Political Dynamics and Liberalization in the Brazilian Air Transport Industry: 1990-2002

Abstract

A first wave of theories on globalization suggested that because of new competitive pressures, national economies would converge into a single market economy model. Economic rationale would overcome politics, and political choices would be restricted to the implementation of a set of policy prescriptions aimed at favoring private investment, so-called "market-oriented reforms". More recently, research based on economic sociology and historical institutionalism has shown that the implementation of market-oriented reforms at national, regional and industry-level has been characterized by a variety of outcomes, and politics has played a major role in producing such variety. The analysis of official documents, newspaper articles, interviews and other sources related to the main actors in the Brazilian air transport industry shows that the implementation of market-oriented reforms in this industry has also been marked by a complex political dynamics, comprising conflict, dispute, negotiation and compromise. This political dynamics has forged a trajectory that is unique in relation to other economic sectors in Brazil, and to the same industry in other countries. This paper concludes that politics has to be seriously taken into account in the debate on the search for efficiency and competitivity in the Brazilian air transport industry.