Trade policy, protection and industrial productivity in brazil

Abstract

This article provides a literature review of the impact of protectionist trade policies on industrial development, with a particular
focus on productivity, using the case study of Brazil. It examines the historical context of Brazil’s industrial development and the use of trade protectionist measures. The article then presents a theoretical contextual review of the economic literature of trade policies and industrial productivity. Finally, the article provides a literature review on the effects of protectionist trade policies on industrial productivity in the case of Brazil through the lens of total factor productivity, within-firm productivity, and gains of productivity from reallocation. The results of the study suggest that protectionist measures exerted negative impact both on total factor productivity, on within-firm productivity, and divided conclusions on the impact on productivity from reallocation. The article concludes by pointing to the necessity of reevaluating Brazilian trade policy and increasingly considering empirical evidence on the design
of public trade policy in Brazil in order to promote productivity growth and contribute to the country’s industrial development. The findings of this paper may be particularly relevant to policymakers in Brazil and shed light on the reasons why some of past policies failed to attain the desired outcomes.