Free Market Reforms Research Articles

Javier Auyero, Poor People's Politics: Peronist Survival Networks and the Legacy of Evita. Durham: Duke University Press, 2001. 296 pp. $64.95 cloth; $19.95 paper

During the early 1990s, Argentina's Peronist Party accomplished a political magic trick: under the leadership of President Carlos Menem, Peronism turned away from its traditional commitment to social justice and an activist state, embraced the free market and neoliberal reform, and yet maintained the electoral support of the majority of the poor. For many Argentine intellectuals, this trick was easy enough to explain. According to the conventional wisdom, poor people remained loyal to Peronism, despite their rapidly declining standard of living, either because they remained under the hypnotic spell of Juan and Evita or because they were bought off by clientelist politicians offering handouts. Javier Auyero's ethnography of Peronist politics in an impoverished shantytown on the outskirts of Buenos Aires challenges these simplistic explanations. This timely and important book reconceptualizes political clientelism, a crucial phenomenon within scholarship on Latin America and beyond, while making visible and intelligible a population that has been relegated to marginality both by socioeconomic realities and by academic discourse.

Productivity Growth in Latin America: The Limits of Neoliberal Reforms

This paper explores some of the main elements behind poor productivity performance in Latin America under neoliberal reforms. I argue that free market reforms addressed only some of the elements shaping productivity growth, while neglecting others that are complementary and necessary for increases in productivity. A means comparison of different indicators for Latin America and a comparison income group shows that Latin American countries demonstrate, on average, poorer performance in technological capabilities, secondary enrollment rates and infrastructure. More activist government policies need to address these issues, if productivity is to rise in the future.

The United States and Peru: cooperation at a cost

General Preface 1. Introduction 2. U.S-Peruvian Relations Prior to 1990 3. Bilateral Policy-Making During the 1990s: Trends and Actors 4. The Bilateral Agenda from the 1980s to 2000: National Security 5. The Bilateral Agenda from the 1980s to 2000: Free-Market Reform 6. The Bilateral Agenda from the 1980s to 2000: Narcotics Control 7. The Bilateral Agenda from the 1980s to July 2000: Democracy and Human Rights 8. Conclusion Postscript

Clusters and Commodity Chains: Firm Responses to Neoliberalism in Latin America

Taking The Wheel: Auto-Parts Firms And The Political Economy Of Industrialization In Brazil. By Caren Addis. (University Park, PA: Penn State University Press, 1999. Pp. 257. $47.50 cloth, $18.95 paper.) Dynamic Agroindustrial Clusters: The Political Economy Of Competitive Sectors In Argentina And Chile. By Gabriel Casaburi (London: MacMillan, 1999. Pp. 234. $65.00 cloth.) Free Trade And Uneven Development: The North American Apparel Industry After Nafta. Edited by Gary Gereffi, David Spener, and Jennifer Bair. (Philadelphia, PA: Temple University Press, 2002. Pp. 368. $74.50 cloth, $24.95 paper.) Industrialization And Private Enterprises In Mexico. By Taeko Hoshino. (Chiba, Japan: Institute of Developing Economies JETRO, 2001. Pp. 142. N.p.) The Handbook Of Latin American Trade In Manufactures. Edited by Montague Lord. (Williston, VT: Edward Elgar, 1998. Pp. 336. $195.00 cloth.) Latin America experienced a paradigm shift in both theory and policy during the 1990s. It could be argued that this opened a new chapter in Latin America's evolution, particularly in terms of forming new relations with the world economy (Gwynne and Kay 2000). Following the neostructuralist debate, one important issue today is how competitive advantages can be generated and created—at the scale of both the nation-state and the firm. In this context much has been written on developing competitive advantage in firms and states in the world's core economies (Porter 1998), but relatively little on Latin America. Much of this literature concentrates on high technology sectors (Storper 1997). However, even books that have focused on how to develop competitive advantage in small, resource-based economies have not extended their horizons beyond Scandinavia (Maskell et al. 1998). Therefore, there [End Page 243] would appear to be serious research gaps in the study of a more grounded political economy in Latin America in the early twenty-first century. It could be argued that new conceptualizations are required, particularly in regards to links between governments and firms. Since the late 1980s most Latin American countries have introduced wide-ranging free-market reforms, liberalized markets, and have opened their economies to the forces of international competition. Now that most of these reforms have been completed, new problems have emerged for which the free-market recipe offers less help. It could be argued that imperfect markets, poor infrastructure, deficient educational systems, and weak governments are making the transition to open and competitive economies very painful (Stiglitz 2002). Many sectors are succumbing to new competitive pressures, and many firms, especially the small and medium-sized enterprises (SMEs), are finding the global marketplace a very hostile territory. There is a surprising lack of research about how Latin American firms deal with and relate to these new competitive pressures. A number of books (Casaburi 1999; Gereffi et al. 2002; Pietrobelli 1998) have appeared over the last five years, many reflecting the results of a wide variety of case studies of how manufacturing firms have adapted to neoliberal policies in Latin America. This review will not only refer to these but also attempt to set out a framework for further research. It will first examine firm responses to neoliberalism before investigating the relevance of the concepts of commodity chains and clusters—with a particular focus on agro-industrial firms and local development. Firm Responses to Neoliberalism in Latin America The character of firms in Latin America has evolved considerably since the implementation of the structural changes linked to the adoption of neoliberal reform in the 1990s. Although the neoliberal reforms did not aim at promoting specific firms, neither were they meant to be neutral. For example, export-oriented firms were supposed to perform better than those geared to domestic markets. Firms within certain sectors were also favored by much greater investment in the postreform period. Thus, in all Latin American countries, firms within the telecommunications sector needed to invest massively in order to modernize during the neoliberal period. In the...

Worker reallocation during Estonia’s transition to market

Based on consecutive labor force surveys, this study examines labor market dynamics during the first decade of the Estonian transition to market. The results show that, similar to other transition economies: Estonia’s employment and labor force was reduced; patterns of mobility profoundly changed – labor market flows intensified and previously nonexistent transitions emerged; and some groups of workers were disproportionally affected, chief among them the less educated and ethnic minorities. But Estonian fundamental free market reforms also produced labor market outcomes that differ significantly from those in other transition economies – above all, the intensity of worker and job flows in Estonia’s transition have surpassed those in most other transition economies. This was achieved by deliberate policies aimed at stimulating job creation and employment, above all by low employment protection and other policies geared toward increasing employability and strengthening the incentives of workers. Moreover, under the dynamic Estonian labor market adjustment, marginal groups have fared better than those in more protective labor markets of other transition economies.

Corporatism and Democratic Transition: State and Labor during the Salinas and Zedillo Administrations

AbstractA long process of free-market reforms and gradual democratization seems to be dismantling Mexico's corporatist system of labor representation. A thorough analysis of the country's corporatist institutions yields theoretical reasons to believe that Mexico's practice of labor relations is indeed changing. An empirical examination of the nation's labor congress and ruling party during the two previous presidential administrations (1988–2000) demonstrates that corporatism is being transformed at a practical level, although the process of reform has been complex and uneven at best. The continuing strength of an officialist labor sector will complicate the task of establishing a new system of labor representation, a problem that may have important implications for future democratic consolidation.

National Security or International Solidarity?

As corporate‐led globalization leads to unparalleled profits for some, poverty and inequality are growing at unparalleled rates throughout the world. The ineluctable rise in free market reforms contributes to rising costs for food and basic necessities for many in the third world. In this environment, nation‐states are unable to determine their economic destinies, and national labor unions are defenseless in protecting the wages and conditions of workers. The failure of neoliberal global policy to address the conditions of the poor is contributing to unprecedented international labor migration and greater economic insecurity among U.S. workers.

Federalism and the Politics of Macroeconomic Policy and Performance

Using economic data for the period between 1979 and 1995 for forty-six large federal and unitary developing nations, I analyze the impact of political federalism in the developing world on a number of measures of national economic adjustment, volatility, and crisis. The findings suggest that federalism in the ten nations where it operates has, as theoretically predicted, a negative effect on macroeconomic performance and reform. I argue that the macroeconomic and fiscal imbalances experienced by these federal nations are, in part, structurally determined by their devolved political and fiscal institutions that create incentives for subnational governments to avoid the political costs of fiscal adjustment. he political economy of stabilization and adjustment in developing nations has been a central topic of comparativists for nearly two decades. In large part this interest has been a response to the increases in international trade and capital flows, collectively known as globalization, which have increased the incentives for developing nations to discard statist models of development in favor of free market policies. With globalization, the capacity of developing nations to maintain macroeconomic stability increasingly determines their success in the search for international investment, competitiveness, and economic growth. As a result, questions about the ability of nations to adjust their economies to this reality have assumed tremendous importance. Under what conditions do governments carry through politically distasteful macroeconomic reforms? What are the key political and economic institutions that mediate a nation's insertion into and relationship with the global economy? What are the political preconditions for successful free market reforms? In addressing these questions, most research has followed in the steps of political economists such as Cameron (1984) and Gourevitch (1986), emphasizing the importance of national level institutions as mediators between the international economy and domestic politics, largely ignoring the complicated relationship between market-oriented reform efforts and the decentralization of political and fiscal power inherent in federal political systems. Likewise, the literature on the reform of the state has failed to explore the implications of federalism and subnational institutions for macroeconomic management in developing nations characterized by the devolution of political and economic power from central to provincial governments. In contrast' this research takes as its central point of theoretical departure the potentially negative consequences of federalism in the developing world for economic adjustment to the challenges of globalization.' I

The International Resource Cities Program: Building Capacity in Bulgarian Local Governments

Since 1989, the transformation of municipal governments in Bulgaria to democratic, participatory practices has been a difficult one alter 45 years of Communism. Leaders and bureaucrats accustomed to the highly centralized administration of government have found it challenging to deal with concepts such as citizen participation and public accountability. The Communist system stripped local officials of initiative and authority to attempt innovative solutions to their problems. As a result, the municipalities of Bulgaria are suffering from antiquated infrastructure and lack of citizen participation, caused largely by a central government that is still hesitant to grant resources and control over most government functions to local officials. In an effort to empower local governments in Bulgaria, the United States Agency for International Development (USAID) contracted with the International City-County Management Association (ICMA) in May 1997 to fund ICMA's International Resource Cities Program (IRC). The IRC was designed to expose municipal leaders in developing and transitional countries to the best practices of American city managers through staff exchanges. The IRC program began with six partnerships in Asia, Africa, and Latin America and expanded to 31 partnerships by gate 1998. ICMA and USAID had identified four program goals: 1. To provide technical expertise to enable cities in developing and transitional countries to address pressing urban management issues. 2. To establish substantive professional relationships between U.S. municipal governments and their counterparts in developing and transitional countries. 3. To establish new professional development opportunities for urban managers in the United States and overseas. 4. To facilitate greater understanding of the mutual benefits that can be derived when community leaders in the United States and their overseas partners achieve sustainable solutions that enhance the capacities of democratic local government. USAID identified 12 Bulgarian mayors elected in 1995 who were committed to democratic and free-market reform. USAID invited these mayors to participate in the Local Government Initiative technical assistance program. An outgrowth of USAID's work with the reformist mayors was the formation of the nonprofit Foundation for Local Government Reform (FLGR). The FLGR has two important roles: 1) it disseminates to its municipal members literature on the best practices in public administration, with emphasis on information from Western countries, notably the United States and the United Kingdom; and 2) it links Bulgarian cities with one another and with other national and international organizations devoted to municipal issues. The ICMA invited the FLGR to partner with it to establish a pilot technical program between three pairs of Bulgarian and American cities. Based on the successes of the initial pairings, USAID expanded the twinning program by four cities in 1998. The program has both long-range and short-range goals. In the short term, the American partner assists its Bulgarian counterpart with specific management problems, with emphasis on economic development, community participation, and public-private relationships. In the long term, Bulgarian cities build capacity to address problems with innovative solutions based on citizen input and professional management. Auburn, Alabama and Blagoevgrad, Bulgaria Auburn, Alabama, applied to participate in the IRC program in June 1998 and was paired with Blagoevgrad, Bulgaria. Home to Auburn University, the city of 42,000 is located in east central Alabama. Its population is diverse, with residents representing all states and more than 55 foreign countries. Auburn utilizes council-manager government with nine elected council members, including the mayor. The city government is known nationally for its innovative programs and management practices, evidenced by awards from the ICMA, the American Society for Public Administration, the United States Conference of Mayors, and the Government Finance Officers Association. …

Europe's evolving economic identity: Spain's role

Since entering the EC in January 1986, Spain has influenced Community life in a range of policy sectors, being particularly engaged in debates over agriculture, structural and cohesion funds, fisheries, external relations with Latin America and the Mediterranean, the concept of European citizenship, the Schengen provisions and asylum matters. After a difficult process of nominal convergence, Spain secured entry into the euro in January 1999 and has sought further economic integration in areas such as fiscal harmonization. This is part of its broader strategy of seeking to avoid enlargement leading to a dilution of European integration. It is in this context that Spain has pressed for a larger EU budget and institutional reforms. More recently, as the Aznar government has grown in confidence, it has sought more eagerly to influence European economic policy, with the aim of Europeanizing its own domestic free market reforms in areas such as privatization, competitiveness and tax cutting.

Neo-liberal Globalization and the Scope for Employment Policy

John Quiggin examines the options for employment policy in a global economy of unconstrained capital flows. He argues that, as is commonly discussed, globalization is simply the international component of the neo-liberal attack on social development, represented at the national level by policies of free-market reform. An alternative global policy framework, based on international cooperation and active national economic and social policy, is urgently needed.

Russian Regions in Expanding Europe: The Pskov Connection

BARGAINING OVER POLITICAL AND ECONOMIC POWER between the federal government in Moscow and the 89 subjects of the Russian Federation is now widely considered as critical to the success of Russia's democratic and free market reforms, if not to Russia's enduring viability as a state.1 The key challenge to Moscow, and to Russia as a whole, is how to harmonise different levels of political control so that economic growth could be accelerated and social tensions eased in the regions. This challenge is aggravated by the absence of reliable institutions (understood as enforceable rules of the game) regulating centre-periphery relations and the ideological and organisational disarray at the centre itself. In the regions along Russia's post-Soviet borders in particular, this problem is further complicated by a tension between geopolitical insecurity and powerful incentives for trade and economic development coming from outside Russia's borders. Relations between Moscow and the outlying regions thus become a truly 'intermestic' issue, affecting both Russia's internal post-Soviet institution building and the mode of Russia's integration into the global economy. The politics that shape relations between the Russian regions and Moscow are therefore part and parcel of Russia's evolving relations with the outside world, and the policies of regional elites are part and parcel of an increasingly complex fabric of Russia's foreign relations.

The woes of economic reform: poverty and income inequality in Fiji

Amongst the major development problems facing many of the developing countries is the increasing levels of poverty and income inequality. Economic growth in the 1950s, 1960s and 1970s was seen as a panacea for reducing poverty. While the key to development progress is still achieving economic growth, the means to do so is based on the ability of governments to move towards a free market type economy. The concern today is the impact of economic structural adjustment policies (SAPs) on the levels of poverty and inequality. In most cases the evidence on the impact of SAPs shows that despite sustained economic growth the poverty level has increased in many developing countries and Fiji is not an exception. The move towards free market reforms is being increasingly questioned as a policy measure and its ability to have positive impact on the reduction of poverty and income inequality. The criticism of the free market approach is its failure to take account of institutional, social and political factors which in many cases are the real causes of poverty and income inequality. The debate on the applicability of SAPs and the evidence of the impact of SAPs is reviewed in the case of developing countries. The level of poverty and income inequality in Fiji are discussed.

Peronism without Peron: unions, parties, and democracy in Argentina

1. Peronism, party institutionalization, and democracy 2. Sectoral elites and political parties before Peron 3. Peronism and its legacy 4. Peronism, proscription, and the rise of Augusto Vandor 5. Vandor versus Peron 6. Revolution, restoration, and repression 7. The rise and fall of renewal Peronism 8. Free-market reform and political shenanigans 9. Distributive conflict, party institutionalization, and democracy Notes Index.

Social democracy and market reform in Australia and New Zealand

Social democratic governments in Australia and New Zealand adopted policies of radical free market reform, including financial deregulation, privatisation and public sector reform in the 1980s. Because of the absence of institutional obstacles to government action, reform was faster and more comprehensive in New Zealand than in Australia. The New Zealand reforms were associated with increasing inequality and generally poor economic outcomes. There is nothing in the New Zealand experience to support the view that radical free-market economic policies are consistent with social democratic welfare policies or with social democratic values of concern for the disadvantaged. The Australian reforms were less radical, and were accompanied by some refurbishment of the welfare state. Economic performance did not improve, as anticipated by advocates of reform, but was considerably better than that of New Zealand.

Fertility in China 1982-1990: Gender equality as a complement to wealth flows theory

Some scholars claim there is little variation in Chinese fertility because of ‘coercive’ family planning policies. This research, however, demonstrates that other factors contribute to significant variation in fertility rates among China's 30 provinces/administrative divisions. Although family planning and socioeconomic development are found to explain significant amounts of variation in fertility for both the 1982 and 1990 census cross-sections, it was also found that gender equality in education had become significant by 1990. Path model results that lag the effects of 1982 socioeconomic development and gender equality in education also indicate that they both have sizable direct effects and moderate indirect effects through family planning behavior on 1990 fertility rates. Discussions include the possibility that the recent free market and institutional reforms, e.g., the decollectivization of agriculture, have contributed a social structure whereby many Chinese families have increased awareness of the opportunity costs associated with their reproductive decision making.

Value changes in Chinese advertisements from 1979 to 1995: A longitudinal study

Prior to 1979, China was relatively isolated from the world. Since then, political and economic developments in China have been profound. Limited experiments in free market reforms catapulted China from the position as one of the world's poorest nations in 1978 to the world's 10th largest economy today. Advertising, which was practically nonexistent in China prior to 1979, has become a multibillion‐dollar annual industry. Advertising in the West is viewed as a cultural artifact reflecting social values and cultural beliefs. Therefore, advertising in China may be characterized as a new window on Chinese society. This study, a longitudinal analysis of ads over a 17‐year period, attempts to identify these changes. A total of 1154 Chinese advertisements from 1979 to 1995 were content analyzed. ‘Information’ was found to be the predominant cultural value at the early stage of its return, but decreased significantly in frequency over time. Other utilitarian ads reflecting the values of ‘convenience’, ‘economy’, ‘quality’, or ‘effectiveness’ also decreased in frequency. Meanwhile, ads with Western values such as ‘competition’, ‘individualism’, ‘modernity’ or ‘sex’ increased in frequency. Finally, executional strategies employed in Chinese ads show increasing diversity over time.

Mexico's Rising Inequality

Mexico, like most other Latin American countries, has seen social inequality significantly increase as free market reforms have been introduced. The transition from protectionist to free trade policies began, not in 1994 with the inauguration of the North American Free Trade Agreement (NAFTA), but rather in 1982 under the administration of Miguel de la Madrid. The new president inherited an economic crisis caused by declining oil revenues and soaring debt payments that began at the end of the administration of his predecessor, Jose Lopez Portillo. The International Monetary Fund (IMF), in return for new loans, required a steep peso devaluation, which resulted in declining real income for the majority of Mexicans. The IMF also applied pressure for other market-oriented reforms including a shift from protectionist to free trade policies. De la Madrid followed the IMF urging and significantly lowered tariffs on imported commodities, signalling the shift away from the decades-long policy of using high tariffs to protect domestic producers. Thus began the era of neoliberal reforms that has continued up through the present, largely capstoned—rather than begun—by the inauguration of NAFTA on January 1, 1994.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

Reasons for Rising Condom Use in Vietnam

This study examines the extent of and reasons for condom use in Vietnam. Data were obtained from the 1988 Vietnam Demographic and Health Survey and the 1994 Vietnam Living Standards Survey. Findings indicate that condom knowledge rose from 45% to 76% during 1988-94. Condom use rose from 1% to 4% and represented the largest increase compared to any other modern method. Most Vietnamese rely on the IUD. IUD use increased from 33% to 66% of all current users. Vietnam has the highest proportions of IUD use and abortion in the region. Increased condom use is attributed to the shift to a free market system in the mid-1980s aggressive family planning promotion free distribution through the public health sector and sales in private pharmacies and roadside stalls. Drawbacks to free supplies include the requirement of registering ones name and travel distance. A private source of supply among users increased from 17% to 51% during 1988-94. Social marketing and the growth of new distribution channels led to increased numbers of brands of condoms. Condoms may be more popular due to greater compatibility with traditional methods which were used by 21% of married women aged 15-45 years in 1994. 31% of condom switchers shifted to rhythm or withdrawal compared to 24% of pill switchers. 9-11% of traditional method switchers shifted to the condom but only 2% shifted to the pill. The rise in condom use may indicate a preference based on traditional Chinese medical beliefs and a balance of body rhythms. Condoms were preferred by more urban users and users with higher educational and occupational status. Condoms provide protection from pregnancy and sexually transmitted diseases. Explanatory factors include decreased family size desires free market reforms compatibility with religious beliefs and Confucian culture a rising wealthy and educated class and increased adolescent and extramarital sexual activity.

The Transformation of Trade Unionism in the Capitalist and Democratic Restructuring of the Czech Republic

This article examines the changing approach of the Czechoslovak (and then Czech) labour movement: from trying to reconcile support for free market reform with the defence of democracy and workers' rights, to a clearer position of workers' interest representation. Union radicalization was spurred first by successes in defending workers' rights at state level immediately after the Velvet Revolution, then increasingly by polarization forced by the entrenchment of a confident right-wing state. While the first five years of post-communist trade unionism produced apparent social consensus and union quiescence, making the Czech Republic an island of `social peace' within a much more turbulent central and eastern Europe, 1995 appeared to mark a turning of the tide towards greater conflict and opposition.