The politics of neoliberal economic reform in South America, 1980–1994

Abstract

What political conditions facilitate market-oriented reform? Prior research suggests that neoliberal policies are inherently unpopular, politically hazardous, and consequently dependent upon the existence of strong and relative autonomous governments. This study reassesses the political costs and benefits of market-oriented reform and attempts to offer insights for future theory building by exploring five hypotheses on the basis of the post-1980 South American experience. The findings suggest that the political obstacles to reform have been exaggerated and theoretically misspecified. Neoliberal policies are less the product of the triumph of technocratic expertise over political calculus than of the structure of political incentives and opportunities created by broader sets of factors, including economic circumstances, structural conditions, pluralist pressures, institutional constraints, and international linkages.