Abstract
The difficulty of making laws stick is a recurring theme in Brazilian economic and social history. Both foreigners and Brazilians feel this difficulty creates a sense of impunity and moral weakness. This articles seeks to establish a theoretical reference model wherein Brazilian laws are purposely ambitious in the direction of social and political progress. There is an understanding that the social and political structure is incapable of enforcing these new laws in their entirety. Only with time. Thus there exists a trade-off between an ambitious social project (which provides a social good) and the delay in the effective enforcement of these laws (which bears a moral cost). This theory reveals the balance between social goods and costs that determines the degree of enforcement attained as well as the changes that alter this model. This model is used to examine corporate governance in Brazil during the last three decades of the nineteenth century and examines the crisis of the ”Encilhamento” of this period.