Institutional design matters: institutional causes of the Brazilian wine industry’s poor performance

Abstract

Triple Helix theory prescribes coordinated actions among government, research institutions and industry to achieve growth. However, the Brazilian wine industry case shows that simply having the institutions is not enough -the institutional framework matters. This paper shows three problems in the Brazilian institutional design that hamper wine quality improvements and impede the development of an effective, fully-fledged Triple Helix model in the Brazilian wine industry. They are: overlapping jurisdictions between the federal and state governments; dissociation between the policy-making locus and the industry; and over-institutionalization. The latter cause is not well developed in the Triple Helix literature as yet. These three factors create coordination problems that appear to be almost insoluble in the present state, and underscore the need for designing institutions carefully before this impasse is reached.