Against the Local Grain: Finance and the Centralization of Urban Water Governance in Brazil

Isadora Araujo Cruxen


December 1, 2021 12:00PM Zoom

WHO: Isadora Cruxên is a PhD candidate in International Development at the Massachusetts Institute of Technology (MIT). She recently succeeded in defending her dissertation! Her work explores how state-market relations shape the governance of essential urban infrastructures and natural resources in developing countries, with a focus on water politics. Beginning in February 2022, she will be Lecturer (Assistant Professor) in Business and Society at Queen Mary University of London. Isadora holds a Bachelor’s degree in Political Science from the University of Brasília, Brazil, and a Master in City Planning from MIT.

WHAT: In 2020, the Brazilian government passed a new law (n. 14.026) that fundamentally altered the regulatory framework for water and sanitation delivery in the country. A central aim of the legislation was to increase private participation in service provision. The reform faced strong opposition from sectoral groups, who succeeded in blocking its approval twice before eventually losing out. Existing scholarship on the politics of market reforms, particularly in Latin America, has typically emphasized the role of international pressures and executives in driving change in hard contexts for reform. In contrast, tracing the four year-long legislative battle around the water and sanitation reform in Brazil, this study shows that domestic private investors were the ones to drive the reform forward. It argues they did so by building business power in motion. That is, by weaving together instrumental, discursive, and structural sources of business power through a fluid process of business mobilization that entailed learning from drawbacks and responding strategically to contextual shifts. This study both (1) upends the conventional expectation within scholarship on the political economy of development that we need “good governance” before we can have private investment, and (2) problematizes the tendency to portray infrastructure investors as passive onlookers searching for institutionally-stable investment geographies. It reveals instead how investors can be key agents of institutional change.