Engines of Growth
The State and Transnational Auto Companies in Brazil

The author looks at the economic and political motivations behind Brazil's industrialization policy and their prohibition of car imports in the 1950s.

Helen Shapiro (Author)

9780521416405, Cambridge University Press

Hardback, published 25 March 1994

284 pages
24.3 x 16.3 x 2.3 cm, 0.54 kg

"Shapiro's closely researched and theoretically sophisticated study, Engines of Growth: The State and Transnational Auto Companies in Brazil, analyzes how the government of President Juscelino Kubitschek successfully promoted the creation of an auto industry in Brazil....Shapiro advances a convincing argument....Shapiro's important study carefully balances the claims of neoclassical and neostructuralist economists." Kurt Weyland, Latin Amrican Research Review

In the 1950s, Brazil prohibited car imports and forced transnational auto companies either to abandon the market or manufacture vehicles within Brazil. Although current approaches to economic development would suggest that this type of industrialization policy would fail in the political-economic context of post-war Brazil, the plan was very successful. This book explains the economic and political motivations behind the plan and why Brazil relied on foreign firms to do the job. It documents the bargaining process between the Brazilian government and transnational firms, estimates the cost incurred by the government as a result of the plan, and provides new archival evidence that shows that firms would not have invested without government pressure. It argues that the current, polarized debate on the role of the state in economic development must become more nuanced, as the Brazilian auto case suggests that the effectiveness of state policy can vary greatly across sectors and over time.

Acknowledgments
1. Approaches to state intervention
2. Why auto?
3. The determinants of firm entry
4. Rent redistribution and linkage effects
5. The automotive parts sector
6. Conclusion
Appendices
Index.

Subject Areas: Central government policies [JPQB]