Understanding the Third World Welfare State after Neoliberalism: The Politics of Social Provision in Chile and Mexico

Author(s): Marcus J. Kurtz Source: Comparative Politics, Vol. 34, No. 3 (Apr., 2002), pp. 293-313 Published by: Ph.D. Program in Political Science of the City University of New York Stable URL: http://www.jstor.org/stable/4146955 Accessed: 22/08/2008 18:33
Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=phd. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission.

JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that promotes the discovery and use of these resources. For more information about JSTOR, please contact support@jstor.org.

http://www.jstor.org

Understandingthe ThirdWorldWelfareState after Neoliberalism

The Politics of Social Provision in Chile and Mexico
MarcusJ Kurtz
While much attentionhas been focused on the political foundationsof social welfare regimes in the advanced industrial countries, less is known about the politics of social provision in underdevelopedareas, in LatinAmerica in particular. Discussions highlight the fiscal constraintsattendantupon free market economic reforms, questions of policy efficiency, and the political uses and abuses of antipovertyspending.1 This emphasis is jarring, however,in the face of a voluminous literatureon the emergence of the first world welfare state that emphasizes interests (business, labor), institutions (federalism, corporatism),ideas and culture, social structure(development, industrialization),and politics (left or Catholic power).2 Moreover, the pressures of globalization and economic liberalization are not sufficient to justify the technocratic focus. Recent scholarship has demonstrated that even small or poor states have substantial capacity to govern markets and support welfare regimes.3 Finally, arguments that emphasize pressures for convergence around a minimalist social welfare regime in poor countriesrun afoul of an empiricalreality of persistent difference. This article examines welfare regime formation and reformationin three politically competitive polities: Chile from 1932 to 1973, Mexico from 1988 to 2000, and Chile from 1989 to 2000.4 Not surprisingly,the first Chilean welfare effort, during the heyday of statism, was universalistic and redistributivein focus. But much less recognized are the dramaticdifferences between Mexico and Chile in the 1980s and 1990s. Mexico emphasized means-based targeting of consumption subsidies and efforts to support the integrationof the poor into the market economy, while Chile since democratization has moved to quasi-universal support of consumption and invested relatively little on the market integration side. This contrast is particularly striking given the strong commitmentof contemporaryChile and Mexico to neoliberal policies, usually seen as inducing convergence around narrowly targeted and austere models of social provision. Moreover, background similarities among the cases in terms of position in the internationaldivision of labor, level of economic development, cultural area, and statist policy legacies suggest further reasons for convergence. How, then, can these widely varying welfare regime outcomes be 293

Politics Comparative

April 2002

explained?The answer lies in the dynamics of political competition as it is framed and ideationalconstraints. by a broadset of structural What exactly is the range of variationto be explained,and what accountsfor it? Welfareregimes include the gamut of policies designed to amelioratepoverty, broadly understood.To begin, policies that benefit the poor are disaggregatedby target.Are they oriented toward the production process, or do they subsidize consumption? assets and Productivistpolicies are furtherdisaggregatedinto those that redistribute of those thatcorrectmarketfailuresthatblock the economic participation the poor (for policies are example,access to credit,failings of humancapital).Consumptionsupport dividedinto highly targeted(or means tested) and more universallyappliedbenefits. The three cases under study can be sorted along these dimensions. In Chile under its earlier democratic regime (1932-73) a substantial welfare state emerged and aimed at universalism on the consumption side of social citizenship (health, pento sions, incomes); it utilized national planning and eventually asset redistribution achieve poverty abatementon the productionside. After a period of narrowtargeting duringmilitary rule (1973-89) the center-leftgovernmentsof Chile's second democratic regime have begun to rebuild a quasi-universalbut less generous welfare state on the consumption side, while making only limited moves towardthe correctionof marketfailures on the productionside.5 Mexico, since the economic catastropheof the 1980s, has taken a decidedly differentroad,much more specifically targetingsocial benefits at the very poor (and,of course, potential supportersof the political opposition). This approachwas apparent in Salinas's (1988-94) PRONASOL program, as well as its successor during Zedillo's administration(1994-2000), PROGRESA;both invested large sums in targeted support of consumption and production-orientedpoverty abatementefforts. This welfare approach,while in theory guided by efficiency criteria,did not always break with the Mexican traditionof clientelistic state-society relations. However,it bypassed traditional corporatist organizations and avoided any sense of universal entitlement.6 These differing outcomes are a result of political dynamics situatedwithin particular developmental models and their ideological underpinnings (see Table 1). Structuralfeatures of a developmentalmodel can be economically inconsistentwith some antipovertypolicies, placing wide but strict boundaries on policy. As important, development models are accompanied by development ideologies that further narrowpotential responses. These ideologies frame the very definition of the problem of poverty and thus the political terrainwithin which solutions are debated. Within the wide arena defined by developmental model and ideology, however, antipovertypolicies are political outcomes. The coalitional basis of consumptionand productionoutcomes is shaped by, among other factors, the competitivenessof the party system, the degree of organization of the poor, and patterns of political alliance. Where the poor are organizedand ally themselves with middle sectorpoliti294

MarcusJ Kurtz Table 1 Social WelfareRegimes in Chile and Mexico

Chile,1964-1973 for to Incentives Parties Bidfor Support withSocialPolicy(competitiveness) to of ClassGroups Capacity Lower SocialPolicy(organization) Demand of Incorporation PoorintoMulti-Class Reformist Coalition(alliance structure) Development Model SOCIAL WELFARE OUTCOME Chile,1989-2000 Low Low High Neoliberal Quasi-Universal Support Consumption withLimited Market AccessEffort Mexico,1988-2000 Medium Low Low Neoliberal Targeted* Consumption Support Market andExtensive AccessEffort

High High High Substitution Import Universalistic Consumption Support withAsset coupled Redistribution

* '"Targeted" of strata society. to is heremeant implyeffortsto support the verypoorest only

cal actors, the antipovertyeffort will be greaterand more universal.7Targetedefforts would tend to divide such coalitions. Policy will also tend toward consumption supports over interventionsin production,since the immediate needs of the poor have a means of entry onto the national political agenda and a sizable coalition can be redistributivepolicies. In party systems where more assembled behind transparently than one reformist party competes for the support of the poor, a bidding dynamic may ensue, leading to social welfare provision even in advance of direct pressure from below. Where the poor are not well organized and the level of political competition is lower, antipovertyefforts will tend toward smaller, more targeted,and dissent-mitigatingforms. Moreover,efforts will emphasize production and avoid obviously redistributionistoutcomes. They will simultaneously provide benefits to the poor and middle sector interestsby channelingresourcesthroughthe latter. Scholars should be more attentiveto the ideological and political foundations of contemporarysocial policies, even in those states where neoliberal economic models are dominant. Although studies that emphasize constraints on policymaking are importantand interesting, they have obscured the variations in design and efficacy of social welfare regimes in Latin America, as well as the explanations of them. More critically,politics-the self-organizationof the poor, their alliances, and party system competitiveness-is as critical as democracy itself in embedding the effective alleviation of poverty in the nationalpolitical agenda. Development Models, Development Ideologies, and Welfare Regimes While the foundationsof differing regimes of social provision are principallypolitical, the struggles that shape them are fought in an arena that is bounded by the pre295

Politics Comparative

April 2002

vailing developmentalmodel and its associated ideational system. Thus, discussion and will begin with the import-substituting neoliberal developmentmodels that conwelfare regimes. The constraintsboth are structuraland are rooted in the strained development ideologies that shape decision-makers'perspectives on such issues as nationalism versus internationalism,the relative value of public action, the efficacy boundariesof privatepropof marketsas allocative mechanisms, and the appropriate relations.While such belief systems simplify problemsand make decision makerty ing easier, they can also serve as blinders to the empirical evaluationof some policy strategies,potentiallyunderminingthe effort to amelioratepoverty.8 How does the adoption of a neoliberal or an import-substitutingdevelopment strategy help condition social welfare policy outcomes? Under import substitution is industrialization,industrialization based, at least initially, on productionfor a protected domestic market, and typically only middle and working class consumers have incomes sufficient to drive economic growth.9 In this context, social welfare supporting systems will tend to be linked to formal employment, disproportionately middle sector groups rather than the most needy informal workers and peasants. Targetedantipovertypolicies are not precluded, but they would redirect resources away from the sorts of domestic market expansion that could underwriteindustrial growth and deepening. The structuralboundariesimposed by neoliberal developmentare quite different. Since the attractionof foreign capital is a crucial neoliberal goal, efforts on the production side to redistributeassets aie unlikely, as they would prohibitivelyraise risk perceptions for potential investors. Similarly,a commitmentto macroeconomicbalance and low tax burdens constrainsthe ability of states to pursue fiscal expansion or widespreaddistribution.10 In ideational terms the models have contrastingimplications as well. Importsubstitution industrialization was rooted in the belief that international markets are biased against primary products and that neither local nor foreign investorswould The intellectual conseinitiate sustained industrializationwithout public support."1 quence is a loss of faith in market forces, a valorization of the role of public intervention, and a suspicion of internationaleconomic pressures.This ideationalsystem is consistent with a redistributive and universal approach to welfare provision. Neoliberalism carries almost precisely the opposite assumptions,that states are inefficient and where possible ought not interferewith markets.Its elective affinity is for targetedpolicies, aiming specifically at those left out of the marketeconomy.Under neoliberalismuniversalpolicies, while not impossible, would be much more vulnerable to political attack on both efficiency and economic grounds, particularlyif they redistributedsubstantialportions of nationalincome. 296

MarcusJ1Kurtz Social Provision in Chile: From Redistribution of Wealth to Welfare The change in social welfare regime across the two periods in Chile was sharp but perhapsnot as dramaticas is sometimes argued.In the first period (1932-73) highly competitive politics, mobilized popular sector constituencies, and a statist national developmentalideology combined to produce a universalwelfare state geared to the redistributionof wealth and income. In the second period, following seventeen years of military rule, a free market developmental ideology, interpartycooperation, and social quiescence producedan austerebut broad-basedwelfare system aimed at mitigating the worst aspects of the open economic strategy. Development Ideology, Politics, and Welfare in Precoup Chile The statist and redistributivemode of social provision began in earnest in Chile under the Popular Front administrations (1938-52). It included substantial spending on housing, health, and education, price controls on basic necessities, and explicit incomes policies. Under the Christian Democratic (PDC) Frei administration (1964-70) it expanded still further,lifting public spending as a percentage of GDP from 35.7 to 46.9 between 1965 and 1970.12The Socialist Allende administration(1970-73) did not so much change this model as intensify it, especially in the areas of consumer subsidies and price controls. Its form is telling: increases in consumption standards were providedthroughthe universalizationof social benefits formerly limited to the middle sectors and urbanworking classes and throughthe encouragementof broadbased tradeunionism. On the productionside public interventionincreased dramatically with the massive 1967 land reform and the wave of nationalizationsof the early 1970s. The ideological foundationsof this approachto poverty alleviation were linked to the nationalistand inward-lookingdevelopment strategy.These tendencies are clearest in the primaryexport sector, mining. PresidentFrei's Chileanizationforced joint ownershipon U. S. multinationalcorporations.Soon thereafterAllende's administration nationalized the mines. Nationalization did not simply result from the election of a Marxist president. The parliamentapprovedit unanimously. Structuralistideas and nationalist economic policies had deep roots, even on the political right. The devalorization of market forces (especially international trade) and the need to expand domestic markets were intellectually consonant with antipoverty strategies that stressed asset redistribution (in agriculture), nationalization (in mining), and Moreover,consumptionpolicies focused on universalismin part because planning.13 marketbroadeningfor domestic manufactureswas a high priorityand because fiscal balance was comparativelyless important(there was limited foreign investment,and much domestic consumption was not directly linked to the availability of foreign exchange). 297

Politics Comparative

April 2002

The expanding reach of the redistributive state in precoup Chile is further explained by the mobilized and competitive politics of the period. Since the 1930s many reformist parties-initially Communists, Socialists, and Radicals, and later also Christian Democrats, Left Christians, and the Revolutionary Left-competed against each other. Particularlyby the 1950s and 1960s the expanding Christian Democratic Party explicitly targetedthe urbanand rural poor as it sought, successfully, to establish an electoral presence.14Once the PDC won the presidencyin 1964, it vigorously tried to organize and provide benefits to these constituencies.15 left The was forced to respondwith ever more radicalproposals, many of which were eventually carriedout after the election of Allende in 1970. It is also importantto note that the welfare system became most comprehensiveafter 1964 when two clearly defined and competing reformist political currents-Christian Democrats and the Unity coalition-became the centralaxis of political competition. FRAP/Popular The poor themselves helped to furtherpropel redistributive reform. In agriculture strike activity rose from a mere fifty-four disputes from 1960 to 1964 to 1,821 between 1967 and 1969, as promotionalefforts by the PDC and a new laborlaw created a reinforcing dynamic between mobilization and policy enactment.16This dynamic turned even more militant after 1970 when land invasions became prevalent.17Similarmobilization and organizationoccurredin the urbanformaland informal sectors as strikes and property seizures there, too, expanded. While the PDC tried to gain clientelistic control over the organizationsof the poor (especially in the urban areas), opposition and competition from both left and right guaranteedthe autonomyof popularorganizationsand their continuedpolitical importance.'sWhile these groups were tightly linked to political parties, they were autonomousof state control. Indeed, competition among parties for supportgave them substantialleverage, and they were generally fiercely competitiveamong themselves. The conventional wisdom Social Provision in Chile after Redemocratization with respect to Chilean social policy in the postmilitary era (1989-2000) is that it largely follows the targetedlogic developed duringthe military'sneoliberaltransformation of the economy. While the posttransitiongovernmentscertainlyincreasedthe level of spending on poverty relief, most analysts have argued that it remains narrowly aimed at the very poor.19But careful analysis indicates a substantialbroadening of the recipient base of social welfare policies.20 This change is linked to the process of democratizationand the attendantreemergence of political competition. The result has been a shift to quasi-universalpolicy outcomes on the consumption side and the emergence for the first time since 1973 of serious welfare efforts on the productionside. This model of social provision differs from the earlier Chilean regime. The pre1973 Chilean welfare state was, if anything,regressively organizedbefore the trans298

MarcusJ Kurtz formationsof the neoliberal era. Benefits were generally structuredas universalentitlements, but enforcementand implementationwere more established among middle sector and unionized formal sector workersthan among the poor concentratedin the countryside and urban informal sectors. During the course of military rule many of these entitlementprogramswere replaced with means-testedand much less generous forms of welfare. With the returnof democracy,however,the commitment to targeting diminished Table2 presents the scope and characterof social welfare policy across dramatically. the two periods of interest. Once the neoliberal model was entrenchedin the social policy arena in the early 1980s, targeted forms of provision became the norm. With democratization,however,dramaticexpansions were made in more universal aspects of poverty relief, especially increases in the family allowance (a subsidy paid per child principallyto formal sector workers)and the minimum wage.21 While the Chilean democraticgovernmentdid not wholly abandontargetedsocial The spending, the beneficiary base was quite dramaticallybroadened.22 unit value of means-testedwelfare transfers(SUF) was increased,but the program'ssize had been capped in 1986. Coverage declined thereafteras recipients leaving the programwere not replaced. Moreover, the program is a complement to the family allowances scheme, which covers only those citizens affiliated with a private or public pension system (almost exclusively formal sector, urbanworkers).Together,the means-tested and family allowance subsidies are of comparablesize and are granted to compleTable 2 The Transformation and Retransformation of Social Welfare (Pesos of 1990, per Month)
TARGETEDASSISTANCE CashTransfers(SUF) Year 1970 1974 1977 1981 1983 1986 1989 1991 1996 Poverty Pensions (PASIS) Value Vue 0 0 6989 9819 9901 9059 7840 9430 10,326 UNIVERSALASSISTANCE Family Allowance Recipients Value n/d n/d n/d 3,962,000 3,929,000 4,024,000 3,817,000 4,021,000 3,200,000 2429 2547 2118 1987 1564 1119 696 903 895* Real Minimum WageIndex (1970=100) 100,0 108.3 119.3 138.7 109.5 85.8 88.9 103.4 128.0 Civilian Pensions Avg. Value 31,354 16,184 17,964 24,528 26,229 26,072 27,724 30,065 n/d

Recipients Value Recipients n/d n/d n/d n/d 527,000 1,086,000 896,000 879,000 766,082 n/d n/d n/d 2,031 1,604 1,246 951 1155 1164 0 0 66,000 156.200 229,400 324,700 292,900 289,100 326,447

*Theaverage threerates: of subsidies phased atthe highestincomelevels. are out SUFrecipients, Sources:ForPensions, from1970-1991: Allowances and Dagmar Family Raczynski PilarRomaguera, "Chile: and in and Poverty, Adjustment, SocialPolicyin the 1980s" NoraLustig,ed., CopingwithAusterity: Poverty in Latin America Institution DC:TheBrookings 297: for 1996:MIDEPLAN, 1995), (Washington, Inequality Chile:Mideplan, Distribucidn Impacto e Distributivo GastoSocialen los Hogares1996(Santiago, del 1998), 12-20; forvalueof SUF,to 1991:MIDEPLAN, en Chile: Sociales:Su lm eato los flogaresChilenos (Santiago, Programas del MIDEPLAN. Vial,"Lafijaci6n Salario 1992),246. Realminimum wage,all years,DavidBravoandJoaquin 45 (June1997), 151. Minimo Chile:Elementos unaDiscusi6n," en Coleccidn Estudios CIEPLAN, para

299

Politics Comparative

April 2002

mentaryconstituencies;collectively, they are nearly universal.Thus, insteadof abandoning poverty-targetedprograms, Chile has complemented them with public supports to the middle and working classes, excluding only the very wealthy. Indeed, fully fifty percent of the new and substantialsocial developmentrevenues raised in the 1990 tax reform went to the somewhat regressive family allowance and pension increases.23 Investment in production with an antipoverty component has taken principally two forms in Chile. The most explicit is the social investmentfund (FOSIS), aimed at encouraging human capital formation, supportingmicro-enterprises,and improving infrastructure in marginalized areas. In addition, there are the decentralized regional and local development funds (FNDR and ISAR) that give some priorityin their fund allocation to the needs of poorer areas. Although these regional development funds have existed since 1976, they did not expand substantiallyuntil democratization. From 1989 to 1994 decentralized spending increased 178 percent in real This productionspending terms, while overall public investmentrose 80.2 percent.24 has a welfare effect, but it is not nearly as focused on the goal of poverty alleviation as the FOSIS program,whose fundinghas stagnatedat a comparativelysmall US$50 million.25 Neoliberalism, the Concertacidn, and Quiescence: Thin but Broad Welfare Provision The social policy of the governing center-left Concertacidn alliance (1989-2000) in Chile is quasi-universalon the consumptionside, with limited market failure correction on the productionside. This policy is not identical to Chilean policy before 1973, as it does not involve asset redistribution,nor is it as universal and generous in its benefits. An importantpart of this difference can be explainedby the way in which new ideas about the state and its relationshipto society and market developed alongside the free market development model. It also involved the posttransitionalliance between center and left parties, as well as the political parameters agreed upon as part of the democratization process itself.26 In Chile free marketideas began to make headway after the 1973 coup. The most well-developed local supporterswere led by a group of Chilean economists trained at the University of Chicago, many of whom entered the military governmentafter the coup. The neoliberal developmentalmodel designed by these economists in the 1970s produced public policies that strongly prioritizedmarket forces.27Free markets came to be valorized by the right as neutral and efficient, while public action was vilified as inherently inefficient and bureaucratic. Indeed, by the late 1980s technocraticapproachesto policy were becoming dominanteven among the opposition.28 With this change in developmentalmodel, the formeruniversaland redistributive form of social provision became ideologically untenable. It entailed redistribution deemed at once inefficient and unjustby the Chicago-school economists who shaped 300

MarcusJ Kurtz the military'seconomic policy.29 On the productionside, then, most interventionwas halted, leaving only highly targeted and meager public assistance on the consumption side. Ideologically, this policy had the benefit of providing resources only to individualsunable to participatein the marketeconomy. It placed little burdenon the public purse, in keeping with neoliberal norms about low tax and spending levels, and did not substantiallyredistributeincome. This form of social welfare provision was not caused by neoliberal ideology, ideology only shaped pubthough it was framed by it. Even under authoritarianism, lic action in accord with political circumstances. Thus, under military rule, when pressure from mobilized constituencies was weak, social provision took on a minimalist, targetedform. With the transitionto democracy,the rise to power of reformist center-left governments, and emergence of previously pent-up demands, both the it level and scope of antipovertyspending increased. Importantly, was still shapedby the neoliberal development ideology (now shared by the center and most of the left).30 Finally,any more explicitly redistributiveor statist approacheswould leave political leaders open to charges of attemptingto reintroduce"failed" policies from the past, judged guilty by association with import substitution industrialization.In an intellectual environmentthat assertedthe primacy of marketsand the inefficiency of states, political debate could center only on the level of spending and the degree of targeting.Qualitativechanges involving a redefinition of the state'srole in society or an end to private provision lack a widely shared intellectual foundation in Chilean society. The Concertaci6n coalition of Christian Democratic and Socialist parties, one side of the bipolar democratic/authoritariancleavage that has become central to Chilean politics, has governed since the democratic transition.31The alliance is strongly reinforcedby an electoral law that places a premiumon cross-partycooperation.32Changes in social policy have as a consequence been negotiated at the highest levels of the party leaderships, thus insulating them from the pressures of the Concertacidn'sown organizedsocial constituencies.As a result, no electoral bidding dynamic-the competitive expansion of the welfare state drivenby political conflict between center and left that characterizedthe 1960s and early 1970s-has emerged. Competition among reformist parties has been replaced by a "responsible"centerleft alliance with an emphasis on fiscal probity in competition with a neoliberal right pushing minimalist government.33 Lacking political traction, the organized social constituencies and competitive political dynamics that historically propelled welfare policy have declined substantially. In particular,the Concertacidnalliance has moderatedthe policy proposals of the Socialist left and has implementedonly gradualincreases in social spending, distributingthem widely across its constituencies in the middle and lower classes.34As noted above, a large proportionof the increase in social spending after democratiza301

Politics Comparative

April 2002

tion went to the broadlyapplied family allowance, serving all but the highest income categories. Indeed, fiscal caution was the watchwordof the posttransitiongovernments,and to the markeddecline in povertybetween 1987 and 1996 can not be attributed redistributive social spending. Governmenttransferpayments as a proportionof income droppedfor all income quartiles over this period, a decline of over fifty percent for The independentpolitical weight of beneficiaries in Chileanpolithe very poorest.35 tics is so limited that even under center-left governmentsthe relative importanceof public assistance has not been maintainedacross time. While it could be arguedthat this decline reflects the success of growth-mediatedpoverty abatement,it must be rememberedthat, for all its successes, the poor in Chile have only recently reestablished the living standardsthey had in 1970, while overall inequality has increased Thus, the Chilean "economic miracle"merely reduced poverty to its dramatically.36 historic levels. Persistently high inequality underlines the fact that even the Concertaci6n'ssocial policy does not aim at real redistribution. Furtherevidence of the moderatingeffects of the presentbipolar party system on political competition can be found in the host of issues that were explicitly removed from the political agenda before PresidentAylwin took office and in the programof governmentof the Concertaci6n. It includes a commitmentto the broad outlines of the neoliberal model and the agrariancounterreform.Pension, health, and industrial privatizationswere not only let stand, but some were expanded. Moreover,to the extent that policy was constructedthroughsocial concertationamong representatives of business, organized labor, and the state, a broadeningof spending was inevitable, but the very poor were the only actors lacking a seat at the negotiatingtable.37 Thus, policy reforms are broad but fiscally quite moderate. Indicative of the restraintimplicit in a neoliberal developmentalmodel is the fact that the largestreal increases in the incomes of the poor came throughthe minimumwage.38This policy indirectlyaffects large swathes of income earnersin Chile and costs the treasurylittle. Direct transfersincreased in value (though overall spending increasedonly moderatelyas coverage declined), but by modest amounts.The entire increase in the welfare family allowance (SUF) between 1989 and 1996 amounted to little more than US$1 per month. This increase contrastedwith a long period of decline but was substantiallyless than the 44 percent real increase in the minimum wage over the same period. The characterand level of antipovertyactivity are also intimately linked to the amount of leverage that the poor themselves can apply directly to the political system. As noted earlier,how this leverage is partly structuredby party system dynamics, particularlythe level of competition and the presence of competing reformist parties. But it also reflects the power that the popular sector has as an actor in its own right or as an ally of others. Two issues impinge here. How organizedare the poor, and what political alliances have they struck? 302

MarcusJ Kurtz When the poor as a group are mobilized and capable of allying themselves with other major actors, they can overcome the disadvantagesof a less competitive party system. But popular sector interestsmust be representedby powerful intermediaries that are valuable allies for middle class actors and are capable of punishing politicians who fail to implement their promises. Unfortunately,the most disadvantaged sectors of society-the informal sectors in the peri-urbanareas and the peasantryare also those least likely to have strong organizationalintermediation.Moreover,in Chile they lack political connections to the right and have only weak organizational linkages to the center-left. Consequently,these groups are largely captive constituencies of the Concertaci6n. Much of the organizationalweakness of the popular sectors can be attributedto the social effects of the neoliberal developmental model pursued since the late 1970s. Indeed,one of the key aims of many of the reforms of the military era, particularly in social provision, labor law, and the pension system, was the disarticulation of what had formerly been exceedingly powerful beneficiary coalitions. Individualization was the watchword, as the state largely ceased to have direct responsibility for the levels of benefit or the terms of labor agreements. In addition, systematic political repression coupled with extremely "flexible" labor markets(and two waves of severe unemploymentand recession) served to undermine most organized actors in civil society.39But this atomization disproportionatelyaffected the poorest elements of society, as organizationin the countryside all but disappeared.40 Even the briefly hopeful signs of organizationamong the urban popular sectors in the mid 1980s quickly evaporated.41 Thus, while the national peasant (CNC) and labor (CUT) confederations are directly tied to the governing parties of the Concertaci6n alliance, their ability to affect policy decisions is notably weak, in marked contrast to the 1960s and early 1970s, since they have no alternativepolitical home. Indeed, the peasant sector has had virtuallynone of its key demands addressed,despite ten years of governmentby political allies. The labor movement has been slightly more successful, but it has obtained only minor changes in the labor code and has recently been marginalized from discussions over the minimumwage.42 The productioninvestments of the FOSIS programhave some potential to mitigate this problemif they are undertakenon a sufficiently large scale. Indeed, encouraging local self-organization among the poor was one of its goals. Politically, the program is structuredaround a cross-class alliance, and this alliance reinforces its stability across time. First, it deliberately involves the private sector in its project structure, undertaking no projects directly but instead operating through private firms or organized social groups. For example, it provides micro-enterprisefunding for peasants and indigenous groups, but it largely offers credit indirectlythroughthe private financial system by subsidizing banks, savings and loan institutions, and nongovernmentalorganizations.Second, its community development (social) aspect 303

Politics Comparative

April 2002

operates through and promotes the creation of local development committees. It is explicitly hoped that these committees will survive after the initial seed money from FOSIS disappears, leading to improvements in local governance and increased capacity to articulate and promote interests. Unfortunately, the program is quite small and has remainedso.43

Mexico: Political Competitiveness, Neoliberalism, and the Shift to ProductionOriented and Targeted Poverty Alleviation Antipoverty policy in Mexico has undergone dramatic transformationsbecause of catastrophiceconomic crisis and the sudden decline in the traditionalpolitical hegemony of the InstitutionalRevolutionaryParty(PRI), lately culminatingin loss of the presidency.After decades of inattentionto poverty,punctuatedin the 1970s only by a in limited returnto asset redistribution land, social welfare reform finally took center stage under the presidency of Carlos Salinas (1988-94). National political competition became in part organized aroundwelfare provision, but now under the leadership of a presidenttrainedin neoclassical economic thought and committedto interAs national integration.44 politics became competitive (the odds of oppositionvictoin Mexico in 1988 were greaterthan the likelihood of the right'swinning in Chile ry in 1989 or 1993) and disquiet from below mounted, the government initiated an extensive policy that targetedproductionand consumption. The debt crisis of 1982 delivered a blow to the long-standingstatist developmental model from which it would never recover.Initially,despite a dramaticupsurgein poverty, austerity, not transformationof social welfare, was the watchwordof the day. The existing form of social provision largely based on universal consumption subsidies (especially for wage foods) quickly became fiscally unsustainable.Indeed, during the sexenio of Miguel de la Madrid(1982-88) social developmentspending contractedby 6.2 percent per year.45It declined even more steeply than generalrevenues, as resourceswere redirectedto paymentof externalobligations. These first six years of crisis were a period of redefinition along severalaxes that culminatedin the election of Carlos Salinas in 1988 and the establishmentof a new model of poverty alleviation. Two changes were critical. In 1988 Mexico held the first truly competitive presidentialelection since the revolution,and the technocratic Salinas'santipovertystrategy, wing of the governing PRI completed its ascendancy.46 embodied in the National Solidarity Program(PRONASOL),was designed to make social spending compatible with neoliberal adjustmentstrategies. It targetedsocial programs directly at those most in need and bypassed corporatist and clientelist institutions that had formerly been central channels of state-society interaction.47 Salinas also hoped it would rebuild support for the severely weakened governing 304

MarcusJ Kurtz This very ambitiousprogramreorientedMexican antipovertypolicy. It highparty.48 ly targeted,on the one hand, forms of consumption and, on the other, market failure corrections,human and social capital formation,and microenterprisefinance in production. It included very importantlythe provision of working and investment capital for peasants who would otherwise lack access to credit, subsidies and credit to and "social enterprises," infrastructural improvementsfor indigenous communities.49 Table 3 presents a breakdown of the considerable resources allocated to this program. The participationof local social groups in both the design and execution of projects to be funded was a key aspect of PRONASOL.The programoperatedthrough some 250,000 local solidarity committees during its six year life.50The committees' political independenceand grass-rootscharactervaried a great deal, but the principle of using social welfare funds simultaneously to alleviate poverty and create local social capital was a core innovation of the program.51Importantly,unlike earlier efforts, PRONASOLwas marketfriendly,involving neither price controls nor direct competitionwith the privatesector.52 Like so many grand projects in Mexico, the life of PRONASOLended with economic crisis and the election of a new president, Ernesto Zedillo, in 1994. While Zedillo retained much of PRONASOL's policy orientation, he restructured the administrationof social welfare funds. Instead of allocating funds through the solidarity committees directly linked to the central government, the bulk of social spending was channeledthroughthe federal structure.States and municipalitieswere for the first time given an importantrole in national antipovertypolicy, while the federal governmentwas officially relegated only to the definition of broad goals.53 It is crucial to note that, while the administration of the program was altered, means-testedconsumptionsubsidies and investmentin productionremainedthe central axes. Indeed, many of the core subprogramsof PRONASOL (for example, agricultural credit, indigenous community development, and social investment funds) Table 3 Productionand ConsumptionOrientedPRONASOL Spending, 1989-1994 (Thousandsof New Pesos of 1989)
1989 Consumption-Side Supports education, health, (includes and housing, foodaid) Production-Side Supports Development Regional Infrastructure DirectAidsto Production 1,266,919 1990 1,953,475 1991 2,526,213 1992 3,431,617 1993 3,817,502 1994 2,683,053

1,050,668 (613,314) (437,354)

1,772,892

2,343,264

2,672,277

2,729,020

1,998,801

(893,854) (1,488,259) (1,520,684) (1,474,748) (1,197,045) (879,038) (853,062) (1,153,594) (1,254,271) (801,766)

Bdsicasobrela Ejecuci6n Desarrollo de Nacional Solidaridad: Sources:DatafromSEDESOL, y Informaci6n Programa variation consumer in del Programa to 1994),176-190,adjusted theDecember December (MexicoCity:SEDESOL, by by pricesas reported the Bankof Mexico.

305

Politics Comparative

April 2002

simply continued under their own names.54The changes were quantitative.Actual was outlays declined as economic crisis forced austerity,and programadministration decentralized. Neoliberalism, Political Competition, and Civil Society: The Limits of Poverty Alleviation The very featuresthat made poverty relief initially more substantialin scope in Mexico than in Chile, greatercompetitiveness in the party system but little real linkage between the poor and reformistparties, eventually underminedits continuation.While the generalboundariesto policy were defined in similarways by the overarchingdevelopmentalideology, the domestic political dynamics that shapedthe policies differed substantially.Crucially, while the momentary threat to PRI dominance in 1988 brought a large policy response via PRONASOL, this response was designed simultaneouslyto improve living conditions and underminedissent. Since the autonomous organizational capacity of the poor was low (or displaced by the presence of official organizations),the popular sector lacked the ability to keep its needs squarely on the national agenda. Nor was it able to form strong linkages to democratic,reformist forces on the left (the PRD) or the right (the PAN) that might make it a locus of political competitionratherthan a PRI captive. Policy outcomes in this context then remainedhighly targetedon the consumptionside (both in political and socioeconomic terms), and funding declined with electoral competitivenessand public austerity. In Mexico, as in Chile, the implementationof a neoliberal developmentalmodel marked a dramaticbreak with the past. The first moves in this direction occurred underPresidentde la Madrid,whose constitutionalreforms (Article 25) strengthened the state'srole in the economy but transformedits function from engine of growthto While neoliberalism as a development ideology may not private sector regulation.55 be as widely accepted across the Mexican political spectrumas in Chile, the historical alternative-nationalism, populism, and import substitution-has been thoroughly discredited. Indeed,the emergence of an ideological commitmentto neoliberalismcan be seen in the willingness of Mexican presidentsto challenge the sacred cows of the revolutionary legacy. Reforms to Article 27 of the constitutionand the passage of the 1992 LeyAgraria ended the land reform and broughta guaranteeof propertyrightsto private landowners.Similarly,any pretense of the nationalismhistorically so centralto howregime legitimacy was abandonedin the ratificationof NAFTA. As important, of ever, as the economic effects that these changes wrought was the transformation that they embodied. The combination of tariff reduction,pridevelopment ideology vatization, and property rights guarantees amounted to a public renunciationof a strong state role in economic guidance. In ideological terms, a commitment to neoliberalism required a rethinking of state-society relations that manifested itself in changes to the regime of social provi306

Marcus J Kurtz sion. As efficiency criteriabegan to govern state action and an emphasis on market price signals became axiomatic, antipovertypolicies were pushed in a more targeted and means-tested direction.56This change squared an important ideological and political circle. It permittedthe state to interveneto mitigate poverty but intellectually justified its intervention in nineteenth century terms of social liberalism rather than the broad-basedclaims of distributivejustice that had formerly prevailed.57In intellectualterms, it also borrowedfrom the Chilean military'sapproachto rendering social and economic policy consistent by utilizing privateagents where possible and emphasizing the perfection of market function (for example, FOSIS and PRONASOL). Some have gone so far as to suggest that the creation of this neoliberal form of social welfare was largely imposed externally,linked to the implementationof liberal economic policies and propelledpolitically by the IME.58 However, the neoliberal development ideology-a feature shared with the contemporary Chilean case-does not explain the marked differences in social policy across these two countries. Here the crucial variablesare located in the political system. In Chile, before the authoritarianinterlude, politics had always been highly competitive, and all tendencies had a meaningful chance of assuming national executive power. Moreover, society, even its poorest segments, had become well organized by the 1960s.59The dynamic in Mexico, while not involving the brutalauthoritarianismof the Pinochet dictatorship,has been quite different. Since the revolution the state had been dominatedby a single political force, the PRI. While party politics became substantiallymore competitive after the 1988 presidentialelections, with the left (PRD) and right (PAN) oppositions winning importantelections, alternationin federal executivepower did not become possible for anothertwelve years. Thus, the Mexican governing party was in a somewhat differentposition than its Chilean counterparts. With the historic blending of state and party resources, it typito incipient dissatisfaction in an ad hoc fashion ratherthan through cally responded institutionalizedwelfare channels. Until at least the 1970s the viability of corporatist social institutions (labor unions, peasant confederations,and popular sector organizations) kept its position secure in the absence of a powerful, autonomous,and organized opposition. When such autonomousmobilization among the poor occasionally developed,public welfare reestablishedregime legitimacy and political quiescence.60 Since national alternationof power did not occur until 2000, there was little incentive for PRI elites to provide costly, stable, and broad-based social benefits. Their social constituencies in the corporatistorganizationswere unable to demand them, and oppositionparties had few connections to similar groups with which to initiate a bidding dynamic. The onset of the debt crisis made this situation all too clear. The response to the crisis was austerity and even a disproportionate decline in antipoverty spending. Social welfare was cut even as real wages collapsed between 7.7 and 10.5 percent per year between 1983 and 1988 and implicit unemploymentreached 20.3 percent 307

ComparativePolitics

April 2002

by 1985.61This response was possible precisely because the PRI's political hegemony was unchallengeduntil 1988. The consequences of this catastrophewere left to the next president,Salinas,who faced a powerful and organized political threat from the left in the form of Cuauhtemoc Cirdenas and the PRD. Rising political competitiveness provoked a response: Salinas launchedthe PRONASOLpoverty relief program.Resourceswere targeted not simply by degree of poverty, however, but also to areas of opposition strength.In this fashion he sought to relegitimatethe governmentand turnback the Indeed,by the 1991 midtermelections PRI supporthad reboundopposition threat.62 ed to 61 percent of the vote. This feat was remarkableindeed, especially given the scope of the economic catastropheof the 1980s. Here the linkage between political competitiveness and autonomousorganization becomes crucial. For PRONASOLto have embodied a truly effective form of social and human capital formation,it would have had to be severed from the discretionary political control of the PRI. Then the resources allocated through local solidarity committees might have been effective seed grants for the constructionof local organization and social capital. Unfortunately,the governing party was incapableof this degree of neutrality,and the programwas frequentlyused in a clientelistic fashion.63 In a move that emphasized its political character, the PRONASOL program was And the actually administereddirectly out of the office of the presidentuntil 1992.64 shift to Zedillo's PROGRESAprogramsealed the fate of the organization-building aspects of welfare policy; by 1994 most of the 250,000 solidaritycommitteesceased to function. Unlike Chile, where the advent of democratizationled directlyto the reemergence of authentic(if dramatically weakened) intermediariesfor peasant,worker,and small business interests, in Mexico much of this political terrainwas already occupied by corporatist or state-influenced organizations.65Actors seeking to represent these interestsmust overcome the dual barriersof an atomized and fragmentedsociety and the presence of (quasi) official organizationsthat seek to monopolize most available political space. The profoundweakness of particularlyruralcivil society may help to explain the discontinuitiesin Mexican antipovertypolicy. In contrastto Chile, there has been no sustainedalleviation of poverty,nor has there been a sustainedstrategyfor its alleviation. In part, the reduced level of political competition in the early to mid 1990s made the alleviation of poverty less importantto the PRI, and in part,there were no organized intermediariesconnected to opposition political parties that might have pressed social demands in an ongoing and effective way. It also naturallyreflects in part the austerityimposed by the 1994-95 economic downturn.If the Chileanefforts at poverty alleviation have been cautious and broadly targeted,the Mexican efforts have been intermittentand usually politically targeted.While neither representsthe best of all possible worlds, at least in Chile by universalizing policy outputs sus308

MarcusJ Kurtz tained and increased spending has been possible. Similarly,if the recent triumph of even a conservative (PAN) opposition presidentialcandidatelike Vicente Fox marks the opening of a truly competitive era in Mexican politics, it raises the possibility of responsiveness and greater stability in the realm of social provision. However, change would require strong links between the PAN and groups representing the poor, links that do not yet exist. Each case, however, ultimately has lessons for the other. Autonomous organization and participationin cross-class alliances have sustained the modest and quasiuniversal antipoverty effort in Chile. More substantial initiatives would require a more competitivepolitical environmentthan that faced by the first two Concertaci6n In administrations.66 Mexico, in contrast, once the PRI's near-deathexperience had few organized actors could protest the decline of the briefly formidable and passed, potentiallyinnovativeantipovertyeffort of the Salinas sexenio. Conclusions What do the experiences of Chile and Mexico tell about the conditions that undergird different programs of poverty eradication? First and foremost, development strategies and ideologies place boundaries on the range of politically viable approachesto poverty relief. Second, political competition and conflict in the context of democracyare critical in determiningpolicy within these limits, but democracy should be thought of in terms of degrees. In comparativelyuncompetitive contexts states may well engage in poverty relief, but it has tended to take the form of means-tested programs to combat short-runproblems and reduce the potential for dissent. However, open democratic competition by itself is insufficient to drive social welfare, even where the impoverishedpopulation is quite large. Rather,party system dynamics and the level of political inclusiveness (the quality of democratic practice) are crucial mediators. Where several reformist parties compete with each other,poor voters can not become a captive constituency,and antipovertyefforts and political accountabilityare likely to be highest, as in Chile before 1973. Where only one political party has as part of its goals serious antipovertyefforts, the impoverished sectors can more easily be subordinatedto other goals, and responsiveness to actors in civil society in general is reduced. Finally,the recent shift towardmore free market forms of economic organization has an atomizing effect on civil society, indeed disproportionately the more marginalizedsectors of civil society. If coalion tions supporting a substantial welfare state are to be formed, the popular sectors must generate autonomousrepresentativeorganizations.Thus, antipovertyprograms that supportthe organizationof the poorer sectors of civil society, that is, those that support social capital formation, especially on the production side, will have a greaterlikelihood of sparkingsuch a virtuous cycle. If an initial effort results in the 309

Politics Comparative

April 2002

generation of more powerful representativesof the poor in national politics, these very same social actors will become increasinglyattractiveas coalition partnersand will be more able to sustainthe antipovertyefforts that gave birthto them.

NOTES
I am again deeply indebted to Peter Houtzagerand Andrew Schrankfor their advice on (many) draftsof this article and to the Instituteof Development Studies for financial support. Studies 1. KurtWeyland,"Economic Policy in Chile's New Democracy,"Journal of Inter-American and World Affairs, 41 (Fall 1999); Robert Kaufman and BarbaraStallings, "The Political Economy of Latin American Populism,"in Riidiger Dornbuschand Sebastian Edwards,eds., The Macroeconomicsof Populism in Latin America (Chicago: University of Chicago Press, 1991), esp. p. 32. See also Carol Graham,Private Marketsfor Public Goods: Raising the Stakes in Economic Reform (Washington,D.C.: The Brookings Institution, 1998), chs. 1-2. On political effects of antipoverty policy, see Kenneth Roberts, "Neoliberalism and the Transformationof Populism in Latin America: The Peruvian Case," WorldPolitics, 48 (1996); EdwardGibson, "The Populist Road to MarketReform: Policy and Electoral Coalitions in Mexico and Argentina,"World Politics, 49 (April 1997); and KurtWeyland,"Swallowingthe Political Bitter Pill: Sources of PopularSupport for Neoliberal Reform in Latin America," Comparative Studies, 31 (October 1998). 2. See Paul Pierson, "Three Worlds of Welfare State Research,"ComparativePolitical Studies, 33 (August-September 2000); Evelyne Huber, Charles Ragin, and John D. Stephens, "Social Democracy, ChristianDemocracy,ConstitutionalStructure,and the WelfareState,"AmericanJournal of Sociology, 99 (November 1993); and Alexander Hicks and Joya Misra, "Political Resources and the Growthof Welfare in Affluent CapitalistDemocracies, 1960-82,"AmericanJournal ofSociology, 99 (November 1993). 3. Peter Evans, EmbeddedAutonomy: States and Industrial Transformation(Princeton: Princeton University Press, 1995); and Linda Weiss, The Myth of the Powerless State (Ithaca: Cornell University Press, 1998). in 4. I say competitive instead of democraticbecause of the partialityof Mexican democratization the 1980s. 5. For social policy during military rule, see Dagmar Raczynski, "Social Policies in Chile: Origin, Transformationsand Perspectives,"Democracy and Social Policy Series Working Paper No. 4 (Notre Dame: Kellogg Institute,1993). 6. JonathanFox, "The Difficult Transitionfrom Clientelism to Citizenship: Lessons from Mexico," World Politics, 46 (January1994). 7. This argument is commonly made for the American case. See MargaretWeir,Ann Orloff, and Theda Skocpol, "The Futureof Social Policy in the United States: Political Constraintsand Possibilities" in MargaretWeir,Ann Orloff, and Theda Skocpol, eds., The Politics of Social Policy in the UnitedStates (Princeton:PrincetonUniversity Press, 1988); and William J. Wilson, WhenWork Disappears: The World of the New UrbanPoor (New York:Vintage, 1996). 8. I do not wish to ascribe excessive rigidity or internalconsistency to the emergence of development models or ideologies, only to consider how they can shape outcomes throughtheir elective affinities. On the emergence of import substitution industrialization,see John Waterbury,"The Long Gestation and World Brief Triumphof Import-Substituting Industrialization," Development,27 (February1999). 9. Albert Hirschman, "The Political Economy of Import Substituting Industrialization in Latin America,"QuarterlyJournal ofEconomics, 82 (February1968), 12.

310

MarcusJ Kurtz
10. Waterbury, p. 324; and John Williamson, "In Search of a Manual for Technopols" in John Williamson, ed., The Political Economy of Policy Reform (Washington, D.C.: Institute for International Economics, 1994). 11. Ratl Prebisch, "Commercial Policy in the Underdeveloped Countries," American Economic Review, 49 (May 1959). 12. Pilar Vergara, "Changes in the Economic Function of the Chilean State under the Military Regime," in J. Samuel Valenzuela and ArturoValenzuela, eds., Military Rule in Chile: Dictatorship and Oppositions(Baltimore:The Johns Hopkins University Press, 1986), p. 86. 13. Nationalization can be (and was) seen as both a developmentaland an antipovertystrategy,since privateprofits it released funds for both reinvestmentand redistribution. by removing expatriated 14. Timothy Scully, Rethinkingthe Center: Party Politics in Nineteenth and TwentiethCentury Chile (Stanford:StanfordUniversity Press, 1992), p. 141. 15. ArturoValenzuela, The Breakdownof Democratic Regimes: Chile (Baltimore:The Johns Hopkins University Press, 1978), p. 36. 16. On strikes,see ibid., p. 153. 17. JuanCarlos Marin,Las Tomas(Santiago:ICIRA, 1972). 18. Scully, p. 161. 19. For example, Pilar Vergara,"MarketEconomy, Social Welfare, and Democratic Consolidation in Chile," in William C. Smith, Carlos Acufia, and Eduardo Gamarra, eds., Democracy, Markets, and StructuralReformin LatinAmerica (New Brunswick:Transaction,1994), p. 248. 20. Ministerio de Planificaci6n y Cooperaci6n (MIDEPLAN), Evolucitn de las Politicas Sociales en Chile, 1920-1991 (Santiago:MIDEPLAN, 1991), p. 17. 21. Lifting the minimum wage is quasi-universalin effect because it forms a floor for the formal labor force as well as a reference point for informal (especially agricultural)workers. Its effects on incomes in Chile are thus certainlynot restrictedto the poor; it lifts the living standardsof the many whose earnings are relativelynearbut above or below its level. 22. For example, in education policy sustained support for the MECE programto improve infrastructure in roughly half the country'smunicipal schools contrastswith severe budget cuts in the P900 program specifically targetedat the bottom ten percent of schools. See Graham,pp. 67-68. 23. Pilar Vergara, "In Pursuit of 'Growth with Equity': The Limits of Chile's Free-Market Social Reforms,"NACLA Report on theAmericas, 29 (May-June1996). 24. Calculated from Claudio Serrano, "Gobierno Regional e Iversitn Pfblica Descentralizada," Colecci6n Estudios CIEPLAN,42 (June 1996), 69-79. 25. Jose Wurgaft,Fondos de InversionSocial enAmerica Latina (Santiago: PREALC/OIT,1993). 26. These political dynamics also affect the ability of the poor to organize themselves. See Peter and Houtzagerand MarcusKurtz,"The InstitutionalRoots of PopularMobilization: State Transformation RuralPolitics in Brazil and Chile,"ComparativeStudies in Society and History, 42 (April 2000). 27. Jual Gabriel Valdes, La Escuela de Chicago: Operacitn Chile (Buenos Aires: Grupo Editorial Zeta, 1989); and Marcus Kurtz, "Chile's Neo-liberal Revolution: IncrementalDecisions and Structural Journal of LatinAmericanStudies, 31 (May 1999). Transformation," 28. Patricio Silva, "Technocrats and Politics in Chile: From the Chicago Boys to the CIEPLAN Monks,"Journal of LatinAmericanStudies, 23 (May 1991). 29. Jose Pifiera, El Cascabel al Gato: La Batalla por la Reforma Previsional (Santiago: Zig-Zag, 1991); and Hernin Biichi, La Transformacidn Econtmica de Chile: Del Estatitismo a la Libertad Econtmica (Barcelona:Grupo EditorialNorma, 1993). 30. On the conversion of the bulk of the Chilean left to free market economic ideas, see Kenneth Roberts, "From the Barricades to the Ballot Box: Redemocratizationand Political Realignment in the Chilean Left,"Politics and Society, 23 (December 1995).

311

ComparativePolitics

April 2002

31. Felipe Agilero and Eugenio Tironi, "iSobrevivird el Nuevo Paisaje Politico Chileno?,"Estudios Publicos, 74 (Autumn 1999). 32. The Chilean legislatureis elected entirely from two member districts. In each districtthe first and second place lists receive seats, unless the first place list receives double the votes of the second. In practice, since the left tends to be the third strongest electoral force, the electoral law provides a powerful incentive for center-leftparties to remain in the Concertaci6n alliance and poses a serious barrierfor the at Communistpartyto achieve any representation all. 33. On the centripetal tendencies created by the electoral system, see Rhoda Rabkin, "Redemocratization, Electoral Engineering, and Party Strategies in Chile, 1989-1995," Comparative Political Studies, 29 (June 1996). 34. See Agiiero and Tironi,p. 161, on the Concertaci6n'selectoral base. 35. MIDEPLAN,ProgramasSociales, p. 247; and MIDEPLAN,Distribuci6n, p. 30. 36. Arturo Le6n, "UrbanPoverty in Chile: Its Extent and Diversity,"Democracy and Social Policy Series WorkingPaperNo. 8 (Notre Dame: Kellogg Institute, 1994). demands 37. Indeed,evidence that the Concertaci6nhas proven unwilling to addressthe redistributive of even its organized social constituencies such as the labor movementcan be found in the fact thatthese groups have recently turnedto strikes and mobilization ratherthan negotiation to force attentionto their Neoliberalismo y Transici6nDemocritica en Chile,"Revista demands. See Patricio Silva, "Empresarios, Mexicana de Sociologia, 57 (October-December1995), 23. 38. On the minimumwage, see Bravo andVial, esp. p. 151. de 39. Manuel Antonio Garret6n,El Proceso Politico Chileno (Santiago: Facultad Latinoamericana Ciencias Sociales, 1983). 40. Marcus Kurtz, "Free Markets and Democratic Consolidation in Chile: The National Politics of Politics and Society, 27 (June 1999). RuralTransformation," 41. Philip Oxhorn, OrganizingCivil Society: The Popular Sectors and the Strugglefor Democracyin Chile (University Park:PennsylvaniaState University Press, 1995). 42. Initially,the Concertaci6n saw the minimum wage as an issue for corporatistbargainingbetween the chamberof commerce (CPC) and the laborconfederation(CUT). The CPC quickly withdrewfromthe process, and recently the governmenthas preferredto impose minimum wage increases unilaterallywithout coming to an agreementwith the CUT.The governmenthas shown little flexibility,and it has not been punished for this stance. 43. Wurgaft,p. 59. 44. Carlos Salinas received his Ph.D. from HarvardUniversity in 1978 and was among the new generation of technocraticPresidents. 45. Santiago Friedmann,Nora Lustig, and Arianna Legovini, "Mexico: Social Spending and Food Subsidies during Adjustment in the 1980s" in Nora Lustig, ed., Coping with Austerity: Poverty and Inequalityin LatinAmerica (Washington,D.C.:The Brookings Institution,1995), pp. 344-46. 46. Many observers wonder whether the leftist opposition candidate, Cuauht6moc Cardenas, was denied victory only by fraud.After a suspicious computercrash Salinas was credited with 50.3 percentof the vote. 47. Consejo Consultivo del ProgramaNacional de Solidaridad,El ProgramaNacional de Solidaridad: Una Visi6nde la Modernizacidnde MWxico (Mexico City: Fondo de CulturaEcon6mica, 1994), 11-12. 48. Peter Ward,"Social Welfare Policy and Political Opening in Mexico,"Journal of LatinAmerican Studies, 25 (October 1993). 49. Programa Nacional de Solidaridad, Informacidn Basica sobre la Ejecuci6n y Desarrollo del Programa (Mexico City: SEDESOL, 1994), pp. 113-26. 50. SEDESOL, Solidaridad: Seis Ahiosde Trabajo(Mexico City: SEDESOL/SOLIDARIDAD, 1994), p. 23. 51. Fox, pp. 165-74.

312

MarcusJ Kurtz
52. Wayne Cornelius, Ann Craig, and Jonathan Fox, "Mexico's National Solidarity Program: An Overview,"in WayneCornelius,Ann Craig, and JonathanFox, eds., Transforming State-SocietyRelations in Mexico: The National Solidarity Strategy (San Diego: Center for U.S.-Mexican Studies, 1994), pp. 10-11. 53. Poder Ejecutivo Federal, Plan Nacional de Desarrollo, 1995-2000 (Mexico City: Secretaria de Hacienday Cr6ditoPfiblico, 1995), p. 124. 54. SEDESOL, Seminario de Actualizaci6n sobre Politica Social Integral: Sintesis Programdtica (Mexico City: SEDESOL, 1999). 55. Guillermo Trejo and Claudio Jones, "Political Dilemmas of Welfare Reform: Poverty and Inequality in Mexico," in Susan KaufmanPurcell and Luis Rubio, eds., Mexico under Zedillo (Boulder: LynneRienner, 1998), p. 181. 56. Sara Gordon, "Entrela Eficiencia y la Legitimidad:El PRONASOL como Politica Social," in Las Politicas Sociales de Mixico en los Ahos Noventa (Mexico City: UNAM/FLACSO/Plazay Vald6s, 1996), pp. 249-50. 57. Hira Gortari and Alicia Ziccardi, "Instituciones y Clientelas de la Politica Social: Un Esbozo Hist6rico, 1867-1994," in Las Politicas Sociales de Mixico en los Aios Noventa, p. 226. 58. Ward,p. 628. 59. See James Petras, Politics and Social Forces in Chilean Development (Berkeley: University of CaliforniaPress, 1969). 60. A good example is the brief returnto serious agrarianreform in the early 1970s under President Echeverriain response to rising unrest in the late 1960s. See Armando Bartra,Los herederos de Zapata: Movimientoscampesinosposrevolucionarios en Mexico (Mexico City: Ediciones Era, 1992). 61. Friedmann,pp. 334-41. 62. Juan Horcasitas and Jeffrey Weldon, "Electoral Determinants and Consequences of National Solidarity"in Cornelius, Craig, and Fox, eds., Transforming State-SocietyRelations in Mexico. 63. Fox, p. 166. 64. Ward,p. 626. 65. For an insightful look at the difficulties of autonomous self-organizationin such contexts with an emphasis on small business, see Kenneth Shadlen, "Neoliberalism, Corporatism, and Small Business PoliticalActivism in Contemporary Mexico,"LatinAmericanResearch Review, 35 (2000). 66. The recent narrow election of Socialist Ricardo Lagos (51.3 percent against the right's 48.7 percent) may augurjust such a change. It is notable that critical policy initiatives of the first year of Lagos's administrationfurther universalized and expanded Chilean social provision. They include proposals to create an unemploymentinsurance fund, extend and equalize access to health care across public and private sectors, and reformthe labor law.

313