The new developmentalism and conventional orthodoxy

Abstract

The failure of the neo-liberal policies and reforms, here called 'conventional orthodoxy' in promoting macroeconomic stabilization and economic growth in Latin America opened room in each country for the rise of national strategy of growth 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 in promoting growth in Latin America since the 1930s, but in the 1980s got distorted and surpassed by the facts. Differently from it, new developmentalism is export oriented, rejecting protectionism.

Since it wants a strong market and a strong state, it supports fiscal discipline aiming at positive public savings. It is nationalist, because it is oriented to the national interest, and rejects pressures from the North, but it is a liberal, social and republican nationalism. It differs strongly, however, from conventional orthodoxy because rejects the growth strategy with foreign savings and the opening of capital accounts, says that the exchange rate can and should be administered, and believes that in Brazil a special strategy is required to overcome the high interest rate/appreciated currency which maintains the Brazilian economy unstable.