Revisiting Import-Substituting Industrialisation in Post-War Brazil

Renato P. Colistete ()

No 2024_36, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: This article reassesses the classic Import-Substituting Industrialisation (ISI) period in Brazil between 1945 and 1979. New sectoral and micro-level data presented here show that Brazilian industry achieved significant labour productivity growth during the post-war years and became more technologically sophisticated when measured by manufacturing exports and evidence of specific industries and firms. At the same time, Brazil's labour productivity growth lagged behind other industrialising countries from the mid-1970s. Technological advances were slow and uneven, and most firms were relatively backward amid high trade protection and low industrial standards. These results suggest that a highly heterogeneous structure became a feature of Brazilian industrialisation - rather than widespread inefficiency and technological stagnation as argued by the dominant interpretation of ISI in Latin America. An institutional set-up marked by a deficient education supply, low-skilled labour, and highly unequal income distribution undermined technological upgrading and productivity growth. Under such conditions, the collapse of debt-led growth in the 1980s severely hit the industrial firms and inaugurated an era of stagnation and sluggish productivity growth in Brazil's manufacturing sector.

Keywords: Import-Substituting Industrialisation; Productivity; Technology; Brazil; Latin America (search for similar items in EconPapers)
Date: 2024-12-17
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