Understanding Latin American political economy: varieties of capitalism or fiscal sociology?

Abstract

Ben Schneider and David Soskice trace the origins and reproduction of Latin America's ‘hierarchical’ market economies to the perverse synergy of: 1) free-market economic reforms that systematically atomize (or demobilize) low-income constituencies; 2) majoritarian presidential elections that no less systematically ensure middle-class support for an upper-class agenda marked by labour market dualism, educational elitism, corporate conglomeration, and associational underdevelopment; and 3) proportionally-elected legislatures that are particularly susceptible to corporate influence. I worry that in their haste to incorporate Latin America into the varieties of capitalism framework, however, Schneider and Soskice: 1) overlook the Iberian roots of the region's principal economic institutions; 2) confuse symptoms like ignorance, informality, and corporate conglomeration with causes like inequality and fiscal underdevelopment; and 3) ignore not only the possibility but the likelihood of left-wing mobilization in the wake of democratization and international integration. And I therefore conclude with an alternative account that addresses not only the historical roots but the contemporary contradictions of the region's admittedly benighted political economies.