The article examines the dynamics of post-interventionist domestic bargaining in Brazil in order to understand the recent increase in its trade protectionism and escalating economic problems. By examining Brazil’s economic history, it can be shown that decades of economically and politically oppressive rule have left the country institutionally weak and vulnerable to internal power struggles. The subsequent domestic bargaining over policy pattern has shifted Brazil’s trajectory from a pro-liberal orientation toward a model of state capitalism. According to this model, the state selectively supports those business sectors and societal groups that the government identifies as strategic. The resulting challenges to the state governability have implications for Brazil’s standing on the international stage. While the state functions as a dominant economic player, Brazil’s credibility as a progressive emerging economy is eroded. Finally, the enduring influence of domestic stakeholders who are primarily interested in unilateral gains means that Brazil’s developmental priorities are increasingly skewed to serve those narrow interests.
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