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Embedding Neoliberal Reform in Latin America

Published online by Cambridge University Press:  13 June 2011

Marcus J. Kurtz  and
Sarah M. Brooks
Sarah M. Brooks
Affiliation:
Ohio State University, kurtz.61@polisci.osu.edu Ohio State University, brooks.317@polisci.osu.edu
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Abstract

Although research in the advanced industrial nations has identified a supportive link between an expanded public sector role and economic openness, studies of the developing world have been much less sanguine about the possibilities of broader state intervention in the context of economic liberalization. The authors investigate the possibility that governments in Latin America may “embed” economic openness in a broader public sector effort. They find that while several countries have moved toward an orthodox neoliberal model with minimal state interventions, other Latin American governments have maintained a broader public sector presence on the supply side of the economy while pursuing deep liberalization. They call the latter strategy “embedded neoliberalism,” to distinguish it from the more egalitarian ambitions of postwar embedded liberalism. Cross-sectional time-series analysis reveals that embedded neoliberal strategies in Latin America have grown out of a legacy of advanced import-substitution industrialization and have been promoted by nonleft governments, except in cases where labor is very strong. The orthodox neoliberal model, by contrast, has emerged where postwar industrial development was attenuated and where labor unions were weakened considerably by the debt crisis.

Type
Research Article
Information
World Politics , Volume 60 , Issue 2 , January 2008 , pp. 231 - 280
Copyright
Copyright © Trustees of Princeton University 2008

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110 Each of these differenced models naturally includes as a control the lagged level of the dependent variable as the change score is very likely in part dependent upon the antecedent level (that is, at high levels further increases are likely to be smaller). No correction for autocorrelation is made as kgrange multiplier tests indicate its absence. The time trend variable was omitted as the multivariate augmented Dickey-Fuller test indicated stationarity.