Partisan Technocratic Cycles in Latin America

Abstract

Given their powerful position in presidential cabinets, technocrats are an important transmission mechanism for explaining economic policy choices, but have received less attention compared to other well-established channels such as elections or democratic tenure. I incorporate the role of technocratic advisors into a domestic policymaking framework. Specifically, I contend that left governments tend to appoint technocrats, or ministers with mainstream economics training, to signal their commitment to sound governance to the electorate. This partisan technocratic pattern, however, is conditioned by a country's place in its business cycle. During periods of high growth, left governments are more likely to align with their partisan preferences and appoint heterodox advisors that drift from fiscal discipline. Employing an originally constructed data index, the Index of Economic Advisors, I conduct a statistical test of 16 Latin American countries from 1960 to 2011, finding partisan shifts in technocratic appointments and fiscal governance that are conditioned by national business cycles.