Private sector responses to economic liberalization policies in Brazil: a look within São Paulos capital goods sector

The tendency to concentrate solely on the analysis of macroeconomicindicators when studying economic liberalization in Latin America has led to an extremelyhomogenizing view of the experiences of economic actors and to a mitigation of the effectsof liberalization on political representation. There is also a general tendency to assumethat every business class supports these policies. This study tests these assumptions byexamining the effects of trade liberalization on the capital goods industry in Brazil, fromthe late 1980s to 1994. Policy responses to liberalization are also examined. In general, the data demonstrate a widespread agreement in relation to liberalization policies, althoughnuanced by a reformist trend that seeks to make the new Brazilian economic paradigm morepalatable to industry interests. The selective response model is proposed as a theoreticalframework to study the dynamics and multifaceted behavior of the private sector duringperiods of profound economic and political changes, as is the case today in Brazil. JEL Classification: F61; F62.