Abstract

The tendency to concentrate solely on the analysis of macroeconomic
indicators when studying economic liberalization in Latin America has led to an extremely
homogenizing view of the experiences of economic actors and to a mitigation of the effects
of liberalization on political representation. There is also a general tendency to assume
that every business class supports these policies. This study tests these assumptions by
examining the effects of trade liberalization on the capital goods industry in Brazil, from
the late 1980s to 1994. Policy responses to liberalization are also examined. In general, the data demonstrate a widespread agreement in relation to liberalization policies, although
nuanced by a reformist trend that seeks to make the new Brazilian economic paradigm more
palatable to industry interests. The selective response model is proposed as a theoretical
framework to study the dynamics and multifaceted behavior of the private sector during
periods of profound economic and political changes, as is the case today in Brazil.

JEL Classification: F61; F62.