Elections, Coalitions, and the Politics of Brazil's Macroeconomic Stabilization

After several failed attempts in previous years, Brazil's Plano Real finally ended hyperinflation in 1993–1994, and a significant driver of inequality and poverty was eliminated as a result. By combining data from Congress and newspaper archives, 17 interviews, and secondary sources, this article takes a qualitative approach to explore the notion that increased electoral competition and effective coalition management enabled price stabilization. Fernando Henrique Cardoso (PSDB), the economy minister leading the plan and the winner of the 1994 presidential election, campaigned as the anti-inflation candidate, promising newly enfranchised low-income voters that reining in prices would boost their earnings. Meanwhile, the minoritarian executive took advantage of coalitional tools to cultivate legislative alliances and approve the plan's measures. For analytical generalization, a potential model is proposed for further investigations on the relationship between competitive elections, cross-party cooperation, and price stability in nine other country cases within and outside Latin America.