The (Un)seen in the contributions to political funding: Lessons from the 2014 Brazilian presidential campaign finance, corruption scandals and new directions in the electoral rules of the game

Abstract

This paper combines Public Choice with Austrian Economics perspectives to provide an interpretation of the logic and the consequences of the Brazilian 2014 presidential campaign finance, often related to corruption scandals uncovered by the “Car-Wash Operation” investigation. Section 1 discusses how Public Choice Theory intersections with Austrian Economics provide a richer understanding of patterns of political behavior in the real world. Section 2 analyzes the rules of the Brazilian political game until 2014. Section 3 shows the top corporate contributors donated to all political candidates, regardless of their parties. We found that they already kept close connections with government infrastructure projects and received subsidized credit from the government. Section 4 wraps the overall argument and concludes that some posterior moves to constrain private sector contributions to political candidates are a kind of smokescreen that reduces transparency, while a bigger role of the government in electoral funds might foster corruption and crony relations.

Keywords

• public choice
• brazilian presidential election
• campaign finance