Ir364 the Political Economy of Latin American Development

IR364 THE POLITICAL ECONOMY OF LATIN AMERICAN DEVELOPMENT

Prof. Carol Wise Spring Semester 2012 VKC 156 T-TH 2:00-3:20 Office Hours: Wednesdays 2:30-5:00 Office: VKC 328 Phone: 213-740-2138 E-mail: [email protected]

This course offers a survey of the main economic development themes and strategies that have prevailed in Latin America over the past century. By analyzing the interplay between politics and economics, as well as the interaction between domestic and international variables, the course explores the dynamic changes that have occurred over this time period. The course will proceed in three parts. Part one spans the period from 1900 to the eruption of the 1982 debt shocks---a critical juncture for Latin America that surpassed the dramatic political and economic impacts of the Great Depression era of the 1930s. Part two analyzes Latin America’s post-1982 transformation from the standpoint of trade liberalization, financial integration, and the widespread transition to democracy in the region. Part three identifies the most pressing issues that remain to be tackled on the contemporary development agenda: the future of regional trade and economic integration, the challenge of inequality and regressive income distribution, and the debate over how Latin America has been affected and can best cope with China’s remarkable surge in the global economy.

The course requirements include: two in-class exams, a mid-term worth 30 points and a final exam worth 60 points; and, your participation in a group presentation and/or student debate. Your participation in the group presentation, as well as in class discussions throughout the semester will together count for 10 points of your grade. If you accrue more than 3 unexcused absences your grade will be reduced by 1 point; more than six unexcused absences will result in a 2 point reduction in your grade, and so on.

All assigned readings (minus the required texts by Bulmer-Thomas, Franko, and Roett & Paz) have been posted on Blackboard and should be completed prior to class. The following four texts are required for the course and all are available for purchase at Amazon.Com and at the campus bookstore (I also suggest that you do some cost comparisons on the Campusbooks website: http://www.campusbooks.com/ ). The text listed below by Thorp can be downloaded for free in PDF format at: http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=909918

The Economic History of Latin America since Independence, by Victor Bulmer Thomas (Cambridge, UK: Cambridge University Press, second edition, 2003). http://www.amazon.com/Economic-History-Independence-Cambridge- American/dp/0521532744/ref=sr_1_16?ie=UTF8&s=books&qid=1250183163&sr=1-16

The Puzzle of Latin American Economic Development, by Patrice Franko (New York: Rowman & Littlefield, third edition, 2007). http://www.amazon.com/gp/product/0742553531

China’s Expansion into the Western Hemisphere: Implications for Latin America and the United States, by Riordan Roett and Guadalupe Paz, eds. (Washington, DC: Brookings Institution, 2008). http://www.amazon.com/s/ref=nb_ss?url=search-alias%3Dstripbooks&field-keywords=roett %2C+riordan&x=0&y=0

Progress, Poverty and Exclusion: An Economic History of Latin America in the 20th Century, by Rosemary Thorp (Washington, DC: Inter-American Development Bank, 1998). This entire book can be downloaded for free at: http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=909918

For those wishing to brush up on some basic economic principles, I recommend the following:

Economic Literacy: Basic Economics with an Attitude, by Frederick S. Weaver (New York: Rowman and Littlefield, 2006). http://www.amazon.com/Economic-Literacy-Basic-Economics-

1 Attitude/dp/0742554309/ref=sr_1_1/102-60962549202526?ie=UTF8&s=books&qid=1188259951&sr=1-1

Students with disabilities: Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible. DSP is located in STU 301 and is open from 8:30 a.m.–5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

CLASS SCHEDULE AND ASSIGNED READINGS

Week 1 (Jan. 10 & 12): Introduction and Overview of the Course

January 10: Overview

January 12: Defining Development Patrice Franko. 2007. The Puzzle of Latin American Economic Development (New York: Rowman & Littlefield, third edition), pp. 1-29.

THE 20th CENTURY IN HISTORICAL CONTEXT

Week 2 (Jan. 17 & 19): Cycles, Shocks, and the Political Economy of Development

January 17: Film---“When Worlds Collide: The Untold Story of the Americas after Columbus”

January 19: The 20th Century---1900-1914, the “Good Times” Rosemary Thorp. 1998. Progress, Poverty and Exclusion: An Economic History of Latin America in the 20th Century (Washington, DC: Inter-American Development Bank), pp. 1-95.

Week 3 (Jan. 24 & 26): The “Bad Times”

January 24: World War I--- The First Big Shock Victor Bulmer-Thomas. 2003. The Economic History of Latin America since Independence (Cambridge, UK: Cambridge University Press, second edition), pp. 83-188.

January 26: The Great Depression---The Second Big Shock Rosemary Thorp, Progress, Poverty and Exclusion, pp. 97-125.

Week 4 (Jan. 31 & Feb. 2): Populist Renaissance Post-1930---Brazil

January 31: Brazil---The Estado Novo Thomas Skidmore. 1967. Politics in Brazil, 1930-1964 (New York, NY: Oxford University Press), pp. 3-47.

February 2: NO CLASS

2 Week 5 (February 7 & 9): Populist Renaissance Post-1930---Mexico & Argentina

February 7: Mexico---Cardenas and the Birth of Single-Party Rule Roberto Newell and Luis Rubio. 1984. Mexico's Dilemma: The Political Origins of Economic Crisis (Boulder and London: Westview Press), pp. 29-72.

February 9: Argentina---The Rise of Peronism in the 1940s Jorge Fodor. 1989. “Argentina’s Nationalism: Myth or Reality?” In The Political Economy of Argentina, 1946-83, edited by Guido Di Tella and Rudiger Dornbusch (London: MacMillan), pp. 31-55.

Pablo Gerchunoff. 1989. “Peronist Economic Policies, 1946-55.” In The Political Economy of Argentina, 1946-83, edited by Guido Di Tella and Rudiger Dornbusch, pp. 59-85.

Week 6 (February 14 & 16): World War II---The Third Big Shock

February 14: Latin America and World War II Victor Bulmer-Thomas, The Economic History of Latin America since Independence, pp. 238-275.

February 16: The Heyday of Import-Substitution Industrialization (ISI) Patrice Franko, The Puzzle of Latin American Economic Development, pp. 55-75.

Rosemary Thorp, Progress, Poverty and Exclusion, pp. 127-199.

Week 7 (February 21 & 23): “Developmentalism” and the Rise of Authoritarian Rule

February 21: From ISI to Export-led Development Peter Kingstone. 2011. The Political Economy of Latin America (New York, NY: Routledge), pp. 19-44.

Katherine Sikkink. 1991. Ideas and Institutions: Developmentalism in Brazil and Argentina (Ithaca, NY: Cornell University Press), pp. 29-71.

February 23: Market Experiments and Military Coups Daniel C. Hellinger. 2011. Comparative Politics of Latin America (New York, NY: Routledge), chapter 7.

Week 8 (February 28 & March 1): The 1982 Debt Crisis---The Fourth Big Shock

February 28 The International Environment Turns Hostile Victor Bulmer-Thomas, The Economic History of Latin America since Independence, pp. 353-391.

Patrice Franko, The Puzzle of Latin American Economic Development, pp. 77-143.

March 1: Student presentations

Week 9 (March 6 & 8): Study Day & Mid-Term Exam

3 March 6: Student presentations

March 8: MID-TERM EXAM

Week 10: SPRING BREAK

THE 1990s: A CRITICAL TURNING POINT

Week 11 (March 20 & 22): The Politics of Economic Reform

March 20: The Widespread Implementation of Market Reforms in the 1990s Patrice Franko, The Puzzle of Latin American Economic Development, pp. 145-184.

March 22: The Interplay between Politics & Markets Juan Corradi. 2003. “Prelude to Disaster: Weak Reform, Competitive Politics in Argentina.” In Post-Reform Politics in Latin America: Competition, Transition, Collapse, edited by Carol Wise and Riordan Roett (Washington, DC: Brookings Institution Press), pp. 105-133.

Karen Remmer. 2003. “Economics and Elections in Contemporary Latin America.” In Post-Reform Politics in Latin America: Competition, Transition, Collapse, pp. 31-55.

Kenneth Roberts. 2003. “Party System Collapse amid Market Restructuring in Venezuela.” In Post-Reform Politics in Latin America: Competition, Transition, Collapse, pp. 249-272.

Week 12 (March 27 & 29): Neoliberalism and Its Discontents

March 27: Post-Washington Consensus Politics and Policies Peter Kingstone. 2011. The Political Economy of Latin America (New York, NY: Routledge), pp. 45-90.

Carol Wise. 2009. “The North American Free Trade Agreement,” New Political Economy 14 (1): 135-149.

March 29: The Return of the State Peter Kingstone. 2011. The Political Economy of Latin America (New York, NY: Routledge), pp. 91-126.

DEVELOPMENT CHALLENGE FOR THE 2000s

Week 13 (April 3 & 5): Why the Rise in Inequality?

April 3: Film: ---“No Son Invisibles: Maya Women and Microfinance”

April 5: Inequality and the Need for a Pro-Poor Development Strategy Patrice Franko, The Puzzle of Latin American Economic Development, chapters 10, 11 & 13.

Martin Ravallion, “Transfers and Safety Nets in Poor Countries.” In Abhijit Banerjee, Roland Benabou, and

4 Dilip Mookerjee, eds., Understanding Poverty (Oxford, UK: Oxford University Press, 2006), pp. 203-229.

Week 14 (April 10 & 12): Trade, Finance & China’s Surge in Latin American Markets

April 10: Trade and Finance in 21st Century Latin America Patrice Franko, The Puzzle of Latin American Economic Development, chapters 7 & 8.

April 12: China’s Rise in the Western Hemisphere Francisco E. Gonzalez. 2008. “Latin America in the Economic Equation---Winners and Losers. What Can Losers Do?” In China’s Expansion into the Western Hemisphere, pp. 148-169.

Riordan Roett and Guadalupe Paz. 2008. “Introduction: Assessing the Implications of China’s Growing Presence in the Western Hemisphere.” In China’s Expansion into the Western Hemisphere: Implications for Latin America and the United States, edited by Riordan Roett and Guadalupe Paz (Washington, DC: Brookings Institution Press), pp. 1-23.

Barbara Stallings. 20008. “The U.S.-China-Latin America Triangle: Implications for the Future.” In China’s Expansion into the Western Hemisphere, pp. 239-259.

Juan Gabriel Tokatlian. 2008. “A View from Latin America.” In China’s Expansion into the Western Hemisphere, pp. 59-89.

Week 15 (April 17 & 19): The Challenge from China

April 17: The Need for a More Compelling Development Strategy in Latin America Robert Devlin. 2008. “China’s Economic Rise.” In China’s Expansion into the Western Hemisphere, pp. 111- 147.

April 19: Student Presentations on the Impact of China on Latin America’s Development

(See last page of syllabus for recommended background readings)

Week 16 (April 24 & 26): The Development Scorecard?

April 24: Student Presentations on the Development Strategies and Outcomes Studied in the Course

(See last page of syllabus for recommended background readings)

April 26: Review for Final Exam

May 8: Final Exam 11-1 pm

Recommended Background Readings for Student Presentations

Import-Substitution-Industrialization

Jorge Dominguez, ed. 1994. Economic Strategies and Policies in Latin America (New York, NY: Garland Publishers).

David Felix. 1989. “Import Substitution and Late Industrialization: Latin America and East Asia Compared,” World Development 14 (9): 1455-69.

Joseph Love. 2005. “The Rise and Decline of Economic Structuralism in Latin America,” Latin American Research Review 40 (3): 100-125.

Laura Randall, ed. 1997. The Political Economy of Latin America in the Post-war Period (Austin, TX: University of Texas Press), chapters 3, 4, 6.

Carol Wise. 2003. Reinventing the State: Economic Strategy and Institutional Change in Peru (Ann Arbor, MI: University of Michigan Press), chapters 2, 3.

Market Experiments & Military Coups

David Collier, ed. 1979. The New Authoritarianism in Latin America (Princeton, NJ: Princeton University Press).

Alejandro Foxley. 1983. Latin American Experiments in Neoconservative Economics (Berkeley and Los Angeles, CA: University of California Press).

Luis Gonzalez. 1995. “Continuity and Challenge in the Uruguayan Party System.” In Building Democratic Institutions: Party Systems in Latin America, edited by Scott Mainwaring and Timothy Scully (Stanford, CA: Stanford University Press), pp. 138- 163.

James M. Malloy, ed. 1977. Authoritarianism and Corporatism in Latin America (Pittsburgh, PA: University of Pittsburgh Press).

Laura Randall, ed. 1997. The Political Economy of Latin America in the Postwar Period (Austin: University of Texas Press, TX), chapters 2, 5.

China’s Expansion into Latin America

Gordon Hanson and Raymond Robertson. 2009. “China and the Recent Evolution of Latin America’s Manufacturing Exports.” In China’s and India’s Challenge to Latin America, edited by Daniel Lederman, Marcelo Olarreaga, and Guillermo Perry (Washington, DC: World Bank).

Adrian Hearn and Jose Luis Leon-Manriquez, eds. 2011. China Engages Latin America: Tracing the Trajectory (Boulder and London: Lynne Rienner Press).

Rhys Jenkins. 2008. “Measuring the Competitive Threat from China for Other Southern Exporters,” World Economy 31 (10): 1351-1366.

Rhys Jenkins, Enrique Dussel Peters and Mauricio Mesquita Moreira. 2006. “The Impact of China on Latin America and the Caribbean,” World Development 36 (2): 235-253.

6 Luisa Palacios, “Latin America as China’s Energy Supplier.” In China’s Expansion into the Western Hemisphere, pp. 170-189.

Carol Wise and Cintia Quiliconi. 2007. “China’s Surge in Latin American Markets: Policy Challenges and Responses,” Politics and Policy 1:410-438.

Development Strategies and Outcomes Studied in the Course

Carmelo Mesa-Lago, et al. 2000. Market, Socialist, and Mixed Economies: Comparative Policy Performance (Baltimore, MD: Johns Hopkins University Press).

Eduardo Lora. 2008. Beyond Facts: Understanding Quality of Life (Washington, DC: Inter- American Development Bank). Can be downloaded for free at: http://www.iadb.org/IDBDocs.cfm? docnum=1775002

Omar Sanchez. 2003. “Globalization as a Development Strategy in Latin America,” World Development 31 (12): 1977-995.

Barbara Stallings and Wilson Peres. 2000. Growth, Employment, and Equity (Washington, DC: Brookings Institution Press), pp. 202-223.

Carol Wise and Riordan Roett, eds. 2003. Post-Stabilization Politics in Latin America: Competition, Transition, Collapse (Washington, DC: Brookings Institution Press).