Working Papers - 1993 (#186 - #201)

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Mercados Financieros y Flujos de Capital en México

Jaime Ros

Working Paper #201 - December 1993


One of the striking features that has characterized Latin American economies in the early nineties has been the rapid expansion of capital inflows into the region. Of the total flow into Latin America the Mexican economy has absorbed almost half. This paper documents the new institutional and external contexts in which this absorption has taken place and analyses the nature and determinants of the capital inflows. The author's main purpose is to evaluate the role of different factors in the origin of these circumstances and to examine the resulting macroeconomic processes of adjustment in the financial markets as well as in the goods markets and the savings-investment process.


Uno de los fenómenos más notables con que se inició la década de los años noventa en América Latina ha sido la revitalización de los flujos de capital hacia la región. En este fenómeno, México ocupa un lugar prominente, ya que aproximadamente la mitad del flujo total ha sido recibida por la economía mexicana. Este trabajo documenta el nuevo entorno institucional y externo en que ha ocurrido el episodio reciente de entradas masivas de capital en México y analiza la naturaleza y determinantes de los flujos. Su objetivo principal es evaluar el rol jugado por distintos factores en el origen de este episodio y examinar los procesos macroeconómicos de ajuste asociados a los flujos, tanto en los mercados financieros como en los mercados de bienes y el proceso de ahorro e inversión.

Jaime Ros, Associate Professor of Economics at Notre Dame, specializes in international political economy and Latin American economic development. He is editor and coauthor of La edad de plomo del desarrollo latinoamericano (FCE, 1993), La organización industrial en México (Siglo XXI, 1990), and MODEM: Un modelo macroeconómico para México (CIDE, 1984). His many articles include "The Mexican Economy: Recent Evolution and Perspectives" (Cambridge Journal of Economics, vol. 4, 1980) and "Mexico from the Oil Boom to the Debt Crisis: An Analysis of Policy Responses to External Shocks, 1978-1985" in Latin American Debt and the Adjustment Crisis (Rosemary Thorp and Laurence Whitehead, eds., Pittsburgh, 1987). He was a senior researcher at ILET (Instituto Latinoamericano de Estudios Transnacionales) and former director of the Department of Economics at CIDE (Centro de Investigación y Docencia Económicas) in Mexico, and senior economist at the Secretariat of the South Commission in Geneva.

This study was carried out as part of the Inter-American Development Bank's research project on "Foreign Capital in the Economies of Latin America." The author is much indebted to Germán Echopar for his help in preparing the data base and for his many comments and suggestions on an earlier version of the text. He also thanks José Casar (ILET, Mexico), Randolph Gilbert (CEPAL, Mexico), and José Alejo Hernández (Bank of Mexico) for their assistance in completing the work on the statistical material. José Casar raised some concerns that led the author to clarify his conclusions. The opinions expressed here, however, together with any remaining errors, are the author's exclusive responsibility.

A version of this paper is now available, under the title "Mercados Financieros, flujos de capital y tipo de cambio en México," in Economia Mexicana 4 (1) 1995 (CIDE).

Juan Linz, Presidentialism, and Democracy: A Critical Appraisal

Scott Mainwaring and Matthew Shugart

Working Paper #200 - July 1993


This paper briefly reviews and critically assesses Juan Linz's arguments about the perils of presidentialism. We largely agree with Linz that presidentialism as it is normally practiced is less likely than parliamentarism to sustain democratic government. Nevertheless, we introduce a number of caveats into the argument. Although we agree with most aspects of Linz's four major criticisms of presidentialism, we disagree with one of them: we argue that presidentialism is less oriented towards winner-takes-all results than Westminster parliamentary systems. We also claim that presidentialism has some advantages that partially offset its drawbacks. These advantages can be maximized by paying careful attention to differences among presidential systems; we build a case for presidencies with weak legislative powers. Presidentialism also appears to be more viable with parties that are at least moderately disciplined, and it is especially problematic with highly fragmented multiparty systems and with congressional elections that occur more frequently than presidential elections. Finally, we argue that switching from presidentialism to parliamentarism could exacerbate problems of governability in countries with very undisciplined parties. All of these points suggest that even if Linz is largely correct in his argument that parliamentary government is more conducive to stable democracy, a great deal rests on what kind of parliamentarism and what kind of presidentialism are implemented.


El presente trabajo analiza brevemente y evalúa críticamente los argumentos de Juan Linz sobre los riesgos del presidencialismo. Nosotros estamos de acuerdo en gran medida con Linz en que el presidencialismo, tal y como es llevado normalmente a la práctica, tiene menos posibilidades que el parlamentarismo de sostener formas democráticas de gobierno. Sin embargo, hacemos varias observaciones en torno a este argumento. Aunque coincidimos con la mayoría de los aspectos de las cuatro principales críticas de Linz al presidencialismo, estamos en desacuerdo con uno de ellos: argumentamos que el presidencialismo se presta menos a resultados de todo o nada que el parlamentarismo de tipo Westminster. También sostenemos que el presiden-cialismo tiene algunas ventajas que compensan parcialmente sus inconvenientes. Estas ventajas pueden maximizarse poniendo una cuidadosa atención a las diferencias existentes entre sistemas presidenciales; argumentamos en favor de presidencias con facultades legislativas limitadas. El presidencialismo también parece ser más viable cuando los partidos son al menos moderadamente disciplinados, y es especialmente problemático en sistemas multipartidistas altamente fragmentados y con elecciones legislativas que ocurren con más frecuencia que las elecciones presidenciales. Finalmente sostenemos que un cambio del presidencialismo al parlamentarismo podría exacerbar los problemas de gobernabilidad en países con partidos muy indisciplinados. Todas estas observaciones sugieren que, aunque el argumento de Linz de que el gobierno parlamentario es más conducente a una democracia estable es en gran parte correcto, mucho depende del tipo de parlamentarismo y del tipo de presidencialismo que se lleve a cabo.

Scott Mainwaring is Professor of Government and International Studies and Fellow of the Kellogg Institute at the University of Notre Dame. He is the author of The Catholic Church and Politics in Brazil, 1916-1985 (Stanford University Press, 1986), and coeditor of and contributor to The Progressive Church in Latin America (Kellogg Institute/University of Notre Dame Press, 1989) and Issues in Democratic Consolidation: The New South American Democracies in Comparative Perspective (Kellogg Institute/University of Notre Dame Press, 1992). He has published articles on political parties, social movements, and transitions to democracy in Latin America.

Matthew Shugart is Assistant Professor at The Graduate School of International Relations at the University of California, San Diego. He is the coauthor of Seats and Votes: The Effects and Determinants of Electoral Systems (Yale, 1989) and Presidents and Assemblies: Constitutional Design and Electoral Dynamics (Cambridge, 1992).

The authors are grateful to Michael Coppedge, Steve Levitsky, and Timothy Scully for helpful criticisms on earlier drafts of this paper.

From Democracy to Democracy: Continuities and Changes of Electoral Choices and the Party System in Chile

Timothy Scully, CSC and J. Samuel Valenzuela

Working Paper #199 - July 1993


After almost seventeen years of authoritarian rule with no regular national elections, Chileans have once again expressed themselves in the polls. The central question addressed in this paper is the extent to which there are continuities in the current elections with the past choices of the voters. This question is examined by comparing current vote totals by party and by tendency with those of the past, and by correlating the votes in the elections of 1969, 1970, and 1973 with the 1988 plebiscite and the 1989 presidential and parliamentary elections. The results show that there is a remarkable consistency of electoral choices in the country, which is still divided into left, center, and right tendencies. And yet there have been changes. New party labels have emerged, and the party system is currently much more centripetal than it was in the past, given a significant degree of consensus among the main political forces over the value of democracy as well as over fundamental socioeconomic policies. Whether these changes will prove to be long lasting in the face of renewed electoral competition over the next years is still an open question.


Después de casi diecisiete años de régimen autoritario bajo el cual no se llevaron a cabo regularmente elecciones nacionales, los chilenos se han manifestado de nuevo en las urnas. La pregunta central de este trabajo es hasta qué grado existe una continuidad entre las elecciones presentes y las pasadas. Esta pregunta es examinada comparando el total de votos actuales por partido y por tendencia con los votos pasados, y correlacionando los votos de las elecciones de 1969, 1970, y 1973 con el plebiscito de 1988 y con las elecciones presidenciales y parlamentarias de 1989. Los resultados muestran que existe una consistencia notable en las opciones electorales en el país el cual todavía se encuentra dividido en tendencias de izquierda, centro y derecha. Y, sin embargo, ha habido cambios. Han surgido nuevos membretes partidistas y el sistema de partidos es, en la actualidad, mucho más centrípeto de lo que era en el pasado, dado el grado de consenso existente entre las principales fuerzas políticas en torno al valor de la democracia y a las políticas socioeconómicas fundamentales. La cuestión que queda pendiente es si estos cambios serán duraderos en presencia de la renovada competencia electoral de los próximos años.

Timothy R. Scully, CSC, is a Fellow of the Kellogg Institute and Associate Professor of Government and International Studies at the University of Notre Dame. His extensive writings on political parties include Rethinking the Center: Cleavages, Critical Junctures, and Party Evolution in Chile (Stanford University Press, 1992) and Los partidos del centro: La evolución política chilena (CIEPLAN, 1992), and he is coauthor and coeditor of a volume with Scott Mainwaring, Building Democratic Institutions: Parties and Party Systems in Latin America (Stanford University Press, 1995).

J. Samuel Valenzuela is a Fellow of the Kellogg Institute and Professor of Sociology at the University of Notre Dame. He is the author of Democratización vía reforma: La expansión del sufragio en Chile (IDES, 1985) and editor of a volume on Labor Movements in Transitions to Democracy (University of Notre Dame Press, 1988). He coedited and contributed to Issues in Democratic Consolidation: The New South American Democracies in Comparative Perspective (Kellogg Series with Notre Dame Press, 1992), Military Rule in Chile: Dictatorships and Oppositions (Johns Hopkins, 1986), and Chile: Politics and Society (Transaction Books, 1976). His articles on comparative labor, development theory, and political change have appeared in English, Spanish, Italian, and French publications.

The authors wish to thank Rodney Ganey of the Social Science Training Lab at the University of Notre Dame and Michael Pries for their help with getting the data in working order, and Jaime Ruiz-Tagle, head of the Programa de Economía del Trabajo in Santiago, Chile, for the use of an office where the first draft of this paper was written. Our appreciation as well to Alan Angell for his comments on an earlier draft. Our names appear in alphabetical order.

Privatization: The Role of Domestic Business

Ernest Bartell, CSC

Working Paper #198 - June 1993


A close examination of the links between privatization programs and domestic business, both in theory and in practice, suggests that the relationships are not nearly so vigorous, uniform, or predictable as conventional promotional arguments imply. It will be argued here that the nature of the relationships between privatization programs and the behavior of domestic business depends upon the goals, methods, and financing of specific national privatization programs as well as on the economic and social characteristics of the private sector in a given country and its macro- and microeconomic policy regime. Privatization programs in themselves are likely to be a secondary and transitory influence on the aggregate behavior of national business with somewhat differing effects and responses within individual sectors of those economies with relatively diverse domestic business communities. As a result, privatization programs are likely to be less important to the incorporation of domestic business into a market-driven development process than other components of economic restructuring and liberalization. These conclusions will be examined briefly in light of the historical record of privatization in Chile, Argentina, Mexico, and Brazil and of interview data with business leaders in Brazil and Chile before and after the installation of their current democratic governments.


El análisis detenido de los vínculos existentes entre los programas de privatización y las empresas locales, tanto en teoría como en la práctica, sugiere que las relaciones entre éstos no son, ni con mucho, tan fuertes, uniformes, o predecibles como lo implican los argumentos convencionales. En este trabajo se argumenta que la naturaleza de las relaciones entre los programas de privatización y el comportamiento de las empresas locales depende de los objetivos, métodos y financiamiento de los programas específicos de privatización, así como de las características económicas y sociales del sector privado de un país determinado y de su régimen de política macro- y microeconómica. En sí mismos, los programas de privatización ejercen, probablemente, una influencia secundaria y transitoria sobre el comportamiento agregado de las empresas nacionales, con efectos y respuestas variados en sectores individuales en aquéllas economías que cuentan con comunidades empresariales locales relativamente diversas. Como resultado, los programas de privatización son, probablemente, menos importantes para la incorporación de las empresas locales a un proceso de desarrollo orientado hacia el mercado que otros componentes de los programas de liberalización y reestructuración económica. Estas conclusiones se examinan brevemente a la luz de la evolución histórica de las privatizaciones en Chile, Argentina, México y Brasil, así como de la información obtenida a través de entrevistas con líderes empresariales en Brasil y Chile antes y después del inicio de sus actuales gobiernos democráticos.

Rev. Ernest Bartell, CSC, is Executive Director of the Helen Kellogg Institute for International Studies and Professor of Economics at the University of Notre Dame. Among his publications are "John Paul II and International Development" in The Making of an Economic Vision, edited by O. Williams and J. Houck (Washington, DC: University Press of America, 1991), and "Private Goods, Public Goods, and the Common Good: Another Look at Economics and Ethics in Catholic Social Teaching" in The Challenge of the Common Good and US Capitalism, edited by J. Houck and O. Williams (Washington, DC: University Press of America, 1986).

Venezuela: The Life and Times of the Party System

Miriam Kornblith and Daniel H. Levine

Working Paper #197 - June 1993


Political parties have been at the center of modern Venezuelan democracy from the beginning. Strong, highly disciplined, and nationally organized parties have dominated political organization and action in the modern period. Parties have penetrated and controlled organized social life and effectively monopolized resources and channels of political action. Beginning in the 1980s, the political parties and the party system as a whole have experienced mounting criticism and challenge. In a time of growing economic, social, and political crisis, efforts have nonetheless been made to loosen national control and open new channels for citizen participation with the aim of 'democratizing Venezuelan democracy.' The ability of the parties to implement these reforms, and to reform themselves in the process, is central to the survival of effective democracy in Venezuela.


Desde sus inicios, los partidos políticos han estado en el centro de la democracia en Venezuela. La vida política de la moderna Venezuela ha sido dominada por partidos políticos fuertes, disciplinados y organizados a escala nacional. Los partidos políticos han penetrado y controlado la vida social y han monopolizado los recursos y canales de la acción política. Desde inicios de la década de 1980, los partidos y el sistema de partidos como un todo han confrontado la crítica creciente, se han visto retados, y han puesto en marcha un conjunto de reformas. Estas reformas pretenden debilitar el control nacional de la dirigencia partidista, abrir nuevos canales de participación ciudadana, para de ese modo democratizar más la democracia venezolana. Estos intentos han ocurrido en un momento de creciente crisis económica, social y política. La habilidad de los partidos para poner en marcha estas reformas y para autorreformarse son cruciales para la sobrevivencia de una democracia efectiva en Venezuela.

Miriam Kornblith is a researcher at the Instituto de Estudios Políticos and Professor at the Facultad de Ciencias Jurídicas y Políticas of the Universidad Central de Venezuela. She is a past Visiting Fellow at the Center for Latin American Studies, Stanford University (1988-1991), and is a Visiting Researcher at the Instituto de Estudios Superiores de Administración (IESA) in Caracas.

Daniel H. Levine is Professor of Political Science at the University of Michigan, and is a past Fellow of the Kellogg Institute. In 1992 and 1993 he has been a Visiting Professor at IESA (Instituto de Estudios Superiores de Administración) in Caracas, Venezuela. His most recent books are Popular Voices in Latin American Catholicism (Princeton University Press, 1992) and Constructing Culture and Power in Latin America (University of Michigan Press, 1993).

The State, Markets, and Development
A Rapporteurs' Report

Enrique Dussel Peters and Mathew A. Verghis

Working Paper #196 - June 1993


This report summarizes the papers and discussions from a conference held at the Kellogg Institute on "The State, Markets and Development." The first section addresses theoretical issues while the second presents the case studies discussed at the conference.


El reporte resume los trabajos y las discusiones de la conferencia realizada en el Kellogg Institute sobre "El Estado, Mercados y Desarrollo". La primera parte analiza temas teóricos y la segunda presenta los estudios de caso que se presentaron en la conferencia.

Enrique Dussel Peters and Mathew A. Verghis are graduate students in the Economics Department at Notre Dame. Dussel is working on current issues related to the North American Free Trade Agreement (NAFTA) while Verghis's dissertation studies the macroeconomic constraints on Indian economic growth.

Modernization and Postmodernization: Theoretical Comments on India

Fred Dallmayr

Working Paper #195 - June 1993


This paper offers a discussion of development theory, with special attention to its relevance in the context of India. Three successive models of development are distinguished in the paper: empirical (structural-functional) development theory; philosophical modernization theory (deriving from Enlightenment teachings); and 'postmodernization' theory, emphasizing cultural resistance to global standardization. In its first section, the paper reviews (once again) the developmental model articulated during the postwar years by social scientists under the aegis of the SSRC. As the author shows, this model gave rise to numerous challenges and rejoinders on both theoretical and political grounds, rejoinders that often, however, bypassed one of the model's central features: its narrowly empiricist outlook. It was chiefly this feature that motivated a new wave of (postempiricist) theorizing which-under the banners of phenomenology, hermeneutics, and critical theory-raised the developmental debate to a philosophical and quasi-transcendental level. This move intensified existing controversies by making modernization and modernity itself central topics of critical inquiry, thus triggering a confrontation between defenders of modernity and of 'postmodernity.' Throughout the presentation, room is given to arguments of Indian philosophers and social theorists, to counteract the conceit of a Western monopoly of the development debate. This focus on Indian thinkers forms the heart of the paper's concluding section which illustrates a loosely postmodern view of development by referring to a strand of argumentation stretching from Gandhi to Ashis Nandy and others.


Este trabajo presenta una discusión sobre la teoría del desarrollo, poniendo especial atención a su relevancia en el caso de la India. En el trabajo se distinguen tres modelos de desarrollo: la teoría empírica (estructural-funcionalista) del desarrollo; la teoría filosófica de la modernización (que proviene de las enseñanzas de la Ilustración); y la teoría de la 'postmodernización', que enfatiza la resistencia cultural a la normalización global. En la primera sección del trabajo se revisa (una vez más) el modelo desarrollista elaborado durante los años de la posguerra por científicos sociales bajo la égida de la SSRC. Como lo muestra el autor, este modelo dió origen a numerosos desafíos y réplicas, tanto en el terreno teórico como en el político. Sin embargo, dichas réplicas muchas veces pasaban por alto una de las características centrales del modelo: su estrecha perspectiva empírica. Fue principalmente esta característica la que originó una nueva corriente de teorías (postempíricas) las cuales-bajo las banderas de la fenomenología, de la hermenéutica, y de la teoría crítica-elevaron el debate sobre el desarrollo a un nivel filosófico y cuasitrascendental. Este movimiento intensificó las controversias existentes convirtiendo a la modernización y a la modernidad misma en temas centrales de la investigación crítica, provocando, así, una confrontación entre los defensores de la modernidad y de la 'postmodernidad'. A lo largo de la presentación, se da cabida a los argumentos de filósofos y teóricos sociales de la India, para contrarrestar la presunción de un monopolio occidental del debate sobre el desarrollo. La atención dada a los pensadores de la India constituye el núcleo de las conclusiones del trabajo, las cuales presentan una visión vagamente postmoderna del desarrollo al referirse a un tipo de argumentación que se extiende de Gandhi a Ashis Nandy y otros.

Fred Dallmayr is Packey Dee Professor of Political Theory at the University of Notre Dame. A native of Germany, he holds a Doctor of Law degree from the University of Munich and a Ph.D. degree in political science from Duke University. Before joining the University of Notre Dame in 1978, he taught at the Universities of Wisconsin-Milwaukee, Georgia, and Purdue where he also served as department chair for five years. He has also been a visiting professor at Hamburg University in Germany and at the New School for Social Research in New York; in addition he has been a research fellow at Nuffield College in Oxford and a senior Fulbright scholar in India. Among his publications are: Beyond Dogma and Despair (1981); Twilight of Subjectivity (1981); Polis and Praxis (1984); Language and Politics (1984); Critical Encounters: Between Philosophy and Politics (1987); Margins of Political Discourse (1989); and Life-World, Modernity, and Critique (1991).

Contesting Authenticity: Battles over the Representation of History in Morelos, Mexico

JoAnn Martin

Working Paper #194 - June 1993


The Mexican state's use of revolutionary history to invoke nationalistic sentiments nurtures a lively tradition of storytelling. Ironically, Buena Vista's storytellers criticize the inauthenticity of official representations of the past even as they draw on the images and ideals of 'official' history to weave their own tales. This paper explores the power of storytelling to create an aura of authenticity in a setting where the boundary between true and false, pure and impure, is contested.


La utilización de la historia revolucionaria por parte del estado mexicano para invocar sentimientos nacionalistas sustenta una viva tradición de cuentos. Irónicamente, los cuentistas de Buena Vista critican la falta de autenticidad de las representaciones oficiales del pasado, aun cuando ellos mismos emplean imágenes e ideales de la historia 'oficial' para forjar sus propios cuentos. Este trabajo explora el poder que tiene la narración de cuentos para crear un aura de autenticidad cuando los límites entre lo verdadero y lo falso, lo puro y lo impuro son debatidos.

JoAnn Martin is Assistant Professor of Sociology and Anthropology at Earlham College, Richmond, Indiana. She received her doctorate from the University of California at Berkeley. She is coeditor, with Carolyn Nordstrom, and contributor to The Paths to Domination, Resistance, and Terror (University of California Press, 1992) and author of "Motherhood and Power: The Production of a Women's Culture of Politics in a Mexican Community," American Ethnologist 17(3). In the fall semester 1991 she was a Residential Fellow at the Kellogg Institute.

The Rational Basis of Wage Determination in Regimes of High Inflation

Edward J. Amadeo

Working Paper #193 - May 1993


In this paper we address the logic of wage determination in a regime of high and accelerating inflation, and the rational basis of 'overindexation' of wages. We discuss the incentives and costs of wage overindexation to the workers, and the determination of the 'optimal' level of wage adjustment. We argue that the degree of overindexation is likely to increase as negotiations become more centralized at the industry level. However, at near-national levels of wage negotiation, the incentives to overindex become much smaller. We also argue that increasing uncertainty over the future path of inflation tends to increase the degree of indexation of wages.


En este trabajo analizamos la lógica de la determinación de los salarios en un régimen de inflación alta y acelerada, así como el fundamento racional de la "sobreindización" salarial. Discutimos los incentivos y los costos de la sobreindización salarial para los trabajadores, y la determinación del nivel "óptimo" de ajuste de los salarios. Proponemos que el grado de sobreindización tiende a aumentar conforme las negociaciones se vuelven más centralizadas a nivel de rama industrial. Sin embargo, a niveles aún mayores de centralización, cuando las negociaciones salariales se vuelven casi nacionales, los incentivos para la sobreindización se vuelven menores. También proponemos que una mayor incertidumbre con respecto a la trayectoria futura de la inflación tiende a incrementar el grado de indización salarial.

Edward J. Amadeo, Associate Professor of the Department of Economics at PUC-RJ, obtained his Ph.D. in Economics from Harvard University in 1985. He has been external consultant for the Brazilian Central Bank, WIDER, PREALC/ILO, the World Bank, and UNRISD. Among extensive publications, he has authored Keynes's Principle of Effective Demand (1989) and coauthored, with Amitava K. Dutt, Keynes's Third Alternative? The Neo-Ricardian Keynesians and the Post-Keynesians (1990) and, with Marcello Estevão, A Teoria Econômica do Desemprego (1991). He is editor of John Maynard Keynes: Cinquenta Anos da Teoria Geral (1989) and Ensaios sobre Economia Política Moderna (1990). He completed a book on 'New Unionism,' Collective Bargaining, and Distributive Conflict in Brazil.

The author is grateful to Eduarda La Rocque, Peter Skott, Willi Semmler, and Lance Taylor for providing useful comments. He is also thankful to José M. Camargo for earlier discussions on issues related to this paper. He is especially grateful to Jaime Ros and Amitava K. Dutt who, with their insightful comments, enhanced the rigor of the analysis and called his attention to some interesting extensions for the model. The author is entirely responsible for the remaining errors.

On the State, Democratization and Some Conceptual Problems
(A Latin American View with Glances at Some Post-Communist Countries)

Guillermo O'Donnell

Working Paper #192 - April 1993


The article argues that for proper understanding of many processes of democratization, current conceptions of the state must be revised, especially with reference to its legal dimension. On this basis several contrasts are drawn between representative, consolidated democracies and the democratic (i.e., polyarchical) forms that are emerging in most newly democratized countries, East and South. From this perspective, various phenomena not presently theorized (except as deviations from a presumed modal pattern of democratization) are discussed. Concepts such as delegative democracy, low intensity citizenship, and a state that combines strong democratic and authoritarian features are introduced for the purpose of that discussion.


Este artículo argumenta que, para entender adecuadamente diversos procesos de democratización, las concepciones corrientes sobre el estado deben ser revisadas, especialmente en lo que se refieren a la dimensión legal del mismo. Sobre esta base el artículo discute varios contrastes observables entre democracias representativas y consolidadas y las formas democráticas (es decir, poliárquicas) que están emergiendo en muchos de los países recientemente democratizados. Desde esta perspectiva, varios fenómenos que no han sido teorizados (excepto como desviaciones de un patrón presuntamente modal de democratización) son discutidos. Conceptos tales como democracia delegativa, ciudadanía de baja intensidad y un estado que combina fuertes elementos democráticos y autoritarios, son introducidos en función de dicha discusión.

Guillermo O'Donnell, Helen Kellogg Professor of Sociology and Government and Inter-national Studies, is Academic director of the Institute.

The ideas presented here owe much to the meetings and various intellectual exchanges of the "East-South System Transformation" project, supported by the MacArthur Foundation. I am particularly grateful to the director and intellectual leader of this project, Adam Przeworski, for his many extremely helpful criticisms and suggestions. Some of the ideas of this text have been inserted and polished by Przeworski and inserted in a volume (Sustainable Democracy, Cambridge University Press: 1995), of which he is the principal author. I presented a previous version of this text at the meeting on "Democracy, Markets, and Structural Reforms in Latin America," sponsored by the North-South Center and CEDES, held in Buenos Aires, March 1992, and at the meeting on "Economic Liberalization and Democratic Consolidation," sponsored by the Social Science Research Council, for the project "Democratization and Economic Reform," held at Bologna-Forli, April 1992. I am grateful for many useful comments received during those meetings, including those of Carlos Acuña, Eduardo Gamarra, and William Smith, codirectors of the first mentioned project. I owe very special thanks to Laurence Whitehead, director of the SSRC project, not only for his helpful criticisms and suggestions but also for his generous efforts to make the present text a reasonably readable one-that he did not entirely succeed is certainly not his fault. I also thank my colleagues at CEBRAP and at the Kellogg Institute for several enlightening discussions.

Economic Policy Elites and Democratic Consolidation

Verónica Montecinos

Working Paper #191 - May 1993


After being the last to join the wave of democratic transitions in the 1980s, Chile is posing intriguing questions for those interested in understanding the present phase of democratic consolidation, not least because of the country's economic accomplishments. This paper suggests that the future of Chile's distinctive transition may be nearer the democratic pole than other "hybrid" democratic-authoritarian regimes that emerged in Latin America in the past decade. The performance of technocratic roles may result in less authoritarian styles of policy-making, due to a unique pattern of interaction between economic and political elites, aided by favorable economic conditions and the legacy of Chile's democratic traditions.


Habiendo sido el último en unirse a la ola de transiciones democráticas de la década de los ochentas, Chile plantea preguntas intrigantes a aquéllos que están interesados en entender la fase actual de consolidación democrática, tanto más como consecuencia de los logros económicos del país. Este trabajo sugiere que el futuro de la transición de Chile puede estar más cerca del polo democrático que el de otros regímenes democrático-autoritarios "híbridos" que surgieron en Latinoamérica en la década pasada. El desempeño de los roles tecnocráticos puede dar lugar a estilos menos autoritarios de formulación de políticas, debido a un modelo único de interacción entre las élites económicas y políticas, apoyado por condiciones económicas favorables y por el legado de tradiciones democráticas de Chile.

Verónica Montecinos is an Assistant Professor of Sociology at The Pennsylvania State University, McKeesport. She has published on the transition to democracy in Chile and on interregional cooperation between Latin America and the European Community. In the fall 1988 she was a Visiting Fellow at the Kellogg Institute.

A Sign of the Times: Television and Electoral Politics in Argentina, 1983-1989

Silvio R. Waisbord

Working Paper #190 - January 1993


This paper examines the use of television as a political campaign tool in the 1983-1989 elections in Argentina. Campaigns were conducted against the background of a national television system that was subject to both commercial and political pressures. Initially, politicians' lack of experience in exploiting the medium led to a scramble for air time right before the election. Within a few years, television became the dominant form of political communication. Political candidates soon developed more sophisticated approaches to television campaigning, but failed to reach a deeper understanding of how television could facilitate the interaction between political parties and citizens in a democracy.


El presente trabajo analiza el uso de la televisión como instrumento de campaña política en las elecciones de 1983-1989 en la Argentina. Las campañas se llevaron a cabo con el trasfondo de un sistema nacional de televisión sujeto tanto a presiones comerciales como políticas. Inicialmente, la falta de experiencia de los políticos en el uso de este medio de comunicación condujo a una rebatiña por el tiempo en el aire justo antes de la elección. Después de unos pocos años, la televisión se convirtió en la forma dominante de comunicación política. Los candidatos políticos pronto desarrollaron enfoques más sofisticados de campaña televisiva, aunque fracasaron en el logro de un entendimiento más profundo de como la televisión puede facilitar la interacción entre los partidos políticos y los ciudadanos en una democracia.

Silvio R. Waisbord finished his Ph.D. dissertation for the University of California, San Diego; his topic is "Unplugged Party Lines: Political Parties, Communication, and Election Campaigns in Argentina, 1983-1989." In the spring semester 1992 he was a Residential Fellow at the Kellogg Institute.

Democratization, Institutional Reform, and Political Conflict: Evaluating Alternative Explanations of Electoral Reform in Costa Rica

Fabrice Edouard Lehoucq

Working Paper #189 - January 1993


This article seeks to identify the conditions that prompt executives and legislators to reform electoral laws, especially those with far-ranging and redistributive consequences. It pursues this objective by evaluating the ability of alternative models of political behavior and institutional reform to account for the promulgation of the 1946 Electoral Code in Costa Rica, one of the oldest and most stable democracies in Latin America and in the world, more generally. The 1946 Electoral Code, among other reasons, merits study because its enactment threatened to loosen the governing party's grip on the presidency in the 1948 elections and promised to eradicate-if not reduce-its majority in Congress in the 1946 midterm as well as 1948 elections. A central conclusion of this article is that, contrary to some recent critiques of strategic models of institutional change, the inability of legislative seat maximization or career protection models to explain the promulgation of the 1946 Electoral Code does not mean that rational choice theories cannot account for the reform of electoral laws. By developing a third model that focuses upon the interest incumbents have in promoting political stability, this paper shows that the creation of institutions that promise to punish key sectors of the ruling bloc is prompted, in part, by the threat of a civil war that at least some incumbents fear losing. The establishment of institutions with such redistributive repercussions also stems from the willingness of some within the ruling bloc to fashion a new alliance with those in the opposition who also share an interest in political stability.


El presente artículo busca identificar las condiciones que impulsan al poder ejecutivo y a los legisladores a reformar las leyes electorales, especialmente aquéllas que tienen consecuencias de gran alcance y redistributivas. Este objetivo se persigue mediante la evaluación de la capacidad que tienen los modelos alternativos de comportamiento político y reforma institucional para explicar la promulgación del Código Electoral de 1946 en Costa Rica, una de las democracias más antiguas y estables existentes en Latinoamérica y en el mundo en general. El Código Electoral de 1946 merece ser estudiado, entre otras razones, porque su promulgación amenazó con reducir el dominio del partido gobernante sobre la presidencia en las elecciones de 1948 y prometió erradicar-si no reducir-su mayoría en el Congreso en las elecciones de mitad de período de 1946 así como en las de 1948. Una conclusión central de este artículo es que, contrariamente a algunas críticas recientes de modelos estratégicos de cambio institucional, la incapacidad de los modelos de maximización de escaños legislativos o de protección de carrera para explicar la promulgación del Código Electoral de 1946 no significa que las teorías de la elección racional sean incapaces de explicar la reforma de las leyes electorales. Al desarrollar un tercer modelo basado en el interés de los políticos en el poder en promover la estabilidad política, este trabajo muestra que la creación de instituciones que prometen penalizar a sectores clave del bloque gobernante es impulsada, en parte, por la amenaza de guerra civil que al menos algunos de los políticos en el poder temen perder. El establecimiento de instituciones con tales repercusiones redistributivas también surge de la voluntad de algunos dentro del bloque gobernante de formar una nueva alianza con aquéllos en la oposición que comparten el interés en la estabilidad política.

Fabrice E. Lehoucq completed his doctoral dissertation for the Department of Political Science at Duke University. In 1989, he taught in the M.A. Program in Central American History, School of History, at the Universidad de Costa Rica. He has received grants from the Harry S. Truman and Tinker Foundations as well as from the SSRC. He has published articles on politics and institutions in Costa Rica in the Journal of Latin American Studies, the Anuario de Estudios Centroamericanos, and the Revista de Historia. He was a Residential Fellow at the Institute during the spring semester 1992.

Major portions of the research upon which this article is based were made possible by an International Doctoral Research Fellowship furnished by the Social Science Research Council and the American Council of Learned Societies. The author acknowledges the help of Benjamín Núñez, Vilma Peña, and Sara Soto Orozco, who helped him to collect much of primary source data referenced in this essay. Iván Molina Jiménez made some useful suggestions on the penultimate version of this paper. Finally, he thanks Torben Iversen for several lengthy conversations about the themes found in this article as well as his willingness to comment upon an earlier version of it.

Poverty in Mexico: An Empirical Analysis

Nora Lustig

Working Paper #188 - January 1993


The main objective of this paper is to measure the incidence of poverty in Mexico using the 1984 Income-Expenditure Survey. The contribution is threefold. First, poverty is estimated using three poverty measures and a range of six poverty lines available for Mexico. Second, the study compares the resulting estimates with those of other available studies based on the same survey. Third, it provides a profile of poor households in terms of their relative position, material conditions, and demographic, educational, and occupational characteristics.


El principal objetivo de este trabajo consiste en medir la incidencia de la pobreza en México utilizando la encuesta de ingreso y gasto de 1984. La aportación es triple. Primero, la pobreza se estima utilizando tres medidas de pobreza y un rango de seis líneas de pobreza disponibles para México. Segundo, el estudio compara las estimaciones resultantes con aquéllas de otros estudios disponibles basados en la misma encuesta. Tercero, proporciona un perfil de las familias pobres en términos de su posición relativa, condiciones materiales, y características demográficas, educacionales y ocupacionales.

Nora Lustig is a Senior Fellow in the Foreign Policy Studies program at the Brookings Institution. A sample of her recent publications include Mexico: The Remaking of an Economy (Brookings Institution, 1992); North American Free Trade: Assessing the Impact (with Barry Bosworth and Robert Lawrence, eds., Brookings Institution, 1992); "From Structuralism to Neostructuralism: The Search for a Heterdox Paradigm" in The Latin American Development Debate: Neostructuralism, Neomonetarism, and Adjustment Processes, Patricio Meller, ed., (Westview Press, 1991).

The author is very grateful to Arianna Legovini for providing excellent research assistance in the preparation of this document. She is also greatly indebted to INEGI for providing the 1984 Income Expenditure Survey and patient advice on its use. In particular, she would like to thank Carlos Jarque, head of INEGI, and María Teresa Jiménez and Narciso Arevalo. Last, but not least, she thanks Oscar Altimir and two anonymous referees for their extremely helpful comments, Surjit Bhalla and Santiago Levy for useful conversations and Annette Leak for typing several versions of this document.

From Trade Liberalization to Economic Integration: The Case of Mexico

Enrique Dussel Peters and Kwan S. Kim

Working Paper #187 - January 1993


This paper reviews Mexico's economic situation before 1982. It outlines the evolution of Mexico's inward-oriented strategy and its experience with trade liberalization since 1985, highlighting the causes of the structural crisis manifested in 1982. Sections II and III examine the reform policies of the de la Madrid administration (1982-1988) and the more radical approach under the current Salinas administration. These sections also explore the implications for Mexico of changing international conditions from the 1980s onwards and the potential of its current development strategy. Finally, the paper examines the conditions and implications for Mexican development of the North American Free Trade Agreement. The paper concludes with a prospective analysis of the Mexican economy.


Este trabajo analiza la situación económica de México anterior a 1982. Describe la evolución de la estrategia 'hacia adentro' de México y su experiencia con la liberalización económica desde 1985, enfatizando las causas de la crisis estructural que se manifestó en 1982. Secciones II y III examinan las políticas reformistas de la administración de de la Madrid (1982-1988) y el proyecto más radical bajo la administración de Salinas de Gortari. Estas secciones además examinan las implicaciones de las actuales condiciones internacionales desde los 1980s y las posibilidades de la estrategia de desarrollo actual. Por último, el trabajo desarrolla las condiciones e implicaciones del Tratado de Libre Comercio para el desarrollo de México. El trabajo concluye con un análisis en perspectiva de la economía mexicana.

Enrique Dussel Peters was a graduate student in the Department of Economics at the University of Notre Dame. He has worked and published on Latin America's debt crisis and wrote his dissertation on "Industrialization and Foreign Trade Liberalization in the Mexican Manufacturing Sector and the Impact of the North American Free Trade Agreement."

Kwan S. Kim is Professor of Economics and Departmental Fellow of the Kellogg Institute at the University of Notre Dame. He is a development economist, occasionally serving as an economic consultant for governments of developing countries and for international agencies. His career includes four years as a Rockefeller Foundation scholar in East Africa, two years as a senior economist with the Agency for International Development, and short stints as an economic advisor or consultant at such institutions as the Hudson Institute, UNIDO, and the Nacional Financiera in Mexico. He has published extensively in over fifty professional journals and edited volumes in the areas of development studies, international trade, econometrics, development planning, and industrialization, with a special interest in East Africa, East Asia, and Mexico, and has edited Papers on the Political Economy of Tanzania and Debt and Development in Latin America. He is author of Industrial Policy and Development in South Korea and coauthor of Development Strategies for the Future of Mexico and Korean Agricultural Research: The Integration of Research and Extension.

An initial version of this paper was presented at the session "Issues in Mexican Structural Adjustment" of the North American Economics and Finance Association (NAEFA) meeting in New Orleans, January 3-5, 1992. The authors thank Maxwell Cameron, Miguel Ramirez, and Jaime Ros for helpful comments and discussions.

Mexico's Trade and Industrialization Experience Since 1960: A Reconsideration of Past Policies and Assessment of Current Reforms

Jaime Ros

Working Paper #186 - January 1993


As are many other developing countries, but perhaps faster and farther than most of them, Mexico has been moving in the 1980s toward a liberalized trade regime after a long period of import subsitution industrialization. Compared to other experiences, and especially to those which are also well advanced in this process such as Chile and Bolivia in Latin America, the Mexican case shows a number of singular features which, over a longer time span, will probably make it a unique case of economic and political success in terms of the smoothness of its transition, given the small adjustment costs involved and the virtual absence of political tensions and resistance to change. This paper argues that-besides the critical role of non-economic factors, including geography and politics-this outcome can largely be attributed to the success that Mexico had with import substitution industrialization and, perhaps more paradoxically, to the very adverse macroeconomic conditions under which trade reform was undertaken in the 1980s. At the same time, and for related reasons, the paper is rather skeptical about the long-term benefits that the particular form of trade liberalization adopted is likely to bring.


Al igual que muchos otros países en desarrollo pero quizás más rápidamente y más lejos que la mayoría de ellos, México ha avanzado en la década de los ochentas hacia un régimen comercial más liberal después de un largo período de industrialización por sustitución de importaciones. Comparado con otras experiencias, y especialmente con las de Chile y Bolivia en Latinoamérica que se encuentran muy avanzados en este proceso, el caso mexicano presenta cierto número de rasgos particulares que a la larga probablemente lo convertirán en un caso único de éxito económico y político, dada la suavidad de su transición, los bajos costos de ajuste y la ausencia virtual de resistencia al cambio y tensiones políticas. Este trabajo argumenta que-además del papel crítico de los factores no económicos, incluyendo la geografía y la política-este tipo de transición puede explicarse por la no menos exitosa experiencia que tuvo México con la industrialización por sustitución de importaciones y, quizás más paradójicamente, por las condiciones macroeconómicas tan adversas bajo las cuales se llevó a cabo la reforma comercial en la década de los ochentas. Al mismo tiempo y, por razones relacionadas con lo anterior, este trabajo se muestra escéptico en relación con los beneficios de largo plazo que puede traer consigo la forma particular de liberalización comercial adoptada.

Jaime Ros, Associate Professor of Economics at Notre Dame, specializes in international political economy and Latin American economic development. He is coauthor of La organización industrial en México (with José I. Casar et al., Siglo XXI, 1990) and editor of MODEM: Un modelo macroeconómico para México (CIDE, 1984). His many articles include "The Mexican Economy: Recent Evolution and Perspectives" (Cambridge Journal of Economics, vol. 4, 1980); "Mexico from the Oil Boom to the Debt Crisis: An Analysis of Policy Responses to External Shocks, 1978-1985" in Latin American Debt and the Adjustment Crisis (Rosemary Thorp and Laurence Whitehead, eds., Pittsburgh, 1987); and, in collaboration with Carlos Márquez, "Labor Market Segmentation and Economic Development in Mexico" in Economic Development and Labor Market Segmentation (Charles Craypo and Frank Wilkinson, eds., forthcoming). He was a senior researcher at ILET (Instituto Latinoamericano de Estudios Transnacionales) and former director of the Department of Economics at CIDE (Centro de Investigación y Docencia Económicas) in Mexico, and senior economist at the Secretariat of the South Commission in Geneva.

This paper was prepared for the UNU/WIDER project on Trade and Industrialization Reconsidered. The author is indebted for comments to Ernest Bartell, c.s.c., José Casar, José Luis Estrada, Claudia Schatan, and the participants at the WIDER conference held at the OECD Development Centre, Paris, August 31-September 3, 1991. Special thanks are due to Gerry Helleiner for his many comments and suggestions on an earlier version. All remaining errors are entirely the responsibility of the author.