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Democracy and Poverty Reduction Strategies in the Latin American Heavily Indebted Poor Countries 1999-2006

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Democracy and Poverty Reduction Strategies in the Latin American Heavily Indebted Poor Countries 1999-2006 Democracy and Poverty Reduction Strategies in the Latin American Heavily Indebted Poor Countries 1999-2006 Sarah Jane Hunt, B.A., MDevStud PhD Thesis University of Limerick Supervised by: Prof. Peadar Kirby Submitted to the University of Limerick, September 2011 Abstract Democracy and Poverty Reduction Strategies in the Latin American Heavily Indebted Poor Countries, 1999-2006. Sarah Jane Hunt This thesis is about the Poverty Reduction Strategy (PRS) approach and its implementation in three Latin American countries, Bolivia, Honduras and Nicaragua. The PRS approach emerged in response to international campaigns around debt relief and international convergence around poverty reduction objectives. The approach implied a role for the state in coordinating poverty reduction interventions, and a role for civil society to participate in these processes, through the principles of ownership and participation. This study engages with the extensive literature on the PRS process in Latin America and assesses the extent to which it offers an adequate account of how donor practices, based on a certain set of theoretical assumptions about the state and civil society, affected outcomes, and whether the impact of politics within these three case study countries is adequately captured. To address this research agenda, this thesis offers a multi-layered analysis to complement top-down approaches with state-centred, political, and bottom-up explanations for change in the region. Combining this analytical approach with comparative insights of the experiences in the three cases offers a unique perspective on the PRS experience. The study examines the implementation of neoliberal reform prior to the PRS approach, highlighting how it shaped politics and society, but also how neoliberalism was contested to set the context. Examining the PRS processes, the study concludes that in part, the disappointing outcomes in these three cases can be attributed to donor actions, and in particular to the incoherence and inconsistency of the theoretical understandings that informed implementation of this approach. However, the study also finds important limits to donor influence in each case and highlights how entrenched political dynamics, weak state capacity and limitations to the capacity of civil society to deliver change particular to each case ultimately determined the trajectory and ‘death’ of the PRS processes. The contribution of this study lies in the multi-level analysis that recognises the particular structural features of the Latin American region, the evolution of the state and the nature of civil society in each case. The findings contribute to broad debates around aid policy and its evaluation, but also highlight key features of the state, of civil society, and of their respective roles in development and democracy. In sum, this study reinforces the importance of agency, and of examining the contingency of political and institutional configurations for explaining change. i Declaration I declare that the work in this thesis is the work of the candidate alone and has not been submitted to any other University or higher education institution in support of a different award. Citations of secondary works have been fully referenced. Signed ___________ Sarah Hunt ii Acknowledgements First and foremost I would like to extend my gratitude to my supervisor Prof. Peadar Kirby, an inspiration and a mentor who has given me unflinching support and encouragement for this project since I first emailed him with a tentative idea back in 2006. This project would not have been possible without funding from the Irish Research Council for the Humanities and Social Sciences between 2008 and 2011, and a part scholarship from the Registrar of the University of Limerick in 2008, and I am grateful for this support. I would like to thank all the staff in the Department of Politics and Public Administration for their help and advice from the outset. I am particularly grateful for the feedback and comments from Prof. Tom Lodge and Dr. Neil Robinson which have proved significant in the development of my work. The Department of Politics and Public Administration and the Faculty of Arts, Humanities and Social Sciences contributed generous support to facilitate numerous conference presentations and extended periods of field work in Central America and Bolivia which were central to this study. In London, I am grateful also to the staff at the Institute of the Study of the Americas at the School of Advanced Studies, UCL in Tavistock Square that welcomed me so warmly during two study periods at the library there. This study is based on, and was inspired by the time I spent in Tegucigalpa, Honduras working with the Trócaire team there, under the leadership of Sally O’Neill. I am indebted to Sally for her personal support and encouragement for this project and for her generous assistance when I returned to Central America, and while I was in Bolivia. Special thanks also go to other Trócaire colleagues that helped me with interviews, logistics and excellent company: Carlos Pacheco in Nicaragua, Blanca Blanco in Guatemala, Triona Pender and Hervé Bund in Bolivia. Many thanks also to Asier Hernandez and Amalia Alarcón, who shared their home with me over an extended period in La Paz. Last but not least, I am grateful to all of the interviewees, who gave up their time and energy to engage with me on this research project. On a personal note, my fellow students and the research cluster group, the ‘ladies who lunch’, and the wonderful Juan Luis, all made these years a lot easier, and lots of fun: thank you all! Thanks are also due to my family and friends that have kept me going over the past few years and especially to Dad and Lisa for proofreading a full draft at a critical end stage. Finally, I would like to dedicate this work to the memory of three people I met and worked with in this field, who helped me to get this far, and who passed away while I was working on this thesis: to Hazel Ngowu, a great friend from my MA class in UCD; to Santos Suazo, Trócaire’s driver in Honduras who accompanied me over two years of field trips to remote communities; and to Pat Rice, whom I met in Argentina in 2003, and who inspired me to stay and learn more about Latin America, and to work harder to support people seeking peace and justice in the region. Sarah Hunt, Limerick, September 2011 iii Table of Contents Abstract i Declaration ii Acknowledgements iii Table of Contents iv List of Tables & Figures vi List of Abbreviations vii Chapter One: Introduction 1.1 Overview 1 1.2 Research Aims and Significance 6 1.3 Theoretical Framework 7 1.4 Methodology 13 1.5 Chapter Synopsis 16 Chapter Two: Literature Review - Development, Debt and Poverty Reduction 2.1 Introduction 19 2.2 Neoliberal development and the origins of HIPC 20 2.3 How debt became linked to poverty reduction 31 2.4 What is the PRS approach, and how has it been evaluated 42 2.5 Conclusions 54 Chapter Three: Literature Review - Latin American Development and Politics 3.1 Introduction 57 3.2 The International Political Economy of Latin American 58 Development 3.3 Latin American politics and development : the state 68 3.4 Latin American politics and development : civil society 86 3.5 Conclusions 98 Chapter Four :The Analytical Framework 4.1 Introduction 101 4.2 Towards an analytical framework 101 4.3 Structure of the case study analysis 110 4.4 Methodology and sources 113 4.5 Conclusion 115 iv Chapter Five: State and Society before 1999 5.1 Introduction 117 5.2 From independence to democracy 118 5.3 Democratisation and neoliberal reform 136 5.4 1999: Aid, state and society 153 5.5 Conclusions 165 Chapter Six: The State and the Poverty Reduction Strategy Processes 1999-2006 6.1 Introduction 169 6.2 The PRS process: the role of the state 170 6.3 Donors and the state in the PRS 186 6.4 Politics and the state in the era of the PRS 199 6.5 Conclusions 217 Chapter Seven: Civil Society and the Poverty Reduction Strategy Processes 1999-2006 7.1 Introduction 219 7.2 The PRS process: the role of civil society 220 7.3 Donors and civil society in the PRS process 238 7.4 Politics and civil society in the era of the PRS 251 7.5 Conclusion 272 Chapter Eight: Conclusions 8.1 Introduction 275 8.2 Researching the PRS process in Latin America 276 8.3 Findings about the state and civil society in the PRS processes 281 8.4 Contributions of the study 285 8.5 Future Research 288 List of Cited Interviews 291 References 293 Appendix A Field Work Report 319 Appendix B Full List of Interviews 333 v List of Tables & Figures Table 5.3.3 Selected Poverty and Inequality Indicators 1990s 145 Table 5.4.3 Selected Social Indicators 1985-2000 158 Figure 5.3.1 GDP Growth % (year-on-year change) 1990s 144 Figure 5.3.2 GDP per capita growth % (year-on-year change) 1990s 144 Figure 5.4.1 Total ODA, United States (Disbursement) 1980s/90s 154 Figure 5.4.1 Total ODA, All Donors (Disbursement) 1985-99 155 Figure 6.2.1 GDP Growth % (year-on-year change) 2000-7 184 Figure 6.3.1 Total ODA, All Donors (Disbursement) 2000-7 197 Figure 6.3.2 Net ODA Received % GNI 2000-7 197 vi List of Abbreviations AMHON Association of Municipalities, Honduras CAFTA Central American Free Trade Agreement CCER Civil Society Coordinating Group for Emergency and Reconstruction, Nicaragua CCERP Consejo Consultivo para la Estrategia de la Reducción de la Pobreza / Consultative Council for the PRS, Honduras CDF Comprehensive Development Framework CIDA Canadian International Development Agency CIDSE International
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