Brazil - Ministers out, Madness in; a gone wrong trade off

Analysis by Gaelle Nohra, Staff Writer

June 19th, 2020

The Prisoner’s Dilemma revolves around two individuals accused of having jointly committed a crime. The truth as to how, when, and why the act occurred lies only in the hands of these two as indices and witnesses are completely absent. Each individual, suspected by the police, is locked in a separate cell so that he’s absolutely unaware of what is going on in the other’s room. By undergoing investigation, suspects are in the face of two options: confessing or lying. As shown in the table below, four scenarios are therefore likely to happen:

The essence of this dilemma resides by the fact that both suspects desire to minimize their imprisonment years, which cannot be ultimately achieved due to the fear of being betrayed by one another – for instance, prisoner A confessing while prisoner B lying renders B worse-off. Lack of information about one another’s behavior and the impossibility of cooperating on generating the exact same testimony - lying for example - places both under the pressure of assuming the other confessed. Thus, ending up with the least disadvantageous scenario for both: scenario 1[i]. Most importantly, this experiment suggests that rationality and optimality hardly go hand in hand, rational suspects will confess their crime in order to avoid the worst-case scenario, keeping in mind the optimal one is far from being realized. 

As of writin this analysis, COVID-19 cases in Brazil have gone beyond 614,000 with a death toll nearing 34,000, making it the second worst-hit country[ii]. It has even been argued that the infection rate could jump to 15 times higher in the coming days due to a lack of widespread testing[iii]. Diving into these numbers, a story lags behind which, if summarized, could take the following headlines: President Jair Bolsonaro’s sharp rejection for social distancing in addition to Mandetta and Tech’s consecutive exits from the Health Ministry. Following weeks of clash, Bolsonaro notified previous Health Minister Luiz Henrique Mandetta about his discharge as tensions over the pandemic coping response were dramatically rising.

While Bolsonaro adhered to an anti-lockdown attitude, and welcomed the idea of administrating Chloroquine as a drug, Mandetta was at odds with the president’s approach, his pro-social-distancing stance was the main stimulator that drove him out of the ministry, according to mainstream media. A similar scenario recurred with his successor Nelson Teich, who left office less than one month later. For the Brazilian President, potential economic damage remains the major justification for his lockdown resistance as he states “Fighting the virus shouldn’t do more damage than the virus itself”. [iv]

President Bolsonaro (left) and previous Health Minister Henrique Mandetta (right) Source: Getty Images

Social distancing wasn’t properly implemented in Brazil and still, economy minister Paulo Guedes projected on May 8th that “Within about 30 days, there may start to be shortages on (store) shelves and production may become disorganized, leading to a system of economic collapse, of social disorder”[v]. Throughout the pandemic journey, the tradeoff between lives and jobs has been globally recognized and experienced. Providing rigid grounds for the job market to smoothly operate will eventually translate into a spike in death tolls, and vice-versa. The question is why the Brazilian compromise fails to sustain even with a blatant reluctance to suspend economic activity, from the President’s side at least. 

Critical explanation lies in the political background, especially when corruption scandals started further gaining relevance with the Impeachment of Dilma Roussef in December 2015 and recent calls from former President Lula Da Silva to impeach Bolsonaro[vi]. Inconsistence on this stage has long been a barrier in front of economic prosperity in Brazil, considering the multifarious complications it adds to the growth procedure. That said, the emphasis in this analysis will shift from the political facet to the above-mentioned and worth-referring thought experiment known as the Prisoner’s Dilemma, which may be used to depict the worldwide existing dilemma as to which curve to flatten – infection rates or economic growth-  and to what extent flattening one speeds up the steepening process of another. 

Prisoner’s dilemma, the Brazilian scene and loss minimization

As mentioned earlier, the tradeoff is worldwide and not confined to Brazil, yet Bolsonaro’s policy attitude remains to a large extent heavily subject to criticism considering the wrongly-timed dismissal of Ministers. In the prisoner’s dilemma and specifically in scenario 1, suspects have a tendency to confess their crime knowing the resulting outcome won’t be the best they wish for simply because the aim is ‘minimizing losses’ instead of ‘maximizing gains’. It is worth mentioning that the use of the term ‘gain’ lacks relevance at this point as the least number of years should be perceived as an inconvenience, however in this context ‘gain’ is synonym of ‘satisfaction’. 

 Assuming moral standards are neutralized in this dilemma, in the sense that subjects do not resort to confessing out of moral convictions, admitting their crime primarily seeks the avoidance of 8 years of imprisonment and not the insurance of one year, raising the occurrence probability of scenario 1 over others. The COVID-19 story is similar by the fact of imposing the need to minimize losses and that is initially why lockdown, social distancing and quarantine are globally rising phenomena. In light of the prisoner’s dilemma, it seems like Bolsonaro’s aim was instead maximizing satisfaction by ensuring the economy remains intact from any damages, leading the Brazilian situation to bear resemblance to scenarios 2 or 3 where the tradeoff fails to sustain a Nash equilibrium between rationality and optimality. 

A successful tradeoff, a differently failing one 

Yet similarity between Brazil and scenarios 2-3 isn’t absolute and is only embodied in the presence of extremity in both cases: 8 years of imprisonment and the high infection rates in Brazil. In scenarios 2 and 3, one side is better-off, which is the lying prisoner that ends up with only one year of imprisonment, however in Brazil, the collapse encompasses both human lives as well as the economy. This takes us back to one of the main essences of this dilemma: escaping extremity.

The COVID-19 game can’t be won simply because the virus is deadly and present, just as suspects cannot exit their dilemma simply because the crime cannot be erased. Events are enough to guarantee the failure but still, they’re unable to determine its degree.

Loss Balance and Loss Concentration

Central authorities are hardly expected to balance between losses by choosing the injury extreme to either the humanitarian or economic side, it is rather a question of loss concentration and picking the element that will be most hurt in order to avoid greater hurt. Refusing to concentrate the loss or concentrating it on the wrong element eventually incurs losses on both sides and that is precisely the suggested behavioral mistake of Bolsonaro. By describing it as a “little flu”[vii], the Brazilian president has obviously missed the right choice by choosing the already fragile constituent: a vulnerable economic base. 

[i] Brazil faces ‘economic collapse’ in 30 days due to lockdown, minister says. May 8th 2020. Retrieved from https://www.france24.com/en/20200508-brazil-economy-minister-paulo-guedes-jair-bolsonaro-covid-19-coronavirus-lockdown-protests

[ii] Brazil’s former president calls for Bolsonaro to be impeached. June 2nd 2020. Retrieved from https://edition.cnn.com/2020/06/02/americas/brazil-lula-bolsonaro-coronavirus-economy-intl/index.html

[iii] Bolsonaro calls coronavirus a “little flu”. Inside Brazil’s hospitals, doctors know the horrifying reality. May 25th 2020. Retrieved from https://edition.cnn.com/2020/05/23/americas/brazil-coronavirus-hospitals-intl/index.html

 [iv] Economics 101: The best solutions to the Prisoner’s Dilemma. February 2nd 2017. Retrieved from https://www.thenational.ae/business/economics-101-the-best-solutions-to-the-prisoner-s-dilemma-1.10219

[v] WHO Coronavirus Disease (COVID-19) Dashboard. June 7th 2020. Retrieved from https://covid19.who.int/?gclid=EAIaIQobChMIqOvEwYzv6QIVieFRCh02rg1_EAAYASAAEgIwlvD_BwE

[vi] Brazil sees record number of COVID-19 cases, more than 1,000 deaths in 24 hours. May 29th 2020. Retrieved from https://www.france24.com/en/20200529-brazil-sees-record-number-of-covid-19-cases-more-than-1-000-deaths-in-24-hours

[vii] Pro- and anti-Bolsonaro rallies erupt in Brazil as COVID-19 cases pass 500,000. June 6th 2020. Retrieved from https://www.france24.com/en/20200601-as-brazil-covid-19-cases-pass-500-000-mark-bolsonaro-rallies-us-sends-unproven-drug