Few contemporary issues have generated more controversy than the effects of economic globalization on human welfare. The premise of Arie Kacowicz’s book is that the persistent disagreements over this question reflect the fact that globalization’s impact is powerfully mediated by politics, and especially domestic politics. More specifically, the author argues that the key determinant of the trajectory of both poverty and inequality since the 1980s has been the “strength” of the domestic state. Because strong states are characterized by “good governance” they tend to implement the policies necessary to improve the welfare of their citizens, especially the most vulnerable among them. In addition, he contends that political institutions at the regional and global level also influence outcomes on these two variables. The author illustrates his “intermestic” model through a broad analysis of Latin America, a relatively in-depth case study of Argentina, and a brief attempt to compare Argentina to two of its neighbors, Brazil and Chile. In the concluding chapter he widens the empirical scope further by comparing Latin America to other developing regions of the world.
This is an ambitious book in terms of the scope of the research question and the diversity of countries and regions examined. The idea that the impact of globalization on social welfare is mediated by domestic politics is not especially counterintuitive, but is nonetheless important and worth refining. Kacowicz also demonstrates considerable fluency in a wide variety of development-related issues, from the ethics of poverty reduction to the historical evolution of Latin American economic policymaking. Unfortunately, the book suffers from a number of flaws that keep it from realizing its full potential. I focus here on problems in two key areas: the research design and the theoretical model.
To get at the causes of cross-national variation in poverty and inequality outcomes, it would make sense to examine a few cases in-depth, use large-n statistical techniques, or employ some combination of these two strategies. However, Kacowicz ends up pursuing none of these approaches. He eschews statistical analysis and the only country he examines in any significant depth is Argentina. His discussion of the Brazilian and Chilean cases (which are folded into the Argentina chapter) is simply too superficial to yield much fruit, and the chapter that examines Latin America as a whole is dedicated mainly to describing broad trends in economic performance, poverty and inequality over time, rather than to systematically examining the causes of cross-national variance.
With regard to the theoretical framework, the book suffers from a number of shortcomings. One involves the crucial notion of state strength. Kacowicz defines a strong state as one that “enjoys a high level of political legitimacy, authority, and recognition by its citizens and its civil society, as epitomized by the state’s ability to collect taxes and to mobilize its population, in terms of both peace and war” (p. 70). This brief definition seems promising, but the author never lays out a clear account of the roots of state legitimacy or the relationship between legitimacy and effective, welfare-enhancing governance. Moreover, in deploying the concept of state strength in his empirical analysis the author largely ignores the idea of legitimacy. When he talks about state strength he refers to such variables as corruption, violence, institutional efficiency, property rights, and even the range of policy tools available to intervene in the economy. These may well be causally linked to legitimacy, but there is little explicit discussion of the character and direction of those links.
One seemingly important aspect of the ambiguity surrounding the concept of state strength is the author’s treatment of its relationship to political regime. On page 80 Kacowicz notes in passing that success in poverty reduction is not necessarily a function of “the type of political regime.” However, on the very same page he suggests that a key “policy implication” of his model is that it points to the “relative advantage of prosperous, market-oriented democracies” and the utility for developing countries of adopting “social democracy in order to cope successfully with the challenges and opportunities of globalization.” There are probably ways to square these two apparently contradictory claims within a broader theoretical account of the links between politics and redistribution, but the author never really gets around to that task.
A related shortcoming involves Kacowicz’s contention that state strength leads to policies that reduce poverty and income inequality. While there may be some validity to this perspective, it is too simplistic. Among other problems, it ignores the possibility that the causal arrow may point in the opposite direction. Is it not at least equally plausible that the state’s legitimacy may at times derive from episodes in which authorities used state power to provide concrete benefits to large swaths of the population? Most scholars of Latin America would probably agree that the reforms initiated by pioneering leaders like José Battle in Uruguay, Lázaro Cárdenas in Mexico and José Figueres in Costa Rica had such an impact. However, Kacowicz does not seriously consider that possibility.
The problems inherent in the author’s treatment of state strength and its relationship to redistribution are on display in his discussion of the recent decline in poverty and inequality in Argentina, beginning around 2003. This trend poses a challenge to his theory because Kacowicz characterizes Argentina as a case of almost chronic state weakness. He explains it by arguing that the Argentine state actually got stronger during this period (p. 146, 163). However, his fleeting discussion of these years (pp. 155–157 and 182–183) focuses almost exclusively on the policies that led to improving social conditions, including renegotiation of the foreign debt, high levies on booming farm exports, and increased social spending. The author would apparently have us believe that these policies reflected the impact of a stronger state, but it seems more plausible that the direction of causality is the reverse, in other words, that the change in policy tack led (at least temporarily) to an increase in the state’s domestic credibility.
A final deficiency of the theoretical framework is the ambiguous incorporation of international organizations, especially those of global scope, such as the World Bank, International Monetary Fund, and World Trade Organization. In a model that purports to explain cross-national variation in dealing with globalization, one would tend to expect these institutions to be present only as a constant aspect of the global context. Yet, the author seems to want to frame their influence as a variable that shapes different national outcomes with regard to poverty and inequality (pp. 73–78). This would be convincing only if he could show that their policies vary across countries in ways that do not simply reflect domestic conditions in the respective country. Yet, he does not make that case, either in the elaboration of his theoretical model or in the empirical chapters.
Although these problems keep Globalization and the Distribution of Wealth from being a truly major contribution to the scholarly literature, the book is still valuable as an introduction to the important contemporary debate on the social impacts of globalization. It also constitutes a solid and evenhanded overview, with some comparative perspective, of Argentina’s puzzling economic development trajectory.
