After the failure of conventional orthodoxy to promote macroeconomic stability and development, Latin America – the region that adopted its policies most strictly – has become home to a clear movement for rejecting its “macroeconomics of stagnation.” Africa also adopted such policies, but there, the rejection has not been so clear. In this chapter, after examining the crisis of old, or national, developmentalism, I compare the rising new developmentalism with the old as well as with the set of diagnoses and policies that rich nations have prescribed and pushed on to developing countries, that is, conventional orthodoxy.

OLD DEVELOPMENTALISM AND ITS CRISIS

Between the 1930s and the 1970s, Brazil and other Latin American countries grew at an extraordinary pace. They took advantage of the weakening of the capitalist center to formulate national development strategies that, in essence, implied forced promotion of savings through the state and protection of national infant industries mixed with the neutralization of the Dutch disease on the import side, even though policy makers knew nothing about the disease. The designation “national developmentalism” emphasized, first, that the basic objective of the policy was to promote economic development, and second, that for this to happen, the nation – that is, businesspeople, state bureaucracy, middle classes, and workers, joined together in international competition, which was needed to define the means to reach this objective within the framework of the capitalist system, with the state as the principal instrument of collective action.