Neo-liberalism,big business and the evolution of interest group activity in Latin America

In the 1980s and 1990s, the confluence of the third wave of democracy, neo-liberal economic reforms and economic crises in Latin America, produced several significant consequences for the region's underdeveloped interest group systems. By using an international political economy approach, this article examines these developments and particularly how neo-liberal policies affected the political fortunes of big business plus the broader political fall-out from neo-liberal policies. In essence, we make the argument that, for three reasons, the consequences of the confluence of these three developments for Latin America's emerging interest group system are mixed in terms of a more pluralist, open-access system. First, the influence of big business persists and in many ways has been enhanced as the economically and politically privileged position of large private companies since the 1980s has given way to economic concentration, transnationalization and the rise of multilatinas (Latin American multinational companies, which primarily operate across the region). Second, political opportunities have been opened for a range of interests, many from the left, that likely would not otherwise have emerged so early in the region. Third, the election of leaders opposed to neo-liberal policies may transform Latin America's political economy and aid in the democratization of its interest group system. Copyright © 2012 John Wiley & Sons, Ltd.     

State of the Field

Although scholars of West European politics have long debated whether the region's highly institutionalised party systems were becoming de‐aligned and electorally unstable, the political fallout from the post‐2008 financial crisis has lent a new sense of urgency to the debate. The threats posed to party systems by economic crises are hardly unique to Europe, however. The Latin American experience with the debt crisis of the 1980s and 1990s suggests that party system upheaval was not simply a function of retrospective economic voting during the period of crisis. It was also attributable to programmatically de‐aligning policy responses to crises – namely the ‘bait‐and‐switch’ imposition of austerity and adjustment measures by labour‐based, left‐leaning parties that were traditional champions of statist and redistributive policies. Such patterns of reform made it difficult for party systems to channel societal resistance to market orthodoxy in the post‐adjustment era, setting the stage for convulsive ‘reactive sequences’ when such resistance arose outside and against mainstream parties through varied forms of social and electoral protest, typically on the left flank. This article explores the political fallout from the European and Latin American economic crises from a comparative perspective, arguing that it is essential to think beyond the short‐term political dynamics of crisis management to consider the longer‐term institutional legacies and fragilities of the different political alignments forged around crisis‐induced policy reforms.     

International capital mobility and Third World development: Compatible marriage or troubled relationship?

The current surge of foreign capital to the Third World resembles that of the 1970s. The channels are now different but the extra-regional flows are again predominantly to Latin America followed by East Asia. Many of the Latin American countries whose overborrowing brought on the 1980s debt crisis are again overborrowing to compensate for low savings rates and other structural flaws, putting their balance of payments at increasing risk. The likelihood that this time they can handle the rising debt servicing and impending slowing of the inflows sans prolonged crisis or a major retreat from their market liberalization policies is not very high, whereas the East Asian countries appear once more structurally capable of riding out the repercussions from an international financial market pullback.     

The Origins of Institutional Crises in Latin America

Institutional instability and interbranch crises pose a fundamental challenge to democracies in Latin America and the developing world more generally. Combining a standard game theoretic model of crisis bargaining with a unique dataset on courts, executives, and legislatures for 18 Latin American countries between 1985 and 2008, the article develops a strategic account of how interbranch crises emerge and evolve. In addition to providing the first systematic picture of the frequency, type, and location of interbranch crises for the region, the article demonstrates that the decision to initiate an interbranch crisis is influenced by the allocation of institutional powers, public support for the targeted branch, and the expectations of success based on recent experiences. Building on these results, the article identifies several novel directions for future research on institutional instability.     

Deficits,Democracy, and Demographics: Europe’s Three Crises

This article argues that the EU and, above all, the eurozone are facing not one crisis – an economic and fiscal one – but three: an economic crisis, a crisis of institutions, and a crisis of demography. These crises are not simultaneous; they are overlapping and self-reinforcing, and there is a high degree of feedback across all three crises. Economically, the euro inflated economic growth and government revenue in the peripheral economies, giving those member states a false sense of their economic prospects. Institutionally, mechanisms were too weak at the EU level to prevent a dangerous escalation of asset (above all house) prices and too fragmented to confront the crisis through an immediate and decisive plan that would provide calm to the markets. Demographically, Europe’s economic and fiscal problems are and will increasingly be exacerbated by the continent’s demographic situation and its projected development, especially in southern Europe.     

Some reflections on teaching demography in Mexico in the beginning of the twenty-first century: a new focus

The evolution and achievements of population studies programs at El Colegio de Mexico since the 1964 founding of the first master's program in demography in Latin America are described, and topics of interest for future research are identified. In 1995 the master's program and the doctoral program in social sciences with specialization in population studies were combined into a single program. Students are trained in demographic analysis, the methods of demographic research, the processes of development, and demographic theory. The program seeks to develop multidisciplinary orientations regarding links between population processes and social and economic factors. 67 students have obtained master's degrees and 8 the doctorate. The aging of the Mexican population resulting from its relatively rapid fertility decline suggests crucial topics for future research. The survival of 3 or even 4 generations, the reduced number of siblings, and other changes in family structure and relationships may generate research. Topics related to old age security for women, the effects of AIDS, internal and international migration patterns, and the demographic processes of the indigenous population are other significant topics. New employment opportunities in addition to the two traditional areas, academia and the public sector, should be sought for demography graduates in business and industry and in regional educational and planning centers.     

Brazilian technocrats and economic development policy

Are there factors of continuity that help in predicting economic development policy in Third World countries? What groups will influence policy as regime types change? In Latin America today several military regimes are shifting to civilian leadership. Technocrats could provide continuity as new decision makers face difficult economic choices. The Brazilian case provides a dramatic example, given the prominent role played by technocrats during the military regimes since 1964 and the increased electoral activity begun in 1982. This study evaluates the role and potential future impact of Brazilian technocrats. It uses the example of Brazilians trained or otherwise influenced by the U.N. Economic Commission for Latin America (ECLA). Given that ECLA has been a major force in promoting development policy involving planning and import substitution, the Brazilians in question could affect major policy change during the current economic crisis.     

Austerity or welfare state transformation? Examining the impact of economic crises on social regulation in Europe

This article provides an encompassing analysis of how economic crises affect social regulation. The analysis is based on an innovative dataset that covers policy output changes in 13 European countries over a period of 34 years (1980–2013) in the areas of pensions, unemployment, and child benefits. By performing a negative binomial regression analysis, we show that economic crises do matter for social policymaking. Our main empirical finding is that crises impinge on social regulation by opening a window of opportunity that facilitates the dismantling of social policy standards. Yet crisis‐induced policy dismantling is restricted to adjustments based on existing policy instruments. We do not find significant variation in policymaking patterns across different macroeconomic conditions for the more structural elements of social policy portfolios, such as the envisaged social policy targets or the policy instruments applied. This suggests that economic crises do not lead to a profound transformation of the welfare state but to austerity.     

Voting,Collective Action,and Liberalisation in Latin America: The Rise and Fall of the Hillinger Paradox

Chile's economic and political evolution after the 1982–83 financial crisis has been offered as a model for the rest of Latin America. This paper interprets the 1973 military coup, and national recovery during the 1980s and 1990s, in terms of the presence and absence, respectively, of the Hillinger (1971) paradox. The paradox arises when democratic voting on platforms consisting of several issues leads to majority support for a platform, itself consisting of issues, none of which is supported by the majority. In the early 1970s, a particular expression of the Hillinger paradox led Chile to the verge of a bloody civil war, and to a prolonged military dictatorship. In the mid 1980s, an important policy question, that of differentiated industrial protection versus free trade, was solved by a stable compromise in favour of the latter. This avoided the Hillinger paradox and eventually made electoral politics possible again.     

Ecological Crisis, Poverty and Urban Development in Latin America

This article deals with the social and ecological crisis in the urban regions in Latin America. To analyse the social and environmental conditions of Latin-American urban regions it is necessary to take into account two main factors: the high population and territorial growth of Latin American cities during the second half of the 20th century and the lack of an integral development which would have improved the urban quality of life. The imported market economy in Latin America, as a bad copy of the growth economy in the North, has generated a highly unequal development. The acceleration of the economic growth has gone hand in hand with the deceleration of development. Whereas the macro-economic rates improve, the indicators that measure qualitative evolution among sectors, territories and people have deteriorated. So, to explain the ecological crisis in Latin America, it is important to consider not only the different forms of environmental impact, but also the socio-economic factors and the availability of infrastructures. Therefore, this article describes the general social and economic development process in Latin America, and then examines the relationships between industrialisation and urbanisation in connection to the social and ecological conditions in urban areas.     

Government employment and pay: the global and regional evidence

Against the background of paucity of complete and reliable data as the basis for sound policy, this article reports on the results of a major international survey of government employment and wages in about 100 countries. Key findings are that: in developing countries as a whole, relative government employment is now less than half the level of OECD countries; the reduction in the role of the state in the ‘decade of adjustment’ is striking, and so is the erosion in real government wages in the poorest countries—particularly in anglophone Africa; decentralization in Latin America is visible in the substantial shift of employment from central to subnational government levels; and the lean and well-paid civil service of East Asia is one possible reason why rapid economic growth could coexist for so long with the governance weaknesses that have surfaced in the form of the Asian crisis. The article then undertakes an aggregate cross-sectional analysis of the determinants of government employment. In Africa and Latin America, relative government employment is positively associated with per capita income and the fiscal deficit, and negatively associated with relative wages and population. Clearly, the tendency for government to expand as the economy grows—the so-called ‘Wagner law’—is still operative in developing countries. However, it seems no longer at work in OECD countries, suggesting that Wagner's law ceases to operate beyond certain per capita income level. The article concludes, nevertheless, with a reminder of the limits of cross-sectional analysis: even ‘good facts’ prove little by themselves—good analysis and policy must rest on country-specific quantitative and qualitative evidence. Copyright © 1998 John Wiley & Sons, Ltd.     

Economic Voting in Latin America: Rules and Responsibility

The impact of institutions on the economic vote stands as a well‐established proposition for the advanced democracies of Europe. We know less, however, regarding the institutional effects on the economic vote in the developing democracies of Latin America. Carrying out an analysis of presidential elections in 18 Latin American countries, we offer evidence that the usual Eurocentric conceptualization of the clarity of responsibility is not ideal for understanding the economic vote in this region. There does exist a powerful effect of institutions on the economic vote within Latin American democracies, but one uniquely associated with its presidential regimes and dynamic party systems. Rules for these elections—such as concurrence, term limits, and second‐round voting—suggest that we should reconceptualize the notion of the clarity of responsibility in Latin America, focusing more on individuals in power and their constraints, and less on the political parties from which they hail.     

Economic adversity and electoral participation of vulnerable socioeconomic groups

Do economic hardships affect electoral participation? Using cross-sectional data for 44 countries in Africa, Asia, Europe and Latin America between 1996 and 2013, we find that individual-level attributes and structural factors shape voters’ reaction to economic adversity. This paper presents empirical evidence showing that economic downturns affect electoral participation. However, macroeconomic fluctuations have heterogeneous effects. While poorer and less educated citizens are more likely to increase their level of turnout during periods of economic adversity, the rate of participation of individuals with a higher socioeconomic status is not affected by economic downturns. Moreover, we demonstrate that the negative impact of economic hardships on the likelihood of electoral participation of the most vulnerable socioeconomic groups is mostly found in countries that are less inserted into the global economy and in states that offer weaker welfare protections.     

Understanding varieties of populism in times of crises

Abstract

This introduction presents the conceptual and analytical framework which constitutes the background for the special issue entitled ‘Varieties of Populism in Europe in Times of Crises’. More specifically, this contribution investigates how different populist parties in the European Union have been affected by the recent economic crisis and the more long-lasting political and cultural crises. Analytically, the article disentangles the role of the Great Recession vis-à-vis other factors (such as political and party system factors, but also structural social changes or cultural opportunities) in the growing strength of populist parties in various European countries. It argues that although the economic crisis has without any doubt provided a specific ‘window of opportunity’ for the emergence of new political actors, which have capitalised on citizens’ discontent, long-lasting political factors – such as the increasing distrust toward political institutions and parties – and the more recent cultural crisis connected with migration issues have offered further fertile ground for the consolidation of populist parties in several European countries. Furthermore, as confirmed by the articles presented in the special issue, the various crises have offered differential opportunities for different types of populism – both inclusionary and exclusionary.     

The Impact of Low Trust on Economic Development: The Case of Latin America

Deficiencies of trust in many Latin American countries significantly impede efforts to attain sufficient levels of sustainable, long-term economic growth. This paper discusses the role of trust as seen through the eyes of small entrepreneurs in Latin America. Three tables are discussed that specifically portray the role of trust in society, how entrepreneurs use trust to sustain their enterprises and socioeconomic networks, and the impacts of low trust in economic development in Latin America. This paper confirms what many leading scholars have claimed over the past two decades, that a cultural legacy of fractious civil societies accompanied with disruptive and often-corrupt polities does matter when measuring human progress and economic development.     

Distributional coalitions,state strength,and economic growth: Toward a comprehensive theory of economic development

High-performing economies in the Asia-Pacific region together with only mediocre economic development in Latin America prompts the question of what explains differential economic growth rates among developing countries. Combining a statist perspective with Olson's theory of interest group formation, this research hypothesizes that nations with weak distributional coalitions will more likely experience high growth and state intervention will be effective. Using a longitudinal research design, this secondary analysis involves a comparative and interactive examination of eight Asian-Pacific and twelve Latin American countries. By considering the role of the state in interaction with distributional coalitions in society, the results indicate that approximately two-thirds of the variance in national economic growth is explained.     

Fiscal Federalism for Emerging Economies: Lessons from Switzerland?

Switzerland is one of the most non-centralized countries inthe world. A groining literature is examining the economic effectsof tax competition between the 26 Swiss cantons. Despite therelative success of Swiss federalism, most federal countriesfollow the principles of coordinated rather than competitivefederalism. We identify the institutional preconditions forwell-functioning competitive federalism in Switzerland. Thesecond part deals with the applicability of the Swiss experiencefor emerging economies in Latin America. The analysis recognizesthat most institutions identified to be crucial in the Swisscase are missing in Latin America. This leads to the policyconclusion that competitive federalism can only produce itspositive effects under certain institutional circumstances.These circumstances are often not considered when introducinglax competition in emerging economies.     

Trust in elections,vote buying,and turnout in Latin America

Although national elections in Latin America are now described as reasonably free and fair by international observations teams, electoral processes are still affected by a series of malpractices (unequal access to the media and public resources, registration problems, vote buying). These irregularities negatively affect citizens' trust in elections. In this paper, we analyze the consequences of low trust in elections and exposure to vote buying practices on electoral participation in Latin America. Using data from the 2010 wave of LAPOP surveys, we find that perceiving that the election is unfair reduces the willingness to participate in national elections, but receiving material incentives during the campaign has the opposite effect of increasing electoral participation. We also show that the effect of trust in elections on turnout is larger in countries where voting is not mandatory.     

State budget stabilization fund adoption: Preparing for the next recession or circumventing fiscal constraints?

The high rate of budget stabilization fund adoption during the 1980s is often attributed to the 1980–1982 recession. In this view, states adopted funds to prevent a recurrence of the fiscal crises experienced during that recession. An alternative hypothesis is that some funds adopted during this period were intended to circumvent tax and expenditure limit laws. We find that states with TELs in place were significantly more likely to adopt statutory funds, but were significantly less likely to adopt funds with stringent deposit and withdrawal rules, suggesting that some funds were adopted to circumvent existing fiscal constraints.     

Work,fertility, and the status of women in Mexico

Among the major transformations affecting Mexican women in recent decades were their growing participation in the labor market and the fertility decline that began in the 1970s with widespread access to contraception. Data from 3 major Mexican fertility surveys, employment surveys, and censuses are used to analyze changes in female employment and their determinants during the years of economic recession in the 1980s. The main characteristics of the Mexican fertility decline are described, and the relationship between fertility and female employment before and during the economic recession is scrutinized for different social sectors. Suggestions for research on the affects of these changes on the social condition of Mexican women are then presented. The proportions of Mexican women over 12 years old who declared themselves economically active increased from 16% in 1970 to 21% in 1979 and 32% in 1987. Until the 1970s the majority of employed women were young and single or childless. But a clear increase occurred between 1976-87 in the economic participation of older women in union. Economic participation of low income and less educated women increased as they sought work or created their own in response to deteriorating living conditions during the recession. Young women with intermediate or higher educational levels did not increase their relative presence in the labor market in the same period. The marked increase in economic participation of less educated women in union with small children was accompanied by a significant increase in manual occupations. Between 1982-87, the proportion of women aged 20-49 in nonsalaried manual occupations rose from 7.6% to 18.5%. Mexico's fertility decline has been well documented. The total fertility rate declined from 6.3 in 1973 to 3.8 in 1986, while the percentage of women in union using a contraceptive method increased from 30.2 in 1976 to 52.7 in 1987. Fertility differentials have been declining but are still considerable. The inhibitory influence of children on female labor force participation in Mexico is clear, but in the years of economic recession the most notable increase in female workers was in women with 3 or more children of whom the youngest was under 3. It appears that the influence of children on women's employment depends on the socioeconomic status of the woman as well as on the dynamism or sluggishness of the labor market. Research is needed on the significance of changes in fertility and female employment for women's status in Mexico. Several recent works have presented results of microsocial analyses of the ways in which women experience changes in their lives resulting from fertility and employment decisions. A methodological strategy for studying these changes and their influence on women's status should focus on comparisons between different generations and birth cohorts, different types of employment, and different socioeconomic statuses. Both macrosocial and microsocial forms of analysis are needed to provide a full picture.