Universität zu Köln

The Political Economy of Neoliberal Resilience. Developmental Regimes in Latin America and Eastern Europe

Madariaga Espinoza, Aldo (2015) The Political Economy of Neoliberal Resilience. Developmental Regimes in Latin America and Eastern Europe. PhD thesis, Universität zu Köln.

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    Abstract

    In the last decades of the twentieth century, Latin American and Eastern European countries experienced thorough processes of economic liberalization and became the hallmark of the neoliberal development model. After severe economic crises, increased social inequality and the associated political turmoil, many countries experienced reform backlashes or built alternative development models. A handful of countries, however, retained their neoliberal development models over time. What explains the resilience of neoliberalism in these countries? I provide a twofold answer: first, specific actors formed coalitions that pursued and defended neoliberal policy alternatives over time; second, specific institutional mechanisms allowed these actors to remain powerful in order to veto changes. To arrive to this answer I conducted a small-n research, focusing on four countries with substantive market reform experiences, two representing resilience (Chile and Estonia) and two representing discontinuity (Argentina and Poland). I combined within-case methods (process tracing) and comparative methods to determine causal links between the explanatory factors (coalitions and institutions) and the outcome to explain (neoliberal resilience). To assess neoliberal resilience, I analyzed the trajectory of two policy domains: exchange rate regimes and industrial policy. The study covers the period from the introduction of market reforms (ca. 1970-1990) until the 2007-8 crisis. Theoretically, I combined insights from the literature on the political economy of policy reforms, international political economy theories of policy preferences, and institutional change theories from political science. In the first part, I analyzed the formation of coalitions supporting and opposing neoliberalism. I focused on three actors: capital, divided into four sectors (financial, public utilities, competitive and non-competitive); political parties, divided on the right-left spectrum; and labor unions. I assessed their strength using quantitative data (sectorial national accounts, electoral data, unionization and collective bargaining levels), traced their preferences for exchange rate regimes and industrial policy using interviews and newspaper articles, and compared the dynamics of coalition formation and support across cases. In the second part I analyzed the political and institutional mechanisms that allowed neoliberal actor constellations to remain powerful over time and veto changes to established policies. I used specialized literature, interviews and newspaper articles to identify and test the relevant mechanisms. The main findings of my dissertation are: 1) neoliberal development projects have been pursued and defended by coalitions between the financial and competitive economic sectors, and right-wing parties; 2) non-competitive economic sectors, labor unions and left-wing parties have opposed neoliberalism (successfully in the cases of discontinuity, unsuccessfully in the cases of resilience); 3) neoliberal coalitions used three mechanisms to maintain their power resources over time: creating business supporters through privatization, blocking opposition using restrictive electoral rules and labor market institutions, and institutionalizing central bank independence and fiscal spending rules. These mechanisms have been used in different combinations in Chile and Estonia to empower actors defending neoliberalism, weaken actors opposing neoliberalism, and prevent significant changes in exchange rate regimes and industrial policy. Conversely, these mechanisms have been either absent or worked in opposite directions in Argentina and Poland.

    Item Type: Thesis (PhD thesis)
    Creators:
    CreatorsEmail
    Madariaga Espinoza, Aldoaldomadariaga@gmail.com
    Corporate Creators: Max Planck Institut für Gesellschaftsforschung, Universität zu Köln
    URN: urn:nbn:de:hbz:38-63649
    Subjects: Political science
    Economics
    Uncontrolled Keywords:
    KeywordsLanguage
    DevelopmentEnglish
    NeoliberalismEnglish
    Latin AmericaEnglish
    Eastern EuropeEnglish
    Faculty: Wirtschafts- u. Sozialwissenschaftliche Fakultät
    Divisions: Wirtschafts- u. Sozialwissenschaftliche Fakultät
    Language: English
    Date: 2015
    Date Type: Publication
    Date of oral exam: 29 June 2015
    Full Text Status: Public
    Date Deposited: 14 Oct 2015 16:04:53
    Referee
    NameAcademic Title
    Streeck, WolfgangProf. Dr. Dr. h. c.
    Beckert, JensProf. Dr.
    Greskovits, BelaProf. Dr.
    URI: http://kups.ub.uni-koeln.de/id/eprint/6364

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