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Partisan Politics in the Southern Cone: Is There Anything Left for the Left? Political Institutions, Privatisation, and Policy Outcome

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Partisan Politics in the Southern Cone: Is There Anything Left for the Left? Political Institutions, Privatisation, and Policy Outcome Partisan Politics in the Southern Cone: Is there anything left for the left? Political Institutions, Privatisation, and Policy Outcome David Doyle BBS, MA School of Law & Government, Dublin City University Supervisors: Prof. Robert Elgie & Dr. Eileen Connolly January 2009 Dissertation submitted for the award of PhD to Dublin City University - i - Declaration of Work I hereby certify that this material, which I now submit for assessment on the programme of study leading to the award of PhD is entirely my own work, that I have exercised reasonable care to ensure that the work is original, and does not to the best of my knowledge breach any law of copyright, and has not been taken from the work of others save and to the extent that such work has been cited and acknowledged within the text of my work. Signed:………………………………. …….. ID No.:……………… Date:………………………………………... - ii - Acknowledgements Firstly, I would like to thank all my colleagues at the School of Law and Government, and the Head of School, John Doyle, for all the encouragement and support that I received. For those who study Latin America, Barry and Peadar, thank you. To all the other graduate students in the School for their support and company over the years, thank you. I owe an enormous debt of gratitude to my supervisors, Prof. Robert Elgie and Dr. Eileen Connolly for setting me on the right track, enabling me to be where I am today. For you guidance, encouragement, support and excellent supervision, thank you. Thank you also to all my family and friends. To Trish, thank you so much, for everything. Finally, to my parents, it is only as a result of your unwavering support that I was able to complete this. So, thank you, this is for you. - iii - Table of Contents Abstract ........................................................................................................................ vi Figures and Tables ...................................................................................................... vii Figures..................................................................................................................... vii Tables ...................................................................................................................... vii Introduction.............................................................................................................. viii Latin America Turns Left....................................................................................... viii The Puzzle: How relevant is the contemporary left? ............................................... ix The Argument: A neglected internal variable – political institutions........................x Privatisation in the Southern Cone.......................................................................... xii The Purpose of this Study ...................................................................................... xiii The Structure of the Thesis .................................................................................... xiv Chapter One – The Literature on Globalisation and Partisan Politics...................1 1.1 The First Wave.....................................................................................................2 1.2 The Second Wave ..............................................................................................12 1.3 Conclusion .........................................................................................................22 Chapter Two – The Research Design.......................................................................25 2.1 The Research Question ......................................................................................25 2.2 The Comparative Approach and Case Study Selection .....................................29 The Comparative Approach .................................................................................29 The Countries Selected for Examination .............................................................31 Unpacking the Left in Latin America ..................................................................34 The Time Period...................................................................................................39 2.3 The Methodology: An Analytic Narrative .........................................................39 2.4 The Dependent Variable: Privatisation Policy...................................................46 2.5 The Independent Variables ................................................................................51 Economic Globalisation.......................................................................................51 Political Institutions .............................................................................................54 Labour Support ....................................................................................................62 The International Financial Institutions ...............................................................64 2.6 Expected Outcomes............................................................................................67 Chapter Three – The Evolution of Privatisation in Brazil.....................................68 3.1 The Origins and Role of Public Enterprise in Brazil .........................................68 3.2 The Beginning of Privatisation and the Transition to Democracy.....................71 3.3 Privatisation under Fernando Collor and Itamar Franco....................................75 3.4 The Election of Fernando Enrique Cardoso.......................................................80 3.5 The Legacy of Privatisation in Brazil ................................................................86 Chapter Four – Privatisation under Lula................................................................88 4.1 The 2002 Election ..............................................................................................88 4.2 Privatisation with Lula in Power........................................................................92 4.3 The Political Institutions ..................................................................................102 The Executive.....................................................................................................103 Legislative Support ............................................................................................107 Policy Delegation...............................................................................................113 Judicial Independence ........................................................................................116 4.4 Labour support .................................................................................................118 4.5 Conclusion .......................................................................................................121 Chapter Five – The Evolution of Privatisation in Argentina...............................123 5.1 The Development of State-Owned Enterprises in Argentina...........................123 - iv - 5.2 The Beginning of Privatisation: José Martínez de Hoz ...................................125 5.3 The Election of Raul Alfonsín: Reluctant Privatisation...................................128 5.4 The Election of Carlos Menem ........................................................................132 5.5 The 2001 Crisis ................................................................................................143 5.6 The Legacy of Privatisation in Argentina ........................................................145 Chapter Six – Privatisation under Kirchner .........................................................146 6.1 The 2003 Election ............................................................................................146 4.2 Privatisation with Kirchner in Power...............................................................150 6.3 The Political Institutions ..................................................................................164 The Executive.....................................................................................................165 Legislative Support ............................................................................................170 Judicial Independence ........................................................................................176 Policy Delegation...............................................................................................182 6.4 Labour support .................................................................................................183 6.5 Conclusion .......................................................................................................187 Chapter Seven – The Evolution of Privatisation in Uruguay ..............................188 7.1 The Origins and Role of Public Enterprise in Uruguay...................................188 7.2 The Transition to Democracy and the Election of Sanguinetti........................190 7.3 The Election of Luis Alberto Lacalle...............................................................193 7.4 The return to power of Sanguinetti ..................................................................198 7.5 The Election of Jorge Batlle.............................................................................202 7.6 The Legacy of Privatisation in Uruguay..........................................................206 Chapter Eight – Privatisation under Vázquez ......................................................208 8.1 The 2004 Election
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