardoso was elected in 1994 following the success of the Real and re-elected in 1998. His presidency represents a center-right coalition that has an agenda focused mainly on implementing a market-oriented program, meaning privatization, deregulation, and the opening of the country's economy. One of the anchors of this policy was the adoption, in 1994, of a stabilization program, the Real Plan, based on the use of high interest rates. This policy is changing the federal arrangements that had been agreed in the 1988 Constitution and it is having a great impact on two aspects of Brazilian federalism. 15 The first of these impacts is the influence of the policy of high interest rates to sustain the value of the Real at the three levels of government, as discussed. Subnational governments have become highly indebted and the federal government is playing all its cards and resources to sustain interest rates and debt services. The second impact is that this policy has affected the state of São Paulo and its capital in particular, not only because they were Brazil's major debtors, but also because the opening up the economy and deregulation have led to the decline of São Paulo's industrial production.
B) brazil is key to the latin american economy
Ray Walser, Ph.D., is Senior Policy Analyst for Latin American in the Sarah and Douglas Allison Center for Foreign Policy Studies at The Heritage Foundation. 2008
(Meeting Energy Challenges in the Western Hemisphere, http://www.heritage.org/Research/LatinAmerica/hl1079.cfm)
The future direction of energy policy in South America will, to a very large degree, be determined by developments in Brazil. With its 190 million citizens and a $1.83 trillion economy, Brazil has become the globe's eighth-largest economy. In the past decade, it has developed strong macroeconomic stability and combined market growth with novel and effective programs aimed at tackling poverty and improving human capital. It is a center for regional trade, via MERCOSUR, and a major player on the international commodities and economic scene. It is also a potential leader for a more unified South America. But it can, as The Heritage Foundation's 2008 Index of Economic Freedom indicates, do much more to improve its current rank of 101st out of 157 nations.
C) latin american growth is key to the global economy
Margolis, , International Institute of Strategic Studies ,1998
(Eric “STORM WARNINGS IN BRAZIL,” Toronto Sun, 10-9, Lexis)
If Brazil implodes, Argentina, Chile, and Mexico could quickly follow. Venezuela is already in a tailspin and has recently devalued. Now, the really scary part. The US exports more to Latin America than it did to Asia. The vast region from the Rio Grande to Patagonia is America's economic hinterland. If Brazil's economy comes crashing down, and takes the rest of the continent with it, American business and banks will be dealt a devastating blow that will dwarf the Asian crisis in magnitude and severity. US banks have far more loan exposure to Latin America than they did in Asia or Russia. Brazil's collapse would savage North American stock markets, threatening an international depression. Finance ministers at the International Monetary Fund (IMF) meeting this week in Washington clearly recognize this awesome danger. They are racing to assemble a US $30 billion loan that will, hopefully, stabilize the `real.' Pray the IMF's wizards will do better this time than they did in Asia or Russia, where their financial nostrums appear to have actually made matters worse. After granting $140 billion in emergency loans to Asia and Russia, IMF's coffers are dry. But Republicans in Congress are delaying appropriating new funds to the IMF, citing its many mistakes. They are right. Still, IMF should be supported - at least until Brazil's emergency passes. Brazil's economic collapse would pose grave dangers not only to the world financial structure, but to Latin America's political stability. Brazil has a high explosion factor. At least 70% of Brazilians are functionally illiterate. Four percent of the population controls 80% of the national wealth. Sixty percent of Brazilians are dirt-poor blacks, marginalized from the economy and politics, kept sedated by soccer, samba, and carnival. A financial collapse will ignite violence and political extremism - and spread across Latin America. The financial world is overseen by three great economic powerhouses. Japan is overlord of Asia's finances. Western Europe dominates East Europe and Russia. The US's bailiwick is Latin America, Central America, and the Caribbean. Japan, mired in deep recession, has failed miserably to defend Asia. Europe has done no better in Russia. If the United States fumbles its financial manifest destiny in Latin America, head for the storm cellars.