This article is about the relationship between poverty and inequality in Brazil on the one hand and the country’s economic development and democracy on the other. First of all it highlights the dimensions and determinations of Brazil’s social inequity and puts them in the context of the diverse economic models adopted in Brazil’s history. The essay suggests an institutionalist explanation and analysis of poverty and inequality as well as the lack of redistribution even under the current democratic conditions. Finally it analyses the negative consequences of poverty and inequality tor both democracy and economic development in Brazil.