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How Left a Turn? Legacies of the Neoliberal State in Latin America

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How Left a Turn? Legacies of the Neoliberal State in Latin America University of Tennessee, Knoxville Trace: Tennessee Research and Creative Exchange Doctoral Dissertations Graduate School 8-2013 How Left a urT n? Legacies of the Neoliberal State in Latin America Aaron Thomas Rowland [email protected] Recommended Citation Rowland, Aaron Thomas, "How Left a urT n? Legacies of the Neoliberal State in Latin America. " PhD diss., University of Tennessee, 2013. https://trace.tennessee.edu/utk_graddiss/2475 This Dissertation is brought to you for free and open access by the Graduate School at Trace: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Doctoral Dissertations by an authorized administrator of Trace: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a dissertation written by Aaron Thomas Rowland entitled "How Left a urT n? Legacies of the Neoliberal State in Latin America." I have examined the final electronic copy of this dissertation for form and content and recommend that it be accepted in partial fulfillment of the requirements for the degree of Doctor of Philosophy, with a major in Sociology. Jon Shefner, Major Professor We have read this dissertation and recommend its acceptance: Paul K. Gellert, Harry F. Dahms, Jana Morgan Accepted for the Council: Dixie L. Thompson Vice Provost and Dean of the Graduate School (Original signatures are on file with official student records.) How Left a Turn? Legacies of the Neoliberal State in Latin America A Dissertation Presented for the Doctor of Philosophy Degree The University of Tennessee, Knoxville Aaron Thomas Rowland August 2013 Copyright © 2013 by Aaron T. Rowland All rights reserved. ii ACKNOWLEDGEMENTS I would like to thank the members of my committee: Paul Gellert, Harry Dahms, and Jana Morgan for their feedback and input on this project. This was especially true of Paul, who read drafts of several different chapters along the way. I would also like to express my gratitude to my committee chair and advisor for the past six years, Jon Shefner who has helped guide (and help push) me along the way through this whole graduate school process, including my Master’s Thesis and this Dissertation. I would also like to express my gratitude to the U.T. Sociology department: faculty, staff and fellow grad students, all of whom have been part of an enormously supportive environment over the years that I have been progressing to this point. Lastly, I would like to thank my family for going through this process with me. For most of my marriage and my daughter’s whole life, I have been a stressed-out, overly busy husband and father and they have dealt with that wonderfully. I don’t know how. Also, to Mom and Dad, thank you for everything you have done my whole life to set me on a path of accomplishment. iii ABSTRACT In the 1980s and 1990s, the Latin American region experienced a profound shift in development ideologies that resulted in the creation of a new type of state: the Latin American neoliberal state. This state emerged in three stages: the stabilization stage—focused on balance of payments and austerity; the structural adjustment stage—which was more broadly and deeply focused on changing the structure and culture of society; and the institutional turn—which was an acknowledgment that the neoliberal state had not effectively dealt with poverty, inequality, or the quality of institutions that integrated market, society, and polity. Beginning in the early 2000s, an electoral shift to the left swept through the region and was characterized by antagonistic rhetoric towards neoliberal policies. This study compares the historical developments of Argentina, Ecuador, and Peru and shows that in cases where the neoliberal state was fully developed, the leftist shift either did not occur (Peru) during the 2000s, or where it did occur (Argentina) did not constitute a break with the neoliberal state but rather formed a fourth stage of neoliberalism. In this stage, the government sought to increase spending on some social programs but did so in ways that legitimated the wider neoliberal state rather than creating a new developmental model that would move beyond neoliberalism. iv List of Abbreviations and Acronyms AGD – Agencias de Garantías de Depósitos ALBA – Alternativa Bolivariana para las Américas Alianza – Alianza por el Trabajo, la Justicia, y la Educación APRA – Alianza Popular Revolucionaria Americana BA – bureaucratic-authoritarian state CCT – Conditional Cash Transfer CELAC – Comunidad de Estados Latinoamericanos y Caribeños CGT – la Confederación General del Trabajo de la República Argentina CONAIE – Confederacion de Nacionalidades Indigenas del Ecuador CPI – consumer price index ECLAC – Economic Commission for Latin America and the Caribbean EMETEL – la Empresa de Telecomunicaciones del Ecuador FDI – foreign direct investment FERTISA – Fertilizantes, Terminales i Servicios S.A. FONCODES – Fondo Nacional de Compensación y Desarrollo GDP – gross domestic product IDB – Inter-American Development Bank IFI – international financial institution IMF – International Monetary Fund INECEL – Instituto Ecuatoriano de Electrificación ISI – import substitution industrialization MITI – Ministry of International Trade and Industry NGO – non-governmental organization NIC – newly industrialized country OECD – Organization for Economic Cooperation and Development OPEC – Organization of the Petroleum Exporting Countries PAIS – Patria Altiva y Soberana PAYG – pay-as-you-go social security system PJ – Partido Justicialist PRI – Partido Revolucionario Institucional PRONAA – Programa Nacional de Asistencia Alimentaria PSC – Partido Social Cristiano SAPRI – Structural Adjustment Participatory Review Initiative SRA – strategic relational approach TNS – transnational state UN – United Nations UNASUR – Unión de Naciones Suramericanas UNDP – United Nations Development Programme VAT – value-added tax WTO – World Trade Organization v TABLE OF CONTENTS Chapter Page CHAPTER I ......................................................................................................................... 1 Introduction ....................................................................................................................... 1 Chapter Outline ........................................................................................................... 13 CHAPTER II ...................................................................................................................... 16 Towards a Model of the State ......................................................................................... 16 Conceptualizing “the State” ........................................................................................ 16 Building Models of the State ....................................................................................... 25 The Developmental State and Embedded Autonomy .......................................... 25 Latin American Models: A Historical Progression ................................................ 29 Neoliberalism as an Economic Ideal Type ................................................................ 38 CHAPTER III ..................................................................................................................... 41 Neoliberalizing Latin American ..................................................................................... 41 The Literature on the Neoliberal State As an Ideal Type ......................................... 42 The Debt Crisis and Neoliberal Response ............................................................. 50 The Washington Consensus ................................................................................... 53 The Critics ................................................................................................................ 56 Neoliberalism in Latin America .................................................................................. 61 Latin America’s “Stages of Reforms” ...................................................................... 62 Conclusion .................................................................................................................... 81 CHAPTER IV ..................................................................................................................... 83 The Latin American Neoliberal State: A Model ............................................................. 83 Introduction ................................................................................................................. 83 “The Neoliberal State” in the Social Science Literature ........................................... 83 The Latin American Neoliberal State: An Alternative Model ................................... 88 First Stage Reforms: ................................................................................................ 89 Second Stage Reforms: ............................................................................................ 91 Third Stage Reforms .............................................................................................. 104 The Latin American Neoliberal State: The Overall Model .................................. 107 Conclusion .................................................................................................................. 111 CHAPTER V .................................................................................................................... 113 How Has The Neoliberal
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