STATE CAPACITY AND ECONOMIC DEVELOPMENT - THE ADVANCES AND LIMITS OF IMPORT SUBSTITUTION INDUSTRIALISATION IN BRAZIL

Abstract

The paper is a study about the process of import substitution industrialisation in Brazil (1930-1980). Given the central role played by the state, the concepts of state capacity and developmental state are employed to understand why the process was not able to produce more consistent results. The paper shows how the state increased its involvement in the economy after 1930, improving its capacity to promote economic development. It also emphasises the obstacles that constrained the action of the state and impeded that its intervention produced a more balanced and self-sustained process of development. In this sense, the paper is also a study about the difficulties to replicate the positive results obtained by the developmental states in Japan and Korea. The paper concentrates special attention in the period 1974-1978, in which the military government implemented an ambitious program of industrial restructuring.