Tuesday, September 11, 2018

Economic Policy Under Latin American Conservatives

Glen Biglaiser and Ronald J. McGauvran, "Political Mandate and Clarity of Responsibility: Economic Policies under Rightist Governments in Latin America," Latin American Research Review 53, 2 (2018): 250-272.


Since the mid-1990s, some rightist governments in Latin America have adhered to a strict market orientation while others have shown less attachment to doctrinaire neoliberal policies, a puzzle as rightists are expected to favor minimal government intervention in the economy. In an environment over the past two decades in which market-oriented policies, in general, have grown increasingly unpopular with many Latin Americans, we contend that rightists have less political cover to endorse neoliberal policies. Using panel data for eighteen Latin American countries from 1995 to 2015, we find that, because of the clarity of responsibility that occurs under political mandates and the unpopularity of market reforms, mandate-holding rightist governments will tend to go against their ideological preferences and decrease neoliberal policies. Our findings indicate that as presidential vote margins increase and responsibility for unpopular economic policies becomes clearer, rightist executives will be less willing to support such policies, but only to a point. The results suggest that clarity of responsibility can influence presidential decision-making concerning unpopular policies, especially microeconomic policies, but this influence diminishes as presidents become more electorally secure.
The upshot here is that conservative governments prefer neoliberal policies but find them impractical to push because it gets pushback and they lose support. I don't see this as a puzzle as much as the authors do--it has been a long time since anyone expected conservative governments to act like they did in the early 1990s. Even the conservative Venezuelan opposition has taken pains to say it wouldn't dismantle everything.

There is an insight worth mentioning in particular. Conservative presidents are more likely to hold onto macro-level policies (e.g. trade openness) and reform micro-level ones (e.g. wages). This is an important distinction because "neoliberal" does often get treated as a single thing rather than a large collection of different policies at different levels. But you can sign a free trade agreement while also creating new laws to protect workers.


Mandramas 8:20 AM  

Ok, so is Macri the outlier here?

Greg Weeks 8:30 AM  

I don't think so. He came to office promising big reforms and then backed down.

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