Abstract
The integration of Latin American countries into the global economy has historically proceeded through the export of primary commodities, a dependency that has long exposed them to developments in core industrial nations, changing terms of trade, and “resource curse” externalities. However, in the early 2000s, a new commodity boom coincided with the arrival of left-of-centre administrations across the region forwarding post-neoliberal visions of development where extraordinary export rents were destined to expand public spending and progressive welfare policies. While the relationship between Latin America’s left turn and this latest boom has been well-covered in the literature, much less has been said about developments in the 2010s, when the end of that boom sent many of these projects tumbling, fuelling political discontent and facilitating the arrival of conservative administrations in places like Argentina, Brazil, and Ecuador, among others. Thus, this article explores the relationship between global integration and political change by looking at the case of Argentina, and developments during the second presidency of Cristina Fernández de Kirchner (2011–2015), when falling agricultural commodity prices aggravated social tensions and political conflicts as the government sought to navigate a “governance puzzle” through which it attempted to square high public expectations for revenue redistribution with falling fiscal collection. In particular, we analyse the co-evolution of global economic conditions, macroeconomic disequilibria, and domestic political pressures, considering how this led the government to lock itself into a distributive conflict pattern that dissatisfied both opposition sectors and important segments of its support base. As such, this case study illuminates the structural challenges confronted by governments in developing economies pursuing ambitious developmental and socially-progressive agendas, while elaborating the political implications that current account and fiscal disequilibria may produce in these contexts.
Highlights
The Latin American pink tide describes a period of major economic and political change between the early 2000s and mid-2010s, when several left-of-center administrations promoted “post-neoliberal” visions of development that combined commodity-led exports, active state intervention in the economy, and marked welfare and wealth redistribution policies
While the idea that Latin American economies are vulnerable to global economic shocks is far from novel, in this article we investigate the governance challenge the end of the commodities boom presented to progressive administrations
We consider that Argentina during this period offers an “extreme” case study of distributive conflict in a developing economy: a country with a sizable commoditydependent economy with high and recurrent macroeconomic instability, where political competition and conflict largely revolve around distributive issues and developmental visions
Summary
The Latin American pink tide describes a period of major economic and political change between the early 2000s and mid-2010s, when several left-of-center administrations promoted “post-neoliberal” visions of development that combined commodity-led exports, active state intervention in the economy, and marked welfare and wealth redistribution policies. During the period in question the country experienced the pattern of macroeconomic boom-and-bust and political change we are interested in discussing: an upward phase where the government drew on agricultural export rents to fund expansive welfare and income policies, which contributed towards raising living standards and granted Kirchnerismo political dominance, and an highly contentious downward phase as macroeconomic conditions deteriorated, leading to a presidential defeat in 2015 against a right-wing candidate (Levitsky and Murillo, 2008; Wylde, 2013; Lupu, 2016) In this regard, we consider that Argentina during this period offers an “extreme” case study of distributive conflict in a developing economy: a country with a sizable commoditydependent economy with high and recurrent macroeconomic instability, where political competition and conflict largely revolve around distributive issues and developmental visions. We triangulate insights on Argentina’s political and economic developments drawn from academic bibliographies in comparative political science, economic history, and development economics, findings in the grey literature produced by relevant economic institutions and think tanks (i.e. ECLAC, OECD, World Bank), and analyses of macroeconomic data drawn from Argentine official sources, international organizations’ databases, and local economic consultancies.
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