Abstract
This chapter examines the transformation of a key part of Brazil's developmental state: the way in which the government owns and runs state-owned enterprises and provides subsidized loans to firms using state-owned banks. It explains how the developmental state worked throughout the 20th century, initially having the government as an accidental owner of companies and later as an active entrepreneur building infrastructure. Finally, the paper explains how in the post-1990 era, after the initial wave of privatizations, the government of Brazil still had majority and minority ownership in a variety of enterprises and supported private firms by providing subsidized loans through its development bank, BNDES, and by purchasing equity using its investment arm, BNDESPAR. The paper ends with a discussion of how the latter two developmental tools seem to have been relatively effective in aiding domestic industry in the 1990s, while their impact was more controversial later.
