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The Economies of Argentina and Brazil

The Economies of Argentina and Brazil

A Comparative Perspective

Edited by Werner Baer and David Fleischer

This book compares the successes and failures of the development and growth processes of Argentina and Brazil. It provides important insights into the different performances of these economies through a series of comparative essays written by Argentinian and Brazilian economists.

Chapter 2: A Bird’s Eye View of Brazilian Industrialization

André Villela

Subjects: development studies, development economics, economics and finance, development economics


André Villela 2.1 INTRODUCTION Over the course of the twentieth century, Brazilian industry grew from a producer of, primarily, wage (non-durable consumer) goods into a diversified manufacturer of, among others, sophisticated machinery, consumer durables, telecommunication and transport equipment, and industrial inputs in general.1 This long journey, in turn, involved three marked phases, to wit: an initial, market-driven – and export-led – ‘easy’ phase of industrialization; a second phase running from the early 1930s to the late 1980s, which saw the growing role of the state in fostering a modern, ‘complete’, industrial structure; and, finally – and following the overlap of macroeconomic disarray and trade liberalization in the late 1980s – a more market-friendly, ‘globalized’ period of industrial restructuring. This chapter provides a very succinct description of the century-long history of Brazilian industrialization and is organized according to the three phases outlined above. The concluding remarks offer a more personal interpretation of this history. 2.2 OVERVIEW From a long-term perspective, it would be hard to deny the fact that Brazil has been a success story in terms of economic growth in the past 100 years or so. Indeed, from a level of just under $800 in 1890, GDP per capita increased sevenfold, to $5200 in 1980, inching to $5500 by the close of the twentieth century.2 If one restricts the analysis to the period 1950–80, per capita income increased by a factor of four, placing the country firmly in the ranks of only 13 well-documented ‘success stories of sustained, high growth’, according to The...

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