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précis Interview: Ben Ross Schneider

Ben Ross Schneider
Ben Ross Schneider is a professor of political science in the Department of Political Science at MIT. He also co-directs the MIT Brazil Program, which is part of the Center’s MIT International Science and Technology Initiatives (MISTI); the Interdisciplinary Workshop on Institutions and Development (IWID), and the Harvard-MIT Workshop on the Political Economy of Development in Brazil.

précis: In 2008, you joined MIT as a professor of political science, after teaching at Northwestern and Princeton. What primarily attracted you to MIT? 

BRS: What attracted me to MIT was that it had a really a great group of faculty with major strengths across my main areas of research and teaching—comparative politics, political economy and development. These strengths are not just in the political science department, but also in other departments on campus, such as MIT's Sloan School of Management and the Department of Urban Studies and Planning.

précis: You were recently named co-director of the MIT Brazil Program. How would you characterize the general mission of the program? What are some of the program’s main activities?

BRS: : Co-directing the MIT Brazil Program with Richard Locke is a wonderful opportunity. The program started in the summer of 2009, with critical start-up support from Lawrence Fish, and has quickly built up into a range of related activities. The core of the program is the Center's MIT International Science and Technology Initiatives (MISTI) internship program, which matches students with internship opportunities in Brazil. We’ve also added Portuguese language instruction, which MIT has never had before, and a new course I created on the political economy of development and technology in Brazil and Mexico. Beyond the MISTI part of the program, we’re fortunate to have additional funding that allows us to support a number of research activities. For example, we organize an ongoing Harvard-MIT Workshop on the Political Economy of Development in Brazil. This faculty and grad student workshop meets once or twice a month usually with visiting Brazilian scholars or local Brazilianists. In addition, we are hosting a big conference at MIT April 14-15, 2011, which will draw leading academics, government figures and business leaders from Brazil. We expect the conference to focus on areas where we think there is the greatest synergy between innovative research in Brazil and here at MIT, such as energy, traditional as well as biofuels and alternative sources, environment and global climate change, emerging multinationals coming out of Brazil, and innovation in policy and public-private partnerships in areas like AIDS policy and social welfare programs.

précis: What types of opportunities does the program provide for MIT researchers and scholars?

JC: We have two opportunities for MIT researchers and scholars to encourage them to engage more in research-related activities in Brazil. One opportunity is travel grants for dissertation students to go to Brazil to do exploratory research. We will also be participating in MISTI global seed funds, which will have a special Brazil component involving partnerships between Brazilian researchers and counterparts at MIT.

précis: Your current research agenda revolves around two areas: 1) market reforms in education in Latin America and 2) distinct institutional foundations of capitalist development in Latin America with particular attention to corporate governance, foreign investment, and worker training. Could you talk a little about the origins of this research and some of the themes of your current work?

BRS: My overarching interest is in examining the political and institutional arrangements that either impede or promote development in the region. Within this general interest, I have been researching a number of different specific topics. One of those that I think is particularly crucial in Latin America is education. Generally speaking, despite recent advances, the region still lags in terms of educational attainment, educational quality, and performance on international tests. To date, I’ve been doing most of my research on education in Chile, where recent governments have invested a great deal in education and enacted significant innovations in education policy.

The bulk of my other research is on what, by way of shorthand, I call hierarchical capitalism in Latin America. The focus of this research is on the largest countries in the region: Brazil, Mexico, Argentina, Chile, Colombia, and Peru. For example, the prominence of large, family-owned, diversified business groups give a distinctive form to the large firms within the region. These are the crucial institutions of the private sector that are very different in Latin America than what you see in most developed democracies. And this is one of the areas where hierarchy comes in, as most of the large firms in the region are either owned by these business groups or are subsidiaries of foreign multinational corporations, so they are all hierarchically controlled. One of the questions about these groups is how innovative are they. Some of them are quite well-managed and innovative, but many of them are not. So, the question is—what is impeding those that are not and what is driving others to be more dynamic? A related question is what is happening in the labor markets and what the demands of these large firms for skills are. Generally speaking, the demand for high-skilled labor has been low, although this has been changing recently in some of the more successful cases—Brazil and Chile, in particular.

précis: : In a 2009 article, "Hierarchical Market Economies and Varieties of Capitalism in Latin America," in the Journal of Latin American Studies, you write that “another enduring characteristic of corporate governance in Latin America is family ownership and management. In the early 2000s, over 90 percent of 33 of the largest groups in Latin America were family-owned and -managed.” What is the impact of this on corporate governance in Latin America? Is this a positive or negative phenomenon?

BRS: The jury is still out on this because you have examples of very well-run and highly innovative family firms and then you have some basket cases. Even researchers in business schools who really focus on this issue are of two minds on the matter. On the one hand, these family firms provide continuity in management and ownership, a long-term perspective, a deep stake in the firm, and a strong commitment to make the firm work. In addition, if you have a family-owned firm, managed by several generations, it can make for a close and cohesive management knit together with strong bonds of trust, which can be a major asset in weakly institutionalized environments. So, in that sense, family control is positive. However, on the negative side, if you want the best management that money can buy you may want to look outside your own gene pool. Also, the transition from one generation to the next is rarely simple or easy. Many firms go through severe crises during these generational transitions.

"We have two opportunities for MIT researchers and scholars to encourage them to engage more in research-related activities in Brazil. One opportunity is travel grants for dissertation students to go to Brazil to do exploratory research. We will also be participating in MISTI global seed funds, which will have a special Brazil component involving partnerships between Brazilian researchers and counterparts at MIT."

précis: In another recent publication, "Big Business in Brazil: Leveraging Natural Endowments and State Support for International Expansion," in Leonardo Martínez-Diaz, ed., Brazil as an Emerging Economic Superpower (Washington, DC: The Brookings Institution, 2009), you write, “By one study, no country in Latin America spends more than $10 per capita on R&D, compared with more than $200 per capita for countries like South Korea, Australia, and Ireland.” What do you think drives these differences? How does one go about changing this?

BRS: Yes, the differences are striking. Part of the absolute difference is due to the level of development. Latin America is spending less because it is poorer. But, even if you look at R&D in terms of percentage of GDP, the regional average is below 1 percent—with Brazil and Chile a bit above—but still less than half of the average for developed democracies and one-third of levels in some East Asian economies. So, it is lower however you calculate it. When you break it down, in most countries of the region most of the R&D is funded or done by the government and what is really missing is large-scale private investment in R&D. Again, there are some bright spots in Chile and Brazil in particular, where you see a great deal more investment and innovation in the last five years, but there is still a long way to go. And the question is, given the commodity driven growth of the last decade, how much R&D and innovation can be done in these areas which have traditionally been considered low-tech. There are some positive signs that there are new areas of innovation, such as biofuels, but it is not yet showing up as a major shift in overall private investment in R&D.

précis: How and when did you become interested in your current areas of research? How did you become interested in political economy and Latin America?

BRS: It is a long story, but I actually first became interested in Latin America during my junior year studying abroad in Paris. For my dissertation, I spent two and a half years in Brazil doing research. Since then, my core research concerns has been what is holding back development in the region and specifically what are the political and institutional constraints on development. My research focus has been within that broad umbrella, but has changed over time. My first book analyzed industrial policy and the variable performance of state-owned enterprises. I next turned to examine business politics, business-government relations, and collective action in business associations.

précis:One of the main advantages of the MIT political science department and CIS is the emphasis on links between academic research and policy. What are some of the direct policy implications of the research you’ve discussed?

BRS: One of the main implications of my recent research is that the policy debate should focus more on the crucial challenge of creating more high skill, high wage jobs. One of the key metrics we should be using to assess policies is whether or not they are generating high-quality jobs, which has not been a top concern at most multilateral development agencies. This policy engagement is one of the other things that attracted me to MIT. In the past couple of years I have been working more with development agencies at the United Nations, the World Bank, and especially the Inter-American Bank Development on various issues revolving around policy making and business-government relations.

précis: What are some of your plans for future projects? Are there issue areas or projects in your mind that you have not started working on, but that you’d like to begin in the upcoming year?

BRS: At this stage, I am mostly focused on finishing up the work I’ve been doing on corporate governance, labor markets, skills, and hierarchical capitalism, and tying them together in a series of articles or possibly a book. Beyond that, on the more distant horizon, there are a couple of things that would be interesting to pursue. One idea would be a project on a new set of technology and innovation policies adopted recently by some governments in Latin America. The question would be what makes these policies work and whether they have promoted, as policy makers hoped, novel forms of business-government collaboration. Another idea would be more theoretical, to push the debate on institutions and development. Most recent research has focused on a thin, narrow conception of institutions conceived as just the rules of the game, such as property rights, regulatory regimes, and so forth. This approach usually takes organizations as given. So, I think there is a great deal to be gained by problematizing organizations and shifting attention more to in depth micro-level research on organizations like public agencies, private corporations, unions, NGOs, and other civil associations.

précis: Any closing comments on the upcoming World Cup or elections in Brazil?

BRS: Well, I’m not going to risk a prediction on who is going to win the World Cup, but Brazilians are usually optimistic going into it. As for the elections this fall, what is so striking is that both of the front-running candidates are mainstream and have both migrated towards the center left. It will be an exciting campaign, but not because there are any significant policy differences between the two. Whoever wins, there is going to be a lot of continuity from the current Lula government. Both candidates have great strengths, so without predicting who is going to win, I think the outcome will be positive.

Massachusetts Institute of Technology