The politics of neoliberal economic reform in South America, 1980–1994

What political conditions facilitate market-oriented reform? Prior research suggests that neoliberal policies are inherently unpopular, politically hazardous, and consequently dependent upon the existence of strong and relative autonomous governments. This study reassesses the political costs and benefits of market-oriented reform and attempts to offer insights for future theory building by exploring five hypotheses on the basis of the post-1980 South American experience. The findings suggest that the political obstacles to reform have been exaggerated and theoretically misspecified. Neoliberal policies are less the product of the triumph of technocratic expertise over political calculus than of the structure of political incentives and opportunities created by broader sets of factors, including economic circumstances, structural conditions, pluralist pressures, institutional constraints, and international linkages.     

After pension reform: Navigating the “Third Rail” in China

Studies of pension reform in developing and transition economies tend to take for granted the capacity of states to implement ambitious and complicated new schemes for the provision of old-age income to pensioners. This article explains the fragmented, decentralized pattern of pension administration in China as an unintended consequence of pension reform. Policy legacies from the command-economy period, principal-agent problems in the reform period, and the threat of pension protests left urban governments largely in control of pension administration. The central government thus succeeded in its policy goals of pension reform but failed to gain administrative control over pension funds. Mark W. Frazier is assistant professor of political science and the Luce Assistant Professor of East Asian Political Economy at Lawrence University. He is the author ofThe Making of the Chinese Industrial Workplace: State, Revolution, and Labor Management (Cambridge University Press, 2002). His current research focuses on how central and local governments in China compete over pension reform. The author gratefully acknowledges helpful comments from Mary E. Gallagher, William Hurst, Dorothy Solinger, Jaeyoun Won, and two anonymous reviewers fromStudies in Comparative International Development. Funds for this research were provided by the Luce Foundation, the University of Louisville, and Lawrence University.     

Federal politics and market reform in the developing world

Prior research on the politics of market reform in developing nations has generally ignored the significant role of federal political and economic arrangements in shaping adjustment processes. In contrast, this research develops a model of macroeconomic reform that accounts for the significance of subnational economic policy in the developing world’s nine major federations. I examine five hypotheses which are expected to influence the capacity of developing federations to conduct polity consistent with the exigencies of market pressures. With the use of a cross-sectional time-series analysis of fiscal and monetary policies, I show that the policy divergence between levels of government shrinks when provincial governments have greater fiscal power and there are high degrees of party centralization across levels of government. These findings have important implications for the political economy of market reform, the widespread move toward fiscal decentralization, and the design of regional supranational institutions. This research is based on work supported by the National Science Foundation under Grant SBR-9809211. I would like to thank Karen Remmer, Ken Roberts, Wendy Hansen, Alok Bohara, and excellent reviewers for helpful comments.     

Ideas,interests and practical authority in reform politics: decentralization reform in South Korea in the 2000s

This paper explains the reason why the hitherto statist country, Korea, has carried out significant decentralization since the 2000s. In explaining the motivation for decentralization, extant literature has focused on the role of parties, bureaucratic politics, democratization, or territorial interests. Yet there is still limited explanation of how the decentralization laws in Korea could be successfully passed in the 2000s, while cental stakeholders still persisted. By tracing the process of decentralization reform in the 2000s, this article demonstrates how structural factors created favourable circumstances and discursive background for institutional change, and how the idea of decentralization, through the idea diffusion mechanism, gave directions for central decision makers to produce a specific path of reform strategies. It also pays attention to the formation of ‘practical authority’ for reform politicians that made it possible to overcome obdurate resistance from central bureaucrats and politicians.     

Structural reform,institutions and earnings: Evidence from the formal and informal sectors in urban Peru

Reforms undertaken in Peru in the early 1990s might have resulted in a slight reduction of the informal sector. Costs associated with becoming and staying informal, and benefits of becoming formal might have increased. This, when a legalistic definition of informality is used. Earnings differentials between formal and informal self‐employed workers are negligible although they persist between formal and informal salaried workers. Skilled workers are more likely to be found in the formal sector and informal wage earners tend to be younger and less skilled. The earnings generating process for both the formal and the informal self‐employed workers is similar.     

From ‘trial and error’ to major reform: The politics of Medicare demonstration projects

Facing fragmented institutions and partisan polarization, officials in the United States often attempt to engineer policy change without assembling new legislative majorities. To this end, they have increasingly employed demonstration projects, policy innovations undertaken by administrative agencies designed to test alternative approaches to implementation or service delivery on a limited segment of the target population and for a limited period of time. Despite the increasing importance of demonstration projects, they are an undertheorized source of policy change. In this article, we conceptualize demonstration projects as part of a class of experimental institutions that, while incremental in scope, have the potential to ‘scale up’ into more substantial reforms. Data from three Medicare demonstrations suggest that policy change is more likely when programmes generate strong support constituencies; minimize administrative and infrastructural costs; are undertaken in contexts with few veto points; and align with the time horizons of elected officials.