The present paper analyzes the institutional incentives public managers face in Brazil. A decision-theoretic model suggests that the constitutional principle of “Legality” induces tenured civil servants to adopt a non-innovative, bureaucratic management style. Conversely, temporary appointed managers tend to be more active, which could either generate higher social returns, in the case of socially inclined managers, or lower social return, in the case of managers involved in corrupt activities. A brief econometric analysis from 2002 to 2011 suggests that Ministries with higher percentages of temporary appointed managers tend to have higher corruption levels. Then, the conclusion discusses how institutions could be adjusted in order to stimulate a socially desirable innovative management while curbing corrupt practices.

This study analyzes the continuity of ISI and neoliberal policies in Argentina and Venezuela from the historical institutionalist view. In the case of ISI in both countries, the positive feedback mechanism was found in the political process which strengthens the path dependency. On the contrary, the neoliberal policies were maintained for over 10 years in Argentina while in Venezuela the same policies were not sustainable. The neoliberal policies were sustained by the political alliance which supported the path dependency of the policies in Argentina, while the political fragmentation in Venezuela impeded the formation of a new political alliance to support the neoliberal policies.