Big Business and Bureaucratic Authoritarianism in Uruguay: A Network-Based Story of Policy Infiltration for Self-Preservation

Abstract

Between 1973 and 1985, Uruguay was ruled by a Bureaucratic-Authoritarian regime. Following regional trends, this period mostly coincided with the stagnation of the industrialization model oriented toward the domestic market. The transition to an open-market model, however, did not exhibit the same characteristics of other countries like Chile, where the adoption of free-market reforms was more radical, displacing previous institutions. This chapter argues that the organization of corporate Uruguay around business groups was a crucial element for neutralizing potential negative consequences of the economic reforms; in turn, it shaped the liberalization process. Businesses applied two main adaptive strategies: direct and individualized participation in government, and financial mismanagement. The analysis is based on a combination of historical and network analysis to show how the structure of the business community and corporate finance made these two adaptive strategies possible. As a result, the corporate governance structure of Uruguay was not dramatically altered by either the dictatorship or the liberalization process.