Lula emerged in the past decade as the icon of Latin America's ``responsible left.'' After three consecutive defeats, he won the 2002 presidential race in Brazil promising policies strikingly different from the Workers' Party's (PT) traditional agenda, and barely distinguishable from those promoted by his center-right opponent. This paper challenges the conventional wisdom that the PT's move to the right occurred gradually, driven by the desire to appeal to a broader audience and win majoritarian elections. I analyze electoral programs broadcast on TV during presidential campaigns to argue that most of the party's programmatic shift occurred precisely in 2002, in response to a confidence crisis triggered in financial markets by the anticipation of Lula's victory; the move was consolidated in subsequent elections.
