Innovation policy dismantling: strategies and causes in contemporary Brazil

Abstract

This paper analyzes the policy dismantling process in the Brazilian innovation system since mid-2010. The research describes how this policy change has been undertaken and explains the strategies deployed and major causes. The study is theoretically grounded in the debate of policy dismantling, meaning changes that result in cuts, reductions, or even abolition of budget, rules, capacities, and instruments of a governmental area. A mixed-methods approach, both quantitative and qualitative, is employed. First, it examines the dismantling process in the last years, focusing on the budget execution patterns of the major policy instruments and agencies in charge of innovation at the federal level. The research relies on the stakeholders’ perception by conducting semi-structured interviews with experts regarding strategies, rationale, reactions, and effects. The empirical findings show the dismantling occurs in both dimensions: density (number of tools reduced) and, mainly, the intensity (budget cuts), varying according to government areas. The interviewees highlighted the prevailing strategy as active dismantling, in which the fiscal austerity aggravated by the COVID-19 crisis, an ideological shift in the government coalition, policy particularities, and a low level of prioritization in innovation by the domestic business community are the main factors that affect the politicians’ preferences to dismantle. Finally, the process seriously affects the national innovation system, such as the loss of bureaucratic and policy capacity, brain drain, and lag in technology, productivity, and consequently, in the country's economic performance.