She held meetings with three presidents. She’s in a photo with a smiling Chilean President Gabriel Boric, who’s holding three of her books. Colombian President Gustavo Petro called her “one of the world’s best economists.” And the Argentine government bragged that they were the first country in Latin America to adapt her ideas into public policy.
It’s hard to imagine how the Italian-American economist Mariana Mazzucato, a professor at University College London, could have gotten a warmer reception when she toured Latin America last October to announce a report she produced with the U.N.’s Economic Commission for Latin America and the Caribbean (ECLAC).
Of course, the reception wasn’t entirely positive: Mazzucato made waves in Chile when she said in an interview with local press that the country’s new direction under Boric represented “a very important experiment in killing neoliberalism.”
After some Chileans responded negatively to the idea of their public policy as an untested “experiment,” Mazzucato said she had misspoken in the Spanish-language interview, meaning to say “experience” rather than “experiment.”
Overall, the October trip was an impressive show of the wide influence of Mazzucato’s idea that governments should set ambitious goals for the private sector. Her work, it’s clear, has won admirers in the region’s halls of power—especially among the left-of-center leaders who represent Latin America’s “new pink tide.”
But it’s not just on the left—her emphasis on innovation and growth has also drawn support on the market-oriented right. Petro’s center-right predecessor, Iván Duque, thanked Mazzucato for her work on strengthening government institutions in an address in 2021.
“Her argument has something for everyone,” says Colombian economist Javier Mejía, who teaches at Stanford University. “The right-oriented type of policymakers [like] the idea that they can coordinate innovation … and the left finds it appealing that without the state, this is not possible.”
But how new are Mazzucato’s ideas really—and why are they so lately popular in Latin America?
Not a radical critic of capitalism
One of Mazzucato’s key ideas is the “missions approach,” outlined in her 2021 book Mission Economy: A Moonshot Guide to Changing Capitalism. She argues economic policy should first identify challenges to be solved, then marshal together the resources of the public and private sector in order to solve them in innovative ways.
Mazzucato’s key example of this strategy in action is when the U.S. government pledged to land a man on the moon by the end of the 1960s—and did, in an effort that “galvanized one of the most innovative feats in human history.” Governments don’t have to be a brake on innovation, she argues: Instead, they can be a catalyst.
“‘Moonshot’ thinking,” she writes, “is about setting targets that are ambitious but also inspirational, able to catalyze innovation across multiple sectors and actors in the economy.”
The missions Mazzucato has in mind for today’s economies are more likely to involve accomplishing the green transition or driving more inclusive growth. Her ideas, while considered “heterodox” by many in the economic world—meaning they lie outside the “mainstream” of the academic field, centered on prestigious university departments mostly in the rich world—are not recognizably Marxist, socialist or anarchist.
“Her ideas are within capitalism,” said José Ignacio Maritano, a senior analyst at the UK-based Chambers and Partners. “Not like an alternative model, [but] a way to renew capitalism.”
In this sense, Mazzucato’s popularity among the leaders of the new pink tide reflects the greater cautiousness and more modest aspirations of this generation of presidents, compared to the earlier pink tide of the 2000s. Then, the phrase “21st century socialism” was a common watchword in describing governments’ goals—now, the focus is more on how to make capitalism more inclusive, more environmentally friendly and more productive.
How does this apply to Latin America? In her ECLAC report, Mazzucato writes that the region’s governments should focus “not on subsidizing specific sectors, but on identifying the most pressing challenges and mobilizing collaboration.” This will require more fiscal space, she writes.
Mazzucato’s report cites innovation hubs in Nuevo León state and its capital Monterrey, as well as Uruguay’s “one laptop per child” plan, as successful examples of the “missions” approach.
In Colombia, the outlet La Silla Vacía reported on March 29 of a proposed consulting agreement worth $1 million between Mazzucato and the government on “green industrial strategy.” Some of the funding may come from private sources, the article said.
Governments frequently seek private consultants’ opinion—but it did not escape the notice of Colombian commentators that Mazzucato’s new book, The Big Con, is an extended criticism of the consulting industry.
Mazzucato denied the claims of the article in a tweet, writing: “There is no personal consultancy but a collaboration with UCL,” her university. La Silla Vacía has stood by its reporting.
Mazzucato declined to be interviewed for this article.
A new style of industrial strategy—or an old one?
Mazzucato’s missions approach sounds like a divergence from the type of state interventions that characterized economic policy in many Latin American countries during the twentieth century. But it’s also a little vague—and open to competing interpretations in the region. Are her ideas an inspiration to leaders who want to pioneer a new, more entrepreneurial approach to state-driven economic development? Or, as some critics believe, does she provide prestigious window-dressing for familiar forms of statism?
“Her arguments are somewhat different in that she emphasizes the idea of innovation and technological progress,” said Mejía, the Stanford economist.
Others see Mazzucato’s framework more as offering an update on firmly established regional traditions. Not all think that’s a bad thing.
“In my opinion, Mazzucato’s perspective allows for the updating of the Peronist vision of tools and ways of understanding production, and how to promote it in a way that’s maximally in line with the current situation,” said Nicolás Tereschuk, a political scientist and the national director of parliamentary relations in Argentina’s cabinet.
For Mejía, Mazzucato’s faith in the potential of the state to help coordinate economic development raises old questions about the bureaucratic capability of Latin American states.
“Traditionally, one of the motives for the expansion of the state in the economy in the region has been to expand the clientelistic opportunities of the rulers,” Mejía told AQ. “These agencies that are supposed to generate innovation, in practice they [may] hire friends of friends.”
“Her approach is interesting and innovative and may even work,” said Sergio Guzmán, the director of Colombia Risk Analysis. “[But] we need more doing and less diagnosing.”
Maritano agreed that states in the region needed to improve their bureaucratic capacity, but also argued the private sector and civil society had room to improve.
Another concern is that many Latin American societies are politically polarized, and policy priorities can change drastically from administration to administration. With that in mind, Mazzucato’s conviction in the potential of the region’s societies to agree on development goals and stick to them over time can seem optimistic.
The Productive Argentina 2030 Plan, announced by the Argentine economy ministry on March 28, is the most concrete example yet of Mazzucato’s influence in the region. A set of bold development goals, put together with her ideas explicitly in mind, it proposes to create 3.5 million private sector jobs.
But it has been announced by a government with just months left in its tenure, as many in the ruling coalition fear looming defeat in elections scheduled for later this year. What if an incoming government decides to scrap it?
Tags: Alberto Fernández, Development, economics, Gabriel Boric, Gustavo Petro, Mariana Mazzucato