Why haven't conditionalities taken off in Brazilian industrial policies between 2004 and 2014?: a qualitative analysis of state capacity for formulation and implementation

The success of industrial policies is usually related to, among other factors, their capacity to demand and enforce requirements from the private sector to make them eligible for such policies. In other words, the conditionalities implemented in those policies are viewed as instrumental to their success. Nevertheless, when it comes to the industrial policies implemented in Brazil between 2004 and 2014 (PITCE, PDP, and PBM), there is a broad consensus that conditionalities were not a distinctive characteristic of them and were present only in scattered measures. Therefore, this paper seeks to investigate why conditionalities were not widespread in PITCE, PDP, and PBM, despite their consensual nature among practitioners and scholars. For this aim, we combine the literature that analyses state capacity with studies that focus on the articulation of ideas and public policies to investigate the historical (non-)development of conditionalities in such Brazilian policies. The data for the present investigation was collected through 26 semi-structured interviews with public officials engaged with the formulation and implementation of the analyzed national industrial policies. Our findings suggest that the predominance of specific ideas on conditionalities and the insufficiency of technical/administrative and political-relational capacities affected the feasibility of creating industrial policies with widespread adoption of conditionalities.