The Political Economy of the Welfare State in Latin America : Globalization, Democracy, and Development

This book, published in 2007, was one of the first attempts to analyze how developing countries through the early twenty-first century have established systems of social protection, and how these systems have been affected by the processes of globalization and democratization. The book focuses on Latin America to identify factors associated with the evolution of welfare state policies during the pre-globalization period prior to 1979, whilst studying how globalization and democratization have affected governments' fiscal commitment to social spending. In contrast with the Western European experience, more developed welfare systems evolved in countries relatively closed to international trade, while the recent process of globalization that has swept the region has put substantial downward pressure on social security expenditures. Health and education spending has been relatively protected from greater exposure to international markets and has actually increased substantially with the shift to democracy. Cover......Page 1 Half-title......Page 3 Title......Page 5 Copyright......Page 6 Dedication......Page 7 Contents......Page 9 Tables and Figures......Page 13 Acknowledgments......Page 19 1 Introduction......Page 23 1.1 The Welfare State: Review of Main Theories......Page 28 1.2 The Welfare State: Latin America in Comparative Perspective......Page 32 1.3 Methodology......Page 38 1.4 Chapter Outline......Page 42 2 The Historical Evolution of Welfare Systems in Latin America: Qualitative Comparative Analysis......Page 46 2.1 The Emergence of Welfare Systems in Latin America......Page 48 2.2 Brief Review of Main Theoretical Perspectives: Defining the Independent Variables......Page 53 Economic Development......Page 54 Trade Openness......Page 56 Democracy......Page 59 Left-Labor Power......Page 63 2.3 Qualitative Comparative Analysis through the Boolean Methodology......Page 70 Chile......Page 76 Uruguay......Page 79 Argentina......Page 81 Brazil......Page 84 Costa Rica......Page 86 2.5 The Trajectories of the Group of Low Welfare Effort Countries (Non-Welfare States)......Page 88 2.6 Summary and Conclusion......Page 91 APPENDIX 2.1: BASIC FEATURES OF QCA......Page 94 Prime Implicated Variables and Reduced Equations......Page 97 3 Theoretical Framework and Main Hypotheses......Page 99 Wagner’s Law......Page 101 Baumol’s Cost Disease......Page 102 The Role of Budget Constraints: Revenue Effort and Fiscal Deficits......Page 105 Globalization: The Critical Importance of Trade Openness and Capital Mobility......Page 111 Trade Openness and the Welfare State: How Does Trade Integration Affect Welfare Effort?......Page 112 Capital Mobility......Page 123 The Role of Democracy in the Previous Welfare State Literature......Page 127 Theoretical Perspectives on the Link between Democracy and Social Spending......Page 129 The Measurement of Democracy......Page 135 Parties, Unions, and Popularly Based Governments......Page 137 Voter Turnout......Page 143 Constitutional Structures......Page 145 3.3 Conclusion......Page 147 4 Determinants of Social Spending in Latin America: A Time-Series Cross-Section Analysis, 1973–2003......Page 149 4.1 Data Sources, Research Design, and Model Specification......Page 150 Dealing with Heterogeneity in Causal Processes......Page 153 The Dependent Variable......Page 156 Globalization......Page 158 Popularly Based Presidents......Page 160 Other Relevant Economic and Control Variables......Page 161 4.3 The Model......Page 164 Aggregate Social Spending......Page 167 The Impact of Globalization......Page 170 Fiscal-Constraint Variables......Page 171 Control Variables......Page 172 Disaggregated Results of Social Security and Health and Education......Page 173 Globalization......Page 178 Fiscal Constraints......Page 182 Political Variables......Page 183 Extension: Interaction Effects......Page 184 4.5 Conclusion......Page 189 APPENDIX 4.1: DESCRIPTION OF VARIABLES......Page 192 APPENDIX 4.2: THE ERROR CORRECTION MODEL......Page 194 5 Chile: A Classic Latin American Welfare State under Authoritarian Stress (1973–1989) and Democratic Reinvention (1990–2000)......Page 196 5.1 Historical Antecedents of the System (1920–1973)......Page 198 5.2 A Welfare System under Stress: Comparative Patterns of Social Spending under Authoritarianism (1973–1989)......Page 199 Decomposing Social Spending into Its Components......Page 206 The Restructuring of the Welfare System during Pinochet’s Military Regime......Page 210 The Relationship between Trade Liberalization and Social Expenditures......Page 213 The Relationship among Structural Reforms, Trade Openness, and the Chilean Welfare System, 1973–1989......Page 215 5.4 Patterns of Social Spending and Social Policy after the Transition to Democracy (1990–2000)......Page 220 5.5 Summary and Conclusion......Page 226 6 Costa Rica: Globalization, Gradual Reform, and the Politics of Compensation, 1973–2002......Page 229 6.1 Brief Historical Antecedents of the System (1940–1973)......Page 230 Phase I: Sustained Expansion (1972–1980) and Temporary Collapse (1980–1982)......Page 232 Phase II: Gradual Economic Adjustment and Recovery of Social Spending Levels, 1982–1990......Page 235 Phase III: Continued Reform and Dilemmas of the Costa Rican Welfare State (1990–2002)......Page 237 6.3 The Links among Economic Reform, Globalization, and Social Policies in Costa Rica......Page 240 6.4 The Essence of the Costa Rican Experience: International Factors, Domestic Political Institutions, and the Politics of Gradual Reform and Social Compensation......Page 244 International Factors......Page 245 Democratic Political Institutions......Page 246 6.5 Conclusion......Page 249 7 Peru: Political Instability, Regime Change, and Late Economic Reform in a Non-Welfare State, 1973–2000......Page 251 7.1 Origins of the Peruvian Non-Welfare System......Page 253 The Military Governments of Velasco Alvarado (1968–1975) and Morales Bermúdez (1976–1979)......Page 255 Fernando Belaúnde (1980–1985)......Page 258 Alan García (1985–1990)......Page 261 The 1980s: Anatomy of an Economic and Social Policy Failure......Page 264 The First Government of Alberto Fujimori (1990–1992)......Page 265 7.3 Social Policies under Fujimori’s Authoritarian Rule (1991–2000)......Page 266 The Economic Basis of the Expansion of Social Expenditures......Page 267 The Decline of Pensions and Other Work-Related Social Benefits......Page 269 The Political Determinants of the Expansion of Poverty-Relief Expenditures......Page 274 7.4 Conclusion......Page 278 8 Conclusion: Summary and Final Reflections on the Sustainability and Effectiveness of Latin American Welfare Systems......Page 281 Historical Origins and Development of Latin American Welfare Systems 1920s–1970s......Page 282 The Evolution of Latin American Welfare Systems in the Era of Globalization and “Third Wave” Democratization, 1973–2003......Page 286 Country Experiences: Beyond the Black Box of Social Expenditures......Page 288 The Long-Term Sustainability of Social Expenditures......Page 293 The Effectiveness of the Welfare State......Page 298 Bibliography......Page 303 Index......Page 327 This Book Is One Of The First Attempts To Analyze How Developing Countries Through The Early Twenty-first Century Have Established Systems Of Social Protection And How These Systems Have Been Affected By The Recent Processes Of Globalization And Democratization. The Book Focuses On Latin America, A Pioneer In Welfare State Development In The Developing World, To Identify Factors Associated With The Evolution Of Welfare State Policies During The Preglobalization Period Prior To 1979 And Studies How Globalization And Democratization In The Last Thirty Years Have Affected Governments' Fiscal Commitment To Social Spending.--jacket. Introduction -- The Historical Evolution Of Welfare Systems In Latin America -- Theoretical Framework And Main Hypotheses -- Determinants Of Social Spending In Latin America -- Chile : A Classic Latin American Welfare State Under Authoritarian Stress (1973-1989) And Democratic Reinvention (1990-2000) -- Costa Rica : Globalization, Gradual Reform, And The Politics Of Compensation, 1973-2002 -- Peru : Political Instability, Regime Change And Late Economic Reform In A (non)-welfare State, 1973-2000 -- Conclusion : Summary And Final Reflections On The Sustainability And Effectiveness Of Latin American Welfare Systems. Alex Segura-ubiergo. Includes Bibliographical References (p. 281-304) And Index. This book is one of the first attempts to analyze how developing countries through the early twenty-first century have established systems of social protection (i.e. pension and poverty programs, and public health and education systems) and how these systems have been affected by the recent processes of globalization (i.e. greater exposure to international trade and capital markets) and democratization. The book focuses on Latin American - a pioneer in social policies in the developing world - to identify factors associated with the evolution of welfare state policies during the pre-globalization period (1920-1979), and studies how globalization and democratization in the last 25 years have affected governments' fiscal commitment to social spending. "This book is one of the first attempts to analyze how developing countries through the early twenty-first century have established systems of social protection and how these systems have been affected by the recent processes of globalization and democratization. The book focuses on Latin America, a pioneer in welfare state development in the developing world, to identify factors associated with the evolution of welfare state policies during the preglobalization period prior to 1979 and studies how globalization and democratization in the last thirty years have affected governments' fiscal commitment to social spending."-- Jaquette