Partisanship amidst convergence: The politics of labor reform in Latin America

Comparative Politics

Volumn 37, Issue 4, 2005, Pages

  Murillo, María Victoria ^a  

^a NONE

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EID: 23344446652     PISSN: 00104159     EISSN: None     Source Type: Journal    
DOI: 10.2307/20072903     Document Type: Review

References (98)

1. Beth Simmons, "The Internationalization of Capital," in Herbert Kitschelt, Peter Lange, Gary Marks, and John D. Stephens, Continuity and Change in Contemporary Capitalism (Cambridge: Cambridge University Press, 1999).
2. Layna Mosley, Global Capital and National Governments (Cambridge: Cambridge University Press, 2003), shows that investors' policy pressures on developing countries are broader than on developed countries.
3. Karen Remmer, "The Politics of Economic Policy and Performance in Latin America," Journal of Public Policy, 22 (2002), 29-59;
4. Juan Carlos Torre, El proceso politico de las reformas económicas en América Latina (Buenos Aires: Paidós, 1998).
5. Eduardo Lora, "Structural Reforms in Latin America: What Has Been Reformed and How to Measure It" (Washington, D.C.: Inter-American Development Bank, 2001);
6. Barbara Stallings and Wilson Peres, Crecimiento, Empleo y Equidad: El impacto de las reformas economicas en America Latina y el Caribe (Santiago: Fondo de Cultura Economica and CEPAL, 2000).
7. Mosley, ch. 3.;
8. Judith Teichman, The Politics of Freeing Markets in Latin America (Chapel Hill: University of North Carolina Press, 2001);
9. Ben Ross Schneider, "The Material Bases of Technocracy: Investor Confidence and Neoliberalism in Latin America," in Miguel Centeno and Patricio Silva, eds., The Politics of Expertise in Latin America (New York: St. Martin's Press, 1998).
10. Labor-linked parties are defined as those that have an institutional relationship with a national labor confederation.
11. Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Nicaragua, Panama, Paraguay, Peru, and Venezuela reformed their labor laws, whereas Bolivia, Cuba, Honduras, Mexico, and Uruguay did not. Maria Luz Vega Ruiz, La Reforma Laboral en America Latina (Lima: ILO, 2000).
12. Susan Stokes, Mandates and Democracy: Neoliberalism by Surprise in Latin America (Cambridge: Cambridge University Press, 2001).
13. Labor-linked parties have to implement very drastic market reforms to win the credibility of business sectors about their commitment to these policies. Alex Cukierman and Mariano Tommasi, "When Does It Take a Nixon to Go to China?," American Economic Review, 88 (March 1998), 180-97.
14. Karen Remmer, "Elections and Economics in Contemporary Latin America," in Carol Wise and Riordan Roett, eds., Post-Stabilization Politics in Latin America (Washington, D.C.: Brookings Institution Press, 2003), shows that growth and inflation were the main concern of voters during the studied period. Labor reforms, however, have no clear effect on inflation, growth, or even unemployment. Marshall suggests no effect of labor deregulation on employment, while Edwards and Lustig, Weller, and Pages and Heckman find no clear effect even when the latter increase their sample to OECD and Latin American countries.
15. Adriana Marshall, "Weakening Employment Protection in Latin America: Incentive to Employment Creation or to Increasing Instability," International Contributions to Labour Studies, 6 (1996), 29-48;
16. Sebastian Edwards and Nora Lustig, "Introduction," in Sebastian Edwards and Nora Lustig, eds., Labor Markets in Latin America (Washington, D.C.: Brookings Institution Press, 1997);
17. Jurgen Weller, Reformas economicas, crecimiento y empleo (Santiago: Fondo de Cultura Económica and CEPAL, 2000);
18. James Heckman and Carmen Pagés, "Introduction," in James Heckman and Carmen Pagés, eds., Law and Employment: Lessons from Latin America and the Caribbean (Chicago: University of Chicago Press, forthcoming).
19. Matthew S. Shugart and Stephan Haggard, "Institutions and Public Policy in Presidential Systems," in Stephan Haggard and Matthew McCubbins, eds., President, Parliaments, and Policy (Cambridge: Cambridge University Press, 2001).
20. The source of labor reforms was the ILO Natlex database and Vega Ruiz. Each reform is compared with the original labor laws. The few cases of constitutional reform and presidential decrees were excluded because the governing party does not necessarily influence constitutional conventions or executive decrees, due to variance on legislative powers to overturn them across the region. By contrast, legal reforms involve the support of partisan legislators.
21. The predominance of regulatory reform on collective labor legislation results from two mechanisms: partisan alliances with labor-linked governments in South America and transnational alliances using the threat of U.S. trade sanctions in Central America and the Spanish Caribbean. M. Victoria Murillo and Andrew Schrank, "With a Little Help from My Friends: Partisan Politics, Transnational Alliances and Labor Rights in Latin America" (unpublished manuscript, 2004).
22. Steward Wood, "Labor Market Regimes under Threat? Sources of Continuity in Germany, Britain and Sweden," in Paul Pierson, ed., The New Politics of the Welfare State (Oxford: Oxford University Press, 2001).
23. Stokes, p. 87.
24. Remmer, "The Politics of Economic Policy," p. 40.
25. Joel Hellman, "Winners Take All: The Politics of Partial Reform in Postcommunist Transitions," World Politics, 50 (January 1998), 203-34,
26. Hector Schamis, Re-Forming the State: The Politics of Privatization in Latin America and Europe (Ann Arbor: University of Michigan Press, 2002).
27. Douglas A. Hibbs, Jr., "Political Parties and Macroeconomic Policy," American Political Science Review, 71 (1977), 1467-87, shows different partisan preferences on inflation and unemployment. Boix and Garrett argue that partisan preferences produce different supply-side policies, with left-wing parties expending more than right-wing parties to provide public goods, such as education and infrastructure.
28. Carles Boix, Political Parties, Growth, and Equality (Cambridge: Cambridge University Press, 1998);
29. Geoffrey Garrett, Partisan Politics in the Globalized Economy (Cambridge: Cambridge University Press, 1998).
30. Robert R. Kaufman and Alex Segura-Ubiergo, "Globalization, Domestic Politics, and Social Spending in Latin America: A Time-Series Cross-Section Analysis, 1973-97," World Politics, 53 (July 2001), 553-87.
31. Katrina Burgess, "Loyalty Dilemmas and Market Reform: Party-Union Alliances under Stress in Mexico, Spain and Venezuela," World Politics, 52 (October 1999), 105-34;
32. Maria Victoria Murillo, Labor Unions, Partisan Coalitions and Market Reforms in Latin America (Cambridge: Cambridge University Press, 2001).
33. Jessica Seddon and Romain Wacziarg, "Trade Liberalization and Intersectoral Labor Movements," Journal of International Economics (forthcoming).
34. Lora, p. 4.
35. World Development Indicators (Washington, D.C.: The World Bank, 2003)
36. Easterly and Levine aggregate capital-labor ratios are measured using capital stock in constant 1985 international dollars. Pushan Dutt and Devashish Mitra, http://www.ualberta.ca/ECONOMICS/dm/dm.htm.
37. The four indicators are regulations on hiring, cost of firing, overtime payment, and social security contributions. Lora, p. 29.
38. Kurt Weyland, The Politics of Market Reform in Fragile Democracies (Princeton: Princeton University Press, 2002).
39. Weller, ch. 2. See John Pencavel, "The Legal Framework for Collective Bargaining in Developing Economies;"
40. and Alejandra Cox Edwards, "Labor Markets Regulation in Latin America: An Overview," in Edwards and Lustig, eds., on labor market rigidities created by labor unions and labor laws in Latin America.
41. These are trade, financial, tax, privatization, and labor policies. Lora, p. 28.
42. Stallings and Perez, ch. 3.; Weyland, ch. 3.
43. World Development Indicators. Using unemployment rate instead of growth does not change the results.
44. René Cortázar, Nora Lustig, and Richard Sabot, "Economic Policy and Labor Market Dynamics," in Nancy Birdsall, Carol Graham, and Richard Sabot, eds., Beyond Trade Offs: Market Reform and Equitable Growth in Latin America (Washington, D.C.: Brookings Institution Press, 1998).
45. Raúl Madrid, "Labouring against Neoliberalism: Unions and Patterns of Reform in Latin America," Journal of Latin American Studies, 35 (2003), 53-88.
46. World Employment Report (Geneva: International Labour Office, 1998).
47. The informal sector was 44.4 percent of urban employment in Latin America and the Caribbean in 1990, and 48 percent in 1998. International Labor Organization, Panorama Laboral, Statitiscal Appendix (Lima: ILO, 1999).
48. Gary Cox and Matthew McCubbins, "The Institutional Determinants of Economic Policy Outcomes," in Haggard and McCubbins, eds.
49. José Cheibub, "Minority Governments, Deadlock Situations, and the Survival of Presidential Democracies," Comparative Political Studies (forthcoming); and the Political Database of the Americas, http://www. georgetown.edu/pdba/Elecdata/elecdata.htrnl. I have also used the share of seats of the governing party without affecting the results, but the difference between 50 and 51 percent is more significant than between 20 and 49 percent or between 51 and 90 percent due to majority voting, thereby making the dummy variable a better measurement.
50. In Nicaragua Chamorro's administration passed regulatory and deregulatory labor reforms. The value used in the quantitative analysis is obtained by comparing the labor law at the end of her administration with the one prior to her inauguration.
51. The models cluster observations across countries because unobserved country-level variables may affect the probability of labor deregulation. The cluster assumes that errors for one country are unrelated to the errors for every other country (that is, there is no spatial correlation). All the independent variables have been averaged per administration, except for trade liberalization and labor liberalization. Using trade openness instead of trade liberalization in the last models does not change the signs or statistical significance of the coefficients, nor does the exclusion of growth, inflation, or both alter the results in any of the models. Some variables have missing values that reduce the number of observations when they are included in the model; for instance, Lora's indexes lack information for Panama.
52. If the government is labor-linked, the conditional probability of regulation is 0.115, and of deregulation, 0.038, holding other variables in the last model at their means.
53. Arturo Bronstein, "Societal Change and Industrial Relations in Latin America: Trends and Prospects," International Labour Review, 134(1995), 167.
54. Ruth Berins Collier and David Collier. Shaping the Political Arena (Princeton: Princeton University Press, 1991).
55. Patricio Frías, El movimiento sindical en la lucha par la democracia (Santiago: PET, 1989).
56. In 1990 President Aylwin stated that Chile was committed to a market economy in which the private sector would be the main engine of development and the state would collaborate by focusing on social services such as health, education, and housing. Cited by Patricio Frías, "Perspectivas de redefinición de la acción sindical," Economía y Trabajo en Chile: Informe Anual 1992-93 (Santiago: PET, 1993), p. 104.
57. According to Siavelis, party identities were not consolidated after the first election due to limits on labels to parties of the left. Moreover, whereas the Concertación received 51 percent of the vote in 1989, pub lic opinion polls by the Centro de Estudios Públicos show an increase in the self-identification with the left between 1991 and December 1993, when it peaked at 37 percent. Peter Siavelis, The President and Congress in Postauthoritarian Chile (University Park: Pennsylvania State University Press, 2000), pp. 47, 104.
58. Patricio Frías, "El sindicalismo y su crisis en la perspectiva de la vinculación entre la política y la economía," Economía y Trabajo en Chile, Informe Anual No. 7 (Santiago: PET, 1997-1998), p. 104.
59. The number of strikes also peaked around this period, with 247 yearly strikes in 1992 and 46,215 strikers in 1991. Volker Frank, "The Labor Movement in Chile, 1990-2000," Working Paper No. 398 (Notre Dame: Kellogg Institute, University of Notre Dame, June 2002), p. 15.
60. CUT's president Manuel Bustos said in a 1990 interview: "Regarding union demands from the CUT, the most important one was the reform of the labor law, which had been promised by the Concertación." Cited by Jorge Rojas Hernández, "Desafíos estructurales del movimiento sindical chileno en el proceso de transición a la democracia," in Fernando Echeverría and Jorge Rojas, eds., Añoranzas, sueños y realidades (Santiago: Editorial Sur, 1992), p. 242.
61. Louise Haagh, "The Emperor's New Clothes: Labor Reform and Social Democratization in Chile," Studies in Comparative International Development, 37 (Spring 2002), 95-97.
62. René Cortázar, Política Laboral en el Chile Democrático (Santiago: Dolmen, 1993), p. 51. Frank, p. 27, argues that the labor reform was the second item on the agenda of the first Concertación administration after the tax reform.
63. In national surveys of urban areas by the Centro de Estudios Públicos, the main concern of the population during Aylwin's administration was delinquency. The concern with unemployment declined from 12 to 8 percent during his tenure.
64. Law 19,010 banned firing without cause, increased severance payment for unjust dismissal and severance payment in general, and fostered job protection for union leaders. Law 19,250 limited the worktime for certain categories of workers and established minimum pay for all types of workers, responsibilities for sub-contractors, new rules regarding vacations and sanctions for breaking the labor law.
65. The Concertación increased its share of the vote from 55 to 58 percent and augmented its difference with the right-wing candidates, despite the consolidation of the right-wing coalition by almost 20 percent.
66. Not only did unionization decline, but CUT demonstrations were also not well attended. Frank, p. 35.
67. Haag, p.105; Frank, p.25.
68. Frank, p. 29.
69. Business associations cited electoral intentions and complained that the executive repeatedly denied its intentions. See www.quepasa.cl/revista/1494.
70. The vote was twice tied in the senate thanks to the twenty-three senators who responded to the right-wing parties or were appointed under Pinochet. Under senate rules, these results assured no consideration of the bill for at least a year. Maria Lorena Cook, The Politics of Labor Law Reform in Latin America (unpublished manuscript, 2004).
71. I b i d.
72. According to Weyland, p. 129, after Pérez enacted his policies only 25.6 percent of Venezuelans endorsed his plan, whereas 52 percent regarded the austerity measures as unnecessary. Presidential popularity declined from 70 to 46 percent. Urban riots of an unprecedented scale, which caused hundreds of deaths, occurred barely eleven days after Pérez announced his reforms.
73. Causa R influence grew in union and local elections during Pérez's administration. Murillo, Labor Unions, Partisan Coalitions, pp. 66-72.
74. The CTV kept pressing for the labor reform until its approval and used it as a centerpiece of its May 1, 1990, demonstration. Murillo, Labor Unions, Partisan Coalitions, p. 70. AD union leaders worked with AD legislators to pass of the law. Interviews with AD-affiliated CTV leaders Zerpa Mirabal and Beltrán Vallejo, Caracas, 1994.
75. Based on interviews with legislators, Javier Corrales, Presidents without Parties (University Park: Pennsylvania State University Press, 2002), p. 132, reports: "Although baptized as the Caldera Law...it could just as well have been called the Adeco Law because AD legislators did everything possible to facilitate its approval. Since the Lusinchi years, Caldera had been trying to get this bill passed. Yet AD legislators always kept it dormant. But in 1989, AD legislators began to work with Caldera to resuscitate the bill. AD labor leaders even collaborated in drafting it....The president of the Senate, David Morales Bello (AD), decided to give the bill 'maximum priority' over other legislative matters and even authorized its approval with only one debate."
76. Oscar Hernández Alvarez and Napoleón Goizueta Herrera in Hernández Alvarez, La reforma laboral en América Latina (Caracas: 1995),
77. as cited by Arturo Bronstein, "Labour Law Reform in Latin America: Between State Protection and Flexilibility," International Labour Review, 136 (1997), 24-25.
78. Pérez called the law populist because it increased labor market rigidity but did not veto it. Interview, Oripoto, 1996.
79. Additionally, AD labor leaders strongly influenced party leadership selection through the party's labor bureau, generating incentives for party leaders to keep their loyalty. Burgess, p. 130.
80. This was one of two reform-adverse bills passed by the Venezuelan congress in 1990. The same year, congress approved twelve reform-supportive bills. Corrales, p. 133.
81. AD electoral support fell from almost 40 percent in 1989 to around 30 percent in the 1992 elections. Corrales, p. 30.
82. Kenneth Roberts, "Party System Collapse amid Market Restructuring," in Wise and Roett, eds.
83. Congress passed only eight of more than twenty bills on labor flexibility sent by the administration between 1989 and 1995. Sebastián Etchemendy and Vicente Palermo, "Conflicto y concertación: Gobierno, Congreso y organizaciones de interés en la reforma laboral del primer gobierno de Menem (1989-95)," Desarrollo Económico, 37 (January-March 1998), 559-90.
84. Yet it passed nine out often privatization bills, and the executive decreed the defeated one. Mariana Llanos, "Understanding Presidential Power in Argentina: A Study of the Policy of Privatization in the 1990s," Journal of Latin American Studies, 33 (2001), 67-99.
85. Etchemendy and Palermo, p. 569.
86. CGT Secretary General Antonio Cassia said that the confederation signed the agreements to have their concerns included in the law and argued that union pressures brought the government to include collective bargaining agreement as a condition for establishing the new contracts. Interview, Buenos Aires, 1995.
87. Etchemendy and Palermo, p. 546;
88. Murillo, Labor Unions, Partisan Coalitions, pp. 146-48.
89. Menem's approval rate grew to over 70 percent in 1991 and remained above 50 percent in 1995. Weyland,p. 126.
90. Menem's approval rate dropped to less than 30 percent by the end of 1996. Ibid. p. 126.
91. Although Sebastiani voted against the reform after providing a quorum, he was forced to resign the presidency of the main business association. "Aprobaron la reforma laboral," La Nación, Sept. 3, 1998;
92. "El PJ consiguió quórum en Diputados y convirtió en ley la reforma laboral," Clarín, Sept. 3, 1998.
93. The PJ could resort to labor resources and activists when it was out of power, whereas Menem himself ran again in the 2003 elections.
94. Madrid, p. 66.
95. J. Samuel Valenzuela, "Recasting State-Union Relations in Latin America," in Colin I. Bradford, ed., Redefining the State in Latin America (Paris: OECD, 1994), p. 138.
96. Katrina Burgess and Steven Levitsky, "Explaining Populist Party Adaptation in Latin America: Environmental and Organizational Determinants of Party Change in Argentina, Mexico, Peru and Venezuela," Comparative Political Studies, 36 (October 2003), 881-911.
97. Remmer provides evidence of partisan effects on fiscal policies. Sarah Brooks, "The Political Economy of Capital Account Liberalization in Latin America: A Transitional Cost Approach" (unpublished manuscript, January 2003), shows partisan effects on capital account liberalization.
98. See Maria Victoria Murillo, "Political Bias in Policy Convergence," World Politics, 54 (July 2002), 462-93, for privatization policies.