ABSTRACT
The process of privatization represents one of the central pillars of Brazilian economic reform during the 1990s. The significance of the privatization process lies in its broader connection with the reform of the Brazilian state. This constitutes a fundamental shift from the previously dominant development strategy in Brazil: import-substitution characterized by a substantial and extensive role of the state in the economy, through state-owned enterprises, large public infrastructure projects, the promotion of particular economic activities, and protectionism. This chapter focuses on the political conflict surrounding the decision to privatize state-owned companies. Because there is no consensus on the nature of the effects of privatization, arguments related to the effects of privatization provide insight into the broader reform objectives of the government and the position of the opposition. The appropriate role of the state, the relationship between the state and market forces and the democratic content of reform processes become central themes in more specific struggles.
