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Administrative reform: end of stability, neoliberalism and risks to democracy

The Presidency of the Republic presented to the National Congress, on September 3, 2020, the Proposal of Constitutional Amendment (PEC) n. 32/2020, which aims to change the rules for future state servants of the Executive, Legislative and Judiciary branches of the Union, states and municipalities.

The PEC is the first of three stages of administrative reform that fulfills the campaign promise of the current President, elected from a neoliberal reformist agenda. For this initial stage to take effect, the proposal must be analyzed by the House of Representatives and the Federal Senate and approved by three-fifths of the members of each legislative house.

Although presented as a technical and essential measure for the control of public accounts in the country, the administrative reform is based on a privatization logic and therefore deserves some questions: what is the government’s objective with the administrative reform? To achieve it, what are the main changes intended by the PEC? And why these changes, of a neoliberal nature, may present a risk to democracy?

The objective of the government and the proposed changes   

With the administrative reform, the Federal Government intends to improve the functioning of the public machine, with “more modern and flexible” management mechanisms, especially by containing public spending and increasing administrative efficiency.

To this end, the PEC proposes measures such as a vacation ban for more than 30 days per year, prohibition of career progression or payment of bonuses to employees exclusively for length of service, and a reduction in working hours ban without a corresponding reduction in remuneration.

In addition, the text presented to the National Congress grants greater autonomy to the President of the Republic – and, by symmetry, to the Heads of the Executive Branch in the states and municipalities – to determine the organization of the Public Administration, which includes the possibility of creating, modifying and extinguishing public offices and agencies by means of decree, without the need of Congress approval.

There is also a prevision about the end of the stability of the state servers.

According to the constitutional text in force since 1988, the rule is that every public servant holding an effective position appointed by means of a public contest is stable after three years of effective exercise. This does not preclude the dismissal of civil servants who do not comply with their duties, since there is the possibility of loss of the position due to a final judicial sentence or a decision in an administrative proceeding, ensuring a broad defense. The constitutional provision for dismissal through periodic performance evaluation procedures has not yet been regulated by the legislature.

The guarantee of stability is not a privilege attributed to servants, but an institute designed to prevent any party-political influence from compromising the performance of administrative activities. In other words, stability serves as an instrument to guarantee the impersonal performance of state employees, who must act in accordance with public interests, without fear of unfair dismissals.

If the PEC is approved as proposed, it will distinguish future employees in five different categories according to the modalities of hiring: the typical positions of State, those hired for an indefinite period of time, those hired for a specific period of time, leadership and advisory positions, and the links of experience (one of the stages of public tenders).

Stability, however, will only be guaranteed to typical state careers, to be specified in later law, but which must include those tasks in the civil service that are unparalleled in private enterprise, such as the positions held by Revenue auditors and diplomats. These typical state careers are also shielded from eventual cuts in working hours and salaries.

It is worth noting that the government’s proposal also facilitates the dismissal of future employees, since it allows for the loss of the position in cases where there is still discussion pending in the Judiciary, without having to wait for the final decision in the process.

Neoliberalism, privatization and authoritarianism

The term “neoliberalism” is not a simple concept. Nevertheless, it is commonly associated with a set of privatization and deregulation policies, of radical reduction of the Social State.

This does not mean, however, that neoliberalism is linked to political libertarianism or the reduction of state interventions in the private sphere. In fact, it seeks to reformulate the role of the state in favor of the market, which now assumes functions traditionally attributed to the social state, including in the sphere of public administration.

Privatization is one of these measures to reformulate the role of the state and encompasses both the attribution of state responsibilities to private actors and the “mercantilization” of bureaucracy, with the reformulation of the rights and duties of servants in accordance with the norms that govern private initiative.

Although presented as a technically and politically neutral solution, supposedly indispensable to face the problems of an overwhelmed state, privatization is part of a clear political agenda and produces major consequences in the normative sphere.

As Jon D. Michaels summarizes, measures such as the flexibilization of public servants’ rights, mercantilization and outsourcing of public services end up increasing the state power, instead of controlling it.

This is because the precariousness of these rights, instituted as a form of internal checks and balances to the public administration, as well as the direct hiring of private agents, has as a consequence the reduction of the independence of the civil service, by the search for alliances of mutual convenience between servants/commissioners/third parties and political agents.

A loyal relationship between the public agents and the leaders in power is thus encouraged, in view of the possibility of dismissal and replacement of these employees.

President Jair Bolsonaro and Minister of Economy Paulo Guedes at the Palácio do Planalto on 20/02/2020. Photograph: Marcos Corrêa.

In addition, servers are bound by strict regulations and have several duties and prohibitions, to which the contractors are not bound, which makes it more difficult to monitor and challenge their activity. As a result, there is less regulation and transparency in the activity they perform, making it difficult for them to monitor and participate in administrative activities.

For all these reasons, administrative reforms based on privatization assumptions seem to be in line with what they intend to solve. Instead of a reduction in the state and a more technical service, a more arbitrary action, linked to political interests, is possible because of the loyalty relationship necessary to maintain public office.

It also weakens the normative ties in the provision of public service, in view of the lower transparency of the activities performed by individuals.

There is, therefore, a strengthening of state power, in addition to a greater politicization of public service and deterioration of the mechanisms of weights and balances traditionally performed by public servants and the participation of the population in the public administration.

Thus, it is no surprise that authoritarian leaders take over the neoliberal agenda to seek consolidation of their power, as in the case of the Pinochet dictatorship in Chile and, recently, in the cases of Poland and Hungary, countries that have been pointed out for some time as examples of the deterioration of democracy.

In Brazil, in the 1990s, a major privatization movement was carried out, in accordance with the measures indicated by the Washington Consensus. Today, this political agenda seems to have been renewed, with labor reform, pension reform and, more recently, the proposal to reform public administration, based on expanding the prerogative of self-organization of the Executive Branch.

This is not the first initiative of Jair Bolsonaro’s government, which, alleging the need for debureaucratization of the state, attacks institutions and guarantees guaranteed by the 1988 Constitution. Decree 9.759/2019, which extinguished and limited the collegiate within the federal public administration, centralized the decision-making processes, to the detriment of citizen participation, opening space for the equipping of the public machine.

Thus, in addition to thinking about the constitutionality of the measures stipulated in PEC n. 32/2020, the discussion on the draft constitutional amendment must consider the normative and institutional effects of a neoliberal reform, especially in view of the risk that it will contribute to the deterioration of democracy in the country – which is already experiencing a substantial democratic decline.

By Ana Luiza Pinto Coelho Marques [1] and Bianca Rocha Barbosa [2].

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[1] Master’s Degree student in Law at UFMG. Researcher at the Center for Transitional Justice Studies (CJT/UFMG).

[2] Specializing in Administrative Law at UFMG. Post-graduate in Mining Law at Centro de Estudos em Direito e Negócios (CEDIN).

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