The massive street demonstrations that have shaken Brazil these past two months caught most pundits – Brazilian and foreign – by surprise. As the protests unfolded and spread from city to city across Latin America's largest country, politicians and journalists alike seemed initially perplexed. After all, here was an exemplary emerging market! From 2000 to 2010 Brazil's economic growth, although not stellar, was certainly reasonable by recent historical standards. Inequality fell markedly throughout the decade and, as a result of those two things, poverty fell from 43 per cent of the population in 2003 to around 25 per cent by the end of decade (using a poverty line of $4 per day). By the World Bank's definition – which is considerably more demanding than the government's – the middle class grew in size by more than 50 per cent, to more than 60 million people in 2010. Infant mortality fell. Life expectancy rose.
And we were going to host the World Cup and the Olympics – the only country other than the United States ever to do so back-to-back. What could people possibly be angry about?
And yet, on June 13, a relatively small demonstration against a 20-cent increase in bus fares in the city of Sao Paulo was violently repressed by police. The following weeks saw a remarkable eruption of street protests across hundreds of Brazilian cities, with hundreds of thousands of people in the streets at certain times. Despite being a soccer-loving country, Brazil's successes at the Confederations Cup did nothing to mitigate popular anger. On the contrary, one of the protesters' multiple banners was indignation at the scale of spending on (and corruption from) football stadiums for next year's World Cup, while schools, hospitals and public transport are allowed to languish.
More: the protests were not led by any political party, labour union, or established social movement. In fact, protesters explicitly resisted attempts by political parties to join or co-opt the movement.
Most analysts – myself included – were baffled. There had been so much social progress! People called to ask about lessons from the "Brazilian model" for other countries! What on earth could explain this sudden explosion – the largest street demonstrations in the country in 21 years? And why were the protesters' demands so disparate? There was anger against corruption; resentment against higher bus fares; complaints about the quality of health care and education. What, if any, was the common thread that kept a supposedly peace-loving people out on the streets for two weeks?
After some head-scratching, I think many of us are beginning to detect a pattern. In the conclusion of a recent book on the rise of the Latin American middle classes, my co-authors and I speculated about the implications of the growth in the continent's middle class (from 100 to 150 million people in less than a decade) for the "social contract" in these countries. We argued that the social contract in most of Latin America was one in which, to stylize, the middle classes paid low taxes, got poor public services in return, but largely opted out of them and consumed privately provided alternatives: private schools, private health plans, private pensions, even private security. And they used cars, rather than public transport, whenever possible.
The exceptions, we noted, were Brazil and Argentina. In these two countries – and in Brazil in particular – public services were also poor, but the tax take was actually fairly sizable: over 30 per cent of GDP. The middle class did not seem to mind. We wondered aloud whether, in the continent as a whole, the emerging middle classes might want to re-negotiate that social contract. Would those millions of people recently emerged from poverty, into what we called a "vulnerable" or lower-middle-class group, also choose to opt out of public services? Or would they instead demand higher quality services – in health, education, transport, communications, and public safety – and be prepared to pay more taxes? Or, in the Brazilian case, demand a more efficient use of public resources?
I think we got our answer much more quickly than we had anticipated. Most of the – apparently disparate – banners held by protesters in Brazil's winter of discontent have to do with demanding decent public services. Better hospitals. Better schools and universities. A public transport system that works, despite the scourge of ever-growing traffic jams. That is where people seem to want their tax money to go, rather than into the pockets of corrupt politicians, or even into beautiful stadiums for the World Cup.
And yes, most of these protesters were not among Brazil's poorest citizens. This was a cry from the middle classes – new and old, perhaps – for the state to use the vast resources it collects efficiently, and deliver commensurate public services.
It may not sound as romantic as fighting for democracy, as we did in the 1980s. Neither is the motivation the same as in Egypt or Turkey. Brazilians are not calling for the immediate removal of the present government: Though her ratings have taken a heavy hit, President Dilma Rousseff remains relatively popular. They are not fighting an increasingly authoritarian state, and they perceive no threat to their democratic institutions from parties with a strong religious allegiance. The "technology" of using social media to organize the protests is similar, and young people like to feel solidarity with their counterparts in far-off countries. But, as always, context matters, and the Brazilian protests are about reforming the country's social contract: the norms that govern the relationship between State and society.
If the political establishment is able to respond adequately, the bursting of the bubble of complacency in which we had been living may actually be great news for the country. It might just propel Brazil onto the next cycle of reforms that are needed for continued growth and social progress. But it won't be straight-forward. Although the country's politicians have fallen over themselves to be seen as responsive – quickly rejecting legislative attempts to weaken public prosecutors, for example – their basic instinct is still to throw more money at the problems. Since the protests, federal and local government officials have promised more resources for health, education, public transport, and so on.
But more resources is not what Brazilians are asking for. They are asking, it seems to me, for those resources that are already available to be used efficiently, and to actually deliver the services that are needed. The idea that more can be achieved with less in a bloated public sector is still new to many of Brazil's elected officials. It goes against wastefulness and patronage habits that are generations old. To change them would be a remarkable achievement.
Francisco Ferreira, a Brazilian citizen, is a Lead Economist at the World Bank's Research Department in Washington and a Research Fellow at the Institute for the Study of Labor (IZA) in Bonn. He writes in a personal capacity.