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UC Berkeley UC Berkeley Electronic Theses and Dissertations Title Including Outsiders: Social Policy Expansion in Latin America Permalink https://escholarship.org/uc/item/6dd0h7j3 Author Garay, Maria Candelaria Publication Date 2010 Peer reviewed|Thesis/dissertation eScholarship.org Powered by the California Digital Library University of California Including Outsiders: Social Policy Expansion in Latin America By María Candelaria Garay A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Political Science of the Graduate Division of the University of California, Berkeley Committee in charge: Professor Ruth Berins Collier, Co-Chair Professor Jonah Levy, Co-Chair Professor David Collier Professor Paul Pierson Professor Peter Evans Fall 2010 Abstract Including Outsiders: Social Policy Expansion in Latin America By María Candelaria Garay Doctor in Philosophy in Political Science University of California, Berkeley Professor Ruth Berins Collier, Co-Chair Professor Jonah Levy, Co-Chair A large share of the population in Latin America has historically lacked access to health care, stable income, and old-age pensions. While social protection was granted to workers in the formal sector—that is, those with labor contracts—workers outside the formal sector and their dependents remained unprotected or underserved by social policy. Labor-market outsiders include the urban informal sector—i.e., the self-employed, street vendors, and employees hired off the books—as well as rural workers and the unemployed. Over the last quarter of the 20th century, this mass of unprotected outsiders and dependents represented at least 50 percent of the population in the most industrialized countries in Latin America, and a large part of them lived in poverty. Beginning in the 1980s, the debt crisis and ensuing market reforms did not seem to augur well for initiatives to address this welfare gap. Most comparative analyses on social policy in Latin America have pointed to declining state capacity to extend social protection, and limited channels for outsiders to influence policymaking. In the face of fiscal constraints and capital scarcity, most research has described a process of social policy retrenchment and the distribution of clientelistic provisions for the poor. In this political and economic scenario, the creation of broad-reaching, stable, rule-based social transfers and services for outsiders appeared highly unlikely. Contrary to these expectations, this study documents a dramatic expansion of rule-based social policy—health care, pensions, and income-support programs—in Argentina, Brazil, Chile, and Mexico starting in the late 1980s. These social policy innovations are surprising not just because they reach outsiders, but also because they are massive. For example, pension benefits have been extended to the majority of outsiders aged 65 and over in Argentina and Brazil, where they reach 97 and 80 percent of this population, respectively. Chile and Mexico have also seen significant expansions, with benefits reaching 62 and 38 percent of the outsider population aged 65 and over, respectively. These levels of protection contrast with pronounced lack of coverage before expansion. Within the general trend of expanding social programs for outsiders, this study identifies two distinct models of social policy, which I term restrictive and inclusive. Restrictive policies have limited scope of coverage, provide lower benefit levels, and do not include the participation 1 of social organizations in implementation. Inclusive policies, by contrast, are broad reaching, often achieving universal or near-universal coverage, provide higher benefit levels, and include social organizations in policy implementation. To account for social-policy expansion, this study provides an analytical framework that highlights the importance of democracy for social policy change. In contrast to prevailing views about the failure of democratic regimes to respond to outsiders, I argue that social policy expansion was triggered by two causal factors generally favored by democratic politics: a) electoral competition for the vote of outsiders, and b) mobilization from below. These causal factors have further shaped the process of policy design, producing different social policy models. In Mexico and Chile, electoral competition for outsiders propelled incumbents to expand social policy, with the resulting compromises leading to the creation of a restrictive policy model. In Argentina and Brazil, mobilization from below put pressure on incumbents to expand social policies and to include social groups in the implementation of the new programs, producing an inclusive policy model. This study is based on extensive fieldwork and original data collection in each policy area and country case from the 1980s through 2009. It also undertakes in-depth analyses of the secondary literature and archival materials to test the argument in the four Latin American countries from the mid-20th century until systematic institutionalized program expansion began. It explains not only the massive expansion of programs for outsiders beginning in the 1980s, but also the limited, clientelistic, or even non-existent, coverage in the earlier period. Finally, the argument is tested on other middle-income countries—Venezuela, Uruguay, and South Africa— to provide an assessment of its broader applicability for understanding the conditions under which social protection is extended to populations outside the formal labor market. 2 Para Fernando, Gonzalo y Camila Pérez Leirós. i Table of Contents Acknowledgements iii Acronyms and Abbreviations v Chapter 1 Protecting Labor-Market Outsiders in Latin America 1 Chapter 2 The Social Policy Divide Before Expansion 24 Chapter 3 Social Mobilization from Below and Inclusive 57 Social Policy in Argentina Chapter 4 Social Mobilization from Below, Electoral 92 Competition, and Inclusive Social Policy in Brazil Chapter 5 Electoral Competition for Outsiders and Restrictive 135 Social Policy in Mexico Chapter 6 Electoral Competition for Outsiders and 165 Restrictive Social Policy in Chile Chapter 7 Including Outsiders in Latin America and Beyond 196 Appendices 217 Interviews 220 References 224 ii Acknowledgements Coming to Berkeley has been an amazing intellectual experience and I would like to thank the members of my dissertation committee for their support. Ruth Berins Collier has provided intellectual stimuli, support, and inspiration since my first year as a graduate student. I am very grateful for all that I could learn from her, and for her enthusiasm and encouragement to pursue the issues that seem interesting. Jonah Levy has taught me how to think about social policy. His class on the welfare state was a turning point in my life as a student. Jonah has helped me identify what mattered in my research, and my work has been greatly enhanced by his guidance and generosity. David Collier has been a great source of support while writing this dissertation. He has pushed me to think about the broader theoretical issues in the field of Latin American Politics and fundamentally to feel confident about my work. Paul Pierson led the dissertation workshop where I first developed this project and his intellectual clarity and his comments have been extremely helpful. Peter Evans has helped me think what ideas to pursue further as I began my work. His class on development helped me think about the implications of my research in other regions and about the sociological aspects involved. I am grateful for my committee’s generous guidance and support in developing this project. I would also like to thank Marion Fourcade, who commented on the first version of this project as part my defense committee, Margaret Weir, whose political sociology class and her work have been of great inspiration, and Nick Ziegler for sharing his knowledge about European politics and for his generosity. I would also like to thank Victoria Murillo and Peter Gourevitch for their comments on this project. Support from an SSRC International Dissertation Fieldwork Grant, a Simpson Fellowship from the Institute for International Studies at Berkeley, and a Social Policy Grant from the Horowitz Foundation allowed me to pursue fieldwork for this project in Argentina, Brazil, Mexico, and Chile. I would very much like to thank the several public officials, activists, politicians, and labor leaders I was fortunate to interview for their generosity in sharing their ideas with me, and for their time. In Mexico, I was lucky to stay with Jenny Dyer, with whom I came to learn about everyday life in her country. I am very grateful for her company and generosity. Several people helped me with my fieldwork in Mexico. I would like to thank Pablo Yankelevich and Leonardo Lomelí, who put me in touch with several of their colleagues at UNAM and talked with me about Mexican politics. I would also like to thank Alicia Ziccardi, Asa Cristina Laurell Miguel Székely, Daniel Hernández, Arturo Vargas-Bustamante, Xóchilt Castañeda, and Gustavo Verduzco for their support, as well as the staff at the library of Congress for their help and hospitality. In Brazil, several people kindly helped me with my fieldwork. I would like to thank Vera Schattam de Coelho, André Urani, Rômulo Paes de Sousa, Renato Martins, and Telinha Grossi. I would also like to thank the staff at the library of the Ministry of Social Security (Ministério da Previdência Social) and at the Library of the Senate for their