Abstract

BRESSER-PEREIRA, Luiz Carlos. The New Developmentalism and Conventional Orthodoxy. Economía UNAM [online]. 2007, vol.4, n.10, pp.7-29. ISSN 1665-952X.

The failure of neo-liberal policies and reforms (or "conventional orthodoxy" as it is called here) to promote macroeconomic stabilization and economic growth in Latin America opened up room in each country for the rise of a national growth strategy which we call "new developmentalism." Capitalism, economic development, nation and nation-state are interdependent historical concepts. Capitalist development depends on a national strategy that relies on a nation capable of formulating it. Old developmentalism was an effective strategy for promoting growth in Latin America since the 1930s, but in the 1980s it became distorted and was surpassed by events. By contrast, new developmentalism is export oriented, rejecting protectionism. Aspiring to a strong market and state, it encourages fiscal discipline with an eye to effective public savings. It is nationalist because it is oriented to the national interest and rejects pressure from the North, but it is a liberal, social, republican brand of nationalism. However, it is decidedly different from conventional orthodoxy because it rejects the strategy of growth through foreign savings and opening capital accounts; it says that the exchange rate can and should be managed; and it considers it a given that Brazil needs a special strategy to overcome the high interest rate /appreciated currency that keeps the Brazilian economy unstable.