How States Raise Employment Above Market Levels: Lessons For Economic Sociology From Modern Brazil.

Thinking in economic sociology about the relationship between the state and development has gone through three phases. In the "heroic" phase, the state was seen as the great engine of development against adverse forces of backward social structure or multinational predation. In the "nostalgic" phase, heroic policies were seen as no longer possible, since the state had been gutted by globalization or by inadequate class or institutional structures. This paper recommends a third phase - "positive incrementalism" in which state contributions are viewed not as dramatic transformations from peripheral to core but as the capacity to raise employment or development to levels not expected from market forces. By imposing a "better than market forces" interpretation on state action - a whole host of otherwise invisible state actions become valid subjects of analysis whose contribution to improving human welfare can be demonstrated.In this paper, econometric models are constructed for three industries in Brazil. Residuals from these models are examined to see which state policies are most effective in raising employment above market levels. Building infrastructure and financing vocational education are shown to have strong robust effects in increasing employment above market levels. State direct investment in enterprises was less effective - - notably because the sectors discussed here were not suffering from any particular capital market failure. Tax cuts had no effects at all.Overall, economic sociologists can teach macrosociologists some lessons about the effective conceptualization of state policies - and re-establish a credible role for the state in economic development. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]