Latin America's resumption of democratic rule in the 1990s was greeted by many political scientists with a great deal of deterministic pessimism. Despite the fact that the region was for the first time since its independence governed by democratically elected presidents (with the notorious exception of authoritarian Cuba), numerous political scientists seemed unable to allow that Latin America had entered a new phase of its political development. Steeped in neo-Marxist explanations of politics, which dominated the study of Latin American politics in earlier decades, many observers appeared convinced that the various social forces that had shaped Latin America's political evolution in the past—international capitalist interests, compliant domestic elites, and authoritarian personalismo—would continue to drive political processes. Such an attitude has underpinned numerous analyses of policymaking over the last two decades in general, and has guided explanations of the adoption of market-friendly economic policies, or what critical observers generally label “neo-liberalism,” in particular.
The two main stories, as commonly told, have been that the dismantling of state-led economic models during the 1980s and 1990s resulted from either the imposition of economic liberalism by international financial institutions or the ability of U.S.-trained technocrats to convince domestic elites to push for economic liberalization, thus insulating themselves from democratic demands. These narratives have tended to ignore the influence that citizens' preferences, demands, and, ultimately, votes have on public policymaking in democratic contexts: as if electors did not matter. That citizens in the three keenest economic liberalizers (Argentina, Mexico, and Peru) returned “neoliberal” governments to power in the mid-1990s through elections does not mean that electoral considerations were not at play and that these governments did not receive a majority of votes.
Maria Victoria Murillo's masterful and important study, Political Competition, Partisanship and Policymaking in Latin American Utilities, is an especially welcome addition to the debate on economic policy reform in Latin America. In her nuanced analysis, Murillo challenges dominant narratives on economic reform and demonstrates that partisan preferences and electoral competition do indeed matter. She studies the privatization of two public utilities, telecommunications and electricity, to argue that “beneath the veneer of policy convergence,” the literature on privatization in Latin America suggests that “electoral choices did shape policy outcomes” in these reforms, even when external pressures were high (p. 3).
By looking at the effects of political competition on policy reform, the author argues that both differences in partisanship and electoral choices have an effect on the timing of privatization (time 1), the type of privatization (time 2) and the postprivatization patterns in regulatory policy. The book is divided into three main general sections, each of which seeks to explain cross-national variance along these three policy levels.
In the first section, Murillo explores the conditions under which governments liberalized the telecommunications and electricity sectors. Accounting for common external pressure to liberalize as applied to countries in the region, she demonstrates, through statistical analyses, that electoral competition explains the timing of policy adoption. Because voters are generally distrustful of market reforms, privatization is significantly (and 75%) less likely to occur when, in a competitive political environment, a challenger poses a credible electoral threat opposing market-oriented reform. In the absence of these challenges, Latin American governments succumbed to fiscal pressures and demands for technological upgrading and introduced market-oriented reforms in public utilities. While these pressures led left-leaning governments, or “pragmatic populists,” to accept the privatization of the two sectors, the type of privatization that took place (time 2) varied depending upon the partisan identities of reformers. These identities impacted the ways in which reformers filtered information regarding technical choices and influenced their choice of experts, to whom they delegated further complex policy decisions.
In the second section, Murillo explores how both the reformers' partisan biases and the different distributive demands of their constituents conditioned the resulting postprivatization regulatory content as being either “market-controlling” or “market-conforming” regulation. The former refers to the establishment of a regulatory framework that provides strong market oversight, whereas the latter allows the market to mitigate conflict among firms and therefore establish weak regulatory oversight. On the basis of an index developed to measure variance in regulatory strength, which includes regulations regarding foreign investment and entry rules, Murillo argues that market-conforming regulation was more likely to be established under right-wing politicians, who believed in the market creed, whereas market-controlling regulation was more likely to be established by converted populists.
In the third section of the book, the author narrows her analysis to three cases, Argentina, Chile, and Mexico, to look at postprivatization patterns in regulatory policy. In this section Murillo very convincingly demonstrates that once privatization has taken place, both partisan preferences and political competition also matter because policymakers respond to demands and will cater to consumers. In situations of intense political competition, governing parties will be more sensitive to salient issues such as tariffs. The distribution costs and benefits among providers, sectoral rivals, and consumers will vary depending upon the political salience of the issue and level of competition.
This book is an impressive and rigorously researched study. Given its ambition and magnitude, readers may well find some components stronger than others. While the inclusion of Chile during the Concertación years in the analysis of postreform patterns is sensible, Chile's inclusion into the discussion regarding the timing of privatization may appear to be less so: Political competition was not existent during the Pinochet years, and so its comparability with electoral democracies is stressed. The work would have also benefited from a closer look at executive–legislative relations. Murillo does a terrific job of exploring the contexts and choices made by policymakers in the executive branch of government, but, in some cases, parliaments played important roles in the politics of economic reform. This was certainly the case with Mexico after the 1997 midterm elections when the dominant party lost its majority in the lower house of congress for the first time in 68 years.
These wrinkles do not detract from the quality of this outstanding work, however. Political Competition makes a significant contribution to debates around economic reform, the influence voters have on policy direction in new democracies, and political institutions. It provides a corrective to the overly pessimistic assessments of democratic politics and policymaking in Latin America with a clear yet extremely important finding: In democracies, however imperfect, voters matter.
