Neoliberalism, Democracy, and Development Policy in Brazil

Abstract

This paper offers a political economy analysis of the two systems of accumulation in the postwar Brazilian economy: import-substituting industrialisation (ISI) and new liberalism, and the industrial policies associated with them. The transition between these two systems of accumulation from the early 1980s to the mid-1990s is reviewed in the light of the country’s key macroeconomic indicators and the political developments which have determined the choice and implementation of economic policy in each period. It is argued that, despite their significant achievements, both ISI and new liberalism were implemented unevenly and inconsistently, and that their shortcomings can be analysed at two levels: internal micro- and macro-economic limitations preventing these development strategies from achieving their stated aims, and external limitations imposed by social conflicts during each period of time. The paper concludes, first, that industrial policies are closely associated with specific state structures, economic constraints, and political configurations which can be analysed only concretely (there can be no general theory of industrial policy, and there is no ‘optimum path’ of accumulation under late development). Second, each system of accumulation is limited by a distinctive set of historically specific economic and political constraints, which set limits to its potential development. Third, and precisely for these reasons, industrial policy is irreducibly political and context-specific.