Shaking the Latin American Equilibrium: The Petrobras & Odebrecht Corruption Scandals


In 2014, a small money laundering investigation into a shady car wash in Brasilia, unpredictably unraveled into what may be the biggest corruption scandal in world history[1], and the largest securities fraud case by a foreign issuer in U.S. history.[2] The scandal led to the imprisonment of dozens of high-executives of Latin America’s most prestigious corporations, and the fall from grace of several former and sitting presidents with otherwise impressive democratic records.[3]

Below, we describe the aspects that have made the Lava Jato case so massive and influential, and explore how its ongoing consequences could represent a watershed moment in favor of strengthening the rule of law, and creating more transparent and competitive markets in Latin America.

I. Lava Jato: Taking Down Brazil’s House of Cards[4]

In 2013, the Brazilian Congress passed the Organized Crime Law, which permitted the use of plea bargain agreements for the first time.[5] As of 2017, Brazilian prosecutors had entered into more than 163 such agreements,[6] and the majority of them came in the context of the Lava Jato investigation.[7] Named after the car wash suspected of money laundering that was the first target of Brazilian prosecutors, the investigation ultimately uncovered a kickback scheme involving Petrobras, Brazil’s flagship company.[8]

For more than a decade, Petrobras’ government-appointed managers colluded with companies that supplied goods and services to Petrobras—notably, Brazil’s largest construction companies—to inflate the prices and skim as much as 3 percent off each massive contract on a cartel-like rotating basis.[9] Early estimates indicated that at least $2.1 billion were embezzled in this manner for the personal gain of the scheme’s operators, as well as to finance electoral campaigns for dozens of politicians, mostly from the ruling Workers Party (“PT”) and its partners in the government coalition, particularly the Party of the Brazilian Democratic Movement (“PMDB”).[10] Besides large cash sums, the bribes included gifts of Rolex watches, $3,000 bottles of wine, expensive artwork, yachts, helicopters and prostitutes.[11] As the scheme was operating at full capacity, rating firms focusing on Environmental, Social and Governance (“ESG”) investment criteria were ranking Petrobras as the world’s “most ethical oil and gas company.”[12]

The scale of the investigation cannot be understated. Between March 2014 and March 2015, dozens of engineers, construction executives, and Petrobras officials were arrested as part of the investigation.[13] That month, Brazil’s Supreme Court also announced that it was investigating 34 politicians on suspicion of involvement in the scandal.[14] A year later, a total of 86 people had been convicted of crimes related to Petrobras, most of them members of Brazil’s political and economic elite. Petrobras’ former director of refining and supply confessed to having received bribes and agreed to pay back as much as $23 million.[15] A third-tier executive who reported to the director for engineering and services, agreed to return $100 million he had stolen from the company and deposited in foreign bank accounts.[16] Another Petrobras director channeled €20 million to personal banks in Monaco from accounts in the Bahamas, Panama, Switzerland, Hong Kong, Portugal, and the U.S.[17]

The racket involved at least 28 major corporations and 20 political parties, and has so far resulted in over 100 convictions.[18] Among the implicated were the CEOs of Brazil’s top construction companies, OAS, Queiroz Galvão, UTC, Camargo Corrêa, Engevix, and, most notably, Odebrecht, which had been particularly aggressive in its international deals.[19] Since 2006, Odebrecht’s legitimate-sounding “Division of Structured Operations” had been in charge of managing and laundering millions of dollars of kickbacks used to pay off politicians that, in return, awarded the company lucrative construction contracts across Latin America.[20] Odebrecht payments could pass through four offshore bank accounts before reaching the politician target of the bribery.[21] Odebrecht even bought the branch of an Austrian bank in Antigua & Barbuda to minimize the risk of raising suspicion.[22]

The damage to Petrobras and to the Brazilian state was massive. In total, Petrobras officials believe nearly $3 billion in bribes were paid as part of the scheme.[23] Moreover, the country’s latest economic slowdown is significantly attributed to the fallout from the scandal.[24]

Interestingly, the investigation received broad support amongst the general public, leaving a sense that, for the first time, corruption would not go unpunished.[25] Prior to Lava Jato, corruption investigations into how the powerful did business ended in a wink, a handshake, or a slice of pizza.[26]

II. U.S. Securities and Anti-Corruption Institutions Blow Up the Case

     A. Petrobras Securities Class Action Settlement

Following the public revelation of the corruption scheme in Brazil, Petrobras’ share price fell by over 80% and its U.S.-traded American Depositary Shares (“ADS”) fell by 78%.[27] In December 2014, only a few months after some of the first confessions emerged, investors who had purchased the company’s ADSs on the New York Stock Exchange filed a securities class action lawsuit in the Southern District of New York against the company, its directors and officers, its auditor, and its offering underwriters.[28] The ADS investors asserted claims under both the Securities Exchange Act of 1934 and the Securities Act of 1933.[29]

Plaintiffs argued that the company had misrepresented facts in public statements and regulatory filings.[30] Plaintiffs alleged that the company illegally capitalized the costs associated with the payments to the cartel members, painting a false picture of the company’s financial condition.[31] With respect to the company’s business and management, the plaintiffs alleged that the company had misrepresented its financial controls and its ethical practices.[32]

In December 2017, investors settled the case for close to $2.95 billion, and the Court approved the settlement in June 2018.[33] The settlement was the largest securities class action settlement in a decade, and the largest settlement ever in a class action involving a foreign issuer.[34] It was also the fifth largest class action settlement ever obtained in the United States.[35]

     B. Petrobras Settlement with the SEC and the DOJ

After years of investigation, in September 2018, the Securities and Exchange Commission (“SEC”) announced it had both charged and settled with Petrobras for misleading U.S. investors by overstating by $2.5 billion the value of assets that were in fact spent on bribes.[36] Petrobras agreed to pay to the SEC disgorgement and prejudgment interest totaling $933,473,797, offset by any payments made to the $2.95 billion class action Settlement Fund.[37]

According to the SEC, Petrobras’ financial statements mislead U.S. investors by “conceal[ing]the massive bribery and bid-rigging scheme at the company,” including in a $10 billion stock offering from 2010.[38] “Petrobras fraudulently raised billions of dollars from U.S. investors while its senior executives operated a massive, undisclosed bribery and corruption scheme,” said Steven Peikin, Co-Director of the SEC Enforcement Division. “If an international company sells securities in the United States, it must provide truthful information about its business operations.”[39]

On the same day, the U.S. Department of Justice (“DOJ”) also announced a non-prosecution agreement with the company.[40] Petrobras had entered into agreements with U.S. and Brazilian authorities and agreed to pay a combined total of $853.2 million in penalties to resolve the U.S. government’s investigation into violations of the Foreign Corrupt Practices Act (“FCPA”) in connection with the bribery scheme.[41] “Protecting the integrity of U.S. financial markets is one of the highest priorities of this Administration,” said U.S. Attorney Terwilliger. “Those who choose to access our capital markets while failing to disclose the corrupt activities of company executives will be held accountable.”[42]

     C. Like Dominoes: Odebrecht’s Stunning Settlement with the DOJ

In December 2016, two years before the Petrobras settlement with the SEC and the DOJ, the same two offices published their plea agreement with global construction company Odebrecht, and petrochemical company Braskem, which was 50% owned by Odebrecht and jointly operated its Division of Structured Operations.[43] This division “effectively functioned as a stand-alone bribe department within Odebrecht and its related entities.”[44] Both companies pleaded guilty and agreed to pay a combined penalty to resolve charges in the U.S., Brazil and Switzerland over bribes paid around the world.[45] At sentencing in April 2017, a U.S. judge ordered Odebrecht to pay $2.6 billion in fines, with about $93 million going to the U.S., $2.39 billion to Brazil and $116 million to Switzerland.[46]

The DOJ had investigated and found jurisdiction over Odebrecht because the company was suspected of making illicit payments from bank accounts in New York City and because a few meetings, of the hundreds of transactions that took place over the years, were held in Miami.[47] As in the Petrobras investigation, U.S. authorities worked closely with Brazilian and Swiss authorities and allocated the proceeds of the fines among the three.[48] Braskem’s American Depositary Receipts (ADRs) had been publicly traded on the New York Stock Exchange, so that subjected the company to the DOJ’s jurisdiction.[49] The DOJ charged the company with conspiracy to violate the anti-bribery provisions of the FCPA.[50]

But what made Odebrecht’s plea agreement so stunning and its effects so wide-ranging was the amount of countries Odebrecht had confessed to have bribed politicians in. The 75-page document stipulated that, between 2001 and 2006, Odebrecht jointly with its co-conspirators, had paid approximately $788 million in bribes in relation to 100 public infrastructure projects in twelve countries, including Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Peru and Venezuela, in Latin America, and Angola and Mozambique in Africa.[51]

The scandal that followed caused several sitting presidents to resign, former presidents to face trial or become fugitives, and even led the former president of Peru—Alan García—to commit suicide at his home as the police closed in on him.[52] Others have managed to escape arrest up to this point, but investigations are ongoing, and new revelations continue to emerge.[53]

Just one month ago, 13,000 documents from Odebrecht’s bribery division were leaked to the International Consortium of Investigative Journalists.[54] The documents have revealed that Odebrecht also built a large port in Cuba, something that seems to not have been disclosed during the investigation.[55] This has called into question whether Odebrecht in fact complied with the truthfulness and completeness conditions of its sworn plea, with a sitting U.S. Senator calling for the DOJ to reassess the settlement.[56]

III. The Latin American Equilibrium Shaken: Moving Towards Political and Corporate Culture Reform

     A. The Emperors Seldom Had Clothes

The Petrobras and Odebrecht scandals exposed the way big business is done in Latin America, and made it clear that this was not just a problem in Brazil. A large Latin American multinational company had been caught greasing governments left and right—also, governments on the left, as well as governments on the right.[57] The lyrics of a well-known Brazilian folk song by Bezerra da Silva, stating that “Thieves are all over, as much in Congress as in the bakery line,” reflect widely held beliefs among Latin Americans that their political and business elites, as well as ordinary citizens themselves, regularly engage in corrupt activities.[58]

In a 2017 Transparency International report, almost two thirds (62%) of the 22,000 people surveyed in 20 Latin American countries said that corruption had risen in the 12 months prior to when they were questioned.[59] More than half (53%) said that their government is failing to address corruption. And one in three people (29%) who had used a public service in the last 12 months said they had to pay a bribe.[60] Based on the estimated population size of these countries, this means that around 90 million people paid bribes.[61] Transparency International’s numbers suggest that there may be more than a grain of truth to the grim assessment of film writer and director José Padilha, who produced the Netflix film, “The Mechanism,” about the Lava Jato scandal: “There is no public contract in any village, town, city or state that is not affected [by this mechanism of corruption], from the tiniest new road to the biggest government project.”[62]

Explanations for the problems of corruption and underdevelopment of Latin America range from cultural (including historic[63] and religious[64]) to geographic reasons.[65] In a book edited by Stanford University professor Francis Fukuyama that sought to explain the development gap between the U.S. and Latin America, Prof. James Robinson rejects cultural and geographic explanations, and instead proposes an institutional theory called “The Latin American Equilibrium.”[66] Robinson argues that the relative poverty of Latin America is the result of the persistence of an entrenched institutional arrangement that, originating in the extractive needs and authoritarian practices of Spanish and Portuguese colonists, has tended to reproduce the following characteristics: insecure property rights, absence of the rule of law, a nonlevel playing field, a lack of constraints on the exercise of political power, and the concentration of that power into the hands of a relatively small subset of the population.[67]

Corruption and clientelism are key components of this institutional arrangement,[68] while “political instability is a natural outcome of a society where economic institutions generate large amounts of rents for those with political power.”[69]

Even though specific economic and political institutions may change, and even when existing elites are destroyed, Robinson explains, “the underlying structures and incentives which gave rise to the previous equilibrium” tend to persist.[70] Under this view, the region’s 1990s free market economic reforms that signaled moving away from clientelism, in fact wound up proving that even “privatization and deregulation could be molded into clientelism”: “Policies changed because political and economic shocks altered the composition of domestic political coalitions, but the form that these policies took did not represent a radical change of the institutional environment.”[71]

Chile’s modern economic success, however, challenges this sweeping understanding. In response, Robinson attributes the Chilean success in “escaping the Latin American Equilibrium” to, in part, its early constitutional arrangement that made it less prone to clientelism than its counterparts in the region,[72] and, more significantly, to the emergence of a “new breed of [pluralistic]agrarian capitalists.”[73] According to Robinson, this new “Chilean gentry” had accidentally benefited from land reform in the 60s and early 70s, and then again benefited from free market reforms in the 70s and 80s.[74] In summary, Robinson points to a combination of policy reform and traumatic shockwaves—caused by “repressive” regimes on the left, and then the right[75]—that combined to shake Chile out of the Latin American Equilibrium.

     B. Can the Equilibrium Be Shaken?

What if these political and economic shocks come from the growing interaction of strong domestic and international institutional structures and incentives? Can these shocks then recalibrate the equilibrium for the better? A running joke among Latin American academics is that it is unbelievable how the same Latin American who matter-of-factly may engage in corruption in his home country, changes radically and won’t even jaywalk upon stepping foot in the U.S.—a country where the legal system is perceived to be more robust, and so corruption cases there are less likely to end up in a wink, a handshake, and a slice of pizza.[76]

In the wake of the unprecedented consequences of the Petrobras and Odebrecht scandals, powerful shockwaves are reverberating across Latin America. The unprecedented breadth and popular support to the Lava Jato investigations inside Brazil overnight forced a significant portion of Latin America’s highly-regarded democrats and the corporate and business elites to confess overnight to having been part of corruption schemes. This unparalleled level of global shame could lead to more than a simple leveling of the waters under the old set of structural incentives. The strong involvement of U.S. securities, law enforcement, and judicial institutions in this case reframed a domestic corruption problem into a continental one that threatened the integrity of the world’s largest financial market.

For the first time in such a wide and coordinated way, both Wall Street investors and government enforcement agencies underlined that Latin American companies seeking capital in the U.S. will be scrutinized and held to account. The message was clear that, if these companies don’t first clean up their acts domestically, their reputations may be shattered, and Miami removed from the list of welcoming vacation spots for their executives.

In the wake of the scandal, Brazil is already opening up its oil industry, and liberalizing its markets in favor of more competition and foreign investment. In recent years, both Brazil and Petrobras appear more open to working with international oil companies.[77] In 2018, for instance, French oil company Total S.A. bought a stake in two Brazilian oil fields and other assets for $2.2 billion.[78] In December 2018, Norway’s Statoil agreed to pay as much as $2.9 billion for a stake in another Petrobras field.[79] After decades of looking from the outside in, Brazil is also now engaged in the process of negotiating and signing bilateral investment treaties in an effort to promote and protect foreign direct investment.[80]

In 2016, Brazil enacted the Investment Partnerships Program (“PPI”), a new program aimed at reducing corruption opportunities in infrastructure projects. The law creating the program seeks to improve licensing procedures and require the adoption of better conduct and working practices.[81] To ensure fair competition and compliance with industry standards, the PPI emphasizes the need for public consultation prior to the issuance of rules, impact studies for regulatory changes, annual monitoring of results, and joint efforts with administrative institutions.[82]

Similar legal reforms seeking to establish more transparent public procurement systems across Latin America are following suit.[83] It remains to be seen if those reforms, coupled with Lava Jato’s embarrassing and ongoing consequences, are enough to alter the underlying structures and incentives that have fostered the present corrupt equilibrium.


[1] See Jonathan Watts, Operation Car Wash: Is This The Biggest Corruption Scandal in History?, The Guardian (June 1, 2017), See also Linda Pressly, ‘The largest foreign bribery case in history’, BBC News (Apr. 22, 2018),

[2] Emma Gilmore, Pomerantz Achieves ‘Stunning’ Class Action Settlement in Petrobras, Pomerantz Monitor (Jan/Feb 2018),

[3] Brian Lee, Former Peruvian President, Ex-Stanford Alumni Scholar Alejandro Toledo Arrested for Role in Odebrecht Bribery Scandal, The Stanford Daily (July 17, 2019),

[4] Vladimir Netto, The Mechanism: A Crime Network So Deep it Brought Down a Nation (2019) (Chapter 1, The House Begins to Fall).

[5] The Role of Plea Bargains in the Fight Against Corruption: A Presentation by Brazil’s Attorney General, Rodrigo Janot, The Wilson Center (July 17, 2107),

[6] Id.

[7] Id.

[8] See Zack Beauchamp, Brazil’s Petrobras Scandal, Explained, Vox (Mar. 18, 2016), (“The Petrobras scandal came to light almost by accident, in mid-2013, when Brazilian police detained a money launderer named Alberto Youssef, who had been previously arrested nine times, on yet another money laundering charge. But this time, Youssef had something very different to say. ‘Guys,’ Youssef reportedly told prosecutors, ‘if I speak, the republic is going to fall.’ Youssef began to describe what we now know as the Petrobras scandal. Police, in response, in early 2014 made their first arrest in Operation Car Wash, so named, reportedly, because some of the money had been laundered through an actual car wash.”). See also David Segal, Petrobras Oil Scandal Leaves Brazilians Lamenting a Lost Dream, N.Y. Times (Aug. 7, 2015), (“You needed a lot of improbable factors aligned for this case to begin,” federal prosecutor Deltan Dallagnol said, sitting at a conference table one afternoon. “It was like the gods giving us a window of opportunity.”).

[9] See Ed Davey, Enough to Educate 17 Million Children: The True Cost of Brazil’s Car Wash Scandal, New Statesman America (Mar. 23, 2018), See also Linda Pressly, ‘The largest foreign bribery case in history’, BBC News (Apr. 22, 2018),

[10] Petrobras Scandal, Encyclopedia Britannica (Oct. 16, 2019, 9:28PM),

[11] David Segal, Petrobras Oil Scandal Leaves Brazilians Lamenting a Lost Dream,  N.Y. Times (Aug. 7, 2015),

[12] Covalence Ethical Ranking 2008, Ethical Quotation System Report, Covalence ESG Ratings (Jan 20, 2009),

[13] See Zack Beauchamp, Brazil’s Petrobras Scandal, Explained, Vox (Mar. 18, 2016),

[14] Id.

[15] Encyclopedia Britannica, supra note 10.

[16] Beauchamp, supra note 13.

[17] Renato Onofre, Dinheiro de ex-diretor da Petrobras Renato Duque passou por Suíça, Hong Kong, Bahamas e Mônaco, O Globo (Mar. 16, 2015),

[18] Davey, supra note 9.

[19] Encyclopedia Britannica, supra note 10.

[20] Sasha Chavkin, The Bribery Division: Leak of Records from Construction Giant Reveals a Bribery Scandal’s Breathtaking Scope, Miami Herald (Jun. 25, 2019),

[21] Fergus Shiel & Sasha Chavkin, Bribery Division: What is Odebrecht? Who is Involved?, Int’l Consortium of Investigative Journalists (Jun. 25, 2019),

[22] Id.

[23] Chad Bray & Stanley Reed, Petrobras of Brazil to Pay $2.95 Billion Over Corruption Scandal, N.Y. Times, (Jan. 3, 2018),

[24] See Ed Davey, supra note 9 (“I would say 90 per cent of the fall in share price is due to Car Wash,” says Tiago Cavalcanti, a Brazilian economist at the University of Cambridge. … So even setting aside Brazil’s paper loss – Petrobras shares may well continue to rise – Lava Jato could have cost the government at least £11bn in revenue in lost tax and lost dividends from its stake in the company. That’s almost eight times the amount stolen from Petrobras in the first place. “That number sounds very plausible and the calculation is logical,” says Cavalcanti, who has himself calculated that without Car Wash and other governmental policies Brazilian GDP would have grown by 1.2 per cent in 2015 and 2016, as opposed to an actual fall of 3.8 per cent and 3.6 per cent. “Another reason for the recession was the falling price of commodities, but Peru and Chile did not have the fall Brazil had. Certainly Car Wash was a very big factor in the recession.”).

[25] Watts, supra note 1 (“[Federal Prosecutor] Ishii said he realised Car Wash was something special when he saw wealthy businessmen not just go to jail, but stay there. ‘That’s when the penny dropped. I began to think, hey, I’m in a country where there is an expression, “Only the poor get arrested” – but here are these millionaires getting thrown in prison.’ More was to come. From corporate executives, Car Wash investigators turned their attention to politicians. Dishonest and venal senators and congressmen had long been protected by the immunity of office. But a window for prosecution was opening. The judiciary was in the ascendant, the electorate was mad as hell, and old loyalties were starting to crack. All the prosecutors needed was a little leverage.”).

[26] See Matthew M. Taylor & Vinícius C. Buranelli, Ending Up in Pizza: Accountability as a Problem of Institutional Arrangement in Brazil, 49 Latin American Politics & Society 59–87 (2007).

[27] Kevin M. LaCroix, Petrobras Securities Suit: Judge Rakoff Rejects Company’s ‘Adverse Interest’ Argument; Rules Brazilian Investors Must Arbitrate Brazilian Securities Law Claims, The D&O Diary (Aug. 2, 2015),

[28] See generally In re Petrobras Sec. Litig., Civil Case No. 14-cv-09662 (S.D.N.Y. 2015) (Individuals or institutions who (i) during the time Period between January 22, 2010 and July 28, 2015, inclusive (the “Class Period”), purchased or otherwise acquired Petrobras Securities, including debt securities issued by PifCo and/or PGF, on the New York Stock Exchange or pursuant to other Covered Transactions; and/or (ii) purchased or otherwise acquired debt securities issued by Petrobras, PifCo, and/or PGF, in Covered Transactions, directly in, pursuant and/or traceable to a May 13, 2013 public offering registered in the United States and/or a March 10, 2014 public offering registered in the United States before Petrobras made generally available to its security holders an earnings statement covering a period of at least twelve months beginning after the effective date of the offerings (August 11, 2014 in the case of the May 13, 2013 public offering and May 15, 2015 in the case of the March 10, 2014)). See also Kevin M. LaCroix, Petrobras Settles U.S. Securities Suit Based on Corruption-Related Allegations for $2.95 Billion, The D&O Diary (Jan. 3, 2018),

[29] LaCroix, supra note 27.

[30] Id.

[31] Kevin M. LaCroix, Petrobras Settles U.S. Securities Suit Based on Corruption-Related Allegations for $2.95 Billion, The D&O Diary (Jan. 3, 2018),

[32] Id.

[33] Petrobras Granted Final Approval of Class Action Settlement, Cleary Gottlieb (Jun. 25, 2018),

[34] Gilmore, supra note 2.

[35] Id.

[36] U.S. Securities and Exchange Commission Press Release 2018-215, Petrobras Reaches Settlement with SEC for Misleading Investors (Sept. 27, 2018),

[37] Id.

[38] Id.

[39] Id.

[40] U.S. Department of Justice Press Release 18-1258, Petróleo Brasileiro S.A. – Petrobras Agrees to Pay More Than $850 Million for FCPA Violations (Sept. 27, 2018),

[41] Id.

[42] Id.

[43] U.S. Department of Justice Press Release 16-1515, Odebrecht and Braskem Plead Guilty and Agree to Pay at Least $3.5 Billion in Global Penalties to Resolve Largest Foreign Bribery Case in History (Dec. 21, 2016),

[44] Id.

[45] Id.

[46] Brendan Pierson, U.S. Judge Approves $2.6 Billion Fine for Odebrecht in Corruption Case, Reuters, Apr. 17, 2017,

[47] Kevin G. Hall et al., They Lived the Good Life in Miami – While Helping Run a Multinational Corruption Machine, Miami Herald (Jun. 25, 2019),

[48] U.S. Department of Justice Press Release 16-1515, supra note 43.

[49] Id.

[50] Id.

[51] Plea Agreement, United States v. Odebrecht S.A., No. 1:16-cr-643 (E.D.N.Y. Dec. 21, 2016); Plea Agreement, United States v. Braskem S.A., No. 16-cr-644 (E.D.N.Y. Dec. 21, 2016).

[52] Shiel & Chavkin, supra note 21.

[53] Id.

[54] Id.

[55] See Sasha Chavkin, Bribery Division Sparks Questions Over Odebrecht’s US Plea Deal, Int’l Consortium of Investigative Journalists (Sept. 16, 2019), See also U.S. Senator Marco Rubio Press Release, Rubio Urges DOJ to Ensure Odebrecht is Complying with Plea Agreement (Sept. 12, 2019),

[56] Id.

[57] See Shiel & Chavkin, supra note 21. See also Donna M. Goldstein & K. Drybread, The social life of corruption in Latin America, 59 Taylor & Francis Online 4, 299 (2018),

[58] Bezerra da Silva, É Ladrão Que Não Acaba Mais, YouTube (Jun. 14, 2013),

[59] 2017 Global Corruption Barometer, Transparency International 9 (Oct. 9, 2017),

[60] Id. at 14.

[61] Id.

[62] Davey, supra note 9.

[63] Goldstein & Drybread, supra note 57 at 303 (“In his now famous travel journal from the 1830s, Charles Darwin commented on the omnipresence of corruption in South America, speaking to its debilitating effects on democratic principles: ‘Nearly every public officer can be bribed. The head man in the post-office sold forged government franks. The governor and prime minister openly combined to plunder the state.’”).

[64] James A. Robinson, The Latin American Equilibrium, in Falling Behind: Explaining the Development Gap Between Latin America and the United States 167 (Francis Fukuyama ed., 2008).

[65] Id. at 166-176.

[66] Id.

[67] Id.

[68] Alvaro Vargas Llosa, Liberty for Latin America: How to Undo Five Hundred Years of State Oppression 193 (2005).

[69] Robinson, supra note 65.

[70] Emphasis added. Id., at 186.

[71] Id. at 187.

[72] James Robinson, Presentation ‘Deconstructing the Chilean Miracle’ at Harvard University, 3-13, (Aug. 5, 2013),

[73] Daron Acemoglu & James Robinson, The Role of Institutions in Growth and Development 95, Growth Commission Workshops Leadership Governance (unpublished manuscript),

[74] Robinson, supra note 64. See also Robinson, supra note 72; and Daniel Yergin & Joseph Stanislaw, The Commanding Heights: The Battle for the World Economy 239 (2008)(emphasizing the role of free market reforms in Chile’s relative success).

[75] Acemoglu & Robinson, supra note 73, at 96.

[76] Taylor & Buranelli, supra note 26.

[77] Bray & Reed, supra note 23.

[78] Id.

[79] Id.

[80] Joaquim P. Muniz et al., The New Brazilian BIT on Cooperation and Facilitation of Investments: A New Approach in Times of Change, 404-17 ICSID Review – Foreign Investment Law Journal 2, 42 (2017).

[81] Julio César Bueno, Brazil, in The Projects and Construction Review 73 (Julio César Bueno ed., 2019).

[82] Id.

[83] Id. at 36 (reforms in Argentina) and 91 (reforms in Colombia). Natalia Mori, Operation Car Wash and Its Impact in Peru, N.Y.U. J. of Leg. and Pub. Pol’y,


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