Corporatism, Neoliberalism, and the Failed Revolt of Big Business: Lessons from the Case of IEDI

Abstract

Like many other Latin American business communities, Brazilian business leaders sharply increased their political mobilization in the 1980s. They were responding to the context of economic and policymaking uncertainty that emerged in the New Republic (1985), the regime following the end of military rule. Two broad concerns lay at the heart of their mobilizing efforts. First, business leaders had come to believe that Brazil needed a new strategic program for economic development. Import substitution industrialization was widely perceived as an exhausted model. Thus, a number of business leaders believed it was necessary to begin a dialogue about the country's developmental priorities. These business leaders, moreover, hoped to reverse the tendency under the Ernesto Geisel administration (1964-85) to exclude business groups from policy making. This belief led to their second concern. A wide array of business leaders had come to see Brazil's corporatist system of interest aggregation and representation as an obstacle to collective action by business (Diniz and Boschi 1993, 7; Kingstone forthcoming a, chap. 4; Weyland 1998; Schneider 1997, 101-4). As a result, a series of revolts, innovations, and reforms occurred in the late 1980s and 1990s within the structure of business representation (Diniz and Boschi 1990, 1993; Nylen 1992b; Kingstone forthcoming b; Schneider 1997, 105-10; Weyland 1998). One particularly important organizational experiment was the Institute of Industrial Development Studies, or IEDI. The IEDI formed in 1989 explicitly as an effort to engage the state in a dialogue about how to promote the country's development. It brought together 30 of the most influential business leaders from a wide range of industrial sectors. These leaders carefully and successfully organized to avoid the mistakes of existing corporatist organizations, notably FIESP (the Federation of Industry of the State of Sao Paulo). Thus they offered to take the lead in solving the business community's collective action problems. Given their individual influence, it was no surprise that IEDI quickly became an important political actor. Yet by 1993, the organization had reached its pinnacle of influence and had already begun to decline. By 1997, IEDI no longer mattered politically at all, even to its own members. poratism, Neoliberalism, and the iled Revolt ofBig Business: