Turning Privatization Upside Down: Petrobras as an Example of Successful State Capitalism

For more than the last three decades, conventional economic wisdom, the dominant policy advice, and lending have been based on a growing economic literature that seeks to demonstrate that liberalization and privatization lead to superior outcomes, including higher levels of investment, accountability, and technology development. However, a new wave of Latin American leaders in countries such as Venezuela, Ecuador, Bolivia, and Brazil, among others, have begun to reverse the movement toward foreign and private investors and reassert national control. Using the example of Petrobras, this article demonstrates that a "state capitalist" system offers the possibility for a new balance between efficiency and broader development goals.