R. Espinal

Development and Change Vol. 23

 A Summary

In a Nutshell

The notion of development has been changing in Latin America, as well as the ideas linking democracy and development.  Modernization theory has seen several challenges. Firstly it was surprising given the progress of modernization in the 50s and 60s that authoritarian regimes emerged where the theory posited a strong link between socio-economic development and democracy. Dependency theory then argued that democracy was not viable in the midst of widespread poverty and exploitation – a strong state was needed to pursue the much needed redistributive agenda. And yet contrary to the predictions of both of these theories democracy re-emerged in a time when poverty not only persisted but had intensified. Some  academics stressed ideological shifts in favour of democracy as a result of discredited military governments. Others thought it emerged due to international pressures, particularly coming from the US.

From Developmentalism to Neoliberalism

  • From the 1940s – 70s the state remained the central actor in the process of development. And yet it was the negative effects of developmentalism and particularly the recession in the mid-70s that led to a change of thought in the region, pioneered by Chile, and later followed in the 80s by the majority of LA economies. The state increasingly was the target of criticism.
  • In the midst of economic decline and crisis, neoliberalism that emphasised the market as the best means of organising production and income distribution, became the dominant ideology. The crisis served to unravel the problems inherent in developmentalism, and also liberalism was seen as a sign of modernity. The problem of development was no longer cast in terms of dependency or periphery, but as a problem of a corrupt and inefficient state that was preventing growth and modernization.
  • Yet with the exception of those that could form links with the international economy, the adjustment process proved catastrophic and the emphasis on technocratic leadership was antagonistic to a broad-based democracy.
  • As the region began to democratise, civilian governments were engaging with neoliberal reforms. This was an innovation as previously they had been imposed from the top down.  Additionally it acquired a more broad interpretation and application, moving from questions of a purely economic nature to an ideology that was redefining the relationship between the citizens and the state.

Electoral Politics and the New Right

  • As the dominant discourse in the region was neoliberalism, the populist parties that came to power were forced to implement policies that were in many ways alien to their traditions (PRI, Peronistas). These policies in turn helped to weaken corporatist ties with e.g. labour. E.g. Menem, fujimori etc.
  • What was curious was that the reforms, ideologically the mainstay of right of centre parties, were enacted by populists. This is because the populists were able to transform their politics to adopt an neoliberal agenda which pre-empted the growth of the parties of the Right. The Right were also unable to organize successfully.
  • In Mexico the Salinas government accepted neoliberal reforms, and confronted powerful union bosses, thus challenging corporatist ties. This is because the policies of export promotion, trade liberalisation etc. required weaker unions as the policies were in many respects an attack on organised labour.

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