Can institutions foster greater environmental awareness in a developmental state? Can a policymaking process driven by "autonomous" bureaucrats include civil society and does this affect policy outcomes? With these questions in mind, I explore the politics behind hydroelectric dam construction in environmentally and culturally sensitive locations in Brazil. Using mixed methods to compare two distinct developmental periods, I find developmental policy makers are becoming more sensitive to the environmental and social costs of large dams instead of solely prioritizing economic objectives. Constitutional protections, indigenous rights, a licensing process with mandated public audiences, and an active public prosecutor are compelling the democratic developmental state to better engage civil society and the environment. Ultimately, the Brazilian state is building a more inclusive developmental model and my research demonstrates how democratic political institutions and environmental protections changed the policy-making process and created a preference for less damaging but less efficient run-of-the-river dams.