| This dissertation examines critically the thesis, occasionally voiced by journalists and policymakers as well as certain academics, that market-based economic reforms are intrinsically related to—and even generate pressure for—democratic political reforms. Specifically, it asks whether privatization of Mexico's state-owned banks and of Argentina's state telephone company and airline strengthened or undermined the institutional and social-structural requisites of democracy in those countries.; The dissertation argues that the main goal of privatization in both cases was to maximize sales revenues, rationalize public finances, and improve the investment climate. Both governments also used privatization as a means to transform their political support coalitions by distancing themselves from organized labor while attracting support and investment from the new financial and industrial elite. Neither government made much effort to diffuse property ownership and expand the middle class through privatization.; In both cases, the focus on short-term financial goals shaped the implementation of privatization, with institutional and structural consequences that underscored and deepened the weakness of democracy. These included a decline in popular access to policy-making; exacerbation of both governments' narrow and exclusionary political style and use of anti-democratic tactics; the undermining of vigorous and autonomous associational life; and a dangerous concentration of property ownership and thus of economic and financial power (especially evident in the Mexican financial sector). Both governments saw privatization as a means to confer upon their new private-sector allies special benefits that hurt consumers' interests while suggesting that a privileged few were reaping the rewards of reform.; The cases suggest that at least in the short and medium terms, privatization in Mexico and Argentina weakened key structural conditions for democracy in those countries. They also suggest that regime type is not determinative in shaping economic policy choice. Both had similar outcomes, despite their very different regime types. The more important variables include the composition and strength of the government's political support coalition, the strength and capacity of state institutions, and the quality of political leadership. |
