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The Public Good and the Brazilian State: Municipal Finance and Public Services in São Paulo, 1822-1930

Author(s):Hanley, Anne G.
Reviewer(s):Cribelli, Teresa

Published by EH.Net (December 2018)

Anne G. Hanley, The Public Good and the Brazilian State: Municipal Finance and Public Services in São Paulo, 1822-1930. Chicago: University of Chicago Press, 2018. xv + 290 pp. $60 (cloth), ISBN: 978-022-65-3507-4.

Reviewed for EH.Net by Teresa Cribelli, Department of History, University of Alabama.

 
Anne Hanley’s most recent work, The Public Good and the Brazilian State: Municipal Finance and Public Services in São Paulo, 1822-1933, examines the ways that centralized government funding — or the chronic shortage thereof — shaped the establishment of public services in seven municipalities (counties) in the state of São Paulo spanning from 1822 (the year that the Empire of Brazil gained its independence) to the end of the First Republic in 1930. Municipalities were charged with providing a range of public services, including the canalization of potable water, the construction of jails, churches, and other government buildings, transportation infrastructure such as bridges and macadamized roads, public health and public education. Meticulously researched, Hanley (Professor of History at Northern Illinois University) draws from more than a centuries’ worth of fiscal data at the municipal and provincial level, including “municipal ordinances, mayoral reports, citizen complaints and requests, municipal council correspondence with provincial and state legislatures, and financial reports” (p. 17).

Hanley finds that during the imperial period, the shortage of financing for public services was rooted in two factors: underfunding from the centralized government in the capital of Rio de Janeiro combined with provincial oversight over the minutest of public works expenditures; and regressive tax regimes that limited the ability of municipalities to raise funds locally to remedy shortages. By the end of the imperial period, just 5 percent of all national revenue was channeled to municipal public services. This number increased to 14 percent during the Old Republic (1889 to 1930), though still fell far short in providing the monies needed to fully fund basic services for municipal communities (p. 99). The heart of Hanley’s argument is that roadblocks to the generation and allocation of revenue for public services led to the deep income inequalities embedded in contemporary Brazil, home to one of the world’s sharpest divisions between the wealthy and the poor. She lays out her argument in seven chapters and a conclusion, including 4 figures and 32 tables that provide detailed data on the fiscal expenditures for the municipalities of Amparo, Araraquara, Campinas, Franca, Riberão Preto, Rio Claro, and São Carlos.

Based on these data, Hanley challenges a traditional historiography that argues that bloated patronage systems and corruption stilted the development of public services in nineteenth-century Brazil. While these were certainly on-going issues that affected government services, Hanley finds that it was top down control from Rio and the inability of local municipal councils to procure sufficient funding from the provincial level that prohibited the expansion of public services. Her sources reveal a sometimes decades-long frustration with the inability or unwillingness of the provincial legislature to channel resources into municipal projects. Funding revenues were further stymied by municipal dependence on local taxes and fees that “came primarily from daily economic and social interactions,” such as fines, taxes on rentals and professional licenses, and tolls (p. 102). While this was not always a strictly regressive tax structure that put the burden of raising public revenue on the least affluent members of society, it posed the dilemma of the chicken or the egg: “the fiscal structure of the Brazilian state isolated hinterland municipalities that needed stimulus for their commerce to thrive, and needed their commerce to thrive in order to generate revenue to pay for essential public services” (p. 65).

Despite the decentralization of oversight for public services and the ability to secure municipal loans with the establishment of the Old Republic in 1889, little changed. Public services remained underfunded and municipalities struggled to service their communities, especially as new technologies such as lighting and telephones, and new public health considerations including yellow fever outbreaks required additional municipal support.

In these examples, Hanley’s analysis goes beyond what may appear on the surface to be dry financial data. The Public Good vividly describes the progression of Brazilian modernization on the local level through the complaints and requests of local officials in official reports. Immediately following independence, municipal concerns focused on local issues such as preventing residents from watering horses in public fountains. By century’s end, municipal responsibilities included more complex projects, including the management of epidemics that required the construction of hospitals and the hiring of medical staff. Railroads hastened urban growth and facilitated trade, but they also spread disease more quickly and efficiently; modernization presented unexpected challenges that resulted in new expenses for municipalities.

Among the many rich insights of The Public Good, a few small questions remain. Hanley argues convincingly that these seven municipalities can be considered representative of the nation as a whole. São Paulo emerged after independence as an impoverished and underdeveloped hinterland that by the twentieth century developed into Brazil’s industrial and financial center and its wealthiest state. These municipalities therefore represent the extremes of poverty and wealth in nineteenth and early twentieth-century Brazil. Nonetheless, this reader would be curious to see how less affluent communities in even more remote regions addressed revenue shortfalls; did their strategies for procuring provincial support differ from São Paulo? Were certain regions favored with funding from Rio more than others? Hanley mentions the impact of the 1890s recession, World War I and the market crash of 1929 on local economies. It would be interesting to know more about the availability of funding in boom times. For example what were the spending priorities of the national government overall? Did events like the Paraguayan War (1865 to 1870) also factor into the availability of revenue at the national and local level?

In closing, The Public Good is a strong and significant addition to recent scholarship that bridges the division between data-driven economic history and social history, including William Summerhill’s Inglorious Revolution: Political Institutions, Sovereign Debt, and Financial Underdevelopment in Imperial Brazil (New Haven: Yale University Press, 2015) and Zephyr Frank’s Dutra’s World: Wealth and Family in Nineteenth-Century Brazil (Albuquerque: University of New Mexico Press, 2004). Hanley deftly weaves together a century’s worth of fiscal data into a carefully-crafted narrative that demonstrates how the construction of gutters and the distribution of vaccines — the ho-hum matter of everyday life — profoundly shaped the Brazilian experience in the nineteenth and early twentieth centuries and set the stage for today’s sharp wealth inequality. The Public Good is a significant contribution to scholarship on nineteenth-century Brazil, and fills a lacuna in our understanding of how modernization (and the financing that facilitated it) progressed on the local level. Beyond Brazil, Hanley’s work presents a model for researching the relationship between funding policies and public service development. Like the municipal councils who oversaw street lamp installation and electrification projects in their nineteenth-century communities, may this important research light the way for further scholarship on finance, local governance, and urbanization.

 
Teresa Cribelli is the author of Industrial Forests and Mechanical Marvels: Modernization in Nineteenth-Century Brazil (Cambridge University Press, 2016). She is currently co-editing a volume on Brazilian periodicals, Press, Power, and Culture in Imperial Brazil, 1822-1889, with Celso Castilho and Hendrik Kraay. Her present research follows two lines of inquiry: the role of readers’ letters in nineteenth-century Brazilian newspapers; and a comparison of narratives of progress and frontier expansion in nineteenth-century Brazil and the U.S.

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Subject(s):Government, Law and Regulation, Public Finance
Geographic Area(s):Latin America, incl. Mexico and the Caribbean
Time Period(s):19th Century
20th Century: Pre WWII