Business Politics and the State in Twentieth-Century Latin America

This is the first systematically comparative and historical analysis of the incorporation of business into politics in Latin America, examining business organizing and political activity over the last century in five of the largest, most developed countries of the region. Why did business end up better organized in Chile, Colombia, and Mexico than in Argentina and Brazil? The explanation for the surprising cross-national variations lays neither in economic characteristics of business nor broader political parameters, but in the cumulative effect of actions of state actors. The book also considers the consequences of these differences in organization and finds that stronger encompassing associations offer government officials opportunities for concerted policy making with business that can enhance policy implementation. The strong hand of the state in organizing business has important implications not only for theories of collective action, but also for our understanding of civil society and its potential to promote democratization. Cover......Page 1 Half-title......Page 3 Title......Page 5 Copyright......Page 6 Dedication......Page 7 Contents......Page 9 List of Tables......Page 12 List of Abbreviations......Page 13 Acknowledgments......Page 23 PART I INTRODUCTION AND ARGUMENTS......Page 27 Variations in Business Organization......Page 29 Explaining Collective Action by Business......Page 35 Unpacking Civil Society, Democracy, and State Capacity......Page 39 The Plan and Methods......Page 41 Olson’s Uneven Legacy......Page 46 The Undertheorized State......Page 48 Why State Actors Organize Business......Page 52 How State Actors Organize Business......Page 57 Labor Unions, Property Rights, and Defensive Encompassing Organization......Page 62 Geographic Factors: Country Size and Regional Concentration......Page 65 Corporate Factors: Concentration, MNCs, and Conglomeration (or Why Sectoral Analysis Is So Problematic)......Page 69 Macropolitical Factors: Development Strategies, Regime Type, and Party Systems......Page 77 Conclusion......Page 80 PART II CASES AND COMPARISONS......Page 83 Introduction......Page 85 The Construction of State Corporatism......Page 86 Some Early Autonomous Associations......Page 92 The Developmental State Reinforced Corporatism and Personal Networks......Page 95 Exclusion, Threats, and Independent Encompassing Organization......Page 99 CMHN: An Executive Committee of the Bourgeoisie......Page 102 The Consolidation of an Encompassing Peak Association......Page 107 The Twilight of State Corporatism......Page 114 Summary and Conclusions......Page 117 Introduction......Page 119 Strong Industry Associations Emerged under Vargas......Page 123 Collective Action against Goulart: Effective but Ephemeral......Page 131 Distortions and Fragmentation in Business Representation under Military Rule......Page 134 Active but Not Organized: Business Opposition to Military Rule in the 1970s......Page 138 New Voluntary Encompassing Associations†......Page 140 Circumventing Corporatism through Mass Mobilization and Internal Reform......Page 146 Conclusions and Comparisons......Page 150 Introduction......Page 154 Federacafe: State Actors Dissolved Obstacles to Collective Action in the 1920s......Page 157 ANDI Developed Institutional Capacity and Encompassing Representation......Page 165 Economy-Wide Coordination and the Creation of the Consejo Gremial......Page 171 Political Portfolios: Parties, Circulation, and Associations......Page 174 Conclusions......Page 176 Introduction......Page 178 From Depression to Consultative ISI......Page 180 Government Reformism Strengthened Encompassing Associations, 1964–1973......Page 188 From Demobilization to Remobilization under Military Dictatorship, 1973–1989......Page 190 Democratization and Business Politics in the 1990s......Page 193 Conclusions......Page 196 Introduction......Page 199 Agriculture and Industry Developed Strong Associations before Perón......Page 201 Perón Politicized Business Representation, 1946–1983......Page 203 Other Encompassing Associations and Patterns of Elite Circulation......Page 209 Redemocratization and Continued Weakness in Business Organization, 1983–2000......Page 216 Conclusions on the Argentine Case......Page 220 Broader Comparisons......Page 223 Institutional Formation and Change......Page 230 PART III IMPLICATIONS AND CONCLUSIONS......Page 233 The Discrete Charms of the Organized Bourgeoisie......Page 235 Concerted Macroeconomic Coordination......Page 238 Coordinated Policy Reform......Page 242 Trade Negotiations and Regional Integration......Page 247 Further Issues in Sectoral Governance......Page 256 Theoretical Implications: Individuals and Organizations in the Microeconomics of Collective Action......Page 260 Business Associations and Democracy: A Checkered Past......Page 267 Representation and Interest Intermediation......Page 270 Contestation, Accountability, and Transparency......Page 272 Governability and Unburdening......Page 276 Disaggregating Civil Societies and Their Effects......Page 279 States, Civil Society, and Dilemmas of Democracy......Page 283 Argentina......Page 289 State-Chartered Associations......Page 292 Independent Sector Associations......Page 293 Chile......Page 294 Colombia......Page 295 State-Chartered Associations......Page 297 Independent Financial Associations......Page 298 Other Voluntary Associations......Page 299 Business......Page 301 Government......Page 302 Government......Page 303 Business......Page 304 Other......Page 305 Currencies......Page 306 References......Page 307 Index......Page 331 Cover 1 Half-title 3 Title 5 Copyright 6 Dedication 7 Contents 9 List of Tables 12 List of Abbreviations 13 Acknowledgments 23 PART I INTRODUCTION AND ARGUMENTS 27 1 Patterns of Business Politics in Latin America 29 Variations in Business Organization 29 Explaining Collective Action by Business 35 Unpacking Civil Society, Democracy, and State Capacity 39 The Plan and Methods 41 2 States and Collective Action 46 Olson’s Uneven Legacy 46 The Undertheorized State 48 Why State Actors Organize Business 52 How State Actors Organize Business 57 Labor Unions, Property Rights, and Defensive Encompassing Organization 62 Geographic Factors: Country Size and Regional Concentration 65 Corporate Factors: Concentration, MNCs, and Conglomeration (or Why Sectoral Analysis Is So Problematic) 69 Macropolitical Factors: Development Strategies, Regime Type, and Party Systems 77 Conclusion 80 PART II CASES AND COMPARISONS 83 3 From State to Societal Corporatism in Mexico 85 Introduction 85 The Construction of State Corporatism 86 Some Early Autonomous Associations 92 The Developmental State Reinforced Corporatism and Personal Networks 95 Exclusion, Threats, and Independent Encompassing Organization 99 CMHN: An Executive Committee of the Bourgeoisie 102 The Consolidation of an Encompassing Peak Association 107 The Twilight of State Corporatism 114 Summary and Conclusions 117 4 From Corporatism to Reorganized Disarticulation in Brazil 119 Introduction 119 Strong Industry Associations Emerged under Vargas 123 Collective Action against Goulart: Effective but Ephemeral 131 Distortions and Fragmentation in Business Representation under Military Rule 134 Active but Not Organized: Business Opposition to Military Rule in the 1970s 138 New Voluntary Encompassing Associations† 140 Circumventing Corporatism through Mass Mobilization and Internal Reform 146 Conclusions and Comparisons 150 5 Business in Colombia 154 Introduction 154 Federacafe: State Actors Dissolved Obstacles to Collective Action in the 1920s 157 ANDI Developed Institutional Capacity and Encompassing Representation 165 Economy-Wide Coordination and the Creation of the Consejo Gremial 171 Political Portfolios: Parties, Circulation, and Associations 174 Conclusions 176 6 Consultation and Contention in the Making of Cooperative Capitalism in Chile 178 Introduction 178 From Depression to Consultative ISI 180 Government Reformism Strengthened Encompassing Associations, 1964–1973 188 From Demobilization to Remobilization under Military Dictatorship, 1973–1989 190 Democratization and Business Politics in the 1990s 193 Conclusions 196 7 Business Politics in Argentina 199 Introduction 199 Agriculture and Industry Developed Strong Associations before Perón 201 Perón Politicized Business Representation, 1946–1983 203 Other Encompassing Associations and Patterns of Elite Circulation 209 Redemocratization and Continued Weakness in Business Organization, 1983–2000 216 Conclusions on the Argentine Case 220 Broader Comparisons 223 Institutional Formation and Change 230 PART III IMPLICATIONS AND CONCLUSIONS 233 8 Economic Governance and Varieties of Capitalism 235 The Discrete Charms of the Organized Bourgeoisie 235 Concerted Macroeconomic Coordination 238 Coordinated Policy Reform 242 Trade Negotiations and Regional Integration 247 Further Issues in Sectoral Governance 256 Theoretical Implications: Individuals and Organizations in the Microeconomics of Collective Action 260 9 Democracy and Varieties of Civil Society 267 Business Associations and Democracy: A Checkered Past 267 Representation and Interest Intermediation 270 Contestation, Accountability, and Transparency 272 Governability and Unburdening 276 Disaggregating Civil Societies and Their Effects 279 States, Civil Society, and Dilemmas of Democracy 283 Appendix A Background Information on Major Business Associations 289 Argentina 289 Brazil 292 State-Chartered Associations 292 Independent Sector Associations 293 Voluntary Encompassing Associations 294 Chile 294 Colombia 295 Mexico 297 State-Chartered Associations 297 Independent Financial Associations 298 Other Voluntary Associations 299 Appendix B Interviews 301 Argentina 301 Business 301 Government 302 Brazil 302 Business 302 Government 302 Chile 303 Business 303 Government 303 Colombia 303 Business 303 Government 303 Mexico 304 Business 304 Government 305 Other 305 Appendix C Conversions 306 Translations 306 Currencies 306 References 307 Index 331 "This book is the first systematically comparative and historical analysis of the incorporation of business into politics in Latin America. It examines business organizing and political activity over the past century in five of the largest, most developed countries of the region to construct an explanation for why business ended up better organized in Chile, Colombia, and Mexico than in Argentina and Brazil. The explanation for the surprising cross-national variations lies in neither economic characteristics of business nor broader political parameters, but rather in the cumulative effect of actions of state officials. The book also considers the consequences of these differences in organization and finds that stronger encompassing associations offer government officials opportunities for concerted policy making with business than can enhance policy implementation. The strong hand of the state in organizing business has important implications not only for theories of collective action, but also for our understanding of civil society and its potential to promote democratization."--Jacket Part I. Introduction And Arguments : -- Patterns Of Business Politics In Latin America -- States And Collective Action -- Part Ii. Cases And Comparisons : -- From State To Societal Corporatism In Mexico -- From Corporatism To Reorganized Disarticulation In Brazil -- Business In Columbia : Well Organized And Well Connected -- Consultation And Contention In The Making Of Cooperative Capitalism In Chile -- Business Associations In Argentina: Fragmented And Politicized -- Part Iii. Conclusions And Implications : -- Economic Governance And Varieties Of Capitalism -- Democracy And Varieties Of Civil Society. Ben Ross Schneider. Includes Bibliographical References (p. 281-303) And Index. Ben Schneider's comparative historical analysis of the incorporation of business into politics in Latin America examines business organization and political activity over the last century in five of the largest and most developed countries of the region. Schneider's explanation for why business became better organized in Chile, Colombia, and Mexico than in Argentina and Brazil, lies neither in economic characteristics of business nor broader political parameters, but rather in the cumulative effect of state policy actions. Patterns of business organization and relations between business and government varied widely across Latin America in the twentieth century.