In the second half of the twentieth century, the annual carnival in the economically depressed northeastern city of Salvador da Bahia underwent a series of transformations that brought it from relative anonymity in Brazil--where festivities in the cities of Rio de Janeiro and Recife had long been given pride of place--to the status of (inter)national showpiece in terms of cultural and entrepreneurial innovation and touristic appeal. It became a dominant factor in year-round local music production. In an era of political constraint, it appeared to embody the collective performance of multiple democracies including race and free-market consumerism. New forms of popular participation were linked to innovations in carnival that, in other national carnival sites, would have been precluded by regulation and tradition. This dissertation draws from debates and analysis in Brazil's intellectual, policy, and media spheres regarding carnival, folklore, tourism, Bahian culture, mass culture, and national identity to argue that 1) the traits of creative spontaneity and popular participation in Salvador's carnival gained prominence as both national ambivalence over "folklore" increased, and dictatorial regimes constrained political democracy; 2) the state, rather than discursively and economically controlling Salvador's carnival, has more often reacted to artistic production and market forces, its hegemony configured through strategies of support and appropriation linked to tourism and an internally amplified social ethic of alegria; and 3) media and cultural commentators have made Salvador's modern carnival a new locus for longstanding national conversations over Brazilian identity, regionalism, race, and cultural imperialism, casting its innovation as simultaneously a promising engine of renovation and a threat to both local and national traditions. Salvador carnival's progressive implications of participation and inclusion have been blunted by a process of political redemocratization that was associated with neoliberal policies at the national and local levels; its internal contradictions and commercialism have challenged both its national and local symbolic power.