In the past ten years the Brazilian economy has experience an unprecedented wave of market liberalization as import substitution has been progressively abandoned in favour of integration into the global economy. Trade barriers have fallen, privatizations have been implemented, and government procurement has been cut back. Although these policy shifts will be familiar to many, their implications in terms of performance may not. Using a comprehensive array of primary and secondary sources and in-depth company case studies, this book examines how one vitally important Brazilian industrial sector-the non-serial capital goods sector-coped with the onset of liberalization. While liberalization undoubtedly helped to promote greater efficiency in some areas of corporate performance, the impact elsewhere was far less favourable. This differentiated response raises some interesting and troubling theoretical and policy issues.

Since the beginning of the 1990s, Brazil has followed a pattern of economic development inspired by Washington Consensus. This framework includes a set of liberalising and market friendly policies such as privatisation, trade liberalization, stimulus to foreign direct investment, tax reform, and social security reforms. This book assesses the determinants and impacts of financial liberalisation in Brazil considering its two dimensions: the opening up of the balance of payments capital account, and the penetration by foreign bank of the domestic banking sector. The author combines theoretical and empirical analyses. Some make use of mathematical models and/or statistical techniques; however, they are only used when they are strictly necessary to the analysis.

In the 1990s Brazil launched a comprehensive economic liberalization program. It lifted its trade barriers, adopted new market-oriented regulations, opened up its capital market and abandoned earlier efforts to internalize production and to build vertically integrated systems across several sectors of the economy. In spite of the visible gap that separated the top global giants from the large local enterprises, Brazilian companies seemed to be willing to join in an economic liberalization process that was bound to expose them to unprecedented levels of competition, bring about a high degree of uncertainty and, in many cases, ultimately put their own businesses at risk. Big Business and Brazil’s Economic Reforms examines the most emblematic aspect of the Brazilian economic reforms, the support from parts of the local entrepreneurial class for the opening up of the economy. It investigates the reasons why Brazil carried out these economic reforms in the 1990s, the transition process and the impact of the opening up of the economy on some of its most important sectors, such as the aerospace, auto and auto parts, food processing, oil and petrochemicals, ethanol, steel, telecoms and telecom equipment industries. This book offers an in-depth analysis of Brazil’s distinctive development paths, from the Latin American economic thinking of the early stages of its industrialization to the neo-liberal stance of the present day. It sheds new light on one of the main challenges facing all the large developing economies in their move to become more integrated into the world economy, the fostering of large enterprises, and is a great resource for students and researchers interested in global business, development economics, and Latin American economic history.

Unfulfilled expectations about economic growth in Brazil has led many observers to question the ability of the new, open trade regime to put the economy back on an path of sustainable growth. Whereas the country's growth record has been really poor, the evidence suggests that the underlying causes had nothing to do with trade. Quite the contrary. This paper shows that trade liberalization has given an important contribution to two of the main drivers of growth: productivity and investment in physical capital. It argues that these gains were not turned into growth due to an unfavorable macro and institutional environment. It also claims that Brazil could have enjoyed more gains from trade, had it pursued a more aggressive trade policy at home and abroad. The paper concludes by outlining the main issues of a pro-growth, trade policy agenda for the country.

The emphasis of this book is on the structural aspects of the Brazilian economy, although analyses of economic performance are also covered. A central theme is that growth with social development requires structural reforms, such as the reorganisation of public finances and other matters.