Name for the Get?lio Vargas dictatorship between 1937 and 1945. Since Vargas had been leading the country since the revolution of 1930 and would return as elected president in 1951, the influence of its ideas is much wider. After his suicide in 1954 the political parties he founded ( PSD and PTB ) would continue to dominate the political scene upto the 1964 military coupe.

The Estado Novo was an authoritarian state in which its enemies were ruthlessly repressed. At the same time it modernized the country and the rural and urban masses were recognized as a political force for the first time. The Estado Novo invested in infrastructure and energy as part of the policy to ensure cheap means of production for the emerging industry. For the same reason labour was controlled by compulsory unions. A minimum wage was set, but at subsistence level.

The Estado Novo justified its lack of civil liberties by its project of national development. This national development and the emphasis on labour would also better the lot of the Brazilian poor. In practice Sao Paolo industrialists were the main beneficiaries.