Corruption scandals involving high-ranking officials have erupted in many Latin American countries in recent years, but those affecting Brazil have been among the most high profile. Charges of corruption led to the impeachment of President Fernando Collor in 1992 and the indictment of scores of Brazilian congressmen in 1993. In the economic arena, it has weakened public support for the government's economic reforms by undermining the legitimacy necessary to implement unpopular austerity measures. In recent years, most Latin American governments have confronted major corruption scandals involving current and former high-ranking officials. Corruption has weakened public support for democratic institutions in many countries as well as for economic reforms by undermining the legitimacy and support necessary for governments to implement often unpopular austerity reform measures.
Corruption has deep historical roots in Brazil and other developing countries.
Such statism does not provide for participation of citizens in the decision-making process and, according to Dr. Douglass North, there are high transaction costs associated with such closed political and economic institutions. In two of the three studies undertaken a sound set of policy recommendations helped to stimulate policy reform. Only in the new regulatory regime governing privatization did the empirical data prove too scant to justify recommendations. Government procurement is notoriously susceptible to corruption. If there is a lack of transparency and accountability in bidding on government contracts, corruption can easily take root in the process.