The political economy of the Left in Latin America: Explaining governments' reactions to neoliberal reforms

Between 1998 and 2007, an unprecedented wave of left-of-center candidates reached power in Latin America. In spite of a shared concern for wealth redistribution and decades of opposition to the Washington Consensus, their governments carried out dramatically different economic policies, from heavy state intervention in Venezuela, to strict market orthodoxy in Chile. Why did some governments drastically reverse neoliberal economic policies amid the supremacy of neoliberalism? Why did others embrace market orthodoxy after denouncing it for decades from the opposition? Why were nationalizations, price controls, and trade barriers implemented in Argentina, Bolivia, and Venezuela, but not in Brazil, Chile, and Uruguay?In answering these questions, this dissertation challenges the conventional wisdom that economic crises and strong executives are crucial for the initiation of significant economic transformations. Instead, I argue that the strength of the party system best explains the leftist governments' ability to implement state interventionist policies in the region. I suggest that changes in economic policy become more moderate as party system institutionalization increases. This relationship hinges upon two main factors: the type of candidate who is able to reach power and the political parties' ability to shape the president's economic transformations.The dissertation also examines alternative explanations regarding the depth of neoliberalism, economic crises, interest groups, state capacity, executive-legislative relations, regime type, and diffusion of ideas among elites. It concludes that these factors, while contributing to explain the type of reaction to neoliberalism in specific cases, fail to systematically account for the variation in economic policies across the region.The project is divided into four main components. First, it presents an account of the leftist candidates' campaigns and economic projects. Next, it conducts a broad cross-national analysis of the Left's economic policy changes, focusing on five indicators: nationalizations tax policy government spending trade, financial, and monetary liberalization and social programs. Third, it tests several political, economic, and sociological explanations for their ability to account for such transformations. Finally, it examines the governments of Hugo Chavez in Venezuela, Lula in Brazil, and Ricardo Lagos in Chile to illustrate the mechanisms by which aggressive, moderate, and orthodox reactions took place.