The growth of public enterprise is generally viewed as a product of the post-World War II developmentalist state. In late-developing capitalist countries, however, many important firms already came under state control during preceding liberal regimes. Because of the liberal context in which they operated, such companies frequently adopted policies that differed in important ways from those followed under the developmentalist state. The purpose of this study is to focus on the Banco do Brasil—the single most important publicly controlled firm of Brazil's First Republic (1889-1930) and today the seventh largest bank in the world—in order to examine the nature of state enterprise in a liberal regime.

Prior to the mid-1960s, there was little concern in Brazil for the relative size of different ownership sectors—state, domestic private and multinational (Baer et al., 1973; Baer et al., 1977). The main policy objective had been the promotion of import-substitution-industrialization (ISI). Because the Brazilian domestic private sector did not have the technological and financial means to create new industries with a high technology content or to help expand public utilities, multinational firms and state enterprises were relied upon to carry out those tasks. The National Bank for Economic Development (BNDE) was created in order to finance the state's direct participation in Brazil's economy.

Until 1968, state enterprises played a minor role in the Peruvian economy. The list of public sector enterprises was relatively small. It included the Central and sectoral banks, a merchant fleet, railways, a minor petroleum producer, hyroelectric power companies, a steel mill, monopolies over salt, tobacco, and guano, a few tourism projects, and a set of regional development corporations. From 1968 to 1974 the state moved swiftly to expand its role in order to direct and control the course of the country's economic evolution. The public sector increased both in size and scope to include most banking, basic industries, and most international and some domestic trade.

In recent years, a considerable amount of scholarly research has been devoted to the analysis of public enterprise in Latin America. The number of individuals actively engaged in research and their output of materials has increased since the mid-1970s. Partially as a result of this heightened interest, several conferences have been organized to deal with public enterprises, and increasingly detailed information has been made available by governments. Most of this information still receives an extremely limited circulation and is therefore unavailable to the majority of scholars.

CONASUPO (Compañia Nacional de Subsistencias Populares) is a vertically integrated distribution system for staple goods in Mexico. It is an autonomous, public enterprise, and it has broad policy formulation and implementation responsibilities as an agency for development. CONASUPO competes with private sector producers, wholesalers, and retailers, in addition to its special roles in economic and market development.

It is the object of this article to describe how marketing decisions are made in CONASUPO. The environment within which market decisions are made in CONASUPO sets the parameters for its decision processes and influences the types of marketing strategies that it pursues.