Law Graduate Program at Candido Mendes University, and Department of Economic Evolution at the
State University of Rio de Janeiro;
National Bank for Economic and Social Development, Brazil;
Institute of Economics, Federal University of Rio de Janeiro.
This study has been prepared within the UNU-WIDER project on Institutions for Economic
Development: Theory, History and Contemporary Experiences, directed by Ha-Joon Chang.
UNU-WIDER acknowledges the financial contributions to the research programme by the governments
of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal
Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency – Sida)
and the United Kingdom (Department for International Development).
ISBN 92-9190-859-2 (internet version)
Research Paper No. 2006/81
The Rise and Halt of Economic
Development in Brazil, 1945-2004
Industrial Catching-up, Institutional Innovation
and Financial Fragility
José A.P. de Souza,
and Nelson H. Barbosa-Filho
This paper seeks to explain the dynamics of Brazilian industrial catch-up in the last 60
years by discussing its background institutional conditions as well as its main
macroeconomic features. After a brief introduction, the second section describes how
after the institutional innovations introduced during the Vargas’ and Kubitschek’s
administrations, a Brazilian version of the Developmental State was created, releasing
the growth potential of the economy during the 1950s. The third section analyses the
inflationary crisis and institutional inertia of the mid-1960s, and its solution through the
introduction of a new of wave of institutional innovations and conflict management
devices, which lead to the Brazilian growth miracle, until the debt crisis of early 1980s
signaled its end. The fourth section analyses why the financial crisis, …/.
Keywords: development, catch-up, institutions
JEL classification: N16, N26, O16