Does Free-Market Reform Induce Protest? Selection, Post-Treatment Bias, and Depoliticization

Abstract

AbstractAcross myriad literatures, it is widely held that expanding economic grievances induce violence, protest, or other forms of backlash. In Latin America, where economic liberalization deepened the downturn of the ‘lost decade’ of the 1980s (and 1990s), reform has been tightly associated with protest and mobilization. At the same time, liberal economic reforms have proven to be remarkably durable, even where long-promised benefits are hard to discern. This article makes the case that economically liberal reforms, despite inducing or deepening severe and sustained economic downturns, have actually undermined political protest. Previous work confirming the conventional wisdom foundered on two main methodological problems. First, selection into economic reform was a consequence of the very economic pain and macroeconomic imbalances it also served to induce. Secondly, because of this, these key (macro)economic characteristics are both pre- and post-treatment. Utilizing a marginal structural model approach to assess the impact of economic liberalization on protest outcomes net of this selection process, and the prior history of treatment, the study finds that painful reform reduces political protest even as it heightens grievances. This depoliticizing dynamic helps to explain the surprising durability of liberal reforms in Latin America.