When you talk about materiel for military use, domestic industry, and the Armed Forces, that combination is a great platform for giving development a boost, with applications in many other areas. Technical know-how radiates out into the civilian area. There is no doubt that the Armed Forces play an important part in the country's development.
General Benedito Onofre Bezerra Leonel, Chief of Staff, Brazilian ArmyDevelopment is a voyage with more shipwrecks than navigators.
Eduardo Galeano
Brazil's military industries expanded dramatically during the 1970s. In a single decade a country heavily dependent on foreign military suppliers became a significant arms exporter and a Third World leader in military R&D. A substantial military-technological infrastructure emerged, anchored by separate R&D institutes for each branch of the armed forces. By decade's end sizable industries in aeronautics, armored vehicles, and shipbuilding were supplying both Brazil's military and the international market with a range of medium-tech weapons systems. Nuclear and space programs straddling civilian and military applications also flourished. The international defense press heralded "Brazil's Arms Industry on the Move."
Ambitious new programs propelled Brazil's defense sector to new heights in the early 1980s. Plans were laid to make Brazil the first Third World producer of several advanced weapons systems, including a state-of-the-art battle tank, a NATO-standard ground attack aircraft, a small nuclear submarine, and a satellite-launching vehicle with ballistic-missile capabilities. These programs deepened Brazil's ties to multinational defense contractors and stimulated a domestic network of high-tech supplier firms.
By the mid-1980s the international defense press routinely heralded Brazil as a new force in the global arms economy, and scholars regularly pointed to Brazil as one of a new wave of Third World suppliers transforming the international arms trade. Even critics accepted the likelihood of sustained defense-sector growth, worrying about the effects of military-industrial development for Brazilian diplomacy, regional peace, and domestic spending priorities in a nation of widespread poverty.
A few years later, the contrast could not have been more striking. Arms exports, after peaking at somewhat less than $1 billion annually in the late 1980s, slowed to a trickle by the early 1990s. The three firms making up the core of Brazil's military-industrial base were effectively bankrupt, and the ambitious programs launched a decade earlier were nowhere near their production goals. The battle tank stalled at the prototype stage, then vanished in the financial collapse of the armored-vehicle industry. The ground attack aircraft did enter series production before decade's end—but delays, technical difficulties, and enormous cost overruns staggered the aircraft industry and made the plane far too expensive to export. The satellite launcher became mired in cost overruns, technical snafus, and political controversy; it failed to meet its target of putting a Brazilian-built satellite in orbit by 1989, and has yet to reach the launching pad. The nuclear submarine, stymied by the stagnation of naval shipbuilding and political controversy in Brazil's nuclear program, remains a vision on a distant horizon. Even the defense sector's boosters were acknowledging that it had become "a pale shadow of what it was a short time ago."
How can we explain the dramatic rise and precipitous decline of Brazil's defense sector? What does the Brazilian experience tell us about the prospects for military-industrial development in the Third World? Can the increasingly sophisticated defense sectors that emerged in several developing countries during the Cold War be sustained in the post-Cold War era? Or is Brazil a harbinger of formidable constraints facing Third World military industrialization?
The answers will influence the prospects for conflict, international security, development, and North-South relations into the twenty-first century. It has long been recognized that sustained Third World military-industrial development would transform the structure of the international system. This recognition first crystallized with nuclear weapons: China's 1964 nuclear test ushered in the era of nonproliferation, and India's successful test a decade later heightened international concern. During the 1980s the focus shifted to ballistic missiles and conventional arms, with research, development, and production springing up in several Third World countries. Many scholars began to describe this incipient military industrialization as an indicator of more fundamental change in the international system, with power being redistributed from North to South. The post-Cold War collapse of the international arms trade, which hit Third World producers with particular force, has tempered such claims of system transformation. But the spread of conventional arms-production technology to the Third World is still described as "the next proliferation challenge," and enduring concerns about Third World nuclear and missile programs reflect the pervasive belief that the South's military-industrial development has global ramifications. Third World programs influence public debates, defense budgets, and force postures throughout the industrialized world.
Moreover, the salience of these programs is not limited to the security realm. Typically, Third World military industrialization has a strong developmental orientation as well. The skepticism of Northern academics notwithstanding, the belief remains widespread in the South that military-industrial programs can provide tangible economic and technological benefits as well as enhanced military security.
The idea that the defense sector can be a springboard for economic development has been particularly strong among the more technologically advanced countries of the Third World. In South Korea, the development of heavy industries in the late 1970s was closely tied to military-industrial initiatives. Broadly similar examples can be cited in countries facing widely varying security contexts, including Taiwan, South Africa, Israel, and Brazil. Even in countries with outdated military-industrial enclaves, including Argentina, Egypt, India, and China, a shift was seen in the 1980s toward greater integration of military and civilian activities.
Historically, the industrial countries themselves have been powerful examples of governments perceiving a symbiosis between defense and development: the use of Atlas and Titan ICBM boosters to launch Mercury and Gemini spacecraft was certainly noticed by Third World governments today using national space programs to develop both space-launch and ballistic-missile capabilities. The issue is typically not posed as one of guns versus butter, but rather of finding a developmental path that can yield more of both.
This book has two purposes. The first is to present the basis for my skepticism about the prospects for sustained military-industrial development for most of the Third World. In adjusting to the discontinuities of the post-Cold War era, foreign policies and security institutions of the industrialized countries have turned their gaze from East to South. The distorted lens through which the South is viewed magnifies the North's fears, in that it projects chronic instability and social conflict combined with weapons proliferation. But this picture frequently overstates and mischaracterizes the South's military-industrial emergence, promoting the continued militarization of North-South relations.
I view Brazil as a strong test of the barriers to Third World military-industrial growth. What has been seen in Brazil is nothing less than the deinstitutionalization of defense production. Unable to adjust effectively to the turbulence of simultaneously changing domestic and international structures, the defense sector experienced declining output, technological stagnation, and the collapse of established roles and rules governing its earlier growth. More importantly, the sector's problems were worsened by the same institutional features that made previous growth and internationalization possible.
In the absence of a dramatic reorientation of both domestic and international structures, the sector's prospects remain bleak. I doubt that an institutional formula can be found by which it becomes possible to simultaneously promote military-technological development, restore the sector's financial base, shore up its political support, adapt to market conditions, and keep path-defining control in military hands. Because all of these elements are necessary for military production to thrive in Brazil, I am skeptical about the prospects for sustained growth.
It is difficult to generalize an argument that stresses the role of domestic political structures and practices. But the twin pressures Brazil has faced—for democratic political reform at home and economic competitiveness abroad—are shared by most of the more technologically advanced countries of the Third World. Even though the specific adjustment challenges facing individual countries vary substantially, Brazil's experience casts fundamental doubts on the viability of traditional military-industrial strategies across a wide range of national settings. Both for Brazil and those who seek to imitate it, a formula for sustained military-industrial growth is likely to remain elusive.
A second purpose of this book is conceptual. The emergence of Third World military industries has been subjected to competing and often contradictory interpretations. For all that has been written, we still lack explanations that convincingly link the goals driving military-industrial growth to the political, economic, and social conditions that permit or inhibit such growth. One reason is that Third World defense sectors straddle key conceptual borders that shape our understanding of the international system—they lie somewhere between the state and the market, and inherently straddle the boundary between what is domestic and what is international. One goal of this work is to study Third World military industrialization as a historical process shaped by the interplay of global and local forces. At the heart of the defense sector lie institutions that must adjust effectively and often simultaneously to changing conditions on both the domestic and international levels if they are to thrive. Applying this model to the Brazilian case illuminates the multiplicity of forces conditioning military-industrial development, and helps to unravel the puzzle of Brazil's boom and bust.
Misunderstanding Third World
Military IndustrializationDespite the salience of emerging defense sectors for questions of security, development, and North-South relations, convincing explanations are lacking for recent patterns of Third World military-industrial growth. This inability to explain the trends is not for lack of effort; returning to the Brazilian example, there is no shortage of explanations for that country's military-industrial fortunes. A diverse and often contradictory set of explanations have been invoked, stressing both economic and political variables, domestic as well as international levels of analysis, and a wide range of inferred goals and strategies.
Some analysts saw geopolitical goals at the heart of Brazil's expansion. Defense-sector growth has often been described as part of a more general quest for power in international relations. But within this broad rubric there has been little consensus on the specific underlying goals—described variously as security against external threats, arms supply independence, regional hegemony, or recognized great-power status. Other observers have seen an underlying goal of economic development, but again with little consensus on specifics: Some see a quest for export-led growth; others see a search for technologically driven industrial development; and still others see a quest for stable expansion in an economy beset by chronic problems of inflation, debt, and declining productivity.
Other observers have inclined toward structural interpretations: Brazil's emergence has alternately been described as part of the transnationalization of global arms production, or as the emergence of a new market niche for medium-tech weapons systems, or as a byproduct of the militarizing effects of superpower rivalry, or as another example of dependent development through transnational industrialization. Still others have invoked domestic structures, ranging from the armed forces' organizational culture to the emergence of dynamic public-private partnerships. Not surprisingly, some analysts have presented models in which military-industrial growth was produced by a convergence of economic and political factors, or by a combination of domestic and international structures. These interpretations differ, sometimes dramatically, in the way they describe the goals and priorities that drove military-industrial strategy during Brazil's growth phase. They also vary widely in their description of the constraints on the pursuit of this multiplicity of goals, and they often present contradictory descriptions of power, authority, and organization in Brazil's defense sector.
If Brazil's rise exposed a lack of consensus as to what makes Third World military industrialization possible, its subsequent fall has exposed our poor understanding of what makes military industrialization sustainable. According to the conventional wisdom, Brazil was probably better positioned to sustain defense-sector growth than any other emerging supplier of the 1980s. During its growth spurt the defense sector enjoyed an unparalleled combination of favorable conditions: a diversified industrial base with a well-developed technological infrastructure; a large pool of inexpensive but skilled labor; supportive state policies that, unlike many broader technological innovation efforts in Brazil, stressed a pragmatic, market-oriented approach to technology development and industrial expansion; close and longstanding ties to a wide range of U.S. and European multinational defense firms; and the backing of a military establishment strongly committed to defense-sector expansion. Why did Brazil's defense sector fall so quickly and so far, when none of these basic conditions changed?
Many observers have cited the faltering of the global arms trade in the early 1990s to explain Brazil's collapse. This is a reasonable hypothesis, given the export dependence of many Third World defense industries. Demand for armaments in the Third World, where most Brazilian exports were sold, declined rapidly: The Stockholm International Peace Research Institute (SIPRI) estimates that Third World purchases of major weapons systems fell by 41 percent from 1989 to 1993. But the onset of serious problems in the Brazilian defense sector predated the drop in global demand by as much as five years in some programs and industries. And several important activities, including those in aerospace, nuclear, and shipbuilding, exported little or nothing during their growth phase; clearly, the loss of export markets cannot explain their difficulties. Indeed, the real puzzle is why Brazil's defense sector did not thrive, or at least hold steady, at a time when the accelerated internationalization of defense production had emerged as a clear global trend. Brazil should have been able to ride out the downturn in the international market, and perhaps even exploit market restructuring to deepen its integration into the global arms economy.
If the changing international context cannot explain the Brazilian collapse, perhaps domestic politics holds the key. National defense sectors typically require extensive state support, which in turn requires political support from a coalition of military and civilian interests. A complex, halting transition to civilian rule dominated Brazilian politics during the period in question: The military regime withdrew from formal power in 1985, and the gradual institutionalization of civilian authority had picked up speed by decade's end. To be sure, civil society in modern Brazil has never maintained full and effective control of the military; the history of the armed forces for most of the twentieth century is that of an organization growing more internally driven, more autonomous, and more closed to civilian influence. But the transition to civilian rule did put an end to the military's status as the hegemonic force in Brazilian politics. Perhaps democratization reined in the ability of the military to support key defense programs and industries, or otherwise derailed the strategy underlying Brazil's impressive gains.
Again, a plausible hypothesis—but a closer look at Brazilian politics suggests just the opposite. Certainly domestic political change had major consequences for the defense sector. But the slow and complex transition to civilian rule strengthened several aspects of military control over key military-industrial activities during the period in question. Retaining control of the defense sector was a goal the military pursued explicitly and with great success during the transition period; civilian elites offered little or no resistance. Indeed, the defense sector would emerge during the second half of the 1980s as an important lever for the military's enduring political influence in postauthoritarian Brazil. This influence can be seen in the way civilian politicians routinely stress the value to the nation of the military's technological endeavors—often as a way to curry favor with the armed forces. Domestic politics has changed, but not in ways that one would expect to undermine military-industrial growth.
In other words, the factors generally thought to favor Third World military-industrial growth were abundantly present in Brazil even as the defense sector collapsed. And neither market change at the global level nor political transitions at the domestic level provide a straightforward explanation for the sector's decline.
An Alternative
ConceptualizationThe failure to explain patterns of military industrialization in Brazil and throughout the Third World is largely conceptual. Third World defense sectors straddle some of the most cherished analytic borders that delimit the disputed terrain of the social sciences. Two such borders are the distinction between state and market (or more generally, between politics and economics), and the boundary between what is domestic and what is international.
Beyond State
Versus MarketOne source of confusion is the widespread desire to distinguish between the political and economic forces governing military-industrial development. Interpretations grounded conceptually in strategic studies have stressed the political and geostrategic factors underlying military-industrial growth. Such frameworks generally view defense-sector expansion as the logical product of the strategic goals of state elites. Interpretations grounded in international political economy have taken a very different approach, stressing global market forces, the transnationalization of production via multinational corporations, and the international availability of technology, financing, and markets. The conceptual divide between political economy and strategic studies has generally meant adopting static assumptions that market conditions determine political relations or vice versa.
But treating Third World defense sectors as an extension of the security-maximizing state or as one sector in a late-industrializing economy cannot capture the essence of a process that inherently blurs the distinction between politics and economics or state and market. As Samuel Bowles and Herbert Gintis point out, the desire to "identify one sphere of social life as `economic' and another as `political"' often obfuscates more than it clarifies:
This convenient division of social space, favored by liberal social theory and academic convention, appears arbitrary given the evidently political nature of corporations, markets, and other institutions commonly termed "economic," and in light of the transparently economic activities of the state.
Nowhere is this blurring more evident than in the global arms economy. On the one hand, states are key economic agents, and arms markets are highly politicized given the extensive state presence. On the other hand, defense firms are often influential political actors, and economic considerations loom large in strategic decisions. Under these circumstances, key actors cannot be assumed to respond to a purely economic or political logic, and the relevant structures shaping military-industrial development cannot be characterized simply as economic or political. Crucial institutions such as the market and the state live in both worlds at once. Under these circumstances, the central dynamic of military industrialization is likely to be the balancing of diverse economic and political interests, rather than the consistent subordination of one to the other.
Straddling the Domestic
and the InternationalA second traditional distinction that produces conceptual confusion involves the boundary between domestic and international. Systemic-structural and domestic-comparative approaches often present starkly different images of Third World defense sectors. Seen from the systemic point of view, the South's military industries are generally understood as an expression of their countries' limited political and economic power in the international system. In this view, the military-industrial capabilities that do exist in the Third World are the product of the transnationalization of the developed countries' defense industries. The North, driven by a range of economic and political motives, has fueled the South's military-industrial expansion through licensing agreements, coproduction, joint ventures, and technology transfer arrangements. Seen in this light, the fate of Third World defense sectors is determined by whether the South's structural weakness is offset by pressures in favor of military-industrial globalization. Although observers differ on the likely future balance between these forces, there is a shared emphasis on Third World military industries as derivative sectors; their strengths and weaknesses are defined not by their own choices but by power and purpose lying at the core of the world system.
Where the system-level view sees an expression of international structure, a domestic-comparative perspective on military industrialization is likely to see an expression of state purpose. As Ayoob suggests, Third World security policies are heavily influenced by the broader economic, social, and political process of state making. But the purposes of state are tempered by the formidable technical and economic barriers to military-industrial development. Thus the question of state capacity becomes central to the domestic-comparative perspective—just as it has to the broader question of explaining differing levels of Third World economic development.
To be sure, military-authoritarian regimes of the sort that predominated in Latin America and Asia in the 1970s and early 1980s often displayed a natural affinity for military industrialization. But they varied greatly in their willingness and ability to shield fledgling defense sectors from domestic political pressures and economic vagaries, and to steer resources in directions conducive to defense-sector growth. Such differences can have a self-reinforcing effect over time: A very different configuration of material benefits began to flow from defense-sector policies in those states able to stimulate military-industrial development, solidifying important political bonds between the military, civilian industrialists, and transnational interests.
In other words, Third World defense sectors sit at the intersection of domestic and international structures. The strongly transnationalized character of most Third World military industries means that their growth is at least partly an extension of evolutionary trends in the global arms economy, and that this will be the case as long as Third World arms producers remain dependent on external sources for technology, investment, and markets. To focus solely on domestic conditions or the goals of domestic elites would overstate the autonomy of domestic actors in a thoroughly transnationalized process. But the global vantage point cannot explain why the defense sectors of states occupying similar niches in the global political-economic hierarchy have so often followed different developmental trajectories. Why did Brazil's defense sector expand much more rapidly and dramatically than, say, Argentina's? System-level analysis may explain why no Third World producers have joined the ranks of first-tier arms suppliers, but beyond this blunt insight it tells us little about variance across individual cases. The global-structural approach fails to consider key domestic variables: the extent of state involvement in defining the sector's trajectory, the role of the military in domestic politics, the nature of public-private interactions within the sector, and the particular mix of goals expressed in state policies.
Global Access and
Domestic ControlBecause Third World defense sectors sit at the intersection of global and local structures, they balance diverse economic and political interests. But what are the relevant structures? Internationally, "structure" could mean the regional security context, key bilateral relationships, the division of labor in the global economy, or the distribution of military and political power among states. Domestically, the term can refer to the distribution of economic power, the organization of the state, or the nature of state-society relations. While all of these contextual factors matter in some sense, particular attention should be paid to structures governing access at the international level and control at the domestic level—structures I describe as global markets and domestic politics.
At the international level, arms transfers have always been based on a complex intertwining of economic, military, and political factors; this will continue for as long as governments value both military power and economic growth. But the fundamental question for Third World defense sectors has been one of access to the technologies, investment capital, and export markets they require to sustain military industrialization. Certainly this has been the case for Brazil: As subsequent chapters will show, growing access to each of these elements in the military-industrial equation fueled military-sector expansion in the 1970s, and changing patterns of access were critical to the deepening sectoral tensions of subsequent crises. Moreover, as discussed in Chapter 5, growth in the number of suppliers, internationalization of production, and commercialization of transactions have combined to create an intensely competitive system—literally, a global arms economy—that operates on the basis of exchange at least as much as on that of persuasion, authority, or coercion.
Describing international structures in market terms does not mean that other structural factors—the balance of power, external threats, alliance formation, or rule-based cooperation through international regimes—are irrelevant. But the global-market approach does make claims about how these factors shape military-industrial growth. When governments in the industrialized countries have opposed Third World military industrialization, they have generally invested more energy and political capital in restricting access on the supply side—in particular, access to production technologies—than they have in more direct coercive, persuasive, or rule-based interventions among would-be military industrializers. International regimes on nuclear and missile proliferation are, in essence, assertions of oligopolist power in the form of suppliers' cartels. Referring to international structures as global markets does not mean that politics does not intrude, but rather that the political intrusion has sought to change patterns of market access.
At the domestic level, the fundamental issue is not access but control. State policies play a critical market-creating role, even in the most export-oriented defense sectors. Key inputs such as skilled labor, investment capital, and technology are also highly sensitive to state policies. Thus the principal issue is who controls the political resources that determine patterns of market performance within a set of state-constructed and highly state-dependent market arrangements. Certainly this was the case in Brazil under military rule: The state explicitly created the conditions for production and strongly influenced the character of sectoral demand. One consequence is that the domestic economic relations that grew up around the defense sector have themselves been conditioned by the structure of Brazilian domestic politics, as seen in the historical strength and intrusiveness of the state, the weak and state-dependent character of Brazil's industrial bourgeoisie, and the traditional insularity and autonomy of the military. To the extent that these features differ in Brazil from other countries, so will the institutional form of Brazil's defense sector.
Detailed case studies of Third World defense industries or security policies (of which there are few) point to the salience of domestic political structures. Barnett stresses the role of the state's capacity to mobilize resources in his comparative analysis of Egyptian and Israeli security policy. Reiser's study of Israel's military industries reveals the importance of a diverse coalition in mobilizing domestic political support for defense-sector expansion. Gupta, writing about India, points to diverging civilian and military priorities as a recurring barrier to effective military-industrial development. Nolan, in a comparative study of the Taiwanese and South Korean defense sectors, points to the key role in each case of effective leadership by domestic political elites.
In other words, from the perspective of Third World defense industries, the most important international structures are those that govern access to the critical resources of technology, financing, and markets. And the most important domestic structures are the political institutions and relationships that define who controls military-industrial policies. The fate and form of the defense sector lie in the space between these global and local structures.
The Problem of Adjustment
and the Role of InstitutionsThe foregoing suggests that promoting defense-sector expansion involves a difficult balancing act. A path of growth and development must be found that will satisfy both the demands of a competitive international political-economic context and the demands of the domestic coalition supporting military-industrial ventures. One way to describe this process is as a two-level game. Decision makers must play an international game of bargaining for access to technology, financing, and markets, and a local game of building support for military-industrial policies among various domestic groups: the military, industrialists, bureaucrats, civilian scientists, and labor unions. Clearly, each "game" affects the other: Successful international bargaining can create resources needed to build a winning domestic coalition, just as "winning" on the domestic level may build support for policies that will "win" internationally. But moves in one game can also complicate the other game. For example, if winning internationally means attracting foreign investment and winning domestically means garnering military support, actions seeking the former (e.g., cutting budgets to create a favorable macroeconomic climate for investment) may complicate the actions needed for the latter (e.g., increasing the size of the defense budget).
In the short run, the challenge is to find a "win-set," or a set of policy "moves" that will produce a favorable outcome in both games. But military-industrial development is not a short-run process. The game metaphor breaks down because the key to success is not simply the implementation of effective policies but rather the institutionalization of effective rules and roles. Military industrialization demands stable institutions—routinized sets of rules, roles, procedures, and practices—because, even on the lesser scale seen in most Third World countries, the defense sector brings together a heterogeneous array of manufacturing and supply firms, civilian and military bureaucratic organizations, research institutes, and other groups. Producing military-technological artifacts involves a diverse array of activities, such as military R&D, the training of technical personnel, coordination of supplier industries, arms production, and the testing, demonstration, and marketing of weapons systems, that create a complex division of labor among these groups. Institutionalized rules, predictable routines, unquestioned goals, clear divisions of responsibility, and established hierarchies of authority are needed to give order and predictability to this highly complex process.
The centrality of technology also creates a demand for stable institutions. The expansion of military-technological capabilities requires internalizing a broad and heterogeneous set of abilities; more generally, technology development involves carrying previously developed abilities forward to new settings. This view presumes that technology is, as Dahlman suggests, "to a large extent embodied in people and institutions, not just in physical objects, and hence to acquire technological capability is mostly a matter of building up skills and institutions, not of buying hardware." The sunken costs inherent in path-dependent learning (investments in people, process technologies, and forms of organization) mean that past choices typically curtail current options sharply, and current choices cast a long shadow onto the future. The number of directions in which one can embark to build upon past learning are limited. Military-technological endeavors therefore tend to follow path-dependent trajectories, typically organized around the core weapons systems of a particular military service.
For military-industrial development to succeed, stable roles, rules, and routines must be institutionalized. But in most Third World settings, the task of creating and maintaining stable institutions is complicated by rapid change and frequent instability on both the domestic and international level. Their dependent integration into a dynamic global arms economy forces Third World producers to adjust repeatedly to processes of technological change and economic restructuring they cannot control. At the same time, domestic political instability creates its own challenges of adaptation. Thus, over time, the problem of finding a path that works both internationally and domestically is likely to be superseded by a larger problem of institutional adjustment to structural change. The challenge facing individual programs, particular industries, and the defense sector as a whole is to maintain or, more accurately, to continually reproduce a set of institutional practices that reconcile prevailing global-market and domestic-political conditions, in a way that is conducive to sector growth and expansion.
The focus on institutions suggests three keys to understanding military-industrial growth and decline: identifying the defense sector's institutional core of roles, rules, and procedures; examining their relationship to the most important international and domestic structures conditioning defense-sector performance; and observing whether and how they adapt to structural change. Because identifying the relevant institutional practices is difficult, two cautions are in order. First, institutions may be nested at different levels of social organization—in this case, individual weapons-system programs, particular industrial segments, or the defense sector as a whole. Second, institutions are not synonymous with formal organizations, and may be embedded in less formal, uncodified arrangements. This distinction is particularly important in the context of Brazilian politics, where, as Schneider points out, rapid bureaucratic circulation weakens organizational loyalties and increases reliance on personal ties, a factor that in turn further undermines formal organization.... Since officials' preferences do not necessarily coincide with those of the agency in which they happen to work, traditional perspectives in bureaucratic politics (based on organizational interests and procedures) are of limited use.
A guide for where to look for key institutional practices can be found in the influential work of March and Olsen, which lists three general insights from the study of political-economic institutions: (1) institutional rules and routines play a crucial role in shaping behavior; (2) institutions not only respond to their environments, but often actively shape those environments; and (3) rather than responding precisely and immediately to changes in the external environment, institutions tend to exhibit "stickiness" as actors cling to established practices, proven procedures, and established technologies.
First, institutionalists stress how rules and routines shape and constrain the capacities of actors. This points our attention to the hierarchy of authority defined by those rules, and to the division of labor that results from their repeated application. How is authority distributed and acknowledged among R&D organs, firms, state agencies, and the military itself within the principal military-industrial segments? What division of labor has evolved among them?
Second, institutionalists stress that institutions both respond to and shape their environment. This calls attention to the nature of the defense sector's external boundary and to the types of linkages that transcend it. How are the key military-industrial programs separated from or tied to a range of actors outside the defense sector, including other Brazilian industries, multinationals operating in Brazil, foreign suppliers, the civilian scientific establishment, Brazilian universities, and organized labor? How stark is the delineation between outsiders and insiders? Does the definition of an insider change over time?
Third, institutionalists study the role of norms, belief systems, and socialization in shaping behavior. These conditioning processes create institutional stickiness, meaning that change is often episodic and punctuated rather than continuous and incremental. What are the enduring aims of military industrialization? What goals go unquestioned for extended periods? In particular, what norms govern beliefs toward technology development? Do general themes such as "technological autonomy" take on broadly consensual meanings that in turn shape behavior?
Reinterpreting
Brazil's ExperienceCombining these two observations—that both domestic and international structures shape the defense sector, and that stable institutions are central to military-industrial growth—produces several hypotheses about military industrialization in Brazil and throughout the Third World. First, military-industrial expansion is more likely when there is a favorable convergence of domestic and international conditions. Second, sustaining growth will require either unusual structural stability at both of these levels or effective institutional adjustment to change at one or both levels. Third, institutional stickiness makes effective adjustment difficult, particularly when both domestic and international structures are changing simultaneously.
Applying this framework to the Brazilian case reveals a clear pattern. In the early stages of defense-sector development, it was possible to pursue a developmental strategy that was viable in both the domestic-political and global-market contexts. Under these circumstances, the sector not only thrived, but also took on an institutional character and a technological trajectory that reflected this structural convergence between the global and the local. The result was not only military-industrial growth but also the institutionalization of several notable characteristics of Brazil's defense sector: its penchant for state-led growth, its limited links to civilian activities, its aggressive but pragmatic approach to technology development, its embrace of a highly commercial logic for production choices, and its subjugation of strategic choices and sector policies to military control.
These features proved critical to sector growth. But their deep institutionalization would greatly complicate the problem of adjustment when global markets and local politics began pulling the defense sector in contradictory directions in the late 1980s. The result was a series of doomed efforts at adaptation, which have in turn produced a pattern of chronic instability, chaos, and deinstitutionalization that continues to this day.
2
The Origins of
Military IndustrializationBrazilian arms production has a venerable history, dating to the colonial era. The emergence of a sugar-based economy in the sixteenth and seventeenth centuries stimulated shipbuilding in the northeastern territory of Bahia, as Portuguese shipbuilders adapted to the use of tropical woods. The discovery of gold in Minas Gerais in 1695 stimulated a southward movement of the fledgling shipbuilding industry to the increasingly important commercial center of Rio de Janeiro. The Naval Arsenal of Rio de Janeiro was founded in 1763 and completed its first warship in 1767. Dagnino reports that prior to this time cannon and other war material were already being manufactured for Portuguese use. Cannon were also produced and used by the bandeirantes—the explorers, soldiers of fortune, and traders in Indian slaves who carved their way into the interior of the South American continent. A more important stimulus came in 1808 when the Portuguese court, fleeing Napoleon's armies, left Portugal to take up residence in Brazil. One of the first acts of João VI upon arriving in Rio de Janeiro was to establish a gunpowder factory. Brazil's first military academy was also opened during this period.
Upon Napoleon's defeat the liberals who assumed power in Portugal sought to reassert colonial control over their rapidly growing South American colony, but in doing so they met opposition among Brazil's landowning elite. A revolution fought to preserve the status quo against renewed Portuguese interference yielded Brazil's independence in 1822. In 1824 Brazil established a constitutional monarchy and installed as emperor the Portuguese king's son, whom the king had left behind as regent when the court returned to Lisbon.
The military needs of the tenuously independent nation did sustain a modest upsurge in military-industrial capacities. An army arsenal to repair guns was installed in Rio Grande do Sul in 1828, and lingering Portuguese control in Brazil's northeast accelerated the shift of the emerging naval construction industry to the south, in Rio de Janeiro. But economic and political developments for most of the nineteenth century had a less salutary effect on military-industrial expansion. The emergence of a coffee-based export economy marked another historical cycle of commodity-based economic growth, paralleling the earlier sugar and gold cycles. But the coffee boom carried with it cheap imports of British-manufactured goods, inhibiting the development of a domestic manufacturing base.
Political developments also inhibited military-industrial growth. The early years of imperial rule saw the formation and rapid growth of the Guarda Nacional at the expense of the army, which the emperor considered to be politically unreliable. In the early years, the guarda played an important role in establishing imperial control, but it remained a decentralized tool of the rural oligarchy. The central state was not strong enough relative to rural elites to build a professional army for use in further consolidating federal control. Thus the army remained a weak and unprofessional institution, while the militias that eclipsed it lacked the central administrative structure necessary for a meaningful expansion of military-industrial capacity.
An important military-industrial stimulus came with the War of the Triple Alliance (1865-1870). The war pitted Brazil, Argentina, and Uruguay against Paraguay in a bloody conflict that killed perhaps half of Paraguay's male population, and in particular indigenous peoples. Pressed for an effective means of controlling Paraguayan rivers, Brazil became the second nation (after the United States) to produce warships with reinforced armor plating. A team of European-trained Brazilians designed and built six such craft for the war, using imported machine tools and iron girders. Naval production had reached a relatively advanced technical level, though lacking a broad industrial base.
The war forced expansion of army production of cartridges, shells, and powder. More significantly, the war transformed the army, which emerged as an important actor in Brazilian politics. The postwar period found Brazil with an army that was larger, more vocal in its dissatisfaction on a range of issues affecting the military, and painfully aware of the organizational weaknesses exposed during the war.
The Old Republic
In 1889 the empire was overthrown by a coalition that included the army, the coffee barons of São Paulo, other segments of the rural elite, and the new urban classes whose growth had been stimulated by war. The ensuing four decades, known as the Old Republic, were an uneasy compromise among elite factions with divergent interests. During the drafting of the new constitution, for example, the army and rural elites disagreed sharply on the appropriate definition of the army's constitutional duties. Economic disputes also emerged. Tariff protection to pay the cost of war with Paraguay did generate a "spurt" of industrialization in the 1870s, but for most of the period exchange-rate policies designed to maximize coffee revenues hindered the development of a domestic manufacturing base.
In marked contrast to the war-driven expansion of the 1870s, the Old Republic saw little growth in military-industrial capabilities. Again, the reasons were both economic and political. Naval production stagnated as the advent of steam propulsion and steel hull construction rendered the Rio shipyards obsolete by the early twentieth century. At the same time, the navy's political influence waned as the army's ascended. Elements within the navy opposed the army officers who served as the first two presidents of the Republic, Marshalls Manuel Deodoro da Fonseca (1889-1891) and Floriano Peixoto (1891-1894). An unsuccessful naval revolt was mounted against Floriano's government in 1893 and suppressed by the army, further weakening the navy's position. Declining political fortunes led in turn to a sharp decline in resources available for defense production or technological modernization.
The limited number of contracts for naval fleet expansion in this period went to foreign firms. European firms were the chief suppliers before World War I (including two British dreadnoughts in 1910), to be supplanted by the United States after the war. An attempt was made to consolidate naval construction in a new Rio shipyard, beginning with a contract awarded to a French firm in 1910. But arsenal construction was slowed by financial constraints and disrupted by World War I, and navy building programs were further derailed by the financial crises of the 1920s.
Unlike the navy, the army played a crucial role in the founding of the Republic and remained a key political actor during the Republic's early years, controlling the presidency until 1894. But the election that year of a civilian São Paulo politician, Prudente de Morais, marked a shift in the civil-military balance. Reduced defense expenditures of the post-1894 civilian-led governments further weakened the army's position. Military expenditures, which had peaked at 31.8 percent of the federal budget during Marshall Floriano's last year in office, fell to an average of 13.9 percent between 1898 and 1921. These cuts worsened the factionalism within the officer corps that had sharpened during the army's years in power.
The budget cuts occurred as the various political crises engulfing successive governments were keeping the army heavily occupied. Beginning with the naval revolt of 1894, the army was used repeatedly to intervene in regional conflicts around the country, to break local resistance to federal authority, and to suppress movements threatening the prevailing order or national integration. Key episodes included the Canudos affair of 1897, a bloody clash between the army and religious separatists in Bahia; the salvages campaigns of 1911-1914, launched against local oligarchies in a number of states; the Contested of 1912-1915, a separatist movement in Paraná and Santa Catarina; several clashes with the emerging labor movement in the early 1920s; barracks revolts sparked by junior officers (the "lieutenants' movement") in 1922 and 1924; and the "Prestes column" of 1925-1927, a 15,000-mile guerrilla march and campaign by rebellious troops. A revolt toppled the Old Republic in 1930, but the pattern continued: A failed counterrevolt was mounted in 1932, and a communist-inspired barracks revolt in 1935 stimulated a new wave of repression against leftist groups. Although such activities stimulated demand for arms and ammunition, they also repeatedly exposed the army's incompetence as a military unit and the deep political divisions within the organization.
The army also suffered a persistent generational gap within the officer corps. This period saw the growth of strongly nationalist, professional, modernizing sentiments within the junior ranks. Although this trend is often traced to the emergence of a Comptean, positivist ideology among the junior officers after the Paraguayan war, organizational changes also played an important role. The officer corps, which was bottom-heavy with lieutenants and captains, grew rapidly during the Old Republic, nearly tripling in size between 1892 and 1927. The higher educational levels of the younger officers subverted the traditional hierarchy, as did the superior training received by a group of junior officers in Germany during 1910-1912. The co-optation of senior officers by political elites, the hardships of army life in the lower ranks, and the perceived incompetence of senior officers all contributed to generational tensions. A series of barracks revolts in the early 1920s reflected this internal tumult, and also foreshadowed the army's growing dissatisfaction with the prevailing political system.
Given these political conditions and the same lack of industrial infrastructure that plagued the navy, the army was unable to support or manage an effective expansion of its domestic production capacity; dependence on foreign suppliers remained the norm. Krupp and other German firms were the army's principal suppliers prior to World War I, a link strengthened by the training of a cadre of young Brazilian officers in Germany in the early 1900s. After the war French influence eclipsed German. The French installed a sizable military mission in Brazil and filled the arms supply gap left by Germany's defeat.
An independent munitions supply was a higher priority than weapons manufacture during this era, but here too barriers were encountered. At the turn of the century the armed forces maintained three army arsenals, three navy arsenals, and three munitions plants (one for cartridges and two for powder). Attempts to expand met with only limited success: A modern powder factory was built in the state of São Paulo in 1908, and the army sought to upgrade its Realengo cartridge facility near Rio de Janeiro. A Department of War Material was formed in 1915 to coordinate activities. But equipment purchases to establish a new Arsenal de Guerra in Rio de Janeiro and boost output at existing facilities were stymied by a lack of skilled labor and an interruption of machinery imports during World War I.
After the war, the goal of arms independence attained the status of official policy. By 1930 some progress had been made in increasing output for uniforms, ammunition, and supplies. Some success was achieved in attracting private capital to these productive efforts; Dagnino reports that by 1930 private firms supplied half of the army's munitions. The São Paulo revolt of 1932 exposed the continuing inadequacy of domestic munitions production, however, and reliance on foreign suppliers remained the norm for anything beyond ammunition.
The ambivalence of private domestic capital exacerbated stifling shortages of financing and skilled labor. In the absence of a strong state guaranteeing a market, private investors were reluctant to enter seemingly unprofitable ventures. For its part, the military remained divided on the role of the private sector in defense production. Hilton identifies military sentiment for a privately owned military industry, and argues that during this period "naval authorities echoed army spokesmen in arguing in favor of civilian predominance in defense production." McCann, however, points out that the influential army journal A Defesa Nacional was calling for a state-owned steel industry to boost arms output.
The Vargas Era and
the Estado NovoThe 1930s marked a turning point for both military politics and industrial development in Brazil, and thus for Brazil's military industries. The global depression, which had a devastating impact on agro-export revenues (and thus foreign exchange), spurred import-substituting industrialization. The state played a lead role in the emergence of basic industries during this period. The National Steel Commission, an organ of the Ministry of War with mixed civilian and military representation, was formed in 1931. Under the commission's guidance, and stimulated by protective tariffs and falling exchange rates, Brazil's small steel industry nearly tripled its output between 1934 and 1940. A "Law of National Similars" prohibiting imports of manufactured goods similar to those produced in Brazil stimulated import-substituting industrialization on a broader scale.
The 1930s also marked a political watershed. An armed revolt against the federal government in 1930, sparked by a disputed presidential succession, toppled the uneasy regional balance of the Old Republic. The revolt supplanted the São Paulo elite that controlled the presidency in the Republic's final years, installing in its place a coalition led by Getúlio Vargas, previously governor of the southern state of Rio Grande do Su1. Vargas is the dominant figure of twentieth-century Brazilian politics. He assumed the presidency in November of 1930 and successfully put down a counterrevolt launched by the São Paulo elite in 1932. In 1937 he used military backing to seize essentially dictatorial powers and declare the Estado Novo (New State), remaining in power until being deposed by the military in 1945. Vargas then returned to power via the ballot box, winning the presidential election of 1950 and serving until attempts to force him from office led to his suicide in 1954.
During his tenure Vargas consolidated federal control over the regional oligarchies, laying the foundation for state-driven industrial growth. His regime also established a clientelistic pattern of negotiations between elites and the state, bypassing political parties and the legislature. In doing so, Vargas established a pattern of interaction between a dominant state and a divided, state-dependent capitalist class that would last, in its basic outlines, to the present day. The result was a new trajectory of economic development and sociopolitical change, marked by what has often been described as conservative, industrializing modernization: industrializing in that it extracted a surplus from the agro-export sector to subsidize industrial growth; modernizing in that it yielded a fundamentally new political terrain, marked by the emergence of urban industrial capitalists, a new middle class, and a strong central state; and conservative in the sense that policymaking continued to be a top-down process of elite definition and negotiation, despite Vargas's frequent manipulation of nationalist sentiment and populist imagery.
Although the army eventually removed Vargas from office, the military was a key partner for most of the 1930-1945 period. As Skidmore suggests, the army high command's goal—a "strong army within a strong state"—converged with Vargas's own ambitions. The revolt of 1930 produced an accelerated turnover of the officer corps, with rapid advancement for junior officers who had supported Vargas. Badly polarized by the internal and external disorder of the 1920s, army hierarchy and discipline were restored to some extent after the failed São Paulo counterrevolt in 1932 led to expulsion of 10 percent of the officer corps. In 1935, an insurrection triggered by a left-wing National Liberation Alliance (ANL) including the Brazilian Communist Party (PCB) further unified the military and pushed it closer to the Vargas government. The link was cemented with the elevation of two Vargas allies: Generals Goes Monteiro to army chief of staff and General Dutra to minister of war. The insurrection also yielded military-backed revisions to the National Security Law and to the Constitution. A National Security Tribunal was formed, and the constitution was amended to allow the president to declare a state of emergency and purge "subversives" from the ranks of the civilian bureaucracy and the military. These changes proved to be precursors to Vargas's seizure of broader powers with military backing in 1937.
As Camargo describes the goals underlying the Estado Novo:
The strategic objective... was to strengthen the power of the state and rationalize the decisions of the government, thus reducing the extreme fragmentation of the political system, which was ineffective and formally controlled by the power of the states.... It would be difficult to accomplish these goals through the old regional alliances, the parties, the Congress, or the prevailing institutional system. It was necessary to disarticulate the institutional system in order to promote reorganization of the state, and to urge on the process of state-building—rearticulating alliances, redefining actors, inflating the power of some and deflating that of others.
The military, and the army in particular, would be among the principal actors thus "inflated." In addition to being the power that guaranteed the continuation of the Estado Novo, the military took on a new and important role in the planning commissions, bureaucracies, and other organs of the state emerging during this period.
Along with growing organizational cohesion and bureaucratic involvement, the 1930s saw the military articulating a vision of a modern, industrialized Brazil. The increasingly loud, clear, and unified voice that emerged was a precursor to the so-called security-and-development ideology of the 1950s. Three central components stand out in military discourse during this period. The first was a growing self-image of the armed forces as a national institution above partisan politics, with an expansive role to play in the political and social life of the nation. A second, related theme emphasized the inextricable coupling between national security and economic development. Security, given its broad economic, political, social, and even psychological components, was contingent on development; and development in turn required shielding the nation from external threats and internal subversion. The final component was a brand of economic nationalism, emphasizing strong state leadership and the need to implant basic industries.
One early articulator of this vision was General Goes Monteiro, military chief of the 1930 revolt and later army chief of staff and minister of war. He described the army as
an essentially political organ.... General policy, economic policy, industrial and agricultural policy, the system of communications, international policy, all the branches of activity, production, and collective existence, including the instruction and education of the people, the political-social regime—all ultimately affect the military policy of the country.... The policy of the Army is war preparation, and this preparation interests and involves all the manifestations and activities of national life, in the material realm . . . and in the moral realm.
These expansive notions of security, development, and the armed forces' role in national life were by no means unique to Brazil. And as McCann points out, many of these basic ideas had been articulated in Brazilian military circles prior to World War I. The significance of the 1930s was the sociopolitical context within which these ideas flourished. An increasingly cohesive officer corps strengthened its political ties to a restructured civilian elite, representing interests far more compatible with those of the military than had been the case historically.
The military's ascendant political influence translated into growing budgets, and the imposed stability of the Estado Novo allowed a shift in attention to reequipment needs. A full-fledged program for nationalization of defense production emerged in this period. But growing industrial capacity and a strengthened political position from which to pursue goals of nationalization did not translate immediately into military-industrial growth. Shortages of financing and skilled personnel continued to plague defense production, and reliance on foreign suppliers remained the norm for heavier equipment in the 1930s. The government concluded agreements with a number of foreign suppliers in the latter part of the decade, including a major purchase of U.S. civilian and military aircraft, a contract for three British destroyers, and a five-year, $100 million arms pact with Germany as part of a reciprocal trade agreement.
Some important precursors to expanded domestic production were also being established, however. Three new war materiel plants were initiated in 1933. Army aviation began assembling Brazilian-designed planes featuring U.S. engines, while the navy began assembling Focke Wulf training planes with German technical assistance in 1936. The Ministry of Transportation established an aircraft assembly plant at Lagoa Santa in Minas Gerais in the late 1930s; this facility passed to the fledgling Brazilian Air Force with the formation of the Ministry of Aeronautics in 1941. Naval ship construction also resumed during the latter part of the 1930s; the Rio shipyards launched a monitor and six minesweepers, and began to assemble three U.S.-designed destroyers.
World War II accelerated the trend toward domestic production, increasing both financial support for, and political pressure on, national industry to respond to surging demand. Assembly of U.S.-manufactured planes (including Fairchild PT-19B Cornell trainers and T-6 Texans) was begun at Lagoa Santa on a cost-plus, profit-guaranteed basis. By the end of the war, planes were being assembled at the rate of one per day. A national engine factory was also established, and output from the war materiel plants reached a new high. American refusal to share sonar technology for tracking German submarines led to a crash development program that marked the onset of collaboration among the navy, the University of São Paulo, and Brazil's small but capable physics community. This collaborative effort helped lay the foundation for the navy's subsequent efforts in nuclear technology and microelectronics.
The Return of
Competitive PoliticsIn 1945 Vargas, increasingly at odds with his former military backers, was forced from power by the army high command on the eve of a presidential election featuring two military candidates. Vargas's successor, General Eurico Dutra, flirted with orthodox liberalism, but then returned to the proindustrialization policies of his predecessor, including exchange controls, import restrictions, and subsidized credit. These policies were continued for most of the next fifteen years, which included Vargas's elected return to power (1951-1954), a brief period of economic orthodoxy under Vargas's successor Café Filho (1954-1955), and the resumption of aggressively proindustrial policies during the presidency of Juscelino Kubitschek (1956-1960).
Not all issues of economic policy enjoyed a broad consensus among elites during this era, as reflected in bitter debates on the role of foreign capital in the petroleum and mineral industries. But the growing economic and political strength of industrial capitalists and urban labor—a coalition first cultivated by Vargas in the 1930s—had produced a definitive shift in the political balance. Policies stimulating the development and expansion of basic industries continued.
As part of Brazil's reward for entering World War II, the U.S. Export-Import Bank financed construction of a modern steelworks at Volta Redonda. The mill, which began production in 1946, accounted for 49 percent of the 700,000-ton national output of finished steel by 1951, and provided a new capacity for heavy and specialized steel. The state-owned oil company Petrobrás was founded in 1953, and the Brazilian auto industry was established with foreign capital soon thereafter. The petroleum and auto industries in turn stimulated the development and growth of supplier industries in electrical equipment, machine tools, and steel, and also enhanced growth in the engineering and skilled technical-labor force. Another important development during this era was the emergence of planning as a central instrument of economic policy (a trend that would peak during military rule in the 1970s). Key steps included the joint U.S.-Brazil Economic Development Commission (1951-1953), the five-year plan of Finance Minister Horatio Lafer (1951), and formation of the National Bank for Economic Development to coordinate strategic investment (1952).
In terms of military politics, the 1950s saw consolidation of the technocratic role that had emerged during the Estado Novo. At the same time, political trends were producing a growing apprehension within the officer corps. The trajectory of conservative, modernizing industrialization took on increasingly populist overtones in Vargas's final years, and by the end of the 1950s a decaying cross-class coalition gave way to accelerating left-right political polarization. These developments were increasingly out of step with the elite, nonparticipatory ideology of national progress that held majority sway within the officer corps.
The military's increasingly technocratic tendencies and its enduring antipopulist sentiment were both reflected in the Escola Superior de Guerra (ESG). Founded as a war college in 1949, the ESG quickly emerged as the focal point for the development of military doctrine. The main tenets of the ESG's self-labeled discourse on segurança e desenvolvimento (security and development)—that security and development were mutually determining, that there existed "permanent national objectives" outside the realm of political bargaining, and that adverse material conditions and "cultural delay" were threats to national security properly understood—bore a strong resemblance to earlier trends in military thought. Markoff and Baretta, for example, link security-and-development ideology to the notions of "order and progress" that emerged in the latter part of the nineteenth century:
What is Segurança e Desenvolvimento after all but a variation on Ordem e Progresso [Order and Progress]? The slogan of the ESG is simply an updated version of the old Positivist catch-phrase, another version of the search for a dramatic formula for modernization without mass involvement, with order (or security) enjoying pride of place.
The significance of the ESG lies less in what it said than in what it represented: a first attempt at interservice communication on matters of military doctrine, and an effort to engage the civilian elites attending its courses and lectures in dialogue, albeit dialogue on the military's terms.
There were some new wrinkles in the ESG discourse, including the Cold War-induced concept of "total war" and greater attention to the notion of strategic planning. One enhanced theme directly relevant to defense production was growing emphasis on the technological variable. While one can only speculate on the source of this heightened emphasis, plausible factors include the experience of the expeditionary force that fought in Italy during World War II, as well as the reinforcing effects of internal lobbying by the growing cadre of technically trained personnel in each service. The air force, for example, formed in the midst of the "victory through air power" mentality of the early 1940s, had a strong technological orientation from its inception, and established a technical school for the training of aeronautical engineers almost immediately. These personnel in turn formed an important lobby for subsequent aeronautics and aerospace development programs.
Whatever the impetus, the 1950s marked the beginnings of a national science and technology policy, with the armed forces playing a leading role. The foundations for the modern military R&D system of both the air force and navy were established during this period, and the navy took an active lead in stimulating national nuclear-energy and electronics programs after World War II. The National Research Council (CNPq) was founded in 1951, largely through the efforts of Admiral Álvaro Alberto da Mota e Silva, to consolidate state control of nuclear activities. CNPq would later evolve into a broader organ of support for science and technology. Other important developments during this period were the Executive Group for Computer Applications (GEAC) and the Organizing Group for the National Space Activities Commission (GOCNAE). GEAC was a mixed military-civilian group under the direction of Roberto Campos, who would become Planning Minister in the post-1964 military regime, while GOCNAE provided an administrative link between the National Research Council and the fledgling rocketry activities of the air force's Aeronautics Technological Center.
Ambitious defense production plans also emerged after the war. The U.S. government transferred production lines for the small arms received during the war through the Lend-Lease Program. With American assistance, the navy established an artillery factory and torpedo factory. By the 1950s the services had adopted policies favoring domestic procurement whenever possible, and postwar contracts with European arms suppliers included technology-transfer provisions meant to increase the nationalization of production. Conditions in the global arms economy would undermine these ambitions, however. American-made weapons systems continued to flow to Brazil under the Military Assistance Program (MAP), undermining the military's plans to invest in domestic production. The famine that followed the feast was equally disruptive: U.S. mobilization for the Korean conflict made it difficult to obtain production machinery and equipment internationally, repeating the pattern established by the two world wars.
Domestic barriers also emerged. The goal of importing complete defense factories during this period was largely thwarted; Hilton speculates that the principal obstacle was the reluctance of Brazilian private capital to participate. Military budgets also failed to keep pace with growth in overall spending during this period, falling from 15.1 percent of government expenditures in 1952 to 5.7 percent in 1964. By the early 1960s, Brazil's industrial infrastructure was increasingly in line with what was needed to undertake meaningful defense-sector expansion. The missing ingredients—sustained access to foreign technology and strong state actions to guarantee markets and attract investment—awaited future developments.
Interpreting
Military-Industrial
HistorySome enduring barriers to military-industrial expansion can be seen in this brief historical sketch: a chronic lack of investment capital and skilled labor, severe infrastructural limits, and the absence of supplier industries. Key twentieth-century economic developments, including the expansion and internationalization of Brazilian industry, the growth of crucial sectors (steel, autos, petrochemicals), and the emergence of an infrastructure for research and development, helped to lessen these barriers. But the historical relationship between defense-sector growth and Brazil's overall industrialization is not a simple correlation; there have been periods when military-industrial expansion moved ahead of the broader pace of industrialization, and other periods when it lagged behind the emergence of civilian production capabilities. Within the long-term secular trend toward greater military-industrial capabilities are significant oscillations between growth and stagnation. Some of the most important factors shaping these swings have been political: the availability of political allies with which the military could unite in pursuing its developmentalist agenda, the willingness or reluctance of the state to intervene in promoting industrial development, and the penetration of the state bureaucracy by the armed forces.
In the twentieth century, two developments foreshadowed post-1964 military-industrial expansion. First, as domestic production of major weapons systems became a real possibility, the fate of military-industrial development became increasingly intertwined with the availability of foreign technology and financing. Second, the defense sector's boom-and-bust cycles became compressed, as its fortunes became caught up in the deepening political turmoil and rapid economic changes engulfing Brazil.
Ken Conca is assistant professor of government and politics at the University of Maryland at College Park, where he specializes in international relations, environmental politics, and the politics of science and technology.
Excerpted from Manufacturing Insecurity _ The Rise & Fall of Brazil's Military-Industrial Complex, by Ken Conca, Lynne Rienner Publishers, 1997, 284 pp.