Abstract Dramaric federal intervention and extensive industrialization in the Brazilian Northeast have not overcome its stagnant economy and society. After centuries of isolation and dependence on sugar exports, the Northeast was integrated economicallu into Brazil during 1930–1960, and since then it has been partially industrialized. The regional economy, however, is weakly integrated and highly unequal, leaving local markets small; industrial growth remains keyed to other parts of Brazil; and dependent politics distort the region's relations with Brasília. Social inequality is extreme. Prospects for the future are bleak.