The Dilemmas of the Developmental State: Democracy and Economic Development in Brazil

Is it possible to reconcile one of the institutional strategies to promote development, known in the literature as “the developmental state”, with contemporary democratic systems of government? If so, what are the challenges, trade-offs and potential gains that such an effort may entail? The vast literature on “the developmental state” claims that it is more likely to succeed under autocratic regimes. While a “democratic developmental state” seems possible in theory, there is very little empirical evidence to show how it would work in practice. This article tries to contribute to this debate by analyzing the case of Brazil, a country that transitioned from a military dictatorship to a democratic regime in the late 1980s, and has been moving towards increasing state interventionism since 2002. While the policies implemented by the “New Developmental State” in Brazil have been explored in the academic literature, their democratic dimensions remain unchartered. There has not been a detailed analysis about how the autocratic features that characterized the developmental states in Latin America from the 1950s to the end of the 1980s (i. e. political exclusion of the majority of groups, and control of economic policies by an elite) have played out in its renewed version. Understanding the interactions between the New Developmental State and the democratic system not only allows for a better understanding of the Brazilian case, but it also sheds light on one of the most important theoretical questions raised by the development literature: is a democratic developmental state possible? Based on the Brazilian case study, we argue that it is not hard to reconcile “the developmental state” with a thin conception of democracy, i. e. with free and fair elections. In contrast, the picture is more complex if the question is whether it is possible to reconcile developmental policies with a thicker conception of democracy that includes demands for transparency, protection of minority groups, a system of checks and balances, and due process. To develop this argument, this article is divided in three parts. In the first part, we provide an overview of the literature, outlining the concept of developmental state, and the tensions that the developmental state policies may create in a democratic setting. In the second part, we focus on the Brazilian case (the “new developmental state”), exploring how these tensions played out in three concrete settings: industrial policy, infrastructure sectors, and social policies. In the third part, we identify some of the research implications of the challenges identified in the Brazilian case, especially for future law and development scholarship.