Corporatism, neoliberalism, and the failed revolt of big business: Lessons from the case of IEDI

The IEDI formed in 1989 explicitly as an effort to engage the state in a dialogue about how to promote the country's development. It brought together 30 of the most influential business leaders from a wide range of industrial sectors. These leaders carefully and successfully organized to avoid the mistakes of existing corporatist organizations, notably FIESP (the Federation of Industry of the State of Sao Paulo). Thus they offered to take the lead in solving the business community's collective action problems. Given their individual influence, it was no surprise that IEDI quickly became an important political actor. Yet by 1992, the organization had reached its pinnacle of influence and had already begun to decline. By 1997, IEDI no longer mattered politically at all, even to its own members. Why did IEDI rise and fall, and what lessons does its story hold for understanding the challenges of neoliberal reform? This paper examines several contributing factors, but the most important was the combined impact of neoliberal restructuring and state neglect. IEDI had insisted since its inception on the need for a discussion of national development goals; but by the mid-1990s, that discussion had yet to take place. Successive Brazilian regimes ignored industrialists' efforts to engage them, yet commercial and financial liberalization advanced significantly. Business firms had no choice but to adjust to neoliberal reform even without an overarching strategic framework. As a result, IEDI's objective of promoting a national dialogue on development grew essentially moot. The process of adjustment, moreover, affected IEDI's members quite differently. IEDI split internally as members pursued different adjustment strategies with different degrees of success.