Models of Economic Liberalization: Regime, Power and Compensation in the Iberian-American Region

Abstract:     
Although the Iberian-American economies started to liberalize a decade earlier, the analytic conceptualization of divergent reform paths has been more pervasive for the post-communist world that for the former mixed economies. This article seeks to provide a unified framework for explaining the politics of neoliberal reform in the Iberian-American region through a focus on the compensatory policies aimed at industrial business and labor. The study posits three types of industrial and labor adjustment after decades of import-substitution industrialization: Statist (Spain 1982-96 and Brazil 1990-2002), Corporatist (Argentina 1989-99 and Portugal 1985-1995), and Market-Driven (Chile 1973-89 and Peru 1990-2000). Each model is characterized by three dimensions, (1) the policy-making pattern, (2) the actors compensated and (3) the types of compensation. Two main variables explain the alternative paths: regime type and the nature of the prior ISI actors, more specifically the organizational and economic power of private industry and unions as they emerge from the inward-oriented model.

Keywords: Latin America, Southern Europe, Economic Liberlization

working papers series