Walking on the Borderline, not Astray: Strategic Management of Entrepreneurial Reputation by a Steel Sector Leader in Political Proximity to a Center-Left President

The disparity in resources resulting from income inequality enables the wealthiest to exert a significantly higher degree of influence on economic policies than average citizens. While doing so, affluent citizens often circumvent accountability for their actions. According to political scientists Page, Seawright and Lacombe (2019), the actions of the wealthiest citizens in politics are characterized by "stealth." Despite generally expressing their political ideologies publicly, billionaires tend to maintain secrecy regarding their preferences in public policies. The involvement of the Brazilian steel industrialist Jorge Gerdau with the first Dilma Rousseff government (2011-2014), from the Workers Party (Partido dos Trabalhadores, PT), provides an opportunity to study the connections of the wealthiest with political power from a specific angle. Instead of stealth, Gerdau's approach involved overt action. Gerdau’s multinational company leads the production of long steel in the Americas. During Rousseff's first presidency, Gerdau chaired the Chamber of Management, Performance, and Competitiveness Policies (CGDC). This was a delivery unit with activities inside the presidential palace, specifically created for Gerdau to implement his own ideas on governance in the state and influence economic policies by collaborating with other business leaders. It is challenging for an individual to advance interests in politics without aligning with others. Hence, Gerdau coordinated interests with many business men and women. The president, the political actor concentrating instruments for the exercise of economic policy, is supported by coalitions of interests either buttressing or limiting the executive’s measures concerning the economy (Hacker; Pierson, 2012). This interaction is a two-way street: as a president affects the economy, her administration is also conditioned by developments in the economic realm (Hacker; Pierson, 2012). The significance of this proposition is straightforward: government members claim credit for policies well-perceived by the public, yet they cannot avoid being held accountable when things don't happen as planned. In contrast, members of a support coalition press governments for political gains but are not faced with the same reputational risks as politicians. What unfolds when a businessman decides to cross the line between the state and the markets, delving into politics? While presiding over the CGDC, Gerdau articulated his opinions about economic policies and the government through public speeches, debates, and the press, allowing us to conduct a comprehensive analysis of how he employed public opinion to further his agenda. This was made by means of process-tracing methodology. Gerdau strategically managed to reduce the reputational costs inherent in working closely with a center-left government by presenting his activities to the public within the framework of a broad productivist program. He aligned with his peers' sentiment regarding the government from the inception of CGDC until the conclusion of his alliance with the government in 2014, an electoral year. As entrepreneurial opposition against President Rousseff heightened, Gerdau similarly adjusted his stance, expressing support for the candidate of the main opposition party at the time.