Brazil’s Oil-Based Industrial Strategy, 1990–2018

Abstract

Abstract This chapter draws from a historical institutionalist approach to examine the institutional continuity of state developmentalism in the Brazilian O&G industry. Brazil’s institutional pathway is based on strong state ownership forged through a combination of pragmatic market opening to foreign companies and a persistent logic of state developmentalism. In this governance model, Petrobras plays a pivotal role. The chapter explains why state ownership in the sector persisted throughout the 1990s and details the consolidation of a regulatory framework in the 2000s that set out a stable institutional arrangement for a shift from state developmentalism towards a more pragmatic model of novo desenvolvimentismo (new developmentalism) to accelerate Brazil’s efforts towards industrialization, with Petrobras as a key economic actor in developing the pre-salt reserves. The persistence of a state ownership model in the sector derives its legitimacy not only from delivering economic growth in a strategic sector, but also through Petrobras’s undeniable technological capability and market-conforming behaviour.