Brazilian privatization in international perspective: the rocky path from state capitalism to regulatory capitalism

This paper describes the history, size and scope of the publicenterprise sector in Brazil, using a variety of indicators anddrawing from different interpretative sources. It shows thatat least until the 1970s, state-owned enterprises contributedto the industrialization process and to fiscal results. Thepaper sets out the political and institutional framework inwhich privatizations are implemented, compares its main featureswith those prevailing in some other countries, and providesan updated account of state sell-offs. The consequences of privatizationin terms of corporate governance are analyzed. In Brazil, theprivate sector has been negatively affected by the post-1991opening of the economy, which has also coincided with generationaltransition in most family-owned groups. Domestic financial institutionshave partly filled the void left after the state retrenchment,but the parallel strengthening of market mechanisms in the allocationof financial resources has trailed behind, posing major policyissues.