Brazil used to be where American and European multinational corporations (MNCs) invested, but it is now Brazilian firms that seek to go beyond their home markets. Yet there is a key difference between MNCs from developed countries and their Brazilian counterparts: the latter are largely the result of targeted industrial policies as part of a broader growth strategy pursued in the last decade by a labor-based party, the Workers’ Party (Partido de los Trabalhadores- PT). Industrial policy under the PT has focused on creating large Brazilian firms through domestic mergers and then promoting their internationalization. The Brazilian Development Bank (BNDES), a state agency with a lending portfolio twice the size of the World Bank, has provided the capital required to achieve these objectives. The results are impressive: Brazil has surpassed both Russia and China in global investment. Yet by promoting MNCs the Brazilian government is signing on to a policy that is biased toward big businesses, perceived by workers and public opinion as a threat to employment and domestic competition and sends large amounts of capital abroad instead of investing it in the local economy. This outcome is hardly what one would expect from the industrial policy of a programmatic labor-based party such as the PT. Why has the PT sought state sponsorship of domestic MNCs? How has it managed the distributional challenges posed by this industrial policy? I hypothesize that the ability of the PT to implement its industrial policy is a function of two crucial factors: the capacity of the government to place a key bureaucratic institution under its political control and the incentives and capacity of labor to challenge the policy. My research design uses semi-structured interviews with bureaucrats, PT leaders, business and labor exploiting variations in policy-making and preference formation across and within firms that are targeted by the PTs industrial policy.