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Revisiting Import-Substituting Industrialisation in Post-War Brazil

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  • Renato P. Colistete

Abstract

This article reassesses the classic Import-Substituting Industrialisation (ISI) period in Brazil between 1945 and 1979. New sectoral and micro-level data presented here show that Brazilian industry achieved significant labour productivity growth during the post-war years and became more technologically sophisticated when measured by manufacturing exports and evidence of specific industries and firms. At the same time, Brazil's labour productivity growth lagged behind other industrialising countries from the mid-1970s. Technological advances were slow and uneven, and most firms were relatively backward amid high trade protection and low industrial standards. These results suggest that a highly heterogeneous structure became a feature of Brazilian industrialisation - rather than widespread inefficiency and technological stagnation as argued by the dominant interpretation of ISI in Latin America. An institutional set-up marked by a deficient education supply, low-skilled labour, and highly unequal income distribution undermined technological upgrading and productivity growth. Under such conditions, the collapse of debt-led growth in the 1980s severely hit the industrial firms and inaugurated an era of stagnation and sluggish productivity growth in Brazil's manufacturing sector.

Suggested Citation

  • Renato P. Colistete, 2024. "Revisiting Import-Substituting Industrialisation in Post-War Brazil," Working Papers, Department of Economics 2024_36, University of São Paulo (FEA-USP).
  • Handle: RePEc:spa:wpaper:2024wpecon36
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    2. Saes, Alexandre Macchione & Loureiro, Felipe Pereira, 2014. "What developing countries' past energy policies can tell us about energy issues today? Lessons from the expropriation of American Foreign and Power in Brazil (1959–1965)," Utilities Policy, Elsevier, vol. 29(C), pages 36-43.
    3. Gerardo della Paolera & Xavier H. Duran Amorocho & Aldo Musacchio, 2018. "The Industrialization of South America Revisited: Evidence from Argentina, Brazil, Chile and Colombia, 1890-2010," NBER Working Papers 24345, National Bureau of Economic Research, Inc.
    4. Schot, Johan & Steinmueller, W. Edward, 2018. "Three frames for innovation policy: R&D, systems of innovation and transformative change," Research Policy, Elsevier, vol. 47(9), pages 1554-1567.
    5. Dante Aldrighi & Renato P. Colistete, 2013. "Industrial Growth and Structural Change: Brazil in a Long-Run Perspective," Working Papers, Department of Economics 2013_10, University of São Paulo (FEA-USP).
    6. Alexandre Macchione Saes & Felipe Pereira Loureiro, 2012. "From Foreign to State Investment in the Brazilian Electric Power Sector: the Expropriation of the American Foreign and Power in Brazil (1959-1965)," Working Papers, Department of Economics 2012_08, University of São Paulo (FEA-USP).
    7. Jose Peres Cajias & Marc Badia-Miro & Anna Carreras-Marin, 2012. "Intraregional trade in South America, 1913-50. Economic linkages before institutional agreements," Working Papers in Economics 270, Universitat de Barcelona. Espai de Recerca en Economia.

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    More about this item

    Keywords

    Import-Substituting Industrialisation; Productivity; Technology; Brazil; Latin America;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N6 - Economic History - - Manufacturing and Construction
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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