The Political Economy of Brazilian Industrial Policy (2003 - 2014): Main Vectors, Shortcomings and Directions to Improve Effectiveness

The Political Economy of Brazilian Industrial Policy (2003 – 2014): Main Vectors, Shortcomings and Directions to Improve Effectiveness This paper is a study about industrial policy and its role in development, investigating how it was recently adopted in Brazil. After a decade of neoliberalism, industrial policy returned to the agenda, increasing the interest in its evaluation. Initially, the article explores general matters related to the needs for industrial policy and to the required factors and procedures that contribute to successful implementation. A benchmark is created to interpret the Brazilian experience. Despite its prioritization and the achievement of specific advances, industrial policy in Brazil failed to produce more consistent results. The main reasons include the lack of an appropriate coordination structure, the incapacity to focus on clear productivity and competitiveness targets, the excessive number of sectors contemplated, the lack of any consistent evaluation and the inability to achieve an encompassing negotiation with business representatives. These deficiencies weakened the possibility of addressing the serious shortcomings inherent to Brazilian industry.