Industrialization and deindustrialization: an empirical analysis of some drivers of structural change in Brazil, 1947-2021

This article investigates the causes of structural change in Brazil, through the riseand the fall of the manufacturing industry, and the consequences for total factor productivityand manufacturing labour productivity, from 1947 to 2021. Our results show that the industrializationof the Brazilian productive structure is positively associated with expansionsin infrastructure investments and with the pursuit of a competitive real exchange rate, thatis, with policies oriented towards economic development. Our findings also indicate thatsuch variables exert a direct influence on total factor productivity and manufacturing labour productivity and an indirect influence through their impacts on the Brazilian productivestructure. Our conclusions suggest that an important cause of the Brazilian premature deindustrialization,and then of its poor performance in terms of total factor productivity andmanufacturing labour productivity, is the adoption of policies not oriented towards economicdevelopment adopted since the neoliberal reforms of the 1980s and 1990s. JEL Classification: O1; O11; O14.