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Brazil Models US Federalism

Brazil models US allocation of state and federal responsibilities

Keith S. Rosenn, Professor of Law at the University of Miami School of Law, 2005

(“Federalism in Brazil” 43 Duq. L. Rev. 577) Lexis

Every federal system has to resolve the problem of how to divide legislative powers between the federal government and the subnational units of government. Brazil's 1988 Constitution partly follows the allocative formula of the U.S. Constitution, but it delineates the distribution of governmental powers in far greater detail. 10 The Brazil Constitution contains an usual innovation by making the Federal District and the municipalities integral members of the federation. 11 Brazil also borrows from the German Basic Law in permitting delegation of exclusive powers and in providing for joint and concurrent powers. 12 Article 21 of the Constitution specifically delegates to the federal government a broad array of powers that are meant to be exclusive even though not specifically denominated as such. These include the powers to maintain international relations; to declare war and states of siege and to make peace; to provide for defense; to regulate currency, exchange rates, and mineral prospecting; and to operate or to regulate radio and television broadcasting, the post office, and the federal police. 13 Article 22 grants the federal government another broad array of powers specifically labelled "exclusive," although some of these powers overlap or repeat powers delegated in Article 21. 14
In twelve areas the federal government, states, federal district, and municipalities have joint powers; 15 and in sixteen areas the federal government, states, and the federal district have concurrent  [*583]  legislative authority. 16 In the area of concurrent authority, the federal government's power is limited to establishing general rules. 17 In the absence of federal legislation, the states may freely regulate an area; however, the supervenience of a federal law on general rules suspends the effectiveness of state legislation to the extent that it contravenes federal law. Whenever the federal government has adopted general rules, the states may adopt only supplementary legislation. The Constitution assures the political, legislative, administrative, and financial autonomy to the municipalities 18 and grants them the power to legislate about subjects of local interest and to supplement federal and state legislation. 19
The Brazilian Constitution contains a residual clause reserving to the states the powers not forbidden to them by the Constitution. 20 This clause, which stems from the 10th Amendment to the U.S. Constitution, has been included in Brazilian Constitutions since 1891, even though when the federation was first formed, the Brazilian provinces never had any powers of their own. The Brazilian Constitution does not grant specifically any exclusive powers to the states. The powers granted to the federal government are so extensive, and so much federal legislation has been enacted, that the states and municipalities are left virtually without any areas wherein they can legislate free from constraints set by the federal government. 21 As Fabio Konder Comparato, one of Brazil's leading jurists, stated, "The Union has supreme authority over other political entities in all economic and financial matters. This is true to such an extent that the old principle, that powers not forbidden to States are reserved to them, becomes entirely meaningless." 22 Unlike the United States, virtually all important legislation in Brazil, such as the civil code, commercial code (what little remains in force), criminal code, procedural codes, labor code, consumer protection code, the corporation law, financial markets law, and electoral law are all federal statutes that apply uniformly throughout Brazil.

Brazilian Federalism Bad: Economy

Brazilian Federalism leads to economic chaos which undermines the economy

Keith S. Rosenn, Professor of Law at the University of Miami School of Law, 2005

(“Federalism in Brazil” 43 Duq. L. Rev. 577) Lexis

As part of its transition to democracy, Brazil instituted important constitutional reforms aimed at transferring power and resources from the national government to the states and municipalities. These reforms were a reaction to the excessive centralization of the military regimes and were in large part motivated by a desire to strengthen democratic institutions by dispersing political power more widely and by increasing popular access to democratic decision-making. They were also motivated by a belief that local application and disbursement of governmental resources would lead to greater economic efficiency than centralized control. This belief turned out to be greatly mistaken. What the Constituent Assembly drafted was a Constitution that produced economic chaos. In the opinion of the first four presidents operating under it, the new Constitution had made Brazil ungovernable. 44

Brazilian decentralization leads to poverty, collapse of social services, and economic decline
Souza, Department of Finance and Public Policies, Federal University of Bahia, Brazil, 2002

[Celina, Publius-“Brazil: The Prospects Of A Center-Constraining Federation In A Fragmented Polity” Spring Vol. 32 Iss. 2]
The third tension affecting Brazil's social and regional inequalities is related to the results of decentralization. Many studies show that decentralization has been implemented without a thorough understanding of various issues, such as the level and timing of such decentralization. Health and education, for instance, have been decentralized to localities without evaluating the administrative capacity of individual municipalities, which varies greatly. Furthermore, there has been no appreciation for the fact that decentralization does not occur in a vacuum, but instead requires a complex politico-institutional engineering."9 In some states and municipalities, policies have thus deteriorated instead of improved as a result of decentralization.' Empirical studies also show that there are no guarantees that the virtuous cycle of decentralized policies will be distributed equitably. In the Northeast, for instance, more than 200 municipalities have no chance of expanding their tax bases or pay for anything other than their civil servants, most earning below the minimum wage." These municipalities lack economic activity and are bound by the extreme poverty of their population. Almost 75 percent of Brazil's municipalities generate less than 10 percent of their total revenue from taxes, and almost 90 percent of the municipalities with 10,000 or fewer inhabitants depend on transfers for 90 percent or more of their revenue.12 As for the states, seven of them collect less than 0.5 percent of the total ICMS levied in the country." Therefore, Brazil's regional inequalities act against the ultimate goal of decentralization because decentralization itself limits the opportunities for the federal government to transfer resources from better-off regions to worse-off ones.

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