Industrial Policy during Workers’ Party Administration in Brazil and Industrial Productivity

Abstract

The objective of this essay is to analyze the industrial policy during Worker’s Party Administration in Brazil from a perspective of economics and estimate productivity on industrial level in recent two decades. The result shows that the productivity growth (in labor productivity and total factor productivity) during Worker’s Party Administration was poor despite a proactive industrial policy. A poor performance could be explicable by analyzing the characteristics of the implemented policies. They were not necessarily focused on enhancing productivity growth, contrary to theories of industrial policy in economics literature. Especially after the financial crisis in 2008, the objective has been changed to sustain economic growth and defend local industry.