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

Abstract

The tendency to concentrate solely on the analysis of macroeconomic indicators when studying economic liberalization in Latin America has led to an extremely homogenizing view of the experiences of economic actors and to a mitigation of the effects of liberalization on political representation. There is also a general tendency to assume that every business class supports these policies. This study tests these assumptions by examining the effects of trade liberalization on the capital goods industry in Brazil, from the late 1980s to 1994. Policy responses to liberalization are also examined. In general, the data demonstrate a widespread agreement in relation to liberalization policies, although nuanced by a reformist trend that seeks to make the new Brazilian economic paradigm more palatable to industry interests. The selective response model is proposed as a theoretical framework to study the dynamics and multifaceted behavior of the private sector during periods of profound economic and political changes, as is the case today in Brazil.