Strategic Industrial Policy for Effective Development: A Review of Brazil's Industrial Policies

Document Type : Research Paper

Authors

1 Associate Prof., Department of Public Administration. Faculty of Management and Accounting, University Allameh Tabataba'i, Tehran, Iran.

2 PhD Candidate, Department of Public Administration. Faculty of Management and Accounting, University Allameh Tabataba'i, Tehran, Iran.

3 Prof., Department of Public Administration. Faculty of Management and Accounting, University Allameh Tabataba'i, Tehran, Iran.

10.22059/imj.2024.357918.1008044

Abstract

Objective
Industrial policy has a rich history in both practice and theory. Following the end of World War II, it emerged as a central topic in development research and policy analysis, despite its definition, scope, and instruments evolving over time. This research aims to present the evolution of industrial policy thought, focusing on elucidating the concept by examining Brazil's historical experiences and policy implementations.
 
Methods
The research employs a descriptive-analytical method, utilizing a review approach through document analysis and library studies to examine the main objective of the study.
 
Results
The scope of policy operation hinges on two primary dimensions: 1) Policymaking capacity, which in turn relies on a set of factors including institutional capacity for design, implementation, and evaluation; and 2) The number and range of tools used depends on the development strategy and its specific goals. These two dimensions define a policy space that includes three horizontal, selective, and boundary policies, each of which is characterized by different sets of tools, targeting, and organizational arrangements. This research identifies several key components of industrial policy, including alignment, comparative advantage, political economy, infant industry, technological learning, dynamic linkage effects, and dependency. These components are essential for understanding the mechanisms through which industrial policy can drive development. Additionally, critical features of effective industrial policy design were highlighted, such as strategic alignment and coherence, consensus-building, reliance on community involvement, a balanced approach to rewards and sanctions, and accountability. These features ensure that policies are both effective and sustainable. Brazil has undergone three distinct phases of industrial policy since revitalizing its framework, each offering valuable lessons from both its successes and challenges. The country’s main policy program is notable for its dual focus, incorporating both a structural and a systemic dimension. The program is configured across three levels: regulatory, executive, and strategic, reflecting a comprehensive approach to policy design and implementation.
 
Conclusion
A historical review of industrial policy shows its continuous evolution under various names and forms, applied in both developed and developing countries. Governments can promote industrialization through either creating an enabling environment or direct intervention. Brazil’s industrial policy design and implementation illustrate this dual approach, with significant investments in research and development, close cooperation among ministries and relevant organizations, and active engagement with the private sector, all coordinated under a unified national development policy by the Ministry of Development, Industry, and Trade. Effective industrial strategies require mobilizing a diverse range of stakeholders beyond business leaders and national policymakers, including ministries, executive management bodies, academia, and civil society groups. Economic history highlights the importance of learning from other countries' experiences, both their successes and failures, while also engaging in local experimentation and adaptive learning through the implementation of industrial policies. Successful outcomes often hinge on replacing ineffective tools with innovative alternatives.

Keywords

Main Subjects

References

 
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Industrial Management Journal
Volume 16, Issue 4
2024
Pages 631-665

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