POLITICAL REGIMES AND ECONOMIC PERFORMANCE IN LATIN AMERICA

POLITICAL REGIMES AND ECONOMIC PERFORMANCE IN LATIN AMERICA

J. Hartlyn & S. Morely

Chapter 2 from Hartlyn & Morely Latin American Political Economy: Financial Crises and Political Change (1986).

 A Summary

Political Regimes

They define political regimes according to

  1. The right to free association, free speech and associated rights
  2. That the leaders compete in elections for periodic validation of the right to govern
  3. The ability of all citizens to effectively participate.

Authoritarian regimes are those that are lacking in one or more of the qualities.

Regime oscillations have been particularly dramatic in Argentina, Brazil and Peru. Chile and Uruguay were democratic for years before the turn to authoritarianism [which makes their fall all the more surprising, as the norms of democracy were presumably to some extent institutionalized. This could be a foil to the Huntington argument.]

  • Regime change has been associated with dramatic shifts in economic policy [indeed the dramatic shifts in some way seem to explain the prevalence of economic based arguments for the conversion to BA.] The moderate nature of politics in Colombia may thus explain why the economic changes have been rather more gradual [e.g. the beginnings of export promotion and mini devaluations – see Hirschman and Serra].
  • They define Mexico is semi competitive, although it may be better described as liberal authoritarian. In any event, the PRI have a legitimacy stemming from the revolution [Hirschman thinks this allows for unequal growth with social stability – this type of share experience narrative does not seem to form part of the Huntington thesis], but control has been extensive with occasional bouts of repression.

Bureaucratic Authoritarian Regimes

  • Brazil 1964, Arg 1966 – the military ruled as an institution rather than as individual military leaders. They had a technocratic approach to policy. Chile fell in 1973, as did Uruguay. A new BA regime installed in Arg in 1976.
  • Depoliticize and thus scale back the demands of labour based upon the threat from left wing mobilization from below and the need to impose economic growth and stability. This involved the erosion of forms of representation, unions, parties, etc.

Economic Growth and Social Equity

  • Growth in the post war period was good. It peaked in the 60s and growth fell in the 70s. Performance was very much conditioned on whether the country underwent an enforced contraction e.g. Brazil in 1964-67.
  • The 80s were obviously a disaster.
  • Although the region made huge increases in investment over the period, the rate of domestic saving was very low, meaning it was funded by foreign saving, i.e. debt. This is with the exception of Colombia. Thus much of the investment goods carried with them a serious liability, and repayment was contingent on the ability to earn forex. In other words, capital constraints were met by borrowing.
  • The balance of payments constraints were similarly met by foreign debt.
  • The period of ISI up to 1965 saw import ratios fell, and neglected exports which also fell. As the system wound up its usefulness and BA regimes came to power which started to think about new ways of developing based on market principals. In many countries tariff levels were cautiously reduced, subsidies for exports introduced, and a more realistic exchange rate pursued. This trend for more openness continued into the 70s except in Mexico. However, ISI was still in full swing, and Brazil regressed somewhat in response to the oil shocks. However, the region was more open
  • There were great advances made in life expectancy, and education whose potential has not fully been met by the lack of absorptive power of the formal labour market. This leads to potential unrest [Huntington].
  • By and large the growth did nothing to improve the state of income inequality as capital and skills intensive growth was pursued (consumer durables etc.). This ignores to some extent upward mobility, but nevertheless the picture is bleak.

 

 

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