Socio-Legal Foundations of Brazilian Central Bank's Autonomy - 1999-2020

Abstract

Between 1999 and 2020, the Central Bank of Brazil - BCB rested on a regime of operational autonomy, but, unlike other central banks, its board of directors did not have a functional mandate established by law. How to explain the functioning of this autonomy without the existence of a legal guarantee? The article seeks to tackle this question by carrying out an in-depth case study examining the governance and performance of BCB. The findings confirm the hypothesis that an institutional complementarity of three factors played the role of a functional substitute for a mandate established by law: the Weberian organization of the BCB, its external coalitions, and the regulatory capacity. The Weberian organization guaranteed cohesion to the bureaucracy and limited political control exercised through appointments; external coalitions reinforced the BCB's powers within the State apparatus, and the regulatory capacity institutionalized the BCB's performance, reinforcing other authorities' deferential behavior.

Keywords:
Central Bank; Bureaucracy; Autonomy; Insulation; Coalitions; Regulatory Capacity