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São Paulo Metropolis By
Norman Gall |
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Braudel Papers - Nº 28, 2001 The village of São Paulo de Piratininga was founded in 1554 by Jesuit missionaries seeking to convert Indians to their faith, at the rim of Brazil’s great Central Plateau beside the inland-flowing Tietê River. The village soon became the cutting edge of Portuguese frontier penetration of the continental interior, as bandeirantes hunted for gold and native slaves. Over the past five centuries the flood-prone village of poor thatched huts became a town, the town became a city and the city became a metropolis, undergoing rapid metamorphoses. São Paulo remained a primitive place until the coffee boom of the late 19th Century, when it became the main supply and trading center and railroad hub serving the expanding plantations of the interior and then an industrial powerhouse in the 20th Century. The population of Metropolitan São Paulo mushroomed from only 31,000 in 1870 to18 million today, growing by 5% yearly, the fastest long-term rate of big-city growth in human experience. This is twice as fast as the growth of Berlin, the leader of Europe’s accelerated urbanization in the 19th Century, whose population expanded by 2.6% yearly, from 170,000 in 1800 to four million in 1925. São
Paulo today is a turbulent ocean of waste and contradiction, its great
vitality challenged as never before by problems of scale and political
disorganization. According to United Nations estimates, São Paulo is
virtually tied with Mexico City and Mumbai (Bombay) for second place
among the world’s giant cities, the three of them far behind Tokyo
with its 26 million people. As a result of rapid urbanization in the
late 20th Century, only eight of the 30 biggest cities lie in the rich
countries today, as opposed to two-thirds of them as recently as 1950,
a shift marking human progress. “Growing urbanization is another
indicator of growing wealth in the form of food supplies that can carry
larger non-agricultural populations,” J.M. Roberts observed in The
Twentieth Century (1999). “Many have starved since 1901, but many
more have lived. To speak of them as enjoying wealth may seem
paradoxical to any visitor struck with dismay on discovering the slums
of Cairo or Calcutta. Yet humanity now has at its disposal a greater
abundance of resources than ever.” The big question is how these
resources are used. “The
city will increasingly become the test bed for the adequacy of
political institutions,” the United Nations said in a new report,
Instanbul+5: The Urban Millennium. “Burdened with all the problems of
growth, cities are increasingly subject to dramatic crises, especially
in developing countries. Unemployment, environmental degradation, lack
of urban services, deterioration of existing infrastructure and lack of
access to land, finance and adequate shelter are among the main areas
of concern.” The
political disorganization of Greater São Paulo is embodied in 39
municipalities spread over some 8,000 square kilometers. At the core of
the metropolis is the giant Municipality of São Paulo, itself with 10
million people, capital of São Paulo State, embracing one of the
world’s richest agricultural regions. This essay analyzes the
weaknesses in São Paulo’s political structure and suggests some
paths of reform that would make its problems of scale more manageable. São
Paulo has been a leader of the worldwide trend to urbanization in the
20th Century while clashing with higher standards of wealth and social
justice. It has evolved into a multi-centered metropolis, akin to Los
Angeles, Houston and Atlanta, less dependent on its old business core,
with the appearance of a new generation of spectacular office towers,
luxury apartment buildings and shopping malls in other areas, as
prospering businesses migrate from old factory and office buildings,
their walls darkened by decades of soot. The metropolis keeps
expanding. The first section of a 170-kilometer Ring Road, designed to
ease truck traffic among Brazil’s regions and clogging of Greater São
Paulo’s streets, is to be finished in 2002. The Ring Road has led to
land speculation and major construction projects near its
limited-access entry ramps, including hospitals, hotels, cargo
distribution centers, warehouses, factories and a dedicated Food Town
cluster for suppliers to McDonald’s restaurants. The
frantic paving of streets, the opening of new traffic arteries and
continuous addition of tunnels and cloverleafs cannot keep up with the
proliferation of motor vehicles, from 55,000 in 1950 to one million in
1980 to five million today, not including the 375,000 motorcycles used
mainly by messengers (“motoboys”) recklessly weaving their way
through traffic jams. There are few maps of the city’s underground
infrastructure, so work gangs often unexpectedly drill into gas,
sewage, water and power lines, causing leakage of poisonous gases,
explosions and flooding. For the rich, São Paulo has the world’s
second-largest helicopter fleet (450), smaller only than New York’s,
in a market growing by 20% annually over the past three years. On the
ground, wealthy men, their wives and children seek refuge from the
perils and inconveniences of the metropolis in an expensive
infrastructure of armored cars, bodyguards and protected condominiums. Because
São Paulo never was damaged by war, unlike most European cities, it
could pursue its precarious life-style on an ever-greater scale.
Survival rates have increased. As an indicator of human welfare, infant
mortality plunged from 124 per 1,000 live births in 1940 to 16 in 1999.
The Municipality of São Paulo runs 244 public health stations and
hospitals providing three million consultations each year, in addition
to services of a parallel medical system operated by the state
government. Since the late 1970s, the share of population served by
piped water rose from 50% to 99% while the sewage network grew to cover
88% of homes, against only 39% in 1978. Real wages rose since 1994,
when the Real Plan stopped chronic inflation. Greater São Paulo is the
main market for Brazil’s meat production from the world’s largest
cattle herd and one of its biggest poultry industries. Brazil’s per
capita beef and poultry consumption is more than the rich countries´
average. While Brazil has a very unfair pattern of income distribution,
with the richest 10% of the population absorbing 47% of the monetary
stream, it would be very hard for the richest 10% to eat meat in
proportion to its share of earnings, so poorer people must be eating
meat as well. In São Paulo the share of homes with washing machines
increased from 46% in 1992 to 60% in 1999, while by now nearly all
families have refrigerators and television. From 1972 to 2000, on the
periphery of the metropolis, 825 clandestine land subdivisions formed
105,102 illegal house lots, many occupied by from three to five
families each on the banks of reservoirs and other land protected by
environmental laws. However, many areas invaded by squatters building
precarious shacks have become vibrant if amorphous communities linked
to the city’s core by crowded traffic arteries and commercial
districts, studded with supermarkets, schools, bus terminals and
hospitals, as well as thousands of small businesses –bakeries,
hairdressers, pharmacies, gas stations, bars and construction materials
suppliers. Above all, São Paulo is an ocean of little houses and
little streets, evoking what Samuel Johnson said of London in 1763:
“Sir, if you wish to have a just notion of the magnitude of this
city, you must not be satisfied with seeing its great streets and
squares, but must survey the innumerable little lanes and courts. It is
not in the showy evolutions of buildings, but in the multiplicity of
human habitations which are crowded together, that the wonderful
immensity of London consists.” While
the quality of public services is poor amid great disorder, it is a
great leap forward from what existed 10 or 15 years ago. In recent
decades, São Paulo developed excellence in finance, engineering, mass
communications, medicine, manufacturing, marketing and fashion. But
this excellence is undermined by demoralizing episodes of corruption,
prison revolts, failing public education, truck hijackings, armed
robberies and murders at traffic lights. Meanwhile, because of demands
for justice, problems of scale and pressures on weak political
institutions have grown. Migrations All
great cities are built with migration. Throughout the 20th Century São
Paulo attracted huge flows of migrants, mainly from Europe and
Brazil’s Northeast, seeking a better life, but also from Japan,
Korea, Syria, Lebanon, Nigeria, Angola, Argentina, Peru and Bolivia.
Newcomers are especially vulnerable to calamities such as the annual
floods brought by summer rains clogging small channels that drain the
sprawl of impermeable paved surfaces. In
Faust’s Metropolis: A History of Berlin (1998), Alexandra Richie
observed that, like São Paulo, Berlin “was built by its coarse
inhabitants and its immigrants, and became powerful not because of some
Romantic destiny but because of its armies and its work ethic, its
railroads and its belching smokestacks, its commerce and
industry….” As in São Paulo of the 1920s, more than 60% of
Berliners in 1900 were immigrants or children of immigrants. As with
the poor migrants from Brazil’s drought-prone Northeast who built
shacks on the hills and ravines of São Paulo’s periphery in the
mid-20th Century, waves of famine-stricken peasants and weavers a
century earlier fled the sandy fields of Prussia’s eastern provinces
to build tent cities on the bloated outskirts of Berlin, which became
“the biggest working-class slum on the continent.” This
is an old story. All the world’s great cities, from ancient Rome to
London and Paris a century ago to New York and São Paulo today, bred
huge gaps between wealth and poverty. Great cities always have been
hard to manage. Like many complex systems, most cities develop
spontaneously but demand management to avoid degeneracy and
disintegration. A time comes in the lives of big cities that the need
for regulation and rational allocation of space, money and other
resources prevails over impulsive processes. Long ago São Paulo
reached the stage in its hectic growth when this transition should have
taken place. One
of the main hopes for Greater São Paulo today is that its population
growth has slowed dramatically since 1980, absorbing fewer migrants,
making it possible for authorities to invest more in improving the
quality of life. In the 1970s, the share of migrants from Brazil’s
poorer regions in São Paulo’s population rose from 13% to 19% and
has stabilized at that level since then. Meanwhile, São Paulo’s
upper-income population has remained in the city, not fleeing to the
suburbs as it has in older big cities such as London and New York. The
metropolis of Greater São Paulo generated a gross domestic product
(GDP) in 2000 of $147 billion, equivalent to one of the world’s 30
biggest national economies, one-fourth of Brazil’s total output and
one-third of the GDP of the New York metropolitan area. In terms of
purchasing power, per capita income in the metropolis is roughly half
that of the United States and twice Brazil’s average. São
Paulo differs from most of the world’s other giant cities in that it
is neither an imperial nor
a national capital. Tokyo and Mexico City, for example, are national
capitals with status of self-contained states within their countries’
political structure. The 10 million people of the Municipality of São
Paulo, only 6% of Brazil’s population, pay 28% of all of Brazil’s
taxes, a share that rose during the 1990s, even as the bulk of these
revenues are transferred to poorer states and municipalities of Amazônia
and the Northeast which pay few taxes and are over represented in
Congress in proportion to their populations. While the Municipality of
São Paulo transfers a huge share of revenue to state and federal
governments, it also spends the third-largest public budget in Brazil,
smaller only than those of the federal government and São Paulo State.
However, local taxes are low for a metropolis of its size and unmet
needs. São Paulo collects 2.5% of its gross product in municipal
taxes, against 5% in New York and Tokyo. Because of low local taxation
and meager transfers from the federal government, São Paulo has lacked
the public investment that usually benefits a political center while
trying to absorb previous waves of poor migrants just as, after 1980,
electoral democracy was being installed and chronic inflation escalated
throughout Brazil. To place in perspective these problems of scale and
institutions, as well as the injustices and inefficiencies they
nourish, this essay will examine the problem of political structure in
more detail. Political
Disorganization São
Paulo’s rapid and colossal growth dwarfed its capacity for
institutional development, leading to political disorganization and
many-faceted failure to manage problems of scale. Adaptation to
problems of scale was stalled by confused and overlapping political
authority and by the lack of educated people to manage a complex
metropolis. At its simplest level, the confusion is embedded in a maze
of superimposed administrative districts that blur lines of
responsibility. Lacking clear boundaries, communities are amorphous.
They have no direct political representation. Civil society is
fragmented and weak. Most current talk of São Paulo’s political
disorganization focuses on corruption. Some of the main scandals are: l
In December 1998 a city inspector attached to the Regional
Administration of Pinheiros, controlled by Councilman (Vereador) Paulo
Roberto Faria Lima, was arrested while extorting $20,000 from a woman
seeking authorization to open an exercise gym. Under questioning the
inspector revealed that he belonged to a bribery ring run by Faria Lima
who, according to prosecutors, demanded $120,000 monthly from his gang
by shaking down city contractors, street vendors, owners of illegal
kiosks and bars, violators of zoning rules and eating places subject to
sanitary regulations. Investigations spread to other districts, leading
to arrest of roughly 100 persons and indictment of 200 others. Three
councilmen were convicted. l
The Municipality of São Paulo alone has some 65,000 streets coursing
over 14,000 kilometers, 86% of them paved, from which 13,000 tons of
garbage must be removed daily. Many scandals and political
controversies focus on garbage collection, street cleaning contracts
and concessions to private companies to operate public bus services
over this huge network. l
Mayor Paulo Maluf (1993-96) and his chosen successor, Celso Pitta
(1996-2000) broke away from the national system of supporting municipal
health services, Sistema Único de Saúde (SUS), to create a
cooperative network of doctors and hospitals, Plano de Atendimento de
Saúde (PAS), sacrificing large federal financial transfers to
municipalities participating in SUS. In 1999, São Paulo received only
R$8 million in SUS funds, against R$426 million for Rio de Janeiro and
R$250 million each for Belo Horizonte and Porto Alegre. During the
first three years of the PAS system, municipal health spending tripled
but PAS nevertheless accumulated deficits of R$2 billion. Widespread
corruption led to overpricing and kickbacks that increased the cost of
routine purchases by 300%-400%, in addition to unnecessary buying to
create opportunities for kickbacks and for theft of medical equipment.
Meanwhile, the cooperatives amassed unpaid debts of R$424 million. l
In São Paulo’s 21 municipal cemeteries, 70,000 burials take place
every year. The Municipal Funeral Service has been accused by police of
engaging in a kickback ring with funeral parlors, flower shops and a
telephone call center, in cahoots with three councilmen, for
price-gouging of bereaved families in selling them coffins, flowers and
burial services. l
In May 2000 the federal government bailed out the Municipality of São
Paulo, assuming debts of $5 billion, to be repaid over 30 years at
below-market interest, one-fifth of which was borrowed fraudulently by
Mayor Paulo Maluf to pay debts incurred in lawsuits (precatórios). But
the money was diverted for other purposes. São Paulo municipal
officials advised governments of other states in financial engineering
of fraudulent borrowing, executed through a ring of small banks and
brokerage houses. This
kind of corruption belongs to the history of big cities almost
everywhere, especially during periods of fast growth, and has its
costs. Problems of scale make inspection and supervision difficult,
contributing to corruption. In New York, construction of the Brooklyn
Bridge was authorized in the 1860s only after promoters delivered a
bribe of $60,000 in cash to the boss of Tammany Hall, William H. Tweed,
who also got controlling stock in the company that built the bridge,
empowering him to get jobs for followers and kickbacks from
contractors. São Paulo differs from New York in its highly competitive
political environment, unlike the one-party machine that ran New York
for so long. However, Boss Tweed might have been proud of the
catchphrase of supporters of Maluf and of Adhemar de Barros, a mayor in
the 1950s: “Rouba mas faz!” (“He steals but he does things!”)
As Commissioner of Public Works, Tweed authorized extensive sewer,
water and gas pipelines, hired excellent engineers and told them to
build the best. In New York as in São Paulo, businessmen bribed
officials to get police protection, lax enforcement of health and
housing codes and profitable concessions to provide public services.
The big difference between politics in New York and São Paulo is that,
over the past century, New York’s elites led several waves of reform
that have managed to curtail if not end corruption, while São
Paulo’s elites complain but do nothing. Complaints
often focus on the impunity of corrupt politicians. Review of public
spending is in the hands of the Accounts Tribunal of the Municipality (TCM),
which functions along the lines of accounts tribunals at the federal
and state levels, as called for in Brazil’s constitution. They give
well-paid jobs to semi-retired politicians with no professional
qualifications for auditing government accounts. Members of the
accounts tribunals usually are appointed by presidents and governors,
collaborating with their legislatures, in full confidence that they
will cause them no auditing problems, even though staff accountants may
discover serious illegalities. The five members of São Paulo’s TCM
are four former city councilmen and a former chief of staff of Mayor
Paulo Maluf. Their docility in reviewing the city’s accounts was
rewarded with a fourfold increase in the TCM budget in 1992-99. Viewed
broadly, political disorganization in São Paulo arises from failure to
deal with questions of scale and local responsibility, magnified by
three problems: (1) a local administrative and political structure that
breeds venality and confusion; (2) overlapping roles of São Paulo’s
state and municipal governments, and (3) the anti-metropolitan bias in
Brazilian federalism. 1.
Local politics All
55 councilmen are elected at-large to the São Paulo City Council, with
the whole city as their constituency and without responsibilities to
specific local electorates. Each is entitled to hire a personal staff
of 21 “advisers.” Between elections every four years, the essence
of politics among most councilmen is to raise money to finance the next
election campaign and to wrestle for power within the incestuous
political class. The
powers of São Paulo’s City Council were expanded when a new
municipal charter was passed in 1990.
The big change was the removal of the 90-day statutory time
limit (decurso de prazo) within which the City Council must vote on the
mayor’s legislative proposals to avoid them automatically becoming
law. Until then, the mayor could employ a small group of allies on the
City Council to use delaying tactics to extend deliberations beyond 90
days. The City Council also gained powers to amend the budget and to
authorize the mayor to shift outlays at his discretion. Under the new
charter, the mayor badly needs a working majority on the City Council
to govern São Paulo effectively. Brazil’s
fragmented and undisciplined political party system has made it hard
for both federal and municipal executives to develop stable legislative
majorities. No São Paulo mayor since 1990 was elected with a City
Council majority. Each mayor is forced to opt for spot market dealing
to get support for each measure needing City Council approval.
Sometimes this works. Mayor Luiza Erundina de Sousa of the leftist
Workers Party (PT) made deals with the City Council that raised
property taxes by 125% in 1991 and by another 52% in 1992. Or the mayor
can build a working majority by distributing jobs and areas of
influence among the councilmen and their allies. The main way of
building a stable coalition of councilmen is distributing among them
control of the 28 Regional Administrations and jobs in decentralized
agencies. Regional
Administrations, used by mayors since the 1950s to gain or reward
loyalty, are responsible for such tasks as street cleaning, maintenance
of municipal infrastructure, enforcing sanitary and zoning regulations,
issuing construction and occupation permits and licensing new
businesses. The city has 1,000 pages of land-use zoning regulations,
which are changed at will by councilmen to meet the demands of
supporters. The Regional Administrations place politicians in frequent
and intimate contact with local voters, contractors and other
businessmen, expanding chances for harvesting graft and electoral
support. In 1993, Maluf won City Council approval to increase the
number of Regional Administrations and then won discretionary spending
powers over 10% of the municipal budget. Many
cities are run this way. The difficulty of this kind of management in São
Paulo is the problem of scale, compounded by the disorganization bred
by a crazy quilt of overlapping and irregular districts with different
functions as defined by federal, state and municipal authorities,
confusing and clouding the lines of access and accountability. The
Municipality of São Paulo first was divided into districts in 1944 and
now embraces 96 districts, grouped into 28 Regional Administrations.
Overlapping these designations are countless other administrative and
planning units created by federal, state and municipal agencies,
including 10,190 census districts, 103 police precincts, 270 planning
units for the subway system, 41 electoral zones, 19 water and sewage
divisions and hundreds of state and municipal school districts. The
boundaries of these political and administrative units rarely coincide.
Many of them were created to accommodate political allies or the
personal convenience of bureaucrats. Communities of 200,000 or 300,000
people within the municipality lack clear territorial definition. Nor
do public agencies regularly share information. “Each agency has its
own culture, nomenclature and procedures that have nothing in common
with other agencies,” observes Aldaíza Sposati, a PT councilwoman
and former Municipal Secretary for Regional Administrations. The
Military Police, which patrols the streets and responds to emergencies,
rarely exchanges information with the Civil Police, in charge of
investigations. Within the municipal government, the Finance Department
cannot obtain information on the property tax base from the Housing
Department, concerned only with the legal status of property and
businesses. Who can manage all this? Who is responsible? 2.
The state and the metropolis Contributing
to the political disorganization of the metropolis is the blurring of
responsibilities of the state and 39 municipal governments, especially
that of the City of São Paulo. In the half-century before the world
economic crisis that began in 1929, São Paulo’s state government
made bold investments in the modernization of its economy and society,
especially in areas of interest to the coffee trade. Rapid progress was
made throughout the state in developing public health and statistical
services, basic sanitation, agricultural research and education. The
federal constitution of 1891 gave states exclusive taxation rights over
exports, industry, real estate and the professions. Fed mainly by
coffee export taxes, São Paulo collected the lion’s share of
Brazil’s public revenues and created the nation’s first modern
bureaucracy. At the same time, the state quickly amassed huge debts as
it tried to subsidize both immigration and coffee production. These
debts sowed the seeds for decades of chronic inflation and, combined
with the transfer of tax revenues to other regions, for the failure to
make critical public investments as the metropolis grew and disputes
multiplied over responsibilities of the state and the city. This
confusion over responsibilities is dramatized every year with the flash
floods that follow summer rains. The Jesuits founded the village of São
Paulo in 1554 on a headland between two rivers to escape the floods
that even then attacked the river valleys during the rainy season. The
rains clog the small channels and streams that drain the immense sprawl
of impermeable paved surfaces into the beds of the big rivers, the Tietê
and the Pinheiros, flooding the main roads that run along the river
banks, causing colossal traffic jams that back up cars, trucks and
buses in different places for a total of 120 kilometers. Stranded
motorists wait on the roofs of their cars to be rescued by police
helicopters while others try to swim or wade to safety. Every year the
floods generate saturation press coverage and dramatic scenes on
television news programs. Every year the politicians are blamed for not
doing more to control flooding. Mayors and governors fight over whether
the flooding problem belongs to the municipality or the state. The law
says that river management is the state’s job while the sewers and
channels feeding the main rivers are the city’s responsibility. The
floods are just one example of overlapping city and state
responsibilities. While state and municipal hospitals and maternity
clinics proliferated, both legal rights and collection of vital
statistics are restricted because registry of births and deaths in poor
areas is made difficult since 18 of the city’s 58 registry offices (cartórios)
are located outside the neighborhoods that they are supposed to serve.
The state government, not the city, sets jurisdictions of cartórios. The
most glaring failures of government in Greater São Paulo are in public
security and education, where state authorities have exclusive or
dominant responsibilities through huge bureaucracies of 120,000 people
in the police and 300,000 in the state school system. Management
burdens on this scale have meant poor supervision of these
bureaucracies, especially at their lower levels. At these levels pay is
low, training is poor, turnover high and performance-related incentives
missing from daily routines. While
the population of the metropolis increased by one-third in 1985-99, the
number of homicides rose by 144%. The 11,460 homicides recorded in
Greater São Paulo in 1999, most of them arising from trivial disputes,
equaled two-thirds of the 17,000 murders committed that year throughout
the United States, with a population 16 times bigger than Greater São
Paulo’s. Even more shocking than the number of homicides is the
tolerance of homicides. Sample studies show that few murder cases are
investigated, only 5% of them are solved and roughly 2% of killers go
to jail. In 1999 Greater São Paulo registered 170,000 car thefts and
157,000 armed robberies, a tripling of these crimes since 1985. Of
these armed robberies, 11,126 of them occurred on the 9,699 public
buses that circulate on 797 routes among the city’s 2,489 bairros
(neighborhoods). However, only 23% of armed robberies are reported to
police and enter official statistics, according to a survey by
Datafolha. Legal
responsibility for public security in São Paulo is invested in two
rival state police forces together employing 120,000 men and women,
burdened by perverse incentives and accusations of corruption. We
define perverse incentives as the devices of law and custom rewarding
behavior that undermines the stated purpose of institutions. Perverse
incentives divert resources and motivation from local police
responsibilities for preventing crime into bloated bureaucracies and
swollen units of shock troops inflicting unnecessary civilian
casualties. Officers of the Civil and Military Police receive little or
no management training for the scale and complexity of their
operations. Perverse incentives mean that bureaucracy reproduces
itself, as career police bureaucrats who never served in the field are
favored in high-level promotions over officers who excelled while
commanding units in dangerous areas. Perverse incentives govern a
system of pensions that absorb nearly two-fifths of the budget of São
Paulo’s Department of Public Security. The Military Police alone
supports some 35,000 pensioners, or nearly one for every two men on
active service, with 1,400 serving first sergeants and almost 14,000
retired ones. There are 53 serving colonels while another 1,000 collect
pensions. Greater
São Paulo’s problems of scale also appear in public education. Most
of its 10.7 million people between the ages of five and 39 are engaged
in some kind of classroom activity, either as students or teachers. The
Municipality of São Paulo alone operates more than 800 kindergartens
and primary schools with some 800,000 pupils. Complementing and
overlapping this huge municipal network, roughly the size of New York
City’s, the state government of São Paulo runs its own parallel
system, embracing another 900,000 pupils in primary instruction and
some 500,000 in secondary education, within the Municipality of São
Paulo. These numbers represent a big effort to bring marginalized
children into the public schools. Of the 4.1 million students in
primary and secondary education in Greater São Paulo, less than 14%
are in private schools, a share that has fallen fast in recent years as
building of public schools in the periphery expanded enormously.
However, the problems of scale are daunting. The state government, with
sole responsibility for public secondary education and absorbing
two-thirds of primary enrollments, runs schools for three million
pupils among the 39 municipalities of Greater São Paulo, part of a
statewide system of seven million students and 300,000 employees. This
poses colossal management challenges at present levels of human
capital. Qualified teachers are scarce. Low pay forces many of them to
teach in three schools in the same day, often starting at 7 a.m. and
finishing at 11 p.m. Pupils get no homework assignments and little
reading instruction. Absenteeism and turnover of teachers, principals
and supervisors are chaotic and promiscuous, with shifting of
assignments often taking place in the middle of the school year,
confusing pupils and interrupting classes, according to the perverse
incentives of a complex promotion system. 3.
Brazilian federalism and the cities In
its constitution of 1988, Brazil created one of the world’s most
decentralized federations, granting municipalities legal equality with
the states and the federal government. The privileges of Brazilian
municipalities stand out against the weakness of local governments in
many other democracies. In the United States, the states can create or
abolish municipalities at will. India’s constitution does not even
recognize the existence of municipalities. In most of Latin America,
municipalities lack autonomous taxing and legislative powers. In
Brazil, however, the share of municipalities in all public revenues
rose by half under the new constitution, thanks mainly to transfers
from the federal government. According to Anwar Shah, a World Bank
specialist in federalism, “Brazilian municipal governments should be
the envy of all local governments, in both rich and poor countries.” The
problem with Brazil’s new federalism is its anti-metropolitan bias
that neglects the big cities. The share of Brazilians living in towns
and cities grew from 36% in 1950 to 81% today. Brazil’s 14 cities
with at least one million people contain one-third of its total
population of 170 million and its heaviest concentration of social
problems. They also produce 85% of Brazil’s GDP, roughly the same
share as the metropolitan regions of the United States. But federal
transfers to municipalities go mainly to small towns that collect few
taxes from their own people. The town of Sena Madureira (population:
23,000) in the remote Amazon state of Acre receives federal transfers
amounting to 10 times local taxation, while São Paulo receives
transfers equal to only 0.4% of municipal revenues. Brazil’s big
cities are under-represented in Congress and lack a political framework
for dealing with metropolitan problems. What
to Do? Big
cities need continuous adaptation. The political structure of Greater São
Paulo badly needs democratic reform. Changes are needed to create
conditions for better management of the size of the metropolis and more
local responsibility. We know that reforms bring difficulties and
frustrations. They usually are attempted in times of desperation. In
her book, Mayors and Money: Fiscal Policy in New York and Chicago,
Professor Ester Fuchs of Columbia University observed that “fiscal
problems find a prominent place on the political agenda only when
banking interests threaten to exclude cities from the bond market; then
cities attempt to restructure their policy processes to deal more
efficiently with the problem of scarce resources.” Just as Brazil
could not continue living under decades of chronic inflation without
risking disintegration of its economy and society, the metropolis of São
Paulo cannot continue to live with its present political structure
without plunging deeper into violence and confusion. The price of
negligence can be very high, as Brazil’s current electricity shortage
shows. A
number of innovations in metropolitan government come to mind. All
present difficulties. Some
now are being discussed: 1.
Sub prefectures: In the 1950s Mayor Wladimir de Toledo Piza proposed
creation of 19 sub prefectures, or boroughs, in a new territorial
division of the city to promote “polynucleation of the urban
agglomeration by local polarization of the anxieties, interests and
aspiration of inhabitants of the neighborhoods.” The sub prefectures
would correspond to metropolitan subdivisions called ku in Tokyo and
delegaciones in Mexico City, where communities elect local leaders
directly. The
idea of creating sub prefectures was abandoned in the 1960s with
creation of the first regional administrations, only to be revived with
the election of PT Mayor Luiza Erundina in 1989. The City Charter of
1990 provides for creation of sub prefectures to replace the regional
administrations, but this measure was never implemented.
All mayoral candidates in the 2000 election supported new
initiatives to create sub prefectures, but disputes continue over
implementation. Reform of the decentralized regional administrations is
needed to combat endemic corruption and to serve local communities
better. The basic issue is: How can the sub prefectures go beyond a
mere renaming of the regional administrations that would preserve the
same distortions? The debate focuses on whether sub prefects should be
elected or appointed by the mayor, and what powers should be invested
in the Representative Councils of each sub prefecture.
Elected mayors and city councilmen are wary of creating rival
power centers and of restricting their capacity to formulate and
execute policy. 2.
Metropolitan Authority. Greater São Paulo needs some kind of
metropolitan authority to deal with endemic regional problems such as
public security, flood control, basic sanitation, garbage disposal,
transportation, education and the environment. However, metropolitan
management in Brazil so far has achieved little. Before passage of the
1988 constitution, which strengthened the powers of states and
municipalities, only the federal government could create metropolitan
regions. In
1994 São Paulo’s state legislature established rules for creating
metropolitan authorities to operate on three levels. First, a
Development Council, with representation shared equally between the
state and member municipalities, would be responsible for planning,
setting priorities, formulating budgets and distributing financial
responsibilities between the state and municipal governments. The
Development Council should create thematic commissions of technicians
and politicians to work on specific problems. A Metropolitan Agency
would be the executive arm of the Development Council, contracting and
supervising public works. A Metropolitan Fund would be the financial
arm of the Development Council, empowered to receive transfers from
municipal, state and federal authorities and to borrow and lend for
specific projects. Under
these guidelines, metropolitan authorities were created for the
clusters of municipalities around the port of Santos (1996) and the
inland city of Campinas (2000). The experience of Santos showed some of
the difficulties. Three years passed before regulations were approved
in 1999 for operation for the metropolitan agency. Some mayors
regularly delayed transfers to the Metropolitan Fund, fearful that the
metropolitan agency would become a useless bureaucracy paralyzed by
political infighting. Then the state government also suspended its
contributions to pressure delinquent municipalities to meet their
obligations. Metropolitan
management also clashes with politicians´ impatience with slow
development of economic and geological studies, aerial mapping and
master plans, needed for long-term public investment. Many mayors want
quick approval of “impact” projects that will impress voters. Big
metropolitan projects can impose unfunded mandates on municipalities,
such as expansion of a trunk highway into the Santos region, which
forced towns to build feeder roads and install new traffic lights.
However, the Santos metropolitan authority also has performed useful
work in planning garbage disposal, a public health program to control
dengue, integration of the region’s network of state and municipal
hospitals and transfer of the port of Santos from federal control to
management by a consortium of state and municipal governments. The
proposals for metropolitan management of Greater São Paulo are akin to
those tried with the Greater London Council. In A History of London,
Stephen Inwood notes: “Only between 1965 and 1986 did London have an
administration, the Greater London Council (GLC), which covered most of
its built-up area. But the GLC…lacked the range of powers needed by a
true urban government, and never managed, in its short life, to
overcome the political and administrative fragmentation that has
characterized London’s government since at least the 16th Century.”
However, even before the directly elected GLC was created, London,
unlike São Paulo, had its own independent water and transport
authorities and police force. One of the GLC’s main successes was in
flood prevention, building the huge Thames Barrier in 1975-82. Like São
Paulo, the GLC tried to build a system of ring roads to ease its
traffic congestion, but failed in the face of opposition from local
residents. As with São Paulo, traffic snarls contributed to the exodus
of manufacturing industry from London, even though a subway system
seven times larger than São Paulo’s eased traffic jams somewhat.
Inwood concludes: “The GLC was squeezed between the central
government, which had a strong tendency (especially in the Thatcher
years) to reclaim powers for itself, and the boroughs [sub
prefectures], which had taken advantage of the GLC’s weakness to
increase their own autonomy.” A
metropolitan authority in São Paulo would face similar problems. The
fiscal and organizational crisis could mobilize energies to rebuild
city government. Or São Paulo could stagnate and resign itself to
poverty and disorder, abandoning its role as one of the world’s great
cities. We know by now that there is no perfect and final formula for
administrative reform of big cities. We must follow a path of
continuous evolution and adaptation to manage problems of scale and
strengthen local responsibility. Here are some suggestions: 1.
Harmonize district boundaries A
joint effort of municipal, state and federal authorities can end the
confusion in political and administrative management of local
communities in Greater São Paulo. Most overlapping district boundaries
can be redrawn by administrative decisions without legislative action.
Municipal, state and federal officials should meet to define and
cluster operational districts with populations of from one to two
million each to achieve economies of scale without overloading
management capabilities. 2.
Create new municipalities Once
district boundaries have been clarified and consolidated, voters can
decide whether it would be in their interest to transform their
district into a municipality to gain more local control over their
affairs. Only by exercising local control through political
institutions can citizens expect to improve key services such as
schools and public security. This will mean more control over taxing
and spending. In democratic government, taxing power and spending power
cannot be separated without generating inefficiencies and political
instability. 3.
Raise taxes Now
that the new PT Mayor of São Paulo, Marta Suplicy (2001-05), has
stopped protesting against the new Fiscal Responsibility Law (FRL),
which disciplines public finance at all levels of government in Brazil,
she is pursuing opportunities to raise taxes. While the Municipality of
São Paulo collects half as much in taxes as Tokyo and New York as a
share of economic activity, with New York highly dependent on the
fortunes of Wall Street, São Paulo has a much more diversified economy
on which to develop an efficient tax base. São Paulo is not taxed
lightly, with federal, state and local taxes totaling 28% of the
city’s GDP, compared with 20% in Paris and London. However, less than
one-tenth of these taxes go to the city. Moreover, the city’s taxes
are distributed to the periphery in much the same way that federal
revenues are distributed to the poorer states throughout Brazil,
highlighting one of the harsh facts of democracy. As poor as public
services in the periphery may be, they are worth more than what these
outlying communities pay in taxes. One of the slogans of the struggle
of the United States for independence from Britain in the 18th Century
was: “Taxation without representation is tyranny.” The slogan also
can be inverted to read: “Representation without taxation is a
farce.” Taxes need not be high to command more effective political
representation. If, for example, the city’s many thousands of bars,
the scene of so much violence in the periphery, were licensed are taxed
by the city in the same way that motor vehicles are licensed and taxed
by the state government, there would be more money available for better
recreational and educational facilities in the periphery. The
City of São Paulo’s most contentious financial problem is not the
FRL, but its municipal debts that the federal government generously
assumed in 2000, requiring repayment over 30 years within a ceiling of
13% of revenues at interest of 6%-9% yearly, far below market rates.
During the 1990s the city paid almost no debt service, allowing
balances to multiply as capitalization. Under the FRL, these debts
cannot be renegotiated. However, by abandoning the corrupt PAS system
and adopting federal public health programs, the city stands to recover
nearly half its debt service in transfers from Brasilia. The
fiscal pressures are forcing the city to raise taxes. Property taxes
would go up by 21%, supplemented by a new sanitation tax and increased
levies on services. There also are ways to raise revenue by moderately
taxing hotels, airports, bars, cell phone relay towers and billboards.
However, to gain acceptance for new taxes, a political structure must
be created to guarantee credible increases in the quality and quantity
of public services. 4.
Federal aid for metropolitan areas One
way to promote cooperation among metropolitan municipalities would be
through the offer of federal support for investment for projects
impacting several contiguous communities, to solve common problems as
in pollution control, building expressways and improving public
transportation. This money should be disbursed only in cases where
municipalities can present a joint investment project, which in turn
could give birth to long-term processes of cooperation. While the
federal budget already is heavily committed to constitutionally
mandated spending, the National Bank for Economic and Social
Development (BNDES) could finance these investments. This is a more
pragmatic way to act than in traditional attempts to create public
agencies of metropolitan coordination, which in the past failed for
lack of money, political disputes and lack of management capacity. The
participating municipalities would be required to commit their own
funds as well, providing a greater incentive for cooperation to assure
success. 5.
Statehood for Greater São Paulo? In
the long run, if the City of São Paulo can consolidate its districts
and other municipalities of Greater São Paulo see the need to join
forces in carrying out metropolitan functions, the citizens of the
metropolis eventually might consider seeking statehood in order to
assume more local power and reduce the scale of public administration. Statehood
for the big cities of the world occurs in many countries. Spain’s 17
largest cities are “autonomous regions.” Cities such as Hamburg and
Bremen are city-states within Germany’s federal system, their
independence rooted in traditions of municipal autonomy that arose in
medieval Europe. In the 17th Century, according to the historian J.H.
Elliott, “the city of Barcelona, thanks to its wealth and its
privileges, was almost an independent republic, a second Venice, linked
to its Count, now king of Castile, by only the slenderest of ties.”
Metropolitan Tokyo, before it became the world’s largest city, was
granted statehood in 1943, governing 26 central ku (districts) and 31
surrounding municipalities. Mexico City performs functions similar to
other Mexican states, divided into 16 delegaciones, akin to Tokyo’s
ku, and elects its own governor. For Greater São Paulo, the prospect
of statehood presents big advantages and obstacles: Advantages
Obstacles
* * * While statehood for Greater São Paulo may be remotely possible, discussion of the idea helps to clarify the scale and scope of the structural problems of governing the metropolis. In São Paulo millions of people in their daily lives are struggling to sustain the weak fabric of order and morality. They need an institutional framework to sustain their efforts. The political structure of the metropolis does not meet this need, nor does it support economic efficiency. São Paulo’s human infrastructure remains much weaker than its physical infrastructure. In the 21st Century, mankind is struggling to overcome the threat of institutional failure in managing problems of scale. These problems of scale appear in the proliferation of financial assets and information flows as well as in the size of enterprises, cities and nations. Sudden changes in the scale of human activity breed institutional demands for applications of knowledge in the form of capital-formation, adaptation, and management. Institutional failure under pressures of scale threatens relapse into more archaic forms of civilization and mortality. Some cities will sustain and speed their development, mastering higher levels of knowledge and organization, while others sink deeper into disease, violence and confusion. So far, São Paulo has been blessed in the conditions of its growth and survival. As the evolutionary biologist Stuart Kauffman observed not long ago, “life evolves toward a regime that is poised between order and chaos…. I suspect that the fate of all complex adapting systems in the biosphere –from single cells to economies— is to evolve to a natural state between order and chaos, a grand compromise between structure and surprise.” However, evolving on the frontier between order and chaos, between structure and surprise, may expose us to risks that a civilized society should seek to reduce by investing in our capacity for adaptation. |
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