This book provides an in-depth historical analysis of privatisation in Costa Rica, focusing on the efforts to privatise four public organisations. Instead of discussing privatisation in its ideological and theoretical context, the book looks at it from an empirical perspective. This approach has two benefits. Firstly, it avoids a cumbersome repetition of the theoretical arguments in favour and against privatisation, too often read by any researcher interested in Latin America. Secondly, by using a case study approach the author emphasises that privatisation has different implications depending on what is privatised, something often overlooked by both proponents and critics of privatisation. The author provides an extremely well informed account of the attempts to privatise different agencies and branches of the Costa Rican public sector. The case studies do not just discuss privatisation in terms of its costs and benefits, but also look at the origins, functions, and public perception of the public agencies that are being or will be privatised. The study is informative and very useful for the researcher interested in Costa Rica and Central America. Costa Rican scholars may find Chamblerlain's key arguments familiar, as they converge with those of the array of local authors that he draws from and quotes. One of the book's accomplishments is precisely that it provides the English- speaking academic community with a well-structured account of the interesting story of privatisations in Costa Rica, very familiar to Costa Ricans but so far not very well known outside of Central America.
Chamberlain uses the Costa Rican case to articulate a strong criticism of privatisation, based on the idea that it may undermine the social stability that has allowed this small Central American country to reach remarkable levels of economic and social development, and to avoid the revolutions and coups that affected all of the democracies of Latin America during the Cold War. The author explains the origins of the Costa Rican welfare state and its evolution, highlighting how, in several sectors such as telecommunications, it has provided the population with services even more efficiently than some of its regional and global privatised counterparts. His critique of privatisation is particularly well timed: in the aftermath of the financial crisis the state is being resurrected as a key developmental actor even in the most advanced economies. One shortcoming of the book may be the little space dedicated to the role of the state in education, given that Costa Rica has one among the highest literacy rates in Latin America. The developmental model that Costa Rica has adopted since the late 1980s has focused on attracting foreign direct investment in services and knowledge-intensive sectors, leveraging its high levels of average literacy, language skills, and the technical preparation of its engineers. If the diffusion of private education causes a decline in the quality of public schools, as it has already happened in many Latin American countries, this would threaten the sustainability of the Costa Rican developmental model. Costa Rica has achieved social stability, as underlined by Chamberlain, thanks to its welfare state. An important part of the story is the Costa Rican education system, which has allowed low-income families to access not only public sector jobs, but also highly paid jobs in the multinationals that invested during the 1990s. This mechanism of social mobility will disappear if the quality gap between private and public schools increases. The study of Costa Rican privatisation that this book provides would have benefited from a chapter on education and the schooling system.
The author accurately illustrates that the privatisation of Costa Rican public agencies has not been a purely domestic affair. He underlines how the USA, which during the 1980s provided massive aid flows to Costa Rica via its USAID agency, pressured different governments to liberalise and privatise the several sectors in which the state played a key role, ranging from electricity, to health and insurance. The book succeeds in exposing the exceptionality of Costa Rica, a small country that, despite mounting pressure from the USA, its main trade partner and donor, has been one of the slowest in Latin America to privatise and liberalise its markets.
Chamberlain makes a passionate argument against privatisation in Costa Rica. He illustrates that in developing countries privatisation may lead to more rather than less corruption and inefficiency, the very illnesses it is supposed to cure. The same argument would have been stronger if complemented by a comparative study of other Latin American countries with similar welfare states, such as Uruguay, or of similar privatisations in different countries, such as the liberalisation of electricity, insurance and telecommunications. In the conclusions the author states that ‘there is little hard evidence that an export-led economy has increased domestic production or fostered widespread prosperity among citizens in countries where this strategy has been adopted.’ He then mentions the Asian Tigers as examples of countries that did not follow an export-led strategy. This sounds slightly confusing. As famous scholars such as Lall and Wade have argued in their studies (Lall, 1999, 2001; Wade, 2004), the state played a key role in the development of the Asian Tigers by fostering the exports of increasingly sophisticated manufactured goods, not by promoting inward-looking protectionism. The author does a good job in exposing the dangers of privatisation in Costa Rica. However, his suggestion that Costa Rica may find an engine of growth and development in its tiny domestic market sounds rather unrealistic, even to an audience highly critical of neo-liberalism; even Cuba is now looking at ways to increase its exports.
