Politicization on Finance Ministry: the effects of political and economic crises on the turnover of civil servants in senior management and advisory positions

Abstract:

This work analyzes the turnover of civil servants occupying senior management and advisory positions (called DAS 4, DAS 5, and DAS 6 in the Brazilian public bureaucracy) in the Ministry of Finance departments between 1996 and 2020. The theoretical reference is studies on the politicization of high-level state bureaucracy. The data analyzed indicates a disparity between the turnover rate of Finance Ministers (which is low) and the turnover rate of those occupying DAS positions (which is high). The article explores explanations for this difference, considering the distinctive characteristics of this ministry in relation to others: it is more insulated, the profile of its staff is more technical, and its area of activity (fiscal and economic management) affects the interests of specific groups in society, private market agents. The results indicate that political-economic crises are important factors in DAS turnover alongside presidential and ministerial turnovers. The politicization of the high-level bureaucracy of the Ministry of Finance is not as strong as pointed out in the literature but is characterized by the preservation of the minister at the expense of his team, whose members are changed in response to political crises and generated by national and international economic instabilities.

Keywords:
bureaucracy; elite; public policy; management positions; politicization.

Resumo

Este trabalho analisa a rotatividade dos ocupantes de cargos de Direção e Assessoramento Superior (DAS) 4 a 6 de secretarias do Ministério da Fazenda entre 1996 e 2020. O referencial teórico são os estudos sobre a politização da burocracia estatal de alto escalão. Os dados analisados indicam que há disparidade entre a taxa de rotatividade dos ministros da Fazenda (que é baixa) e a taxa de rotatividade dos ocupantes dos cargos de DAS (que é alta). O objetivo do texto é explorar explicações para essa diferença, considerando as características distintivas desse ministério em relação aos demais: ele é mais insulado e o perfil de seu pessoal é mais técnico, e sua área de atuação (gestão fiscal e econômica) afeta interesses de grupos específicos da sociedade, os agentes do mercado privado. Os resultados indicam que as crises político-econômicas são fatores importantes na rotatividade dos DAS ao lado de turnovers presidenciais e ministeriais. A politização da burocracia de alto escalão do Ministério da Fazenda não seria tão forte quanto apontado pela literatura, mas se caracterizaria pela preservação do ministro às custas de sua equipe, cujos membros são alterados como resposta a crises de ordem política e geradas por instabilidades econômicas nacionais e internacionais.

Palavras-chave:
burocracia; elite; políticas públicas; cargo de direção; politização

Resumen

Este trabajo analiza la rotación de ocupantes de los cargos DAS (Dirección y Asesoría Superior) 4 a 6 en las secretarías del Ministerio de Hacienda entre 1996 y 2020. El marco teórico está compuesto por estudios sobre la politización de la burocracia estatal de alto nivel. Los datos analizados indican que existe una disparidad entre la tasa de rotación de los ministros de Finanzas (que es baja) y la tasa de rotación de quienes ocupan cargos DAS (que es alta). El objetivo del texto es explorar explicaciones de esta diferencia, considerando las características distintivas de este ministerio respecto de otros: está más aislado, el perfil de su personal es más técnico, y su área de actividad (gestión fiscal y económica) afecta a los intereses de grupos específicos de la sociedad, agentes del mercado privado. Los resultados indican que las crisis político-económicas son factores importantes en la rotación de los cargos DAS junto con las rotaciones presidenciales y ministeriales. La politización de la burocracia de alto nivel del Ministerio de Hacienda no sería tan fuerte como se señala en la literatura, sino que se caracterizaría por la preservación del ministro a expensas de su equipo, cuyos miembros cambian en respuesta a crisis políticas generadas por inestabilidades económicas nacionales e internacionales.

Palabras clave:
burocracia; élite; políticas públicas; puestos directivos; politización

1. INTRODUCTION

This article examines the politicization of the Ministry of Finance in Brazil, focusing on the turnover of civil servants in senior management and advisory positions - specifically positions designated as DAS 4, DAS 5, and DAS 6 - during political and economic crises from 1996 to 2020. This research addresses the underexplored area of high-level bureaucracy politicization in Brazil, which differs from the more commonly studied forms of politicization related to clientelism, partisanship, and the fragility of career structuring and bureaucratic professionalism.

The research is guided by the question: How does the politicization of civil servants in appointed positions in the Ministry of Finance manifest, given that this institution is considered one of the most shielded from politicization and that its positions are expected to be less prone to turnover due to protective mechanisms such as structured and stable careers and institutional incentives for professionalization?

To address this question, we analyzed data on the turnover of DAS positions in conjunction with political and economic crises. Exploratory data analysis reveals a connection between turnover rates and these crises, with varying responses observed across different departments of the Ministry of Finance. This suggests a higher level of politicization than typically acknowledged.

The study reveals that, despite perceptions of immunity to political pressures (Abrucio et al., 2010), the Ministry of Finance is not entirely insulated. The findings illustrate how politicization occurs within DAS positions, highlighting that it does not stem from ministerial turnover and varies among departments and DAS levels.

2. POLITICIZATION OF BUREAUCRACY AND ECONOMIC CRISES - A LITERATURE REVIEW

Bureaucracy is neither dead nor dying. Despite the extensive neoliberal administrative reforms of the late 20^th century aimed at diminishing or weakening it, bureaucracy has evolved and increased in politicization (DuGay, 2005). The politicization of bureaucracy refers to the mechanisms through which political actors seek to influence public administration, impacting decisions and actions related to public policies (Panizza et al., 2019).

This politicization manifests in various ways at the intersection of politics and administration. It includes a) the control exerted by the President and ministers through appointing civil servants (Lewis, 2008), b) the allocation of positions to individuals from outside the public service, c) the selection and promotion of civil servants based on political or partisan criteria, d) political oversight of policy formulation and implementation (Pierre & Peters, 2004), and e) administrative politics, which encompasses the interactions between the bureaucracy and political actors such as parties, legislators, and societal advocacy groups (Peters, 2018).

Politicization is understood as the process by which elected officials, political parties, and societal groups attempt to influence public policies by shaping the choice of personnel to appointed positions in public administration. These individuals, due to their expertise, policy convictions, or ideological alignments with political parties or interest groups, are perceived to steer government decisions in line with the desires of these political or societal entities, given the discretionary nature of their roles. Thus, politicization extends beyond mere partisanship, where appointments serve as bargaining chips in coalition formation, to encompass broader influences on policy outcomes.

In Brazil, the politicization of bureaucracy has traditionally been examined through the lens of patrimonialism (Nunes, 1997) and, more recently, through contemporary analyses of the politics-administration relationship (Loureiro et al., 2010). However, a more nuanced understanding of this phenomenon is needed through qualitative analyses. While partisanship in Brazil may be weak, high turnover rates suggest significant political influence. It is crucial to precisely identify the nature of political influence on bureaucracy.

A central issue in understanding the politicization of bureaucracy is determining whether political influence on administration is legitimate, as part of democratic social oversight, over the state’s action, or illegitimate, representing the private appropriation (legal or not) of public resources. Recent literature indicates that this distinction is neither binary nor uniform. The legitimacy of political influence (from parties, elected leaders, or interest groups/activists) over the administration (policy decisions) varies according to institutional, political, and cultural contexts between countries (Peters, 2018).

In the administrative structure of various countries, institutions exhibit varying degrees of politicization based on their autonomy and areas of activity. Ministries tend to be more politicized than independent agencies and state-owned enterprises. Additionally, sectors such as health, media, and economic policy (including industrial policy and privatization) are more politicized than the military, education, and finance, particularly in macroeconomic management (Kopecký et al., 2016).

In Brazil, a significant focus of the study on politicization has been the appointment of high-ranking officials to positions in public administration and its relationship with the political party system. Research has examined the appointments to senior management and advisory positions (DAS). Although these appointments are crucial for forming political-party coalitions (Abrucio & Loureiro, 1999; Loureiro et al., 1998), they are not predominantly based on party affiliation. Instead, they are significantly influenced by personal relationships (Praça et al., 2022) and trust networks (Olivieri, 2007). The appointees typically have high professional profiles (D’Araujo & Petek, 2018) and serve for approximately 24 months - about half the length of a presidential term (Lopez & Silva, 2022).

Studies also show that ministries involved in government coordination, such as Planning and Finance, are more protected and professionalized compared to others (Batista & Lopez, 2021; Loureiro, 1997; Loureiro et al., 1998; Schneider, 1994). This protection is linked to both political and bureaucratic factors. Politically, the ministers of finance are appointed by the president, free from the influence of other groups in a coalition, which makes them less vulnerable to crises in these relationships (Loureiro & Abrucio, 1999). Bureaucratically, civil servants allocated in the Ministry of Finance are positioned in one of the most established, professionalized, and well-compensated careers (Loureiro & Abrucio, 1999).

The literature indicates that bureaucratic politicization results from interest group influence beyond the formal political system (parties and/or elected officials). Given that partisanship in high-level appointed positions in Brazil is low - with appointees often possessing high educational levels - the Ministry of Finance is viewed as more insulated from politicization and more professionalized. This leads us to the question: How does bureaucratic politicization occur in the relatively less politicized Ministry of Finance, which lacks clientelistic practices and maintains a structured bureaucracy?

Our hypothesis is that politicization in the Ministry of Finance is reflected in the turnover of DAS positions rather than the ministers. This effect is expected to be more pronounced during economic and political crises rather than solely during electoral transitions. Thus, while the Minister of Finance appears insulated from political pressures, this insulation is offset by turnover among DAS positions, indicating that politicization within the ministry is “hidden” within these roles.

Previous national literature has explored politicization through high-level turnover, positing that stable tenure in a position suggests independence from political pressures or negotiations, while turnover reflects the influence of such pressures and thus represents bureaucratic politicization.

Lopez and Silva (2022) analyze the turnover of bureaucratic elites in relation to changes in party control, noting that the stability of these elites often correlates with the duration of ministers’ tenures. When examining high turnover rates in a ministry such as the Ministry of Finance, where leading officials typically serve longer terms, it becomes essential to investigate the role of interest groups, particularly in contexts where party influence is weak (Praça et al., 2022).

To explore this further, we included economic and political crises in our analysis, recognizing their significant impact on economic management. Our definition of crisis aligns with the literature, considering it as events creating political or economic instability. Although the definition can be influenced by the context and interpretation of a social phenomenon (Maia, 2021), it was possible to identify years marked by crises that impacted governmental decisions.

By analyzing years marked by such crises, we identified ten key crises from 1996 to 2020:

1. ) 1997 - Asian Tigers Crisis;

2. ) 1998 - Russian Crisis;

3. ) 1999 - Devaluation of the Brazilian Real (BRL);

4. ) 2001 - Blackout Crisis;

5. ) 2005 - Mensalão Scandal (monthly bribe payments to legislators);

6. ) 2006 - Mensalão Parliamentary Commission of Inquiry (CPI);

7. ) 2008 - Fall of the Brazilian Stock Market due to the Subprime Crisis in the US;

8. ) 2013 - June Protests;

9. ) 2016 - Impeachment of Former President Dilma Rousseff;

10. ) 2020 - Global Economic and Health Crisis caused by COVID-19.

These crises are categorized into two types: international economic crises, which impact Brazil through events like exchange rate crises and currency devaluations, and national political crises, including corruption scandals and street protests, which influence the economy by reducing growth expectations and investment. The 1990s were predominantly affected by international economic crises, while the 2000s saw more national political crises.

During Fernando Henrique Cardoso’s presidency from 1996 to 2001, Brazil experienced four crises: three international economic crises and one domestic crisis. Despite the success of the Plano Real, an economic plan that managed to reduce inflation and stabilize the economy, the country faced significant challenges, including electricity rationing, which had severe economic and political repercussions.

In 1997, the Asian Tigers Crisis impacted emerging economies, including Brazil, which had trade relations with affected countries. The Brazilian government used international reserves to prevent exchange rate instability, leading to increased interest rates and unemployment (Helal & Rocha, 2013).

The following year, the Russian Financial Crisis caused substantial international economic instability, culminating in the devaluation of the Brazilian currency in 1999, a consequence of Brazil’s focus on exchange rate stability (Pinto et al., 2005).

The 2001 Blackout Crisis (at the end of President Cardoso’s second term) was characterized by widespread electricity rationing and an ensuing economic downturn. The electricity shortages were primarily due to insufficient rainfall, which severely impacted hydroelectric power generation. The government struggled with political resistance and internal discord while attempting to develop a strategic response to the water crisis. This situation was further compounded by rising external debt, which reached 57.4% of Brazil’s GDP, and increasing interest rates (Goldenberg & Prado, 2003).

Under President Luiz Inácio Lula da Silva, Brazil faced three crises between 2003 and 2010: two internal and one international. The period following the 2002 election was marked by significant economic instability. The lingering effects of the currency devaluation and market concerns about Lula’s potential presidency contributed to instability. Despite efforts to expand social policies and maintain political stability, distrust in the political transition persisted, exacerbated by fears of non-compliance with public debt contracts and IMF agreements (Carvalho & Senhoras, 2020; Singer, 2012; Jardim, 2013).

In 2005, the exposure of the “Mensalão” political scandal, which garnered extensive media attention, severely damaged the government’s credibility. This scandal’s repercussions led to the resignation of Minister Antonio Palocci from the Ministry of Finance in 2006 and necessitated a restructuring of the government coalition (Singer, 2012).

The 2008 Subprime Crisis, triggered by the collapse of the real estate bubble in the United States, caused the USD to surge and resulted in a significant contraction of the Brazilian GDP. Despite this, the Ministry of Finance during the second term of President Lula da Silva’s government, successfully implemented anti-cyclical, expansionary measures that facilitated a rapid economic recovery in 2009 (Lima & Deus, 2013). However, these measures contributed to an economic slowdown in the subsequent years (Lima & Deus, 2013).

During the administration of President Dilma Rousseff (2011-2016), the country faced two internal crises within a challenging context. Early in President Rousseff’s first term, Brazil experienced a slowdown in BRICS growth due to the European economic downturn in 2011 and instability in the Chinese economy in 2012 (Coelho & Capinzaiki, 2017). Additionally, a prolonged period of high interest rates undermined Brazil’s reindustrialization efforts (Singer, 2018, p. 98). Politically, the government’s strategy of “ministerial clean-up” to legitimize its management eroded its political support and diminished its standing with the electorate, exacerbated by stagnant economic growth (Carvalho, 2018; Singer, 2018).

In 2013, the government’s approval ratings plummeted from 57% to 30%, largely due to the widespread protests called Jornadas de Junho, or June Journeys. These protests, driven by dissatisfaction with public transport fares and violent police repression, also highlighted broader issues such as corruption scandals involving the Brazilian state-owned oil company Petrobras and the works preparing the country to host the 2014 FIFA World Cup (Singer, 2018).

The climax of these issues came in 2016 with President Rousseff’s impeachment, which intensified the country’s political crisis (Anderson, 2019). Although the subsequent administration of President Michel Temer was marked by unpopularity (Anderson, 2019; Taylor, 2020), it did not face major crises comparable to those of its predecessors.

In 2020, the emergence of the COVID-19 pandemic, alongside tensions between the executive and legislative branches (Avritzer, 2018), represented the final crisis within the period under analysis. The pandemic’s global economic impact marked a significant challenge during this time (Mattei & Heinen, 2020).

3. METHODOLOGY

A qualitative method was employed to analyze turnover in DAS positions, using the appointees’ online resumes as data sources.

The period between 1996 and 2020 was chosen because it was broad enough to encompass several mandates, from different parties and with many economic “events.” The names of those occupying the positions were collected by accessing all of the Ministry of Finance’s online domains in the section “Quem é quem” (Who’s who) that presents the ministry’s organizational graphs and the civil servants working there, with the 1996 version being the oldest available. The data was collected between 2020 and 2021, at the beginning of the COVID-19 pandemic, so the process survey was conducted remotely, with the end date in 2020. We used website archiving tools (Wayback Machine) since the 2019 ministerial reform discontinued the websites that contained information on the occupants of the positions (the reform merged several agencies, such as the Ministry of Finance, into the “superministry” of Economy).

DAS positions are freely appointed. A maximum of 40% can be filled by professionals from outside the state bureaucracy, and at least 60% must be filled by career civil servants (Law No. 14,204/2021).

Descriptive statistics were adopted for qualitative analysis of the impact of the crises on DAS turnover. This method was chosen since the number of observations was not sufficient to obtain acceptable confidence levels to perform simple linear regression and Probit.

We analyzed all seven secretariats, excluding the two that were abolished during the period analyzed (Federal Department of Control [SFC] in 2003 and Union’s Asset Department [SPU] in 2017):

1. ) Minister’s Office (GMF);

2. ) Executive Secretary (SE);

3. ) Brazilian Federal Revenue Service (RFB);

4. ) National Treasury Department (STN);

5. ) Department of International Affairs (SAIN);

6. ) Department of Economic Policy (SPE); and

7. ) Department of Economic Monitoring (SEAE, which was renamed in 2019 as Department for Productivity and Competition [SEPRAC]).

We gathered resumes for 84.3% of individuals holding DAS positions from various sources, including official government documents, institutional records, news articles, and social media platforms like LinkedIn. A notable challenge was the limited availability of resumes in public domains, especially for Federal Revenue Service auditors and for individuals who had passed away (this issue was more frequent when seeking resumes of appointees from the 1990s).

The research dataset included 1,232 observations, each corresponding to an individual occupying a position at the end of a given year. If an individual held multiple positions across different years, each instance was recorded separately, reflecting both the number of positions held and the duration of each tenure.

The data face two main restrictions. First, most resumes do not provide monthly-level details, so the analysis was conducted on an annual basis to ensure consistency across all positions. Second, only the most recent name registration from each year was used, except for former Minister of Finance Joaquim Levy, who left the office on December 21, 2015, just a few days before completing one year.

We categorized position occupants according to Olivieri’s (2007) classification: (i) career civil servants, who entered public service through competitive hiring processes and have worked exclusively in the public sector; (ii) market professionals, who had careers in the private sector both before and after their appointments to DAS positions; and (iii) hybrids, who have experience in both the public and private sectors.

Turnover is measured by the annual change in position occupants. Specifically, the turnover rate for each position is calculated as the ratio of the number of occupant changes by the end of each presidential term (numerator) to the total number of available positions at the end of each term (denominator).

The turnover rate is calculated based on the number of occupant changes, rather than the total number of occupants. A turnover rate of “zero” indicates that the same individual held the position throughout the presidential term. A rate of “1” means that every position experienced a change each year, while a rate greater than “1” implies that there were multiple changes per year.

To facilitate specific analyses of each department and assess the impacts of crises and turnover on DAS positions, we also calculated the average turnover rate. This average allows for comparisons across different departments and job levels.

For defining crises, we relied on events recognized in specialized literature as sources of political and/or economic instability. Although the concept of a crisis can be influenced by contextual understanding and varying interpretations (Maia, 2021), we identified years characterized by events that likely affected government decisions.

The analysis considered ten political and/or economic crises, four changes in the presidential mandate, and eight changes in the position of the Minister of Finance in Brazil during the period under study. Given that some crises overlapped with changes in mandates or ministers, we used a total of ten key dates as indicators of potential impacts on DAS turnover in the Ministry of Finance.

4. POLITICIZATION WITHIN THE MINISTRY OF FINANCE: TURNOVER OF DAS POSITIONS AND CRISES

This section offers (a) an overview of the types of departments within the Brazilian Ministry of Finance and the profiles of individuals holding senior management and advisory positions (called DAS positions); and (b) an analysis of the data, highlighting the differing turnover patterns between ministers and DAS occupants. Specifically, it shows that ministerial turnover is significantly lower and less affected by crises compared to DAS positions, whose turnover rates fluctuate based on the type of department and are more influenced by crisis events.

4.1 Presidents and ministers of finance: a relationship of trust

The turnover pattern of ministers of finance in Brazil demonstrates a strong alignment with the presidential term: since 1996, ministers have typically left office only at the end of a presidential term or due to severe political and/or economic crises.

The role of the minister of finance is crucial to the success of a government, reflecting the centrality of economic performance in evaluating a presidency. This role is characterized by a relationship of profound trust and shared economic policy goals between the president and the minister, which tends to provide the minister with greater stability and less frequent turnover than other positions (Loureiro, 1997; Loureiro & Abrucio, 2004).

The politicization of this ministerial position is largely driven by the president’s need to establish a relationship of trust with the minister. This relationship enables the president to exert substantial control over the economy, a crucial area for the administration’s success (Loureiro, 1997). This control is evident in the president’s direct appointment of the minister of finance (Lewis, 2008).

Graph 1 illustrates the turnover of all positions analyzed (minister and DAS 4, DAS 5, and DAS 6) alongside the dates of the identified political and economic crises. The graph reveals that most changes in ministers occurred either during the transition of mandates or as a result of severe crises. However, not all crises led to ministerial changes. For example, Minister Pedro Malan retained his position through the early crisis of President Cardoso’s second term, Minister Guido Mantega stayed through the Subprime Crisis and the June Journeys of 2013, and Nelson Barbosa remained until President Temer took office following President Rousseff’s impeachment.

The graph also highlights that DAS positions experience significantly higher turnover than ministers. Even without a ministerial change, multiple DAS positions frequently undergo transitions.

Graph 1
Turnover of DAS 4, DAS 5, and DAS 6 positions in the Ministry of Finance between 1996 and 2020 in Brazil

Thus, the position of the minister of finance is not used as a bargaining chip in political coalition-building; it remains relatively stable and shielded from political and economic upheavals. Instead, its politicization stems from the direct, close, and highly trusting relationship between the minister and the president. In contrast, DAS positions experience a different pattern of politicization, which will be explored further below.

4.2. Types of departments and managers’ profile

To analyze the politicization of senior management and advisory positions (DAS 4, DAS 5, and DAS 5), we first examined the classification of departments based on their activities and the profile of the individuals occupying these positions.

4.2.1 Departments of the Ministry of Finance: stability and continuity

Each department of the Ministry of Finance has specific responsibilities, whether in political terms (according to its proximity to the activities of the minister’s office) or in organizational terms (considering the different types of activities, such as tax collection, public debt management, and international affairs).

According to these differences, we classify the departments as:

• Core departments (they are very close to the minister’s routine activities, such as the Minister’s Office - GMF and the Executive Secretary - SE);

• Bureaucratic departments (these offices carry out internal and specific work related to the government’s routine, such as the Brazilian Federal Revenue Service - RFB and the National Treasury Department - STN); and

• External departments (which carry out activities more focused on producing an impact on the market, such as the Department of International Affairs - SAIN, the Department of Economic Policy - SPE, and the Department of Economic Monitoring - SEAE).

The Minister’s Office (GMF) and the Executive Secretary (SE) are the departments closer to the minister and have substantial influence over the other departments. The GMF is the main department because it houses and assists the minister, as well as provides guidelines for the activities of the other departments. The SE is a strategic department for coordinating the ministry’s activities, following the directions defined by the minister and, consequently, by the president (Borges & Coêlho, 2015). For Pereira et al. (2015, p. 139), “an important monitoring mechanism is the appointment of executive secretaries (SE) trusted by the president, who act as inspectors within the ministries.”

The bureaucratic departments are crucial for overseeing tax collection and managing public accounts, areas of specialization for tax auditors in the Brazilian Federal Revenue Service (RFB) and federal auditors within the National Treasury Department (STN). The RFB, one of the oldest departments, handles tax collection, while the STN is responsible for public account management through accounting and financial administration. The STN plays a highly technical and politically strategic role, as it controls government resources for policy implementation and manages the country’s internal debt.

The external departments are more recent and their activities are less related to the internal operation of the public administration apparatus and more to aspects that may affect the market. The Department of International Affairs (SAIN) coordinates the relations of the Brazilian economy with other countries and international economic blocs. The Department of Economic Policy (SPE) analyzes the country’s economic scenario and outlines economic policy strategies and proposals. The Department of Economic Monitoring¹ promotes competition advocacy, monitoring prices, and reviewing tariffs.

4.2.2 Profile of civil servants in DAS 4, DAS 5, and DAS 6 positions in the Ministry of Finance: differences across departments

The profile of individuals occupying the positions examined in this research remains consistent with what has been documented in the literature for over 20 years: economists with graduate degrees in areas such as Public Sector Economics, International Economics, and Finance (Loureiro et al., 1998). This continuity highlights the sustained high level of professionalization among both civil servants and personnel with backgrounds outside of public administration.

However, the distribution of these professionals varies significantly across different departments and DAS levels. In core departments, the majority of professionals come from market and hybrid backgrounds. In bureaucratic departments, career civil servants are predominant. External departments, meanwhile, feature a notable number of hybrid and market professionals, with SAIN standing out due to its high proportion of civil servants.

Regarding DAS levels, a key distinction exists between DAS-6 and the other positions. DAS-6 positions predominantly reflect the profile associated with each type of department: market and hybrid professionals in core and external departments, and career civil servants in bureaucratic ones. In contrast, DAS-4 and DAS-5 positions are largely occupied by career civil servants, though there are exceptions. Core departments, despite a significant presence of career civil servants in DAS-4, also include a substantial number of hybrid professionals. In external departments, DAS-5 positions generally feature a considerable proportion of hybrid and market professionals.

4.3. Politicization in the secretaries: turnover in face of the change of ministers and due to crises

Although staff turnover in economic departments is lower compared to other ministries (Lopez et al., 2015), it remains a significant factor in understanding the politicization of high-level state bureaucracy. This section demonstrates that turnover rates vary between departments and DAS levels, occurring not only with changes in ministers but also as a result of economic and political crises.

As illustrated in Table 1, turnover rates (data in the last column) are generally higher in external departments (0.35) compared to core (0.30) and bureaucratic departments (0.24). Additionally, turnover tends to increase as one moves down the DAS hierarchy, with rates rising from DAS-6 (0.29) to DAS-5 (0.30) and DAS-4 (0.32). The table provides the average turnover rates for each department and DAS level.

Table 1
Average turnover rate of civil servants in DAS 4, DAS 5, and DAS 6 positions in the Brazilian Ministry of Finance

AVERAGE	DAS-6	DAS-5	DAS-4	In general
GMF	0.20	0.24	0.32	0.25
SE	0.32	0.34	0.37	0.34
Core departments	0.26	0.29	0.34	0.30
RFB	0.20	0.31	0.14	0.22
STN	0.26	0.19	0.32	0.26
Bureaucratic departments	0.23	0.25	0.23	0.24
SAIN	0.28	0.23	0.12	0.21
SPE	0.40	0.52	0.47	0.46
SEAE	0.39	0.30	0.48	0.39
External departments	0.36	0.35	0.36	0.35
Total	0.29	0.30	0.32	0.30

• Note: Information from resumes of civil servants in DAS positions.
• Source: Elaborated by the authors.

4.3.1 Core departments

Core departments are closely aligned with the minister’s routine and political and administrative functions, so positions in these departments are typically filled by individuals who are close to the minister. As noted earlier, the profile of DAS positions in these departments predominantly includes market professionals and hybrids. Turnover in these roles generally occurs with changes in mandate rather than during economic crises, suggesting that these employees, particularly those from the GMF, benefit from some level of political protection by the president. Nevertheless, this protection is not as strong as that enjoyed by ministers, who exhibit a lower turnover rate.

Graph 2 highlights peaks in DAS turnover in the years 2002, 2007, 2015, 2016, and 2019. These years follow the crises identified in this study: the Blackout Crisis (2001), the Mensalão scandal (beginning in 2005 and extending into subsequent years), and the events leading up to President Rousseff’s impeachment in 2016. These significant crises had direct repercussions on the presidency at the time.

Graph 2
Turnover of DAS 4, DAS 5, and DAS 6 positions in the Minister’s Office (GMF) between 1996 and 2020

The Blackout Crisis in 2001 may have cost the presidential election for the incumbent political party at that time, the Brazilian Social Democracy Party. In the first and second terms of President Lula da Silva (Workers’ Party) (2003-2010), it was possible to observe the impacts of the first alternation of power for the years analyzed in this research and the impacts of the Mensalão scandal (2005-2007). President Rousseff’s first and second terms showed a high turnover rate due to ministerial “ethical cleansing,” aimed at publicly addressing corruption scandals. This period saw significant disruptions in coalition organization and a reduction in government support during the impeachment crisis of 2015. In 2016, amidst ongoing political and institutional crises, President Temer’s administration also experienced substantial turnover in the GMF. The turnover rates between the Dilma II and Temer governments remained high, reflecting both the effects of power alternation and a deepening political-institutional crisis.

In 2019, the high turnover rate can be attributed to administrative reforms within the ministry. These reforms led to the integration of the inspector general (DAS-5) and general coordinator (DAS-4) positions into the Office of the Attorney General of the National Treasury, enhancing their roles in the country’s tax management.

According to Graph 3, two periods stand out for high turnover rates in the SE: the Lula da Silva I and II administrations and the Bolsonaro administration. During the Lula da Silva I and II terms (2003-2010), changes in appointment processes by the Office of the Chief of Staff further decentralized the government and increased the representation of coalition parties (Lameirão, 2015). This, coupled with the need to build broad coalitions to maintain government stability amid the Mensalão scandal (Singer, 2012), contributed to the increased turnover rate.

Graph 3
Turnover of DAS 4, DAS 5, and DAS 6 positions in the Executive Secretary (SE) between 1996 and 2020

In 2019, the rise in turnover within the SE was linked to efforts to secure legislative support through ministerial reforms and to a strategy employed by the Office of the Chief of Staff to remove employees associated with or supportive of the public policies of President Lula da Silva and President Rousseff who had remained in office during Temer’s administration (Gallego, 2019).

4.3.2 Bureaucratic departments

Bureaucratic departments, such as RFB and STN, are mostly occupied by career civil servants allocated in the Ministry of Finance. The greater number of civil servants occupying DAS positions in these departments would lead us to expect a situation of bureaucratic isolation, as described by Nunes (1997). In fact, these departments have the lowest average turnover in relation to the others. However, the data indicate that the positions, especially DAS-4 and 5, suffer turnover in almost all crises, in addition to moments of ministerial transition.

Graph 4
Turnover of DAS 4, DAS 5, and DAS 6 positions in the Brazilian Federal Revenue Service (RFB) between 1996 and 2020

The STN is regarded as one of the most influential entities within the federal executive branch (Loureiro et al., 1997) and has its own established auditing career. As a strategic agency, it oversees the country’s accounting, financial affairs, and public debt. Although its positions are highly sought after by various interest groups due to its control over the federal budget, the STN is unique in its capacity to “constantly redefine the decisions made in Congress” (Loureiro et al., 1998, p. 58). Thus, the STN plays a dual role: it manages federal resources and is a crucial oversight mechanism for the Ministry of Finance and, by extension, the President.

Graph 5
Turnover of DAS 4, DAS 5, and DAS 6 positions in the National Treasury Department (STN) between 1996 and 2020

As illustrated in Graph 5, turnover in STN is notably influenced by crises, including the Blackout (2001), South American economic crisis (2003), international financial crisis (2008), and pre-impeachment political instability (2015). In contrast, the STN experienced minimal disruption during the 2019 ministerial reform. This stability can be attributed to the preservation of the STN’s directors amidst the broader reorganization that led to the creation of the Ministry of Economy through the merger and restructuring of departments from other ministries.

4.3.3 External departments

External departments are predominantly staffed by professionals from outside the public administration and have fewer positions available to the minister. Established between the late 1980s and early 1990s, they show a distinct turnover pattern compared to core and bureaucratic departments. They experience higher average turnover rates, with crises being a more significant factor influencing DAS position changes than ministerial changes.

In SAIN, many career civil servants are from the Ministry of Foreign Affairs, indicating that this ministry frequently plays a role in the interactions between the department of the Ministry of Finance and the President (Lima & Oliveira, 2018). Contrary to the assumption that SAIN’s turnover might be influenced by international economic and financial fluctuations, the data reveal that turnover peaks in SAIN are more pronounced during national crises.

Graph 6
Turnover of DAS 4, DAS 5, and DAS 6 positions in the Department of International Affairs (SAIN) between 1996 and 2020

In the case of SAIN, DAS-6 positions exhibit greater sensitivity to turnover. DAS-4 and DAS-5 positions generally show similar turnover patterns, except for the period between 2013 and 2017. From 2006 to 2012, turnover for DAS-4 and DAS-5 positions declined, which can be attributed to the establishment and strengthening of the BRICS grouping in 2006. This period marked Brazil’s growing prominence in international activities, although there was also a need to stabilize Executive-Legislative relations due to other crises. The South American crisis (2003) and the subprime crisis (2008) had less impact on SAIN compared to other departments. Instead, the Mensalão scandal (2005) and the subprime crisis (2008) had more pronounced effects on SAIN’s turnover rates. In 2019, the ministerial reform within SAIN led to the highest turnover peak for the department.

The SPE consistently shows the highest turnover rates among all departments, with five years in which the department experienced a complete turnover of its occupants. Unlike other departments where turnover is primarily driven by crises, in the SPE, the commencement of new political terms significantly influences the turnover rate.

Graph 7
Turnover of DAS 4, DAS 5, and DAS 6 positions in the Department of Economic Policy (SPE) between 1996 and 2020

It is important to consider that SEAE and SPE were established more recently compared to other departments. Also, they count on a limited number of positions - both departments had an average of five positions throughout the analyzed period. The SPE appears to be particularly sensitive to crises, so it is useful to examine periods of lower turnover peaks. For instance, the decrease in turnover in 2007 may be associated with the implementation of the Growth Acceleration Program (PAC), which focused on medium- and long-term economic policies for infrastructure (Bolle, 2016; Carvalho, 2018). Between 2011 and 2014, despite moderate turnover rates, the turnover was intermittent, possibly reflecting the political and institutional instability during President Rousseff’s first term.

As the most recent secretariat, SEAE presents similar turnover patterns to the SPE, though to a lesser degree. Changes in SEAE’s DAS positions generally peaked during transitions in government mandates and during the economic and political crises discussed in this study.

Graph 8
Turnover of DAS 4, DAS 5, and DAS 6 positions in the Department of Economic Monitoring (SEAE) between 1996 and 2020

Notably, SEAE experienced turnover rates for all its positions in 2007 and 2015, coinciding with periods of significant political and institutional instability. In 2019, SEAE saw another peak in turnover, which can be attributed to its transformation into the Department for Productivity and Competition (SEPRAC). This change brought new responsibilities and, consequently, new positions.

We summarize below the key findings from the analysis of DAS position turnover:

1. Turnover rates are higher in external departments than in core and bureaucratic departments. Additionally, turnover increases from DAS-6 to DAS-4 levels.

2. Core departments benefit from some level of political protection from the president. However, this protection is less intense than that enjoyed by ministers, as evidenced by higher turnover rates in core departments compared to those of ministers.

3. Bureaucratic departments have the lowest average turnover rates. Despite this, positions, particularly DAS-4 and DAS-5, experience turnover during nearly all crises and periods of ministerial transition.

4. External departments have the highest average turnover rates, with crises being a more significant factor influencing DAS position changes than the change of ministers.

5. FINAL CONSIDERATIONS

The research question addressed in this study - “How does the politicization of civil servants in appointed positions within the Ministry of Finance manifest?” - reveals that politicization varies across different departments/secretaries within the analyzed Brazilian ministry. Politicization is defined here as the process by which politicians, parties, and societal groups seek to influence public policies by appointing civil servants to senior management and advisory roles (known as DAS positions). This influence is evidenced by turnover in these positions. The findings indicate that:

1. ) Core departments: These offices are relatively shielded from politicization. Their turnover is more closely associated with changes in ministers rather than crises, and their turnover rates are lower than other departments (except bureaucratic ones). The appointees in DAS positions in core departments are almost as insulated from politicization as the finance ministers.

2. ) Bureaucratic departments: Contrary to expectations, these departments are more vulnerable to politicization. Although they are primarily staffed by career civil servants, who generally have lower turnover rates compared to non-career appointees, departmental turnover tends to increase with ministerial changes and during economic and political crises.

3. ) External departments: These are the most susceptible to politicization, exhibiting the highest turnover rates and a stronger association with crises than other departments.

The hypothesis that the politicization of the Ministry of Finance’s bureaucracy is observed through turnover in DAS positions rather than the position of the minister is both supported and promising. Although statistical analyses to confirm causality between crises and turnover are not feasible with the available data, patterns suggest varying turnover dynamics influenced by: a) the type of activity performed by the department; b) its proximity to the minister’s political power; and c) significant external factors such as economic and political crises.

The study suggests that the insulation of the Brazilian Ministry of Finance from politicization may be weaker than previously indicated in the literature. The stability of the minister (characterized by low turnover) appears to be maintained at the cost of higher turnover among DAS position holders, particularly in less central departments. Thus, politicization within the ministry is effectively “hidden” in the DAS positions, which may be considered the “price” for more stable core decision-making departments.

Another key contribution of this research is the emphasis on analyzing turnover in a disaggregated manner, taking into account data for each type of department and hierarchical level within DAS positions. Additionally, we evaluated the impact of economic and political events that may cause significant strain on the president and the government. Other ministries, in addition to the Ministry of Finance, likely exhibit similar phenomena that warrant further exploration, such as varying responses to crises in terms of staff turnover and the impact of sector-specific crises, including environmental and climate-related challenges.

Finally, it is important to acknowledge a limitation of this study. While analyzing turnover reveals significant patterns across different departments, it does not address critical factors in the politicization process identified by Peters (2018) and Pierre and Peters (2004). Specifically, this analysis does not explore how personnel changes affect public policy implementation or the nature of interactions between the bureaucracy and political actors, such as parties, legislators, and advocacy groups. To gain a more comprehensive understanding of the politicization process, future research should employ qualitative methods to gather detailed data on policy changes, decisions made by officeholders, and these interactions. Developing analytical models that examine the relationships between these factors is essential for a deeper understanding of the interplay between politics and bureaucracy in Brazil.

ACKNOWLEDGMENTS

We extend our gratitude to the reviewers for their invaluable contributions to the final version of this article.

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• 1
  The Department of Economic Monitoring was dissolved by Decree No. 9,266 on January 15, 2018, and was subsequently renamed the “Department for Productivity and Competition” (SEPRAC), a title it retained until 2020.

• DATA AVAILABILITY

  The entire dataset supporting the results of this study is available upon request to the corresponding author Lucas Almendra. The dataset is not publicly available due to lack of funding to maintain the data in an online repository.

• 9

• 10
  [Translated version] Note: All quotes in English translated by this article’s translator.

Reviewers:

• 13
  Raphael Amorim Machado (Instituto de Pesquisa Econômica Aplicada, Brasília / DF - Brazil) https://orcid.org/0000-0001-7500-4485
• 14
  One of the reviewers did not authorize the disclosure of their identity.

• Peer review report:

  the peer review report is available at this URL: https://periodicos.fgv.br/cadernosebape/article/view/91485/85919

Edited by

Alketa Peci (Fundação Getulio Vargas, Rio de Janeiro / RJ - Brazil) https://orcid.org/0000-0002-0488-1744

Gabriela Spanghero Lotta (Fundação Getulio Vargas, São Paulo / SP - Brazil) https://orcid.org/0000-0003-2801-1628

Data availability

The entire dataset supporting the results of this study is available upon request to the corresponding author Lucas Almendra. The dataset is not publicly available due to lack of funding to maintain the data in an online repository.

Publication Dates

• Publication in this collection
  20 Sept 2024
• Date of issue
  2024

History

• Received
  23 June 2023
• Accepted
  21 May 2024