Failed Strategies, Broken Promises: PSDB and PT Development Strategies Reexamined

• Date: 01 March 2022
• Author: Jawdat Abu-El-Haj
• DOI: 10.1177/0094582X211070784
• Published date: 01 March 2022
• Subject Matter: Articles

https://doi.org/10.1177/0094582X211070784

LATIN AMERICAN PERSPECTIVES, Issue 243, Vol. 49 No. 2, March 2022, 118–143

DOI: 10.1177/0094582X211070784

© 2022 Latin American Perspectives

118

Failed Strategies, Broken Promises

PSDB and PT Development Strategies Reexamined

by

Jawdat Abu-El-Haj

Prado Júnior, Cardoso, and Fernandes set two general guidelines that influenced the

development strategy adopted by Brazil’s Partido da Social Democracia Brasileira (Social

Democracy Party—PSDB) and Partido dos Trabalhadores (Workers’ Party—PT) between

1994 and 2016. The first aimed to strengthen the internal market, the second to maintain

national capital control of key sectors. This consensus did not extend to policy. The PSDB’s

adopted macroeconomic adjustments, while the PT’s stressed poverty alleviation and mass

consumption. The differences extended to the choice of a profile of favored businesses. The

PSDB supported globalized entrepreneurs, while the PT preferred businessmen with

working-class backgrounds or with historical ties to national developmentalism. This

political choice backfired. Provided with public funds, those businessmen embarked on

international acquisitions to the detriment of internal development, and in 2018 the eco-

nomic crisis paved the way for the political ascent of the far right.

Prado Júnior, Cardoso e Fernandes estabeleceram duas premissas gerais que influenciaram

a estratégia de desenvolvimento adotada pelo Partido da Social Democracia Brasileira (PSDB)

e pelo Partido dos Trabalhadores (PT), entre o período de 1994 a 2016. A primeira visava

fortalecer o mercado interno, enquanto a segunda, a manutenção do controle nacional de

setores chaves. O consenso, entretanto, se limitou à teoria. O PSDB escolheu ajustes macro-

econômicos, enquanto o PT embarcou na redução da pobreza e no consumo de massa. As

diferenças se manifestavam no tipo de empresário apoiado para controlar setores estratégicos.

A tipologia do PSDB era de um empresário globalizado e competitivo, enquanto o do PT era

oriundo das classes populares ou com vínculos históricos no desenvolvimentismo nacional.

Essas escolhas políticas mostraram-se equivocadas. Capitalizados por fundos públicos, esses

empresários enveredaram-se por aquisições internacionais, em detrimento do desenvolvim-

ento interno, abrindo o caminho, em 2018, para a ascensão política da extrema direita.

Keywords: Dependency, Development strategy, Entrepreneurs, Power resources,

Brazil

Dependency and development are two themes closely identified with

Latin American intellectual contributions to the study of late capitalism. Until

the late 1970s they dominated the continent’s intellectual scene and spilled

over across the globe (Chilcote, 1982; 1986). By the late 1980s, however, they

Jawdat Abu-El-Haj is a professor of political science and sociology at the Universidade Federal de

Ceará. He is grateful to Ron Chilcote for his many suggestions and insights, to Joana Salém for her

critical reading, to Cliff Welsh for his helpful comments, and to the participants in the university’s

seminar “Estado e classes sociais no Brasil” for a stimulating intellectual milieu.

1070784LAPXXX10.1177/0094582X211070784Latin American PerspectivesAbu-El-Haj/PSDB AND PT DEVELOPMENT STRATEGIES REEXAMINED

research-article2022

Abu-El-Haj/PSDB AND PT DEVELOPMENT STRATEGIES REEXAMINED 119

had lost their appeal and new academic agendas had appeared. What hap-

pened to that tradition? It migrated from the intellectual camp to official pol-

itics when the democratic opposition assumed political leadership. The shift

was particularly evident in Brazil during the administrations of the PSDB and

the PT, which employed development strategies whose basis had been estab-

lished by Fernando Henrique Cardoso, Caio Prado Júnior, and Florestan

Fernandes.

Three issues made these scholars politically influential. First, they favored

concrete class analysis as opposed to abstract structuralism. Second, they

formulated the policy-oriented social knowledge that guided the opposition

to the military regime. Finally, their policy platforms went beyond political

democratization to seek significant socioeconomic change, a sort of great

transformation from dependency and underdevelopment to advanced capi-

talism (Abu-El-Haj and Chilcote, 2011; Chilcote, 2014). By the late 1980s their

social knowledge set the development agendas for the new democratic

power elite that replaced the military regime. Brazil’s development lag was

considered due to the unevenness of productivity between regions, sectors,

and urban-rural areas and chronic social inequality that blocked the internal

market and reduced the accumulation rate of low-productivity sectors. With

this diagnosis, a two-part development strategy, supply-side and demand-

side, was formulated. The supply-side part focused on the economic leader-

ship of business groups attuned to internal development that were supposed

to become high-productivity role models for the entire economy. The

demand-side part sought to expand and sustain internal consumption by

improving buying power, maintaining a low inflation rate, and sustaining a

stable wage.

This general outline differed, however, under the PSDB and the PT, the

two parties that dominated national politics until Bolsonaro’s 2018 election.

On the supply side, while the PSDB supported capitalist accumulation led

by competitive and globalized entrepreneurs, the PT threw its weight behind

businessmen with working-class backgrounds or nationalist credentials. The

PSDB’s demand side favored macroeconomic policies to maintain low infla-

tion and stable currency, while the PT’s favored poverty alleviation, expan-

sion of public education, and credit for mass consumption. To implement the

development strategy, political and economic power resources were amassed

under the control of the federal government. Political power resources

(offices and ministries) were used by both administrations to form large leg-

islative majorities for the passage of constitutional changes that expanded

and centralized the public funds of the federal government. These funds

(pensions, social security contributions, and development bank assets) were

used to place particular economic groups in the leadership of the Brazilian

bourgeoisie.

The unraveling of this development strategy will be described in three parts.

In the first I summarize the three scholars’ theories, focusing on agency and

political practice. In the second I emphasize differences between the PSDB and

the PT approach. In the third I present two case studies as examples of develop-

ment practice and their shortcomings.