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Banking crises and social policy: the case of Latin America and the Caribbean

Published online by Cambridge University Press:  09 March 2020

Rana S. Gautam
Rana S. Gautam*
Affiliation:
Department of Sociology, Social Work, & Anthropology, Christopher Newport University, Newport News, VA, USA
*
*Corresponding author. Email: [email protected]
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Abstract

This paper examines the social policy consequences of systemic banking crises or financial crises in 13 Latin American and Caribbean countries between 1990 and 2010. It takes a rationalist approach to political economy to analyse the effect of these crises on aggregate social policy spending and on four distinct social welfare policy programmes – education, health, housing, and social security – benefits of which vary across social groups. The results indicate that banking crises have a statistically strong negative effect on aggregate social expenditure, but the impact is not uniform across the four programmes. While social security spending increases during the course of crises, health and education expenditures decrease in the same period. The results reinforce the view that distributional conflicts overshadow governments’ response and the burden of crises is unevenly shared in a heterogeneous society. These findings are robust to alternative specifications.

Keywords

banking crisescomparative social policywelfare statepolitical economyLatin America and the Caribbean
Type
Research Article
Information
Journal of International and Comparative Social Policy , Volume 31 , Issue 3 , October 2015 , pp. 209 - 233
Copyright
Copyright © 2015 Taylor & Francis

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