economic expansion-cum-modernization of the country under the military was accompanied by a great expansion of the bureaucratic apparatus. This new tier was freed from the cumbersome procedures regulating the so-called administração direta, the ordinary public service. These included the free recruitment of personnel and some financial and budgetary autonomy. In the 1980s, the Brazilian bureaucracy consisted of a vast hybrid structure encompassing a number of insulated ilhas de excelência as they came to be called (literally, islands of excellence), coupled with large sectors of non-professionalized staff. In addition to those cited above, the key insulated bureaucracies were the state development banks and state-owned enterprises in oil, petrochemicals, mining and energy sector (Petrobras, Vale do Rio Doce, Chesf, Itaipu, and Banco Central, among many others). Schneider (1993) examined the career patterns of elite bureaucrats in Brazil in the 1970s and 1980s, compared with their counterparts in Mexico, France, US and Japan, and argues that Brazil and Mexico have a much higher circulation of elites within different agencies and ministries than do the other countries. Unlike Japan and France, this has produced more bureaucratic autonomy vis-à-vis interest groups and more loyalty to the various Presidents and their inner circles (Schneider, 1991). This circulation intensified during the transition to democracy in 1985. This is so because in the political game discussed in this report, the assignment of bureaucrat posts is a key element of Brazil’s coalition presidentialism. In this game, as noted before, the President allocates cabinet portfolios more or less according to the share of Congressional seats held by the coalition members. In order to obtain his preferences for fiscal stability, the President faces the dilemma of delegating bureaucratic discretion to coalition party members while reducing the associated agency losses. The institutional rules governing the bureaucracy have enabled presidents to successfully play this game. The President can resort to 18,000 political appointments (known as DAS posts), a considerable number of which are low-rank posts. The key high-rank posts (approximately 3,000) are filled by the DAS 4, 5 and 6 appointments representing less than 2 percent of federal public employees. Presidents have recruited personnel for these positions from within the civil service, from non-tenured but highly qualified professionals currently holding positions in the bureaucracy, from public universities, and from the private sector. The President delegates less in the areas of taxation, budgeting, and planning in the Ministries of Finance and Planning. Top-rank bureaucrats in these ministries are typically
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