In the 1950s, Brazil prohibited car imports and forced transnational auto companies either to abandon the market or manufacture vehicles within the country. Although currently contending approaches to economic development would suggest that this type of industrialization policy would fail in the political-economic context of postwar Brazil, the plan was successful according to a variety of criteria. The Brazilian auto industry would become the largest in the periphery. The book explains the economic and political motivations behind the plan, and why Brazil relied on foreign firms to do the job. It documents the bargaining process between the Brazilian government and transnational firms, estimates the cost incurred by the government as a result of the plan, and provides new archival evidence that shows that firms would not have invested without government pressure. It argues that the current, polarized debate on the role of the state in economic development must become more nuanced, as the Brazilian auto case suggests that the effectiveness of state policy can vary greatly across sectors and over time.
"Helen Shapiro has written an excellent and important book on the Brazilian automobile industry...The importance of this book goes beyond the impressive documentation of Shapiro's research; it also addresses debates about the role of the market in development and the potential and pitfalls of state intervention in this process...Engines of Growth is a fascinating and compelling account of auto industrialization in Brazil, and it deserves a wide audience among those interested in the causes and effects of industrial policy in the developing world." Jeffrey Cason, Business History Review "Shapiro's closely researched and theoretically sophisticated study, Engines of Growth: The State and Transnational Auto Companies in Brazil, analyzes how the government of President Juscelino Kubitschek successfully promoted the creation of an auto industry in Brazil...Shapiro advances a convincing argument...Shapiro's important study carefully balances the claims of neoclassical and neostructuralist economists." Kurt Weyland, Latin Amrican Research Review