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August 10, 2016

Olympics remind us of the importance of local governance

August 10, 2016

As the world’s greatest athletes, brave tourists, and the eyes of a global TV audience (London 2012 brought 3.6 billion global viewers, and Rio is expected to break viewership records in the United States) descend on Rio for the 2016 Olympics, Brazil’s political troubles and urban infrastructure are also in the spotlight.

Awarding the Olympics to Rio was not a completely foolish act. In 2009, when Brazil won its Olympic bid, the country was recovering from the 2008 financial crisis faster than the United States and enacting new social programs to further assist its poor populations. From 2003 to 2014, 29 million Brazilians were lifted out of poverty, and income inequality, measured by the Gini coefficient, fell 11 percent. When the International Olympic Committee announced Brazil’s selection as the Olympic host, Brazilians threw a party on Copacabana Beach, and then-president Luiz Inácio Lula da Silva (Lula) declared a new era for Brazil’s progress.

But the spate of recent bad news for Lula himself and for Brazil demonstrates that it is harder to achieve a new era than it is to declare one.

Today, Lula awaits trial for allegedly obstructing an investigation of Brazil’s national oil company. His hand-picked successor, Dilma Rousseff, faces impeachment on budget manipulation charges. Interim president Michel Temer has been charged with violating campaign finance law. Even Brazil’s anticorruption minister resigned over evidence that he attempted to sabotage a corruption investigation.

Meanwhile, water quality in Rio’s Guanabara Bay, where Olympic boatmen-and-women race, emphasizes the reality that Rio is not London or Beijing. Brazil’s urban poor are concentrated in crowded favelas, or slums, where untreated sewage runs in the streets and militarized “Pacifying Police Units” wage war on ruling drug gangs. In Rio this year, police have killed at least 238 civilians, and 43 officers have been killed. Some Olympic construction has failed catastrophically. And then there is Zika.

Hosting the Olympics puts a huge strain on local and national systems, and though Rio’s logistical problems are well documented, the root of these problems and their solutions have received less coverage. The physical infrastructure that houses athletes or transports fans from their hotels is the result of both political and administrative systems for planning, budgeting, and implementing policies. These systems and the institutional arrangements that dictate who makes decisions and how people are held accountable are fundamental in any society but are tested in this case before a global Olympic audience.

While Brazil’s dramatic poverty reduction of the 2000s reflected sensible macro policies from the central government, international measures of state capability or effectiveness do not show Brazil rising. Transparency International gives Brazil mediocre marks on controlling corruption, scoring only 38 out of 100 in perceptions of corruption. Scores on the World Bank’s broad governance measures barely changed between 1996 and 2014. The World Bank’s measures of the ease of doing business rank Brazil as the 116th best place to do business, well behind regional neighbors Mexico or Chile and fellow BRIC, China. In starting a business or getting a construction permit Brazil is close to the bottom of the 189 country rankings, at 174th and 169th respectively.

These metrics point to underlying challenges collectively described as “governance.” The values and practices we summarize as good governance are not ones that can be imported in the months before an Olympics, just as they can’t be retrofitted after a weather disaster. Improvement requires political and fiscal capital to reform deeply entrenched habits of patronage, corruption, or impunity.

Brazil is not alone in struggling to accomplish complex tasks that require collaboration across levels of government. Colleagues here at the Urban Institute recently looked at obstacles to water, sanitation, and solid waste services in 42 cities across 14 countries (other than Brazil) to examine five elements of effective local services management. Their findings suggest that local autonomy and accountability are not high in many of the world’s poorest places. Leaders in Brazil recognize this, but progress to improve local accountability comes slowly.

The 1995 State of Brazil reforms sought to improve civil services through objectives, managed competition, and direct democracy, rather than absolute bureaucratic control. These reforms also privatized and outsourced state-owned industries and devolved publicly funded initiatives to the nonprofit sector. Brazil has pioneered participatory budgeting at the local level, and open budget progress in cities such as São Paolo are drawing attention.

Yet, in areas such as housing, where localities have had more complex assignments and results have not been as positive, the details of local governance apparently still complicate progress on services and infrastructure. The fundamentals of autonomy—permission and responsibility, coupled with accountability and resources—are necessary for effective local government, especially when managing complex problems.

The Olympics have been a self-imposed stress test for Brazil’s cities. Other will surely come, from the ongoing political turmoil to climate-induced extreme weather events. Olympic coaches remind their athletes to “master the fundamentals.” The same goes for Olympic hosts. Even after the closing ceremony, can the spotlight prompt lasting attention to governance fundamentals?

Pollution floats in Guanabara Bay on February 6, 2015 in Rio de Janeiro, Brazil. Photo by Mario Tama/Getty Images

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