Predicting the unpredictable: analyzing Brazilian extraordinary credit from 2001 to 2016*

Victor Hugo Corrêa Rodrigues, 22, from Rio de Janeiro (Brazil), graduated in Mathematics at University of Helsinki. He is a researcher at Fundação Getúlio Vargas, where he currently studies Law. His interests are Machine Learning, Institutional Design and Public Policies

Bruna Veríssimo Lima Santos, 20, from Rio de Janeiro (Brazil), is a Law student at Federal University of Rio de Janeiro. She currently works as research assistant at Getulio Vargas Foundation (FGV). Her interests include Constitutional Law, Institutional Theory and Democratic Regimes.

Abstract

Our research investigates the Brazilian extraordinary credit decrees from 2001 to late 2016. These are mechanisms that produce immediate legal effects before the evaluation of National Congress, and have been a relevant way for the president to conduct public policy in Brazil. In order to meet the constitutional requirements, these measures must contain urgent, relevant and unpredictable expenses. We conclude that there are weak legal boundaries to the powers Brazilian presidents have to create such decrees. Furthermore, we found that December is the month with the highest chance for the creation of these provisional measures. Throughout our article, we provide important insights on how the lack of institutional checks from both the Congress and the Supreme Court incentivizes such a behavior from the Executive branch of the government.

Keywords: accountability, extraordinary credit, institutional design, presidential powers, provisional measures.

* All data was collected as part of the project "Congress in Numbers", developed at Getulio Vargas Foundation (FGV Direito Rio). This initiative generates data-driven analysis using big data and releases monthly reports about the National Congress' behavior.

IntroductionThis paper focuses on one of the particularities of the power granted to Brazilian presidents. Extraordinary Credits are expenditures the president allows government agencies to execute without the need for previous Congress authorization, since they can be authorized through “provisional measures”, which go into effect immediately. Those measures are a power constitutionally assigned to the president to bypass the normal budget process, but the constitution explicitly says extraordinary credits can be authorized only for “unforeseeable and urgent expenses, such as those resulting from war, internal commotion or public calamity”1.

Extraordinary Credits have affected many important global issues, from policies trying to contain the Zika virus to those focused on receiving Syrian refugees. The country spent approximately half a trillion BRL [approximately a hundred and fifty billion dollars] through extraordinary credits from 2001 to late 2016. That large amount has stimulated much debate on how unpredictable were actually those expenses.

Given this scenario, we ask the following question: during a year, can we predict when it is most probable a Brazilian president will authorize Extraordinary Credits? Our thesis is that there is a positive answer to the question.

1 Constitution of the Federative Republic of Brazil. Art. 167. The following are forbidden: Paragraph 3. The opening of Extraordinary Credit may only be allowed to meet unforeseeable and urgent expenses, such as those resulting from war, internal commotion or public calamity, observing the provisions in article 62.

The hypothesis of this article puts in check the constitutionality of several Brazilian Presidents’ use of Extraordinary Credits. If they were truly authorized in response to unpredictable events, there should not be patterns in their use. We have, however, good reasons to think that this is not the case. We show that not only can we expect that Extraordinary Credits will be used in years to come, but also demonstrate in which months it is probably going to happen.

We analyze all the provisional measures that authorized Extraordinary Credits from 19th September, 2001 to 18th September, 2016.2 We also analyzed the jurisprudence of the Brazilian Supreme Court regarding those provisional measures.

We would like to show that there are institutional incentives for the President to open extraordinary credit, particularly in December. We use data collected about provisional measures to distinguish patterns in the monthly authorizations for those credits, both in frequency and amounts. Data from the Brazilian Chamber of Deputies (the lower-house of Congress) is used in support of some of our theoretical hypothesis on those incentives, as is data from the Brazilian Supreme Court. Our goal is to use both theoretical and empirical information to illustrate how a particular institutional design, characterized by a lack of checks from both the Supreme Court and Congress, has influenced President’s behavior.

In the Conceptualization and Theoretical Framework section we explain the definitions and context of some regulatory concepts in Brazil, which will be valuable for our analysis and may be similar to other countries. We also explain how those norms led us to our hypothesis. In the Literature Review section we write about some of the most important research done in the 2 We used this range due to significant changes on the procedure of enactment of provisional measures in 2001. In specific, the constitutional amendment n. 32/2001, followed by the National Congress’ Resolution n. 1/2002.

area, and what are this paper's major contributions to the field. Next we write about our Hypothesis. In the Method and Data section we explain what is the data we are working with, how did we fetch it, what did we do with it, and what do we hope to achieve with it. In the Analysis and Findings section we organize all the ideas that support our hypothesis. In the conclusion we finalize the paper, by reviewing all the information we have exposed.

Conceptualization and Theoretical FrameworkProvisional MeasuresProvisional measure is a temporary decree enacted by the President that becomes legally binding before the National Congress deliberates about its content. Its creation goes back to the enactment of our Constitution. It is considered a democratic version of the law-decree, a legislative species that existed during our dictatorial period (Clève 2010: pp. 51-53). These decrees must follow two constitutional requirements: importance and urgency3.

Since the constitutional amendment n. 32-2001, other directives regarding the measures were created. For our purposes, the most relevant is on article 62, paragraph 1, item I, line d4. It expressly mentions the use of provisional measures authorizing Extraordinary Credits.

3 Constitution of the Federative Republic of Brazil. Article 62. In important and urgent cases, the President of the Republic may adopt provisional measures with the force of law and shall submit them to the National Congress immediately. 4 Constitution of the Federative Republic of Brazil. Article 62, paragraph 1. The issuance of provisional measures is forbidden when the matter involved: I – deals with: a) nationality, citizenship, political rights, political parties, and election law; b) criminal law, criminal procedural law, and civil procedural law; c) organization of the Judicial Branch and of the Public Prosecution, the career and guarantees of their members; d) pluriannual plans, budgetary directives, budgets, and additional and supplementary credits, with the exception of the provision mentioned in article 167, paragraph 3.

Also, article 62, paragraph 6, establishes the agenda halting5. That means the Chamber of Deputies is prevented from voting every other bill if it does not vote the decrees within 45 days. This was a way to force deliberation, since before 2001 the National Congress had procedural instruments to bypass the analysis of such measures6.

The decrees have a limited time of efficacy of 60 days. If Congress does not vote within this period, it can be extended for 60 more days.

The Act n. 1-2002 and the internal regime state that this term is suspended during recess, which happens from December 22 to February 1st and from July 16 to July 317.

During the deliberation on the Nation Congress, there is always a chance of rejection. If that happens, congressmen can enact, in 60 days, another decree to regulate the legal relations that were eventually settled8.

5 Constitution of the Federative Republic of Brazil. Article 62, paragraph 6. If a provisional measure is not examined within forty-five days as of its date of publication, it shall subsequently be forwarded to urgent consideration in each House of the National Congress, and the deliberation of all other legislative matters shall be suspended in the House where it is under consideration, until such time as voting is concluded.6 The National Congress could re-edit infinitely the provisional measures without deliberating about them. This situation became excessive and motivated the approval of the EC n. 32/2001. (Clève 2010: pp. 185-186) 7 Constitution of the Federative Republic of Brazil. Article 57. The National Congress shall meet each year in the Federal Capital, from February 2 to July 17 and from August 1 to December 22. 8 Resolution n. 1/2002. Article 11. Finalizado o prazo de vigência da Medida Provisória, inclusive o seu prazo de prorrogação, sem a conclusão da votação pelas 2 (duas) Casas do Congresso Nacional, ou aprovado projeto de lei de conversão com redação diferente da proposta pela Comissão Mista em seu parecer, ou ainda se a Medida Provisória for rejeitada, a Comissão Mista reunir-se-á para elaborar projeto de decreto legislativo que discipline as relações jurídicas decorrentes da vigência de Medida Provisória.§ 1º Caso a Comissão Mista ou o relator designado não apresente projeto de decreto legislativo regulando as relações jurídicas decorrentes de Medida Provisória não apreciada, modificada ou rejeitada no prazo de 15 (quinze) dias, contado da decisão ou perda de sua vigência, poderá qualquer Deputado ou Senador oferecê-lo perante sua Casa respectiva, que o submeterá à Comissão Mista, para que esta apresente o parecer correspondente.§ 2º Não editado o decreto legislativo até 60 (sessenta) dias após a rejeição ou a perda de eficácia de Medida Provisória, as relações jurídicas constituídas e decorrentes de atos praticados durante sua vigência conservar-se-ão por ela regidas.

As the literature points out, these decrees have become one of the expedient instruments presidents use to conduct public policy in Brazil.

Extraordinary CreditsPublic budget in Brazil is conceived as program, a management tool and a fiscal policy (De Faria, 2009: pp. 31). It is expected to suit the government’s plannings on the long term and sustain existing policies. Every year, the president elaborates the Annual Budget Law with the estimated revenue and the authorization of expenses for the following year9. Its approval depends on the approval from the National Congress.

It is important to mention that this law in specific is only authoritative, not mandatory. This is happens due to the enormous gap between the elaboration and execution of the law, which obviously ignores future political and economical changes that may alter the expected revenue and, therefore, limit the expenses.

On the contrary, these conjunctural premises may require expenses beyond what was previously authorized. For this reason, the Public Finance Law10

foresees three different possibilities to increase debts, each of them related to a specific type of reason and authorization process: additional, supplementary and extraordinary11.

Extraordinary Credits identify relevant, urgent and unpredictable expenses. The Constitution establishes that this type of credit can only be enacted

§ 3º A Comissão Mista somente será extinta após a publicação do decreto legislativo ou o transcurso do prazo de que trata o § 2º.”9 Constitution of the Federative Republic of Brazil. “Article 165. Laws of the initiative of the Executive Power shall establish: I – the pluriannual plan; II – the budgetary directives; III – the annual budgets.”10 Law n.. 4.320/6411 Law n. 4.320/64, art. 41.

through provisional measures12. That means the President authorizes its use before the Congress’ approval.

The provisional measures that authorize Extraordinary Credits are the only ones who have an additional requirement to “relevance” and “urgency”: unforeseeability13.

Since they are related to the annual budget, the President can only authorize credit to be used in the current year. An exception to this norm arises if the president enacts a provisional measure over the last four months of the fiscal year14. In that case, (i) the credits are incorporated into the budget of the subsequent fiscal year15 and (ii) the credits can be spent until the end of the subsequent fiscal year.

Direct Action of Unconstitutionality (ADI)In Brazil, the Federal Supreme Court (STF) is allowed to review the constitutionality of laws and normative acts. This happens via a specific set of actions.

12 Constitution of the Federative Republic of Brazil. Article 62, paragraph 1, item I, line d, The issuance of provisional measures is forbidden when the matter involved:I – deals with:(…)d) pluriannual plans, budgetary directives, budgets, and additional and supplementary credits, with the exception of the provision mentioned in article 167, paragraph 3;”.13 Article 167, paragraph 3. ”The opening of extraordinary credit may only be allowed to meet unforeseeable and urgent expenses, such as those resulting from war, internal commotion or public calamity, observing the provisions in article 62.”14 In Brazil, the fiscal year is equal to the calendar year. 15 Constitution of the Federative Republic of Brazil. Article 167, paragraph 2. Special and extraordinary credits shall be effective in the fiscal year in which they are authorized, unless the authorization act is enacted during the last four months of that fiscal year, in which case, reopened within the limits of their balances, such credits shall be incorporated into the budget of the subsequent fiscal year.

The Direct Action of Unconstitutionality (ADI) is the instrument used to review the constitutionality of federal and state laws or normative acts16. Not all citizens can file this actions. The Constitution establishes a roll of legitimate plaintiffs authorized to file the suit before the Court.

The jurisprudence over the meaning of the expression “law of normative act” has evolved through the years. Specifically on the topic provisional measures related to budget, the first ADIs were rejected. The Supreme Court ministries required that, in order to be subject to judicial review, the law/normative act ought to be general and abstract (Barroso 2012: pp. 125). Since the provisional measures opening credit had a determinate object and certain addresses, they were treated as administrative acts, not normative acts17; for this reason, judicial review was prevented. Most of the processes at that time were dismissed without prejudice18.

This paradigm begun to change in 2008. Minister Gilmar Mendes in a preliminary decision on the ADI 4.048 stated that it was possible to determine the unconstitutionality of a provisional measure that opened Extraordinary Credits.

After his decision, other actions were filed, but only two were analyzed either by a Minister monocratically or collegiately.

Literature Review

16 Constitution of the Federative Republic of Brazil. Article 103.17 ADI 3709. “Inviável a aferição da nota de imprevisibilidade e de urgência, ao arrepio do escrutínio da substância mesma das despesas, o que é vedado a esta Corte. É, com efeito, entendimento aturado e velho deste Tribunal que lhe não é lícito controlar ou estimar o juízo de urgência e relevância, que autoriza a edição de medida provisória pelo Poder Executivo, posto que atinente à matéria orçamentária.” Rapporteur: Minister Cezar Peluso. Accessible at: http://www.stf.jus.br/portal/peticaoInicial/verPeticaoInicial.asp?base=ADIN&s1=3709&processo=3709 (16 mar 2017)18 See Annex 1

The arbitrary use of provisional measures to open Extraordinary Credits has been reported by several authors19. From literature, we are able to establish a framework of how the Supreme Court and the National Congress deal with the subject. Their contributions also explicit some good institutional reasons for the authorization of Extraordinary Credits without following all constitutional requirements.

On this matter, Rafael Fonseca argues that the reiterated use of Extraordinary Credits represents a constitutional violation (Da Fonseca 2016: pp.163-164). The budget system in Brazil was conceived to give the Legislative the possibility to influence the priorities on the public sector and monitor the execution of the Annual Budget Law (Gomes 2008: pp. 25-26). Once approved, the president is authorized to collect and spend according to what was previously established (Piscitelli 2006: pp. 4) The use of additional credit should be exceptional, exclusively to adequate the expenses to the reality (Gomes 2008: pp. 26).

However, there has been a historical trivialization of this institute (Marshall 2008: pp. 34-27). This has increased the chances of disrespecting the Constitutional requirements (Da Fonseca 2016: pp. 134). The federal government works on a “scheduled emergencies" regime and often uses the Extraordinary Credits to hide problems regarding budgetary responsibility (Da Fonseca 2016: pp. 165).

Despite discussions over the constitutionality of the credit authorizations, we can find institutional reasons that incentivizes the president’s behavior. They come from both the Congress and the Supreme Court.

19 See Araújo, Walbinson Tavares de (2008), Da Rocha, Diones Gomes (2009) and Dos Santos (2013).

The first one is related to efficacy. The National Congress approves a high number of enacted measures. Rafael Bezerra points out that only 2 out of 51 provisional measures authorizing credit were fully rejected by the Congress between 2008 and 2015. According to him, this makes it much easier to the President to detract the requirements to approve provisional measures than to wait for the Congress to deliberate about the expenses following the ordinary procedure (Da Fonseca 2016: pp. 134)

The immediate production of effects from provisional measures is another incentive. Unlike any other budgetary norm, the Extraordinary Credit is available right after it is published in the Official Gazette20. The status quo is altered before Congress has time to analyze if the decree meets the requirements. This puts the President in a more comfortable situation, because the political and social costs of rejecting the decree are higher, once the status quo has already been altered. In the words of Fernando Limongi and Argelina Cheibub,

“if the congress prefers the prior status quo to the provisional decree but prefers the provisional decrees’ new status quo to the situation that would obtain with its rejection, the provisional decree is approved. It would have been rejected if it had been introduced as an ordinary bill” (presidential power, legislative organization and party behavior in Brazil, p. 164).

This conclusion from Limongi and Argelina could be an explanation for part of the evidence we found from Congress and Supreme Court in this paper. Our data shows that there is a moment when this reasoning is strengthened.

20 The Official Gazzette is a daily journal coordinated by the Public Press that publishes all of the new approved laws and normative acts. http://portal.imprensanacional.gov.br/acesso-a-informacao/institucional/perguntas-frequentes (15 mar 2017)

However, both the Supreme Court21 and part of the literature22 have pointed out measures that did not meet these requirements.

The Supreme Court also gives the President good reasons to keep on enacting such decrees regardless of the constitutional requirements. One is related to its own deference (Vieira 2008: pp. 452) posture; others are related to procedure rules that prevent eventual interventions.

The Supreme Court’s jurisprudence on the field was marked by a certain deference to the President and Congress’ decisions, on a phenomena called self-contention. The Justices stated that the provisional decrees opening credit were mere administrative acts, not juridical ones23. Therefore, according to this way of thinking, the Court would not to deliberate about the cases, since this action would violate the separation of powers. This quite posture endorsed the President’s behavior. Not even the Supreme Court was able to deliberate about the decrees.

Years later, in 2008, a decision changed this scenario. Justice Gilmar Mendes decided to suspend the provisional measure n. 405/2007, which authorized R$5.455.677.660,00 in Extraordinary Credits. On his vote, he mentioned that the previous posture was not in accordance to the Constitution. To him, the possibility of judicial review was essential to the maintenance of the constitutional order.

21 “A hipótese é de não-cabimento da ação direta, pois, conforme a jurisprudência pacífica deste Tribunal, as leis que veiculam matéria orçamentária, limitando-se à previsão de receita e despesa, ou, ainda, à abertura de créditos orçamentários, configuram leis unicamente em sentido formal, não sendo dotadas de generalidade e abstração, caracteres próprios dos atos normativos, os únicos passíveis de controle de constitucionalidade pela via principal.”ADI 4.041. Accessible at: http://www.sbdp.org.br/arquivos/material/1046_ADI-MC_4.048_Integra.pdf (15 mar 2017)22 See Gomes (2008).23ADI 4.048 http://www.sbdp.org.br/arquivos/material/1046_ADI-MC_4.048_Integra.pdf (15 mar 2017)

When analyzing the contested measure, he decided that the decree did not meet the requirements and should be suspended until further deliberation. The same happened to the following ADI, n. 404924. However, as we will see, data shows that these decisions only affected the enactment of provisional measures for a certain time.

Another behavior that prevents the judicial review of Extraordinary Credits by the Supreme Court is that it takes too long to review the case while it still has effects.

Another problem is timing. The jurisprudence of the Supreme Court states that the ADI loses its object and, therefore, is dismissed, when the law/normative act loses its efficacy or is revoked25. As we have seen, authorizing credit is related to the annual budget and, therefore, usually produces effects on the same year. If the Court takes more than a year to decide, the whole process is dismissed.

Justices from the Brazilian Supreme Court decide more individually than collectively. That used to happen only in judicial review, but now it affects the abstract scenario (when Justices review a law or normative act if one thinks it is unconstitutional) (Arguelhes and Hartmann 2015: pp. 59-73).

24 “4. A abertura de crédito extraordinário para pagamento de despesas de simples custeio e investimentos triviais, que evidentemente não se caracterizam pela imprevisibilidade e urgência, viola o § 3º do art. 167 da Constituição Federal. Violação que alcança o inciso V do mesmo artigo, na medida em que o ato normativo adversado vem a categorizar como de natureza extraordinária crédito que, em verdade, não passa de especial, ou suplementar. 5. Medida cautelar deferida” Accessible at: http://www.stf.jus.br/portal/processo/verProcessoAndamento.asp?incidente=2602441 (16 mar 2017)25 “A jurisprudência do STF é pacífica quanto à prejudicialidade da ação direta de inconstitucionalidade por perda superveniente de objeto, a qual tanto pode decorrer da revogação pura e simples do ato impugnado como do exaurimento de sua eficácia. Precedentes.” http://www.stf.jus.br/portal/processo/verProcessoAndamento.asp?incidente=2602441 (16 mar 2017)

To some authors, such as Conrado Hübner Mendes, the individual judgment removes the collegial character of the Court. The Supreme was conceived to maintain deliberation dialogues and debates of ideas (Mendes 2008: pp. 235) This does not happen in the individual judgment. To remove this feature is to reduce the Supreme's position to "eleven islands" (Mendes 2010) with powers distributed without a joint action, and therefore with less chance of influencing the President and Congress’ posture. Article 102, §2º26 gives binding efficacy to all judicial review decisions pronounced by the Supreme Court Plenary (session with all Justices). As all the ADIs were dismissed, there is no way to accomplish that.

Also, we may have Justices who do not pronounce a decision and, therefore, use their schedule in order to contribute to their dismissal (Werneck and Hartmann 2015: p. 69).

Another important issue is that the Supreme Court goes on recess in the end of the year. More precisely, between December 20th and January 31.27

During this period, all legal terms are suspended and the workflow is reduced. The Supreme Court works on an emergency regime, so it is more difficult to have a decision on the merit during the period. The president of the Supreme Court is the only one who has the power to decide whether a case is urgent.28 Due to the other reasons mentioned, plaintiffs are not

26 Constitution of the Federative Republic of Brazil, Article 103, paragraph 2. Final decisions on merits, pronounced by the Supreme Federal Court, in direct actions of unconstitutionality and declaratory actions of constitutionality shall have force against all, as well as a binding effect, as regards the other bodies of the Judicial Power and the governmental entities and entities owned by the Federal Government, in the federal, state, and local levels.” 27Article 78, Regimento Interno do Supremo Tribunal Federal “O ano judiciário no Tribunal divide-se em dois períodos, recaindo as férias em janeiro e julho. §1º Constituem recesso os feriados forenses compreendidos entre os dias 20 de dezembro e 1º de janeiro, inclusive.” 28 Article 13, Regimento Interno do Supremo Tribunal Federal. São atribuições do Presidente: (...) viii – decidir questões urgentes nos períodos de recesso ou de férias.

incentivized to file a suit during these days. Only two ADIs that questioned provisional measures opening credit were filed during recess29.

This may generate a slightly favorable environment to authorize credit. As the decrees are legally-binding from its enactment, if a decision is pronounced after recess, the decrees will have produced effects for more than a month and it could not be possible to control how much of the credit was spent.

In general, provisional measures have a maximum validity of 60 days until their rejection or conversion into law. However, there are situations where this time limit can be extended. The first of these is provided by the Constitution itself.30 The Constitutional law extends in 60 days the total amount of time to deliberate and to vote the decree. This deadline increase occurs automatically if Congress does not decide on the matter.31

Another possibility to increase the deadline is due to the parliamentary recess. In December 22, the activities of both the Lower House and the Senate are interrupted and their deadlines suspended. Thus, a provisional measure enacted on December 22 would only have the validity period started on February 2 of the following year. The decree results, however, remains unchanged. Hence, it is possible that a provisional measure enacted in December remains applicable for more 150 days awaiting the deliberation of the Congress.

29See ADI n. 4304 (http://www.stf.jus.br/portal/peticaoInicial/verPeticaoInicial.asp?base=ADIN&s1=4304&processo=4304) and 4365 (http://www.stf.jus.br/portal/peticaoInicial/verPeticaoInicial.asp?base=ADIN&s1=4365&processo=4365).30 Article 62 Constitution of the Federative Republic of Brazil. In important and urgent cases, the President of the Republic may adopt provisional measures with the force of law and shall submit them to the National Congress immediately31

In this perspective, when the Congress begins to deliberate about the subject, the provisional measure has already changed the status quo for at least a whole month (January). Hence, the rejection of a provisional measure in this situation may become challenging. As we have written before, this is due to the many effects the norm could have had in society.

Moreover, the budget system in Brazil is partly authoritative, partly mandatory (Greggianin, and Silva 2015: pp. 6). The Constitution establishes a series of expenditure norms that reduces the possibilities of adequate the budget to the governmental priorities (Alves and Pederiva 2016: pp. 6) For this reason, the budget of the subsequent year becomes very similar to the previous one.

Some authors point out that the federal government uses instruments, such as additional credits (Alves and Pederiva 2016: pp. 7), in order to modify the budget and adequate it to the government plans (Alves and Pederiva 2016: pp. 8).

This is particularly relevant in the end of the year. The Constitution states that the effectiveness of additional credits authorized in the four last months of the financial exercise - that represents a year - is postponed for the following year32. That means the credits produce immediate effects, but are only incorporated to the next annual budget.

Despite some quick mentions to this phenomenon, the analysis per month of the decrees has been neglected by the literature (Da Fonseca 2016: pp. 130). Previous analysis were only focused on what happened over the years, which gives us a different set of information, such as the influence of the 32 Constitution of the Federative Republic of Brazil. Article 167, paragraph 2. Special and extraordinary credits shall be effective in the fiscal year in which they are authorized, unless the authorization act is enacted during the last four months of that fiscal year, in which case, reopened within the limits of their balances, such credits shall be incorporated into the budget of the subsequent fiscal year.

electoral period on the enactment of provisional measures (Da Fonseca 2016: pp. 130).

It is important to clarify that we are not stating that the president must never use the measures, but that he lacks constraints from other Powers, which could produce inadequacies to our legislation.

HypothesesWe believe the data we found and the literature on the issue of authorizing extraordinary credit create a space for new findings regarding the Brazilian budget. We have a set of four hypothesis in the paper. First, that the Congress and the Supreme Court in Brazil norms incentivizes the current practice presidents in Brazil have of authorizing Extraordinary Credits every year. Second, those norms from both institutions incentivizes predictability to when the Extraordinary Credits will be authorized. Third, the same rules also promote when presidents should authorize more Extraordinary Credits. Those three hypothesis could help us supporting a fourth thesis that there is a lack of checks from both Congress and Supreme Court regarding authorization of Extraordinary Credits.

Method and DataExecutive BranchWe wanted to analyze the provisional measures related to Extraordinary Credits. In order to do that, we retrieved information about all provisional measures from the official executive branch website.33

The executive branch enacted 745 provisional measures from 19/09/2001 to 18/09/2016. From the web page we could extract the number of each

33 http://www.planalto.gov.br/ccivil_03/mpv/principal.htm (15 mar 2017)

provisional measure, together with its enactment date, current situation and summary.

We created a python script that highlighted the measures that had in their summary the text "abre crédito extraordinário" (open Extraordinary Credit), considering the combinations with and without capital letters and special characters. We have confidence that the filtered data represents all provisional measures related to Extraordinary Credits. After that, we created another script that extracted the amount of Extraordinary Credits authorized from each provisional measure. Only 3 of these did not have the explicit value in the summary, leading us to read the full text to actually save the correct amount in our database.

After cleaning the data, we created a table with all the data, and calculated how many of the provisional measures that authorize Extraordinary Credits have been created each month. We calculated the probability of Extraordinary Credits being authorized in each month. We also calculated the amount of credits authorized in each month on average.

CongressWe wanted to calculate the maximum number of days it would take on average for a provisional measure to lose its effect in National Congress each month of a year. We fetched data from the official Chamber of Deputies website.34 We extracted the final date from each provisional measure.

We have the enactment date from each provisional measure from the executive branch data. Now we fetched the date when each measure would lose its effect, if Congress does not veto or approve it before. Hence, we can calculate how many days at most each provisional measure could stay in 34 http://www2.camara.leg.br/ (15 mar 2017)

action, before it is archived or converted into law. Since we know this information for each date of the year, we can calculate the average of maximum days for each month.

Supreme CourtWe wanted to analyze all ADIs that were against provisional measures authorizing Extraordinary Credits. In order to accomplish that, the data was taken directly from the official Supreme Court’s website.35 We inserted the expressions “medida e provisória” (provisional and measure) and “crédito e extraordinário” (extraordinary and credit), and found 33 ADIs.

Our filtering was based on two other steps. First, we selected ADIs between 19/09/2001 and 18/09/2016 . Second, the ADIs should be against provisional measures enacted by Presidents. The last step is important, since some federal states can enact provisional measures as well. As a result, only 21 out of the 33 first ADIs met the requirements.

After that, we created a table with the number of the ADI, the author, number of the contested MP, the minister rapporteur, date of filing, date of the last decision, if there was a preliminary - a temporary - decision, the type of final decision (monocratic or collegiate) and the final result. The full list is in the Appendix A.

Analysis and findingsCongressAs we can see in figure 1 in this section, provisional measures related to Extraordinary Credits enacted in the last four months have on average the most active days before being vetoed or approved in the legislative branch. This is due the recess in the end of the year. In other words, the president

35 http://www.stf.jus.br/portal/principal/principal.asp (15 mar 2017)

can expect that their provisional measure would change the status quo for a longer time, if it is created in the last four months.

Figure 1. Source: Authors of the paper.

The recess starts in December. A provisional measure changes the status quo even when Congress is at recess. During this period, Congress cannot veto a provisional measure. Hence, the current norms in Congress stimulate the creation of provisional measures during December.

Supreme CourtUntil 2008, because the Supreme Court, by its own decision, chose not to decide cases about budget law, including Extraordinary Credits, in a phenomena called self-contention. In other words, there was no judicial constraint to the President’s actions.

After ADI n. 4.048 and n. 4.049’s preliminary decisions were pronounced, data slightly changes. The President may have started to be more careful on opening credit, due to the possibility of judicial interference.

Figure 2. Source: Authors of the paper.

It is interesting to observe the plaintiff that filed the vast majority of the suits: PSDB, an opposition party until 2016. In fact, in 2008, it seems to have been a strategic filing of many suits contesting different provisional measures enacted in november and december, possibly as an attempt to bypass the distribution of the processes. The reasons to the peculiar behavior from this party are beyond the scope of our research. However, it calls attention to the famous phenomena in Brazil called the “judicialization of politics”, meaning that opposition parties begin to use the Supreme Court as a reaction to the Executive branch.36

ADI 4.365 exemplifies the difficulties of an action filed during recess. Justice Cesar Peluzo was the Vice-president of the Supreme Court at that time and did not decide the case preliminarily because he sustained that the lawsuit was not enough urgent to justify a pronouncing during recess37. More than a

36 See Zuccolotto, Vinicius Rodrigues (2016) and Seleghim (2014). 37"Não encontro, no caso, situação de urgência que justifique, nos termos do art. 13, VIII, do Regimento Interno, atuação desta Presidência. Submetam-se, pois, os autos a oportuna e livre distribuição, que permitirá ao Relator sorteado apreciação do requerimento de liminar.Publique-se." ADI 4365. Minister Cezar Peluso, DJ 13-01-2010. Accessible at: http://www.stf.jus.br/portal/peticaoInicial/verPeticaoInicial.asp?

year later, in 18.08.2011, the Plenary of the Supreme Court dismissed the case without prejudice. The other action filed during recess is ADI n. 4.90438. It was filed in 22.01.2013 and still awaits a final decision. Not even a preliminary statement was pronounced.

Figure 3. Source: Authors of the paper.

Another finding is related to the high delegation of decisional power to Justices individually. On one hand, Justices might actually analyze the case, as it has happened on ADI 4.048. Justice Gilmar Mendes brought the case into discussion and suspended the provisional measure 405/2007. On the other hand, if a minister chooses not to decide, it is quite possible that the process will be dismissed without prejudice. As we can see in Appendix A, this has happened several times. In fact, one ADI n. 4047, filed in 2008 and ADI 4904, filed 2013, still lack a decision.

base=ADIN&s1=4365&processo=4365 (16 mar 2017)38 ADI 4.904. Accessible at: http://www.stf.jus.br/portal/peticaoInicial/verPeticaoInicial.asp?base=ADIN&s1=4904&processo=4904 (16 mar 2017)

Also, as we can see in figure 3, all the vast majority of the final decisions are monocratic. The only ADI in which there is a final pronouncement by the Plenary was dismissed without prejudice.

Finally, another difficulty comes out as we take a look at the Court’s procedural rules. Article 12 of Law n. 9.868/199939 establishes that, if a relevant, urgent and significant case is filed, the Justices can, after requesting information, submit the preliminary decision to the approval of the Plenary. However, the data points out that, even though some Justices tried to follow the procedures in 8 ADIs, all of them were dismissed without prejudice. What happened was that, after the request for information, the actions were never analyzed by the Justices; the respective fiscal year ended leaving no other way than to dismiss the cases.

We can infer from these evidences that the Supreme Court faces some strong difficulties to pronounce a definitive and collegiate decision about provisional measures that authorize Extraordinary Credit. That can be interpreted as an incentive to the president’s behavior.

Executive BranchAs we can see from the following table, the Executive branch approved most of its provisional measures regarding Extraordinary Credits. This means that Congress and the Supreme Court have not blocked most of the decrees, even though both of those institutions have the means to do it, as we read before in the paper.

39 “Law n. 9.868/1999, article 12. Havendo pedido de medida cautelar, o relator, em face da relevância da matéria e de seu especial significado para a ordem social e a segurança jurídica, poderá, após a prestação das informações, no prazo de dez dias, e a manifestação do Advogado-Geral da União e do Procurador-Geral da República, sucessivamente, no prazo de cinco dias, submeter o processo diretamente ao Tribunal, que terá a faculdade de julgar definitivamente a ação.” Accessible at: http://www.planalto.gov.br/ccivil_03/leis/L9868.htm (15 mar 2017)

Situation QuantityConverted 143Rejected 4

Uneffective 2End of Procedure 20

Total 169Table 1. Source: Authors of the paper.

One can grasp from Figure 4 that every year the president authorizes Extraordinary Credits. First, that the Congress and the Supreme Court in Brazil norms incentivizes the current practice presidents in Brazil have of authorizing Extraordinary Credits every year. Second, those norms from both institutions incentivize predictability to when the Extraordinary Credits will be authorized. Third, the same rules also promote when presidents should authorize more Extraordinary Credits. Those three hypotheses could help us supporting a fourth thesis that there is a lack of checks from both Congress and Supreme Court regarding authorization of Extraordinary Credits.

As we saw from the previous analysis on Congress and Supreme Court, we have good reasons to think that it is more probable for a president to authorize Extraordinary Credits in December. Given 15 years, from September of 2001 to September of 2016, we calculated the proportion of years that have an authorization for each month. Indeed, the data shows that December is the most probable month to have Extraordinary Credits authorized.

Figure 4. Source: Authors of the paper.December is also the month with the highest number of provisional measures regarding Extraordinary Credits, as we can see in Figure 5. It has more than double the value of every other month. From another perspective, it is also important to note that, in our data, presidents authorized in last month of the year approximately one fourth of all Extraordinary Credits. This empirical result, together with theoretical reasons exposed in the Congress and Supreme Court sections, leads us to think that the norms from both institutions incentivizes the president to authorize Extraordinary Credits during December.

Figure 5. Source: Authors of the paper.

For each month, we summed the amount of authorized Extraordinary Credits by the president in each month. The empirical result shows us that December has a much higher value than any other month. The value surpasses the amount of 200 billion BRL [approximately 65 billion dollars]. This shows us that December is not only the month with the highest probability to have authorized Extraordinary Credits, but it is also the moment when most of the value is spent.

Hence, from these we can see a pattern of how these kind of provisional measures are created. From the data, as well as the reasons priorly exposed, we could think that this contradicts the Brazilian Constitutional value of unpredictability. If the norms in the Legislative and Supreme Court remains the same, we cannot expect this to change, since it has happened so many times throughout the past years. As we saw in figure 4, presidents from 2001 to 2015 authorized Extraordinary Credits in December 87% of the years.

This points to us that we have good reasons to think that there is a lack of checks from both Legislative and Judiciary institutions regarding some actions from the Executive branch. Indeed, many of those actions seem to be predictable, when they should not be. As we showed, there are ways of limiting the authorization of Extraordinary Credits, when they do not seem unpredictable.

It might be the case that the instruments that both Judiciary and Legislative have are not enough to limit well this kind of power from the Executive. This also represents a lack of checks.

This could put in check the mechanism of authorizing Extraordinary Credits. It might be that they are necessary to the Brazilian society. But they are probably not Constitutional in some cases.

Figure 6. Source: Authors of the paper.

ConclusionsIn this paper, we first defined some concepts that are common in the Brazilian public institutions. Second, we discussed about the theoretical framework that supports some ideas regarding authorizing Extraordinary Credits. Later, we proposed four hypotheses about our theme. Afterwards, we exposed the methods we have used to gather the data. Finally, we arranged all the analysis from the Executive, Legislative and Judiciary. In the latter section, we discussed how our findings supported the hypotheses

This idea affects many public policies in Brazil, from Olympiads to Zika virus. It is important that we understand the forces behind the many actions that happen everyday in the country. As we saw, both quantitative and qualitative analysis are helpful to us in solving the problem.

For future work, it would be interesting to see more data analysis regarding the events inside Congress and the Supreme Court. By understanding how

both institutions deal inside with the problem could guide us to a better understanding of the whole situation.

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Appendix A - List of ADIs

N. PlaintiffsN. of the MP

Rapporteur

Date of filing

Date of the decision

Preliminary

Final Decision

Final Result

3017

Procurador-Geral da República

131/2003

Ellen Gracie 3/10/2003

09/02/2004

No. Art 12

Monocratic

Dismissed without prejudice. Falta deaditamento dainicial

3487 PSDB247/2005

Ellen Gracie

05/05/2005

17/05/2005

No

Monocratic

Dismissed without merit. art. 21, § 1º, do RISTF

3709 PFL290/2006

Cezar Peluso

18/04/2006

05/05/2006

No

Monocratic

Dismissed without prejudice. They cannot be object of judicial review

3712 PSDB290/2006

Cezar Peluso

19/04/2006

27/04/2006

NoMonocratic

Dismissed without prejudice

3891 PPS364/2007

Ricardo Lewandovski

26/04/2007

29/05/2012

No. Art 12

Monocratic

Dismissed without prejudice. Time lapse

4038 PSDB395/2007

Roberto Barroso

04/03/2008

20/11/2015

No. Art 12

Monocratic

Dismissed without prejudice

4041 DEM420/2008

Menezes Direito

06/03/2008

12/03/2008

No

Monocratic

Dismissed without prejudice. Indef inicialJurisprudence

4044 PSDB 400/2007

Celso de Mello

12/03/2008

10/08/2009

No Monocratic

Dismissed without

prejudice

4045 PSDB399/2007 Eros Grau

12/03/2008

04/02/2009

No. Art. 12 Monocra

tic

Dismissed without prejudice. Time

4046 PSDB408/2007

Ricardo Lewandovski

12/03/2008

29/05/2012

No. Art 12 Monocra

tic

Dismissed without prejudice. Time

4047 PSDB409/2007

Roberto Barroso

12/03/2008 -

No- -

4048 PSDB405/2007

Gilmar Mendes

12/03/2008

14/02/2011

YesMonocratic

Dismissed without Prejudice

4049 PSDB402/2007

Teori Zavascki

12/03/2008

10/03/2016

YesMonocratic

Dismissed without prejudice

4050 PSDB406/2007

Menezes Direito

12/03/2008

13/03/2008

NoMonocratic

Dismissed without prejudice.

4098 PSDB424/2008

Ayres Britto

20/06/2008

07/08/2009

NoMonocratic

Dismissed without prejudice.

4365 PSDB477/2009

Dias Toffoli

31/12/2009

05/03/2015

No. Art. 13, VIII Tribunal

Dismissed without prejudice

4572

Confederação dos Servidores Públicos do Brasil

507/2010 Luiz Fux

10/02/2011

26/08/2013

No. Art 12

Monocratic

Dismissed without prejudice

4602 PSDB515/2010

Roberto Barroso

19/05/2011

27/10/2015

No. Art 12

Monocratic

Dismissed without prejudice

4607 DEM515/2010

Roberto Barroso

20/05/2011

27/10/2015

No. Art 12

Monocratic

Dismissed without prejudice

4904PSDB, DEM

598/2012

Marco Aurélio

22/01/2013 -

No- -

5513 SD722/2016

Gilmar Mendes

29/04/2016

16/12/2016

YesMonocratic

Dismissed without prejudice