Hostname: page-component-cd9895bd7-lnqnp Total loading time: 0 Render date: 2024-12-28T09:57:46.304Z Has data issue: false hasContentIssue false
  • English
  • Français

Organizing Interests and Coalitions in the Politics of Market Reform in Latin America

Published online by Cambridge University Press:  13 June 2011

Ben Ross Schneider
Ben Ross Schneider
Affiliation:
Northwestern University
Get access

Abstract

A recent wave of deep empirical research provides a solid basis for a comparative reassessment of the role of coalitions in the politics of market reform in Latin America in the 1990s. This research confirms earlier findings that interest groups and distributional coalitions were not major protagonists in either antireform or proreform coalitions. The new research goes further empirically into analyzing the origins of interests, especially business interests, and finds them to be much more ambiguous and dynamic than assumed in earlier studies. Consequendy, other factors, especially organizations and the evolving macroeconomic context, were stronger influences on preferences regarding reform. Given the relative weakness of interest group coalitions, the article provides a typology and preliminary analysis of other kinds of coalitions—electoral, legislative, and policy—that have become more central to reform politics. These other types of coalitions still require further theoretical elaboration and empirical investigation in order to determine how they can best be deployed to illuminate reform politics.

Type
Review Articles
Information
World Politics , Volume 56 , Issue 3 , April 2004 , pp. 456 - 479
Copyright
Copyright © Trustees of Princeton University 2004

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Haggard, Stephan and Kaufman, Robert, The Political Economy of Democratic Transitions (Princeton: Princeton University Press, 1995), 7Google Scholar.

2 The books under review, as well as others cited extensively by Corrales, Eaton, Mariscal, and Schamis, grew out of dissertations and represent a massive collective investment in empirical research: years of field research, hundreds of interviews, and endless days of archival research. See Corrales, Javier, Presidents without Parties: The Politics of Economic Reform in Argentina and Venezuela in the 1990s (University Park, Pa.: Pennsylvania State University Press, 2002)Google Scholar; Eaton, Kent, Politicians and Economic Reform in New Democracies: Argentina and the Philippines in the 1990s (University Park, Pa: Pennsylvania State University Press, 2002)Google Scholar; Mariscal, Judith, Unfinished Business: Telecommunications Reform in Mexico (Westport, Conn.: Preager, 2002)Google Scholar; and Schamis, Hector, Re-Forming the State: The Politics of Privatization in Latin America and Europe (Ann Arbor, Mich.: University of Michigan Press, 2002)CrossRefGoogle Scholar.

3 For overviews, see Waterbury, John, “The Political Management of Economic Adjustment and Reform,” in Nelson, Joan, ed., Fragile Coalitions (New Brunswick, N.J.: Transaction, 1989)Google Scholar; World Bank, World Development Report: The State in a Changing World (New York: Oxford University Press, 1997)Google Scholar; Burki, Shahid and Perry, Guillermo, Beyond the Washington Consensus: Institutions Matter (Washington, D.C.: World Bank, 1998)CrossRefGoogle Scholar; , Corrales, “Coalitions and Corporate Choices in Argentina, 1976-1994: The Recent Private Sector Support of Privatization,” Studies in Comparative International Development 32 (Winter 1998), 24–51CrossRefGoogle Scholar; and Schamis (fn. 2).

4 Harberger, Arnold, “Secrets of Success: A Handful of Heroes,” American Economic Review 83 (May 1993)Google Scholar.

5 See Teichman, Judith, The Politics of Freeing Markets in Latin America: Chile, Argentina, and Mexico (Chapel Hill, N.C.: University of North Carolina, 2001)Google Scholar.

6 Nairn, Moises, Paper Tigers andNlinotaurs: The Politics of Venezuela's Economic Reforms (Washington, D.C.: Carnegie Endowment, 1993)Google Scholar.

7 Bates, Robert and Krueger, Anne, “Generalizations Arising from the Country Studies,” in , Bates and , Krueger, eds., Political and Economic Interactions in Economic Policy Reform (Oxford: Blackwell, 1993), 455Google Scholar. For a broader review, see Geddes, Barbara, “The Politics of Economic Liberalization,” Latin American Research Review 30, no. 2 (1995)Google Scholar.

8 , Haggard and Webb, Steven, “Introduction,” in , Haggard and , Webb, eds., Voting for Reform (New York: Oxford University Press, 19)Google Scholar; and Thacker, 4.

9 Kingstone (167) cites survey data from 1991 showing large majorities of businesspeople in fact favored trade liberalization.

10 What Barbara Geddes wrote a decade ago is still true: the conventional paradigm based on the centrality of economic interests, “decrepit and battered, lives on.” Geddes (fn. 7), 214.

11 See , Haggard, “Interests, Institutions, and Policy Reform,” in , Krueger, ed., Economic Policy Reform (Chicago: University of Chicago Press, 2000)Google Scholar.

12 Weyland, Kurt, The Politics ofMarket Reform in Fragile Democracies: Argentina, Brazil, Peru, and Venezuela (Princeton: Princeton University Press, 2002)Google Scholar.

13 Bates and Krueger (fn. 7), 456; Stallings, Barbara and Peres, Wilson, Growth, Employment, and Equity: The Impact of the Economic Reforms in Latin America and the Caribbean (Washington, D.C.: Brookings Institution Press, 2000), 12Google Scholar.

14 Calvo, Ernesto, “Disconcerted Industrialists: The Politics of Trade Reform in Latin America” (Ph.D. diss., Northwestern University, 2001)Google Scholar.

15 Goldstein, Andrea and Schneider, Ben Ross, “Big Business in Brazil: States and Markets in the Corporate Reorganization of the 1990s,” in Amann, Edmund and Chang, Ha Joon, eds., Brazil and Korea (London: ILAS, 2004), 62–63Google Scholar.

16 Thacker and Kingstone both provide useful reviews. In the asset-specificity approach, large firms tend to be capital intensive and have assets dedicated to particular economic activities (i.e., more specific). Large firms therefore tend to oppose policy change in order to protect assets that cannot be shifted to other activities. On asset specificity, see especially Frieden, Jeffry, Debt, Development, and Democracy (Princeton: Princeton University Press, 1991)Google Scholar; and Shafer, D. Michael, Winners and Losers: How Sectors Shape the Developmental Prospects of States (Ithaca, N.Y.: Cornell University Press, 1994)Google Scholar. Michael Hiscox develops a new argument contending that factor mobility determines whether trade politics cleave along factor or sector lines. See , Hiscox, International Trade and Political Conflict: Commerce, Coalitions, and Mobility (Princeton: Princeton University Press, 2002)Google Scholar. For recent reviews of interests in trade politics in the literature on international political economy, see Alt, James, , Frieden, Gilligan, Michael, Rodrik, Dani, and Rogowski, Ronald, “The Political Economy of International Trade: Enduring Puzzles and an Agenda for Inquiry,” Comparative Political Studies 29 (December 1996)CrossRefGoogle Scholar; and Frieden and Martin, Lisa, “International Political Economy: Global and Domestic Interactions,” in Katznelson, Ira and Milner, Helen, eds., Political Science: The State of the Discipline (New York: Norton, 2002)Google Scholar. The first review notes that each economic model “seems to be contradicted in some significant way by the available data, and, even in combination, the models do not appear to entirely explain the observed variation. We may well have to turn to some theory that has not yet been widely discussed” (p. 699). Both reviews point to the importance of organizations in translating preferences into politics, an issue I examine later.

17 , Schneider, “Elusive Synergy: Business-Government Relations and Development,” Comparative Politics 31 (October 1998)Google Scholar. For studies that highlight the predominance of intersectoral diversification among large firms in Latin America, see , Nairn and Frances, Antonio, “The Venezuelan Private Sector: From Courting the State to Courting the Market,” in Goodman, Louis, ed., Lessons of the Venezuelan Experience (Baltimore: Johns Hopkins University Press, 1995)Google Scholar; Conaghan, Catherine, “Capitalists, Technocrats, and Politicians: Economic Policy Making and Democracy in the Central Andes,” in Mainwaring, Scott, O'Donnell, Guillermo, and Valenzuela, J. Samuel, eds., Issues in Democratic Consolidation (Notre Dame: University of Notre Dame Press, 1992)Google Scholar; Silva, Eduardo, The State and Capital in Chile: Business Elites, Technocrats, and Market Economics (Boulder, Colo.: Westview, 1996)Google Scholar; Kessler, Timothy P., “Political Capital: Mexican Financial Policy under Salinas,” World Politics 51 (October 1998), 42CrossRefGoogle Scholar; and , Schneider, Business Politics and the State in 20th Century Latin America (New York: Cambridge University Press, 2004), 49–51Google Scholar.

18 Naim(fn. 6), 86.

19 See Bates and Krueger (fn. 7), 457; and Schamis (fn. 2).

20 Schamis (fn. 2); Murillo, M. Victoria, “Political Bias in Policy Convergence: Privatization Choices in Latin America,” World Politics 54 (July 2002)CrossRefGoogle Scholar; Kessler (fn. 17); Teichman (fn. 5); , Haggard, “Democratic Institutions, Economic Policy, and Development,” in Clague, Christopher, ed., Institutions and Economic Development (Baltimore: Johns Hopkins University Press, 1997), 125Google Scholar.

21 Corrales(fn.3),25.

22 Ibid.

23 See Pinheiro, Armando and , Schneider, “The Fiscal Impact of Privatisation in Latin America,” Journal of Development Studies 31 (June 1995)CrossRefGoogle Scholar. In the sale of Telmex, for example, government officials maintained a vertical monopoly with postprivatization restrictions on competition in order to attract foreign capital, reduce the public debt, and develop the domestic capital market: “in the context of a fiscal crisis, maximizing the sale price of Telmex was an important government objective ...” Mariscal (fn. 2), xv.

24 Corrales (fn. 3) emphasizes this point and offers examples of businesses in Argentina that prior to 1991 bought privatized firms and then turned to oppose other privatizations.

25 Beyond the extreme case of Chile in the 1970s, much of the crucial empirical work on the political behavior of proreform rent seekers remains to be done. For example, Argentina is a crucial case of rent creation through “market” reform, yet scholars still disagree on the role of big business in the process of privatization. Teichman (fn. 5), for example, claims that large conglomerates were major beneficiaries of privatization and stalwart supporters of Menem, even before he was elected. Large conglomerates “made heavy campaign contributions to the Peronist Party: officially the top six conglomerates are reported to have contributed $700,000 each to Menem's 1989 campaign, while Bunge and Born claim that its actual contribution was $3 million (U.S.)” (p. 125, see also pp. 117-24). Cor-rales (fn. 3), by contrast, argues that some large firms supported Menem's candidacy precisely because they thought he would stall market reform (p. 29).

26 Haggard and Kaufman (fn. 1), 10.

27 See Stokes, Susan, Mandates and Democracy: Neoliberalism by Surprise in Latin America (New York: Cambridge University Press, 2001)CrossRefGoogle Scholar.

28 See Stark, David and Bruszt, Laszlo, Postsocialist Pathways: Transforming Politics and Property in East Central Europe (New York: Cambridge University Press, 1998)Google Scholar. In their comparative analysis of market reform in East Europe, they found that “institutionally constrained executives were more capable of carrying out sustained reform.” See also , Stark and , Bruszt, “One Way or Multiple Paths: For a Comparative Sociology of East European Capitalism,” American Journal ofSociology 106 (January 2001), 1135Google Scholar.

29 See Haggard (fn. 11), 40; and especially Eaton (fn. 2), 4.

30 Cox, Gary W. and McCubbins, Mathew D., “The Institutional Determinants of Economic Policy Outcomes,” in , Haggard and , McCubbins, eds., Presidents, Parliaments, and Policy (New York: Cambridge University Press, 2002), 27Google Scholar.

31 See Bresser-Pereira, Luiz Carlos, “The 1995 Public Management Reform in Brazil: Reflections of a Reformer,” in , Schneider and Heredia, Blanca, eds., Reinventing Leviathan (Miami: North-South Center Press, 2003)Google Scholar; Kingstone, Peter and Power, Timothy, eds., Democratic Brazil: Actors, Institutions, and Processes (Pittsburgh: University of Pittsburgh Press, 2000)Google Scholar; and Melo, Marcus, Reformas Constitucionals no Brasil: Instituições e Processo Decisório (Constitutional reforms in Brazil: Institutions and decision making) (Rio de Janeiro: Revan, 2002)Google Scholar.

32 Weyland (fn. 12).

33 Edward Gibson offers one of the best examples of the interaction of reform policies and the electoral strategies of the reforming governments in Mexico and Argentina. See , Gibson, “The Populist Road to Market Reform: Policy and Electoral Coalitions in Mexico and Argentina,” World Politics 49 (April 1997)Google Scholar.

34 See, for example, Haggard and Kaufman (fn. 1), 166-70. For a full review, see Eaton (fn. 2), 7-14.

35 Siavelis, Peter, The President and Congress in Postauthoritarian Chile: Institutional Constraints to Democratic Consolidation (University Park, Pa.: Pennsylvania State University Press, 2000), 125Google Scholar.

36 The comparative literature on legislative coalitions in presidential regimes is incipient, and what does exist rarely focuses on economic reform. However, several pioneering studies have added this major new factor to analyses of governance and governability in Latin America, as well as to debates on the relative merits of presidential and parliamentary regimes. See Siavelis (fn. 35); Neto, Octavio Amorim, “Presidential Cabinets, Electoral Cycles, and Coalition Discipline in Brazil,” in Morgenstern, Scott and Nacif, Benito, eds., Legislative Politics in Latin America (New York: Cambridge University Press, 2002a)Google Scholar; Amorim Neto, “Presidential Policy-Making Strategies and Cabinet Formation in Latin America's Presidential Democracies, 1946-95” (Paper presented at the Conference on “El Gobierno Divido en Mexico,” Mexico City, May 2002b); Deheza, Grace Ivana, “Gobiernos de Coalición en el Sistema Presidencial: América del Sur,” in Nohlen, Dieter and Fernández, Mario, eds., El Presidencialismo Renovado (Presidentialism renewed) (Caracas: Nueva Sociedad, 1998)Google Scholar; and Bernhard Thibaut, “El Gobierno de Democracia Presidencial: Argentina, Brasil, Chile y Uruguay en una Perspectiva Comparada,” in Nohlen and Fernández.

37 Lisa Baldez and John Carey, “Budget Procedure and Fiscal Restraint in Posttransition Chile,” in Haggard and McCubbins (fn. 30), 116-18.

38 Siavelis(fn. 35), 55.

39 Amorim Neto (fn. 36,2002a), 59.

40 See Ames, Barry, The Deadlock of Democracy in Brazil (Ann Arbor, Mich.: University of Michigan Press, 2001)CrossRefGoogle Scholar and , Mainwaring, Rethinking Party Systems in the Third Wave of Democratization: The Case of Brazil (Stanford, Calif.: Stanford University Press, 1999)Google Scholar versus the contrasting revisionist views in Figueiredo, Argelina Cheibub and Limongi, Fernando, Executivo e Legislativo na Nova Ordem Constitucional (Executive and legislature in the new constitutional order) (Rio de Janeiro: Fundação Getúlio Vargas, 1999)Google Scholar.

41 Amorim Neto (fn. 36, 2002a), 50, 69-75.

42 Amorim conducted a broader statistical analysis of postwar democratic governments in Latin America and found that presidents are more likely to appoint coalition cabinets if they lack constitutional decree powers, if they are closer to the center of the political spectrum, and if their parties have a sizable bloc in the legislature (fn. 36,2002b), 18.

43 Corrales (fn. 2); and Eaton (fn. 2).

44 Policy coalitions also go by several other names, such as “iron triangles,” “bureaucratic rings,” “change teams,” “technocracy,” or “policy networks.” See, respectively, Cox and McCubbins (fn. 30), 53-54; Cardoso, Fernando Henrique, Autoritarismo e Democratização (Authoritarianism and democratization) (Rio de Janeiro: Paz e Terra, 1975)Google Scholar; , Waterbury, Exposed to Innumerable Delusions: Public Enterprise and State Power in Egypt, India, Mexico, and Turkey (New York: Cambridge University Press, 1993)Google Scholar; , Schneider, “The Material Bases of Technocracy: Investor Confidence and Neoliberalism in Latin America,” in Centeno, Miguel and Silva, Patricio, eds., The Politics of Expertise in Latin America (London: Macmillan, 1998)Google Scholar; and Teichman (fn. 5). Teichman offers the fullest elaboration of the policy network approach.

45 Teichman (fn. 5), 18.

46 Ibid., 27.

47 Bates and Krueger (fn. 7), 463; and Schneider (fn. 44).

48 Williamson, John, The Progress ofPolicy Reform in Latin America (Washington, D.C.: Institute for International Economics, 1990)Google Scholar.

49 See also Haggard (fh. 11), 49.

50 See Heredia and Schneider, “The Political Economy of Administrative Reform in Developing Countries,” in Schneider and Heredia (fn. 31).

51 Eaton (fn. 2), 5.

52 , Weyland, “‘Growth with Equity’ in Chile's New Democracy?” Latin American Research Review 32, no. 1 (1997)Google Scholar; and Boylan, Delia, “Taxation and Transition: The Politics of the 1990 Chilean Tax Reform,” Latin American Research Review 31, no. 1 (1996)Google Scholar.

53 Bresser-Pereira (fn. 31); and Melo (fn. 31).

54 Basic political interests have also been subjected to closer empirical investigation, and simple assumptions of a primary interest in reelection rejected in favor of more inductive, contextualized characterizations. See especially Eaton (fn. 2); and Morgenstern and Nacif (fn. 36).

55 See, for example, Frieden (fn. 16), 5-6.

56 Bates and Krueger (fn. 7), 456. This conclusion is especially significant coming from two authors who did much to propagate rent-seeking models of policy making, which in turn influenced early exaggerated expectations on resistance to market reforms. See , Krueger, “The Political Economy of the Rent-Seeking Society,” American Economic Review 64 (June 1974)Google Scholar.

57 See, for example, Teichman (fn. 5), 56.

58 Haggard (fn. 11), 28.

59 Gibson (fn. 33).