The political economy of innovation; an institutional analysis of industrial policy and development in Brazil

Abstract

This dissertation examines Brazilian industrial policies during the administrations of President Lula (2003-2010) and questions if innovation has truly been the main driver of those instruments. It provides a brief overview on the intersections of politics, economics, innovation and institutions as well as the main choices, incentives and alliances of the Brazilian government, which are illustrated by the Innovation Law, PITCE, PDP and campaign financing of President Lula's 2002 and 2006 candidacies. By adding to the analysis Brazil's exports, its balance of trade and the expenditures of BNDES, this research indicates a disconnect between the intentions and the results of the industrial policy. China and “low-tech” businesses seem to have become the real drivers of the government's agenda; the first for its importance to the Brazilian economy and the latter for its influence with government. Finally, while recognizing some positive results, it presents an alternative model based on a “high-tech” natural resources vision of development which could convert the current challenges into opportunitiesBrazil; development; institutions; innovation; industrial policy