How did Brazil come to possess such a large and diversified public enterprise sector by the 1980s? Was it the result of particular historical and political circumstances? Or the calculated moves of a determinedly interventionist government?

The argument can be made that the creation of public enterprise in Brazil has been almost accidental, that is, the result of historical circumstances, such as a balance of payments crisis, rather than of conscious government policy. Suzigan, for example, observes: “The rise of the State as entrepreneur did not result from any planned action and its ideological motivation does not extend beyond the economic nationalism that was in vogue at the time that some of these sectors were created.”

Recent Brazilian governments have certainly made many public statements that any decision to use state-owned enterprises was taken with the greatest reluctance. An official document of the high-level Council for Economic Development in 1976 emphasized: “There will be projects under control of the government enterprises if, in practice, the private sector demonstrates clearly that it either cannot or does not wish to carry them out.”

Another point of view, best expressed by representatives of the Brazilian public sector during the often strident debate on estatização (“statization”) in the mid-1970s, roundly rejected this “accidental” or “circumstantial” explanation of the creation of public enterprises by a regime with a presumed commitment to fostering private initiative. For these business groups, the explanation rested much more heavily on the unbridled exercise of power by autonomous state bureaucrats.