Theories of policy diffusion: Lessons from Latin American pension reform

World Politics

Volumn 57, Issue 2, 2005, Pages 262-295

  Weyland, Kurt ^a  

^a UNIVERSITY OF TEXAS AT AUSTIN   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

PENSION SYSTEM; POLICY DEVELOPMENT; PRIVATIZATION; SOCIAL POLICY; WELFARE REFORM;

LATIN AMERICA; WESTERN HEMISPHERE; WORLD;

EID: 24944482383     PISSN: 00438871     EISSN: None     Source Type: Journal    
DOI: 10.1353/wp.2005.0019     Document Type: Review

References (223)

1. See John Ikenberry, "The International Spread of Privatization Policies," in Ezra Suleiman and John Waterbury, eds., The Political Economy of Public Sector Reform and Privatization (Boulder, Colo.: Westview Press, 1990), 101-3, 107;
2. and cf. John Meyer and Brian Rowan, "Institutionalized Organizations," American Journal of Sociology 83 (September 1977);
3. and Martha Finnemore, National Interests in International Society (Ithaca, N.Y.: Cornell University Press, 1996).
4. See, e.g., Daniel McFadden, "Rationality for Economists?" Journal of Risk and Uncertainty 19 (December 1999);
5. Richard Thaler, "From Homo Economicus to Homo Sapiens," Journal of Economic Perspectives 14 (Winter 2000).
6. For exceptions, see Covadonga Meseguer, Bayesian Learning about Policies (Madrid: Instituto Juan March de Estudios e Investigaciones, 2002);
7. Beth Simmons and Zachary Elkins, "The Globalization of Liberalization: Policy Diffusion in the International Political Economy," American Political Science Review 98 (February 2004).
8. This article conceives of causal mechanisms as do Doug McAdam, Sidney Tarrow, and Charles Tilly, namely, as driving forces ("moving causes" in Aristotle's terminology) that operate in the same way in different settings but that may well produce different outcomes in these different settings; see McAdam, Tarrow, and Tilly, Dynamics of Contention (Cambridge: Cambridge University Press, 2001).
9. Another case of diffusion that is strikingly similar to the spread of Chilean pension privatization is the emulation of Czech voucher privatization by former communist countries. See Hilary Appel, "Western Financial Institutions, Local Actors, and the Privatization Paradigm," Problems of Post-Communism 51 (September-October 2004).
10. See, e.g., Gustavo Demarco, "The Argentine Pension System Reform and International Lessons," in Kurt Weyland, ed., Learning from Foreign Models in Latin American Policy Reform (Washington, D.C.: Woodrow Wilson Center Press, 2004);
11. Raúl Madrid, Retiring the State: Pension Privatization in Latin America and Beyond (Stanford, Calif: Stanford University Press, 2003);
12. Katharina Müller, Privatising Old-Age Security (Cheltenham: Edward Elgar, 2003);
13. Kurt Weyland, "The Diffusion of Innovations: How Cognitive Heuristics Shaped Bolivia's Pension Reform," Comparative Politics 38 (October 2005).
14. Daniel Kahneman, Paul Slovic, and Amos Tversky, eds., Judgment under Uncertainty: Heuristics and Biases (Cambridge: Cambridge University Press, 1982);
15. Thomas Gilovich, Dale Griffin, and Daniel Kahneman, eds., Heuristics and Biases: The Psychology of Intuitive Judgment (Cambridge: Cambridge University Press, 2002).
16. As the assessment of the cognitive heuristics framework below shows, this conceptualization of inferential shortcuts differs from the analysis in Samuel Popkin, The Reasoning Voter (Chicago: University of Chicago Press, 1991);
17. and in Arthur Lupia and Mathew McCubbins, The Democratic Dilemma (Cambridge: Cambridge University Press, 1998).
18. Kahneman, Slovic, and Tversky (fn. 6);
19. Gilovich, Griffin, and Kahneman (fn. 6).
20. Everett Rogers, Diffusion of Innovations, 4th ed. (New York: Free Press, 1995), 11, 22-23;
21. Frances Berry, "Sizing Up State Policy Innovation Research," Policy Studies Journal 22 (August 1994), 443;
22. Mitchell Orenstein, "Mapping the Diffusion of Pension Innovation," in Robert Holzmann, Mitchell Orenstein, and Michal Rutkowski, eds., Pension Reform in Europe (Washington, D.C.: World Bank, 2003), 179-80;
23. and Sarah Brooks, "Interdependent and Domestic Foundations of Policy Change: The Diffusion of Pension Privatization around the World," International Studies Quarterly 49 (forthcoming), 42.
24. See also Richard Li and William Thompson, "The 'Coup Contagion' Hypothesis," Journal of Conflict Resolution 19 (March 1975), 65.
25. Hugh Heclo, Modern Social Policies in Britain and Sweden (New Haven: Yale University Press, 1974).
26. See especially Orenstein (fn. 8), 179-80.
27. Brooks (fn. 8), 42;
28. for the following point, see Orenstein (fn. 8), 185-86.
29. It is not uncommon in Latin America for reform legislation simply to remain on the books. For a partial explanation of why governments get cold feet, see the discussion of the Nicaraguan case at the end of this article (p. 294).
30. David Collier and Richard Messick, "Prerequisites versus Diffusion," American Political Science Review 69 (December 1975), 1311-13;
31. Harvey Starr, "Democratic Dominoes," Journal of Conflict Resolution 35 (June 1991);
32. Stephen Walt, "Fads, Fevers, and Firestorms," Foreign Policy 121 (November-December 2000), 41;
33. Orenstein (fn. 8), 174, 178, 185-86.
34. Heclo (fin. 9).
35. Collier and Messick (fn. 14), 1311-13.
36. Orenstein (fn. 8), 185-86. Similar neighborhood effects and regional patterns consistently appear among the forty-eight contiguous U.S. states for a variety of issue-areas. Robert Holzmann, Mitchell Orenstein, and Michal Rutkowski, eds., (Washington, D.C.: World Bank)
37. See, e.g., Berry (fn. 8), 442;
38. Michael Mintrom, "Policy Entrepreneurs and the Diffusion of Innovation," American Journal of Political Science 41 (July 1997), 756-59;
39. Michael Mintrom and Sandra Vergari, "Policy Networks and Innovation Diffusion," Journal of Politics 60 (February 1998), 129, 139-44.
40. See in general Finnemore (fn. 1), 43-44, 137-39.
41. E.g., Beth Simmons, "The International Politics of Harmonization: The Case of Capital Market Regulation," International Organization 55 (Autumn 2001).
42. See especially Barbara Stallings, "International Influence on Economic Policy," in Stephan Haggard and Robert Kaufman, eds., The Politics of Economic Adjustment (Princeton: Princeton University Press, 1992);
43. see also Ikenberry (fn. 1), 99-101;
44. Wade Jacoby, Imitation and Politics (Ithaca, N.Y.: Cornell University Press, 2000), 28-30;
45. Appel (fn. 4).
46. See, e.g., Witold Henisz, Bennet Zelner, and Mauro Guillén, "International Coercion, Emulation and Policy Diffusion: Market-Oriented Infrastructure Reforms, 1977-1999" (Manuscript, Wharton School, University of Pennsylvania, 2003);
47. Alexandra Guisinger, "Patterns of Trade Protection and Liberalization: Is There a Role for Diffusion?" (Paper presented at the conference on the International Diffusion of Political and Economic Liberalization, Harvard University, October 3-4, 2003).
48. Certainly, forceful pressure is not the only way in which the IFIs can, in principle, contribute to policy diffusion. As the discussion of normative imitation immediately below shows, for instance, the IFIS may "teach" new norms. By providing objective information, they may also influence rational learning, and by calling attention to a novel policy model, they can shape the inferences of boundedly rational decision makers. Yet in the extant literature, IFI pressure ("coercion," conditionality) has attracted the most attention.
49. Meyer and Rowan (fn. 1);
50. Paul DiMaggio and Walter Powell, "The Iron Cage Revisited," American Sociological Review 48 (April 1983).
51. Finnemore (fn. 1).
52. See especially Meseguer (fn. 3);
53. also Jacoby (fn. 19), 9, 24.
54. Kahneman, Slovic, and Tversky (fn. 6);
55. Gilovich, Griffin, and Kahneman (fn. 6);
56. Rajeev Gowda and Jeffrey Fox, eds., Judgments, Decisions, and Public Policy (Cambridge: Cambridge University Press, 2002).
57. Advocates of rational learning have argued that the mass public can use simple cues to make reasonably good political choices, at least in the aggregate;
58. see Popkin (fn. 6)
59. Lupia and McCubbins (fn. 6) But this argument holds when actors are asked to choose between "given" options and when there is access to long-established cues (such as partisanship) that have over time proven to be good predictors of outcomes. These preconditions are clearly not fulfilled when actors face a unique momentous decision on whether to adopt and to adapt a novel model with little track record, such as pension privatization.
60. Headed by officials from the target region, the regional development banks, such as the Inter-American Development Bank, are less powerful and less insistent on conditionality than the IMF and the World Bank, as numerous Latin American policymakers indicated in interviews.
61. World Bank, World Development Report, 1993: Investing in Health (Washington, D.C.: Oxford University Press, 1993), 161-71.
62. World Bank, Averting the Old Age Crisis (Washington, D.C.: Oxford University Press, 1994).
63. Orenstein (fn. 8), 185-86.
64. Joan Nelson, "Promoting Policy Reforms," World Development 24 (September 1996);
65. Wendy Hunter and David Brown, "World Bank Directives, Domestic Interests, and the Politics of Human Capital Investment in Latin America," Comparative Political Studies 33 (February 2000);
66. Sarah Brooks, "International Financial Institutions and the Diffusion of Foreign Models of Social Security Reform in Latin America," in Kurt Weyland, ed., Learning from Foreign Models in Latin American Policy Reform (Washington, D.C.: Woodrow Wilson Center Press, 2004);
67. Appel (fn. 4), 4-7, 9.
68. Author interview with Alfonso Peña Rueda, former national pension secretary (1995-97), La Paz, July 24, 2002.
69. Author interviews with Fabio Durán, former actuarial director, Costa Rican Social Security Institute, San José, Costa Rica, June 25, 2004,
70. and with Adolfo Rodríguez Herrera, general superintendent of securities and former leader of first pension reform team (1995-98), San José, Costa Rica, June 21, 2004.
71. Author interviews with Helga Salinas, former vice-minister of finance and leader of first pension reform team (1991-93), La Paz, July 26, 2002,
72. and with César Peñaranda, former head adviser to Economy Minister Carlos Boloña, Lima, July 12,2002;
73. similar author interview with Pablo Gottret, superintendent of pensions, securities, and insurance, La Paz, July 30, 2002;
74. see also Meseguer (fn. 3), 13-14.
75. Meyer and Rowan (fn. 1);
76. Finnemore (fn. 1);
77. Martha Finnemore, "Norms, Culture, and World Politics," International Organization 50 (Spring 1996);
78. Martha Finnemore and Kathryn Sikkink, "International Norm Dynamics and Political Change," International Organization 52 (Autumn 1998);
79. Ellen Lutz and Kathryn Sikkink, "International Human Rights Law and Practice in Latin America," International Organization 54 (Summer 2000).
80. Cf. James March and Johan Olsen, Ambiguity and Choice in Organizations (Bergen: Universitets-forlaget, 1976);
81. John Kingdon, Agendas, Alternatives, and Public Policy (Boston: Little, Brown, 1984).
82. See, e.g., Finnemore (fn. 1), 42-47.
83. Stanley Lieberson, A Matter of Taste (New Haven: Yale University Press, 2000).
84. Michael Cichon, "Notional Defined-Contribution Schemes," International Social Security Review 52 (October-December 1999).
85. Cf. Orenstein (fn. 8), 183;
86. see in general Albert Bergesen, ed., Studies of the Modern World System (New York: Academic Press, 1980).
87. In fact, adherents of this framework depict the spread of norms and models as a "cascade" that quickly gathers momentum. See Finnemore and Sikkink (fn. 36), 902-4;
88. Lutz and Sikkink (fn. 36), 638, 655-59;
89. see also, on reputational cascades, Timur Kuran and Cass Sunstein, "Availability Cascades and Risk Regulation," Stanford Law Review 51 (April 1999), 687, 714, 728-31.
90. Cf. Theodore J. Lowi, "American Business, Public Policy, Case-Studies, and Political Theory," World Politics 16 (July 1964).
91. Finnemore (fn. 1).
92. Its official purpose - to plan and coordinate scientific activities - would place such an institution under Lowi's (fn. 42) category of "regulatory" decisions, but in most underdeveloped countries - especially those without a significant science community - it simply allowed government leaders to make additional patronage appointments, which turned this innovation into a distributive decision.
93. See Daniel Kahneman, Jack Knetsch, and Richard Thaler, "Fairness as a Constraint on Profit Seeking," American Economic Review 76 (September 1986).
94. Carmelo Mesa-Lago, Ascent to Bankruptcy (Pittsburgh, Pa.: University of Pittsburgh Press, 1989).
95. Author interviews with Salinas (fn. 34)
96. and Alberto Bonadona, former leading pension reform team member, La Paz, August 9, 2002.
97. Author interviews with Víctor Ramírez, intendent of the public pension system and leading reform team member, San Salvador, July 8, 2004,
98. and with Ruth Solórzano, leading pension reform team member, San Salvador, July 7, 2004.
99. Author interview with Alfonso de los Heros, former labor minister and prime minister, Lima, July 8, 2002.
100. Interviews with De los Heros (fn. 49),
101. Peñaranda (fn. 34),
102. and Fritz Du Bois, former adviser to Economy Ministers Carlos Boloña (1991-92) and Jorge Camet (1993-97), Lima, July 2, 2002.
103. Reliable cross-nationally comparable data on the financial and actuarial difficulties of social security systems are unavailable, as confirmed by personal communications from Sarah Brooks, Department of Political Science, Ohio State University, January 22, 2005, and from Raúl Madrid, Department of Government, University of Texas at Austin, January 24, 2005. In fact, several aspects of expenditures and revenues - for instance, what counts as the system's revenue sources - were contested in a number of countries. The strength of IFI pressures also differed from country to country. But whereas adherents of rational choice tend to take external constraints as a given and focus on the margin of choice that actors retain, my classification of theoretical frameworks sees the extent of actors' choice as an issue to be explained and therefore treats it as the first step in my nested theoretical analysis.
104. Cf. Ikenberry (fn. 1), 101-2. There are some rational learning arguments that predict an S-shaped pattern for adoption of decisions, but these arguments focus on learning from experience in each separate case and do not consider learning among cases, that is, diffusion.
105. See, e.g., Daniel Carpenter and David Lewis, "Political Learning from Rare Events: Poisson Inference, Fiscal Constraints, and the Lifetime of Bureaus," Political Analysis 12 (Summer 2004).
106. See, e.g., author interview with Moisés Naím, Venezuela's former economy minister (1989-90), Washington, D.C., March 30, 2000;
107. Kurt Weyland, ed., Learning from Foreign Models in Latin American Policy Reform (Washington, D.C.: Woodrow Wilson Center Press, 2004), chaps. 4-9.
108. For instance, Price Waterhouse, Proyecto de Reforma del Sistema Previsional Boliviano (Project for a reform of Bolivia's social security system) (N.p., 1993), an early version of Bolivia's privatization project, lists in its short two-page bibliography twelve consultant reports by Chilean experts. And a succinct analysis of the Salvadoran reform process, written by a member of the small domestic reform team, "Proceso de Implementación de la Reforma al Sistema de Pensiones de El Salvador" (N.d.), refers to Chilean - and only Chilean - consultants in many places.
109. George Tsebelis, Nested Games (Berkeley: University of California Press, 1990), 32-38.
110. Popkin (fn. 6);
111. Lupia and McCubbins (fn. 6).
112. Herbert Simon, "Human Nature in Politics: The Dialogue of Psychology with Political Science," American Political Science Review 79 (June 1985).
113. As reported, e.g., in author interviews with Sergio Tamayo, pension reform team member, San Salvador, July 6, 2004,
114. and with Bonadona (fn. 47);
115. for other Latin American countries, see Müller (fn. 5), 121-22;
116. Madrid (fn. 5), 49-52, 79, 113, 181-83.
117. See John Steinbruner, The Cybernetic Theory of Decision (Princeton: Princeton University Press, 1974), 121-22.
118. Particularly contagious were team members' focus on the Chilean model and neglect of other reform experiences, as well as their overextrapolation of the Chilean model's success, which the following pages discuss and document. As a result, team members who had initially been more skeptical came to endorse the Chilean model wholeheartedly. In El Salvador, for instance, a leading pension reformer had initially advocated a mixed public/private system but soon embraced a full-scale reform modeled closely on the Chilean original. Compare the following: Víctor Ramírez, "El Sistema de Pensiones de El Salvador: Un Acercamiento al Problema," in Víctor Ramírez and Mauricio, Chavarría, Diagnósticos sobre la Seguridad Social en El Salvador (Assessments of social security in El Salvador) (San Salvador: Fundación Dr. Guillermo Manuel Ungo, 1994), Documento de Trabajo: Serie Seguridad Social 94-1 (January), 16-17;
119. and Víctor Ramírez, "El Sistema de Pensiones de El Salvador: Un Acercamiento al Problema," in Centro Internacional para el Desarrollo Económico (CINDE), ed., Soluciones Descentralizadas/Privadas a Problemas Públicos (Decentralized/ private solutions to public problems) (San Salvador: CINDE, 1994), 100-102.
120. Judith Teichman, The Politics of Freeing Markets in Latin America (Chapel Hill: University of North Carolina Press, 2001);
121. Robert Kaufman and Joan Nelson, "Introduction," in Kaufman and Nelson, eds., Crucial Needs, Weak Incentives: Social Sector Reform, Democratization and Globalization in Latin America (Washington, D.C.: Woodrow Wilson Center Press, 2004), 6-7.
122. See in general Bryan Jones, Politics and the Architecture of Choice: Bounded Rationality and Governance (Chicago: University of Chicago Press, 2001);
123. and Barbara Levitt and James March, "Organizational Learning," Annual Review of Sociology 14 (1988).
124. Kahneman, Slovic, and Tversky (fn. 6);
125. Gilovich, Griffin, and Kahneman (fn. 6).
126. Kahneman, Slovic, and Tversky (fn. 6), chaps. 1, 11-14, 33;
127. Gilovich, Griffin, and Kahneman (fn. 6), chaps. 3-5.
128. Kahneman, Slovic, and Tversky (fn. 6), chaps. 1-6;
129. Gilovich, Griffin, and Kahneman (fn. 6), chaps. 1-2.
130. Daniel Kahneman and Amos Tversky, "On the Study of Statistical Intuitions," in Daniel Kahneman, Paul Slovic, and Amos Tversky, eds., Judgment under Uncertainty (Cambridge: Cambridge University Press, 1982), 503;
131. see also Gilovich, Griffin, and Kahneman (fn. 6), chaps. 6-8.
132. Interestingly, Mintrom (fn. 16) found that among the U.S. states, neighborhood effects are especially influential in agenda setting (pp. 756-59, 761).
133. Moreover, countries that did not suffer from the problem that the new model promises to resolve may well refuse to adopt the innovation, regardless of its performance. Thus, there are additional reasons why the wave of diffusion may not affect the universe of cases.
134. Thus, bounded rationality arguments do not deny that actors can modify their initial judgments as more information becomes available. But they disagree with rational choice arguments that such adjustments optimally process the relevant information in a systematic and unbiased fashion.
135. On these variations, see Carmelo Mesa-Lago, "Social Welfare Reform in the Context of Economic-Political Liberalization," World Development 25 (April 1997);
136. and Madrid (fn. 5), 14-21.
137. See Richard Rose, "What Is Lesson-Drawing?" Journal of Public Policy 11 (January 1991), 10-11.
138. Joan Nelson, Reforming Health and Education (Washington, D.C.: Overseas Development Council, 1999), 22-24; Nelson explains why Chile's health and education reforms were not sufficiently comprehensive, integrated, and bold to turn into similarly "available" models.
139. Author interviews with Bonadona (fn. 47),
140. Ramírez (fn. 48),
141. Alfredo Romero, former leader of pension reform team (1992), Lima, July 17, 2002,
142. Salinas (fn. 34),
143. and Tamayo (fn. 58);
144. "Proceso de Implementación" (fn. 55);
145. Comisión Técnica de Pensiones, Sistema de Pensiones en Chile: Informe de la Visita Efectuada a Chile (The pension system in Chile: Report on the trip to Chile) (San José: Caja Costarricense de Seguro Social, 1990).
146. Author interviews with Celecino de Carvalho Filho, secretary of special studies, Ministry of Social Security and Assistance, Brasília, July 12, 1989,
147. and with Celso Barroso Leite, former secretary of social security, Ministry of Social Security and Assistance, Rio de Janeiro, February 19, 1990.
148. Author interview with Luis Fernández Fagalde, former president, Social Policy Committee, Chamber of Deputies, La Paz, July 25, 2002;
149. see also Andrés Bustos González, "A Previdência Social no Chile. Enfoque dos Trabalhadores," in Associação Nacional dos Auditores Fiscais de Contribuições Previdenciárias (ANFIP), Ciclo de Estudos sobre Seguridade Social: Seminário Internacional sobre Seguridade Social (Series of studies about social security: International seminar on social security) (Brasília: ANFIP, 1995).
150. Demarco (fn. 5), 86-89.
151. Interview with Mauricio Barassi, one of the architects of Argentina's pension privatization, reported in Madrid (fn. 5), 114-15.
152. Author interviews with Salinas (fn. 34),
153. Bonadona (fn. 47),
154. and Teresa Vargas, former core member of pension reform team, La Paz, July 31, 2002;
155. similarly author interviews with Ramírez (fn. 48)
156. and Tamayo (fn. 58) for El Salvador;
157. and with De los Heros (fn. 49)
158. and Mario Roggero, former deputy of the Democratic Front (FREDEMO) and initiator of pension reform project, Lima, July 11, 2002, for Peru.
159. For Colombia, Juan Manuel Santos, "La Reforma de las Pensiones en Colombia," in José Piñera, ed., "La Revolución Latinoamericana de las Pensiones" (The Latin American pension revolution) (book manuscript) reports a very similar experience.
160. On Colombia, Mexico, and Uruguay, see also Madrid (fn. 5), 173-75;
161. and Müller (fii. 5), 34-38.
162. This included not only additional nations that enacted pension privatization, such as Ecuador and El Salvador, but also a number of countries that ended up rejecting reform, such as Guatemala, Honduras, Panama, and Paraguay; Madrid (fn. 5), 173-74.
163. See, e.g., Instituto Liberal (IL), Previdência Social no Brasil (Social security in Brazil) (Rio de Janeiro: IL, 1991), chap. 4;
164. Clovis de Faro, ed., Previdência Social no Brasil (Social security in Brazil) (Rio de Janeiro: Editora da Fundação Getúlio Vargas, 1993).
165. Evelyne Huber and John Stephens, The Political Economy of Pension Reform (Geneva: United Nations Research Institute for Social Development, 2000), 2, 22-29.
166. Cichon (fn. 39).
167. Author interviews with Rodríguez (fn. 33),
168. Salinas (fn. 34),
169. Solórzano (fn. 48),
170. Tamayo (fn. 58),
171. and Vargas (fn. 78);
172. Sarah Brooks and Kent Weaver, Lashed to the Mast? The Politics of Notional Defined Contribution Pension Reforms (Chestnut Hill, Mass.: Center for Retirement Research at Boston College, 2005), 24-25.
173. There is no trace of the NDC scheme in the mass of primary documents that I collected in Bolivia, Costa Rica, El Salvador, and Peru, nor in published case studies by other authors, such as Madrid (fn. 5);
174. Müller (fn. 5);
175. and Demarco (fn. 5).
176. As the only exception, Uruguay, with its wealth of pension expertise, considered a notional defined-contribution scheme in 1991-92 but discarded it under the influence of the Chilean model; Müller (fn. 5), 35-36.
177. Pablo Gottret, "Bolivia: Capitalisation, Pension Reform and their Impact on Capital Markets" (Paper prepared for Organisation for Economic Co-operation and Development, Advisory Group on Privatisation, Paris, September 21-22, 1999), 15-16.
178. World Bank, Bolivia: Public Expenditure Review, Report no. 19232-BO (Washington, D.C.: World Bank, 1999), 10, 22.
179. Manuel Arellano, "Natural Gas, Social Unrest, and the Ousting of a President" (Talk presented at the panel "Are Latin American Presidents Living Dangerously?" University of Texas at Austin, April 8, 2004);
180. Roberto Laserna, "Bolivia: Entre Populismo y Democracia," Nueva Sociedad 188 (November-December 2003), 13.
181. As Madrid (fn. 5) argues in general (pp. 31-40), documents for Mexico (pp. 73-76), Argentina (pp. 109-10), Brazil (p. 145), Bolivia, Colombia, Costa Rica, the Dominican Republic, Nicaragua, Peru, and Uruguay (pp. 170-73), and confirms through a wide-ranging quantitative analysis (pp. 192-200), the claim that pension privatization would raise domestic savings, which experts and decision makers inferred in a logically problematic fashion from the Chilean experience, was a decisive motive for enacting structural social security reform in Latin America. Sarah Brooks establishes the same point through a sophisticated statistical analysis; Brooks, "Social Protection and Economic Integration: The Politics of Pension Reform in an Era of Capital Mobility," Comparative Political Studies 35 (June 2002).
182. Author interviews with Juan José Daboub, former finance minister, San Salvador, July 9, 2004,
183. and with Peñaranda (fn. 34);
184. similar interviews with Du Bois (fn. 50)
185. and Solórzano (fn. 48).
186. The team of Costa Rican experts that visited Chile in 1989 also emphasized the impact of pension privatization on domestic savings as a major attraction: Comisión Técnica de Pensiones (fn. 73), 14-16.
187. Interview with Peña Rueda (fn. 32);
188. similar interviews with Du Bois (fn. 50) 187 for Peru
189. and with Tamayo (fn. 58) for El Salvador;
190. data computed from Superintendencia de Administradoras de Fondos de Pensiones (Santiago de Chile), Rentabilidad Real Anual del Fondo de Pensiones, www.safp.cl/inf€tadistica/index.html (accessed May 12,2004).
191. Andrew Samwick, "Is Pension Reform Conducive to Higher Saving?" Review of Economics and Statistics 82 (May 2000);
192. Joseph White, "Looking in the Wrong Place: Why Chile Provides No Evidence for Social Security Privatization," Public Budgeting and Finance 20 (Winter 2000).
193. Peter Orszag and Joseph Stiglitz, "Rethinking Pension Reform" (Paper presented at the conference on "New Ideas about Old Age Security," World Bank, Washington, D.C., September 14-15, 1999), 8;
194. similarly, see Nicholas Barr, Reforming Pensions: Myths, Truths, and Policy Cboices (Washington, D.C.: International Monetary Fund, 2000), 12-13.
195. See also the World Bank's new skeptical assessment of pension privatization in Indermit Gill, Truman Packard, and Juan Yermo, Keeping the Promise of Social Security in Latin America (Washington, D.C.: World Bank, 2004).
196. Orszag and Stiglitz (fn. 91), 4.
197. A similar sequence of initial enthusiasm and later disappointment occurred among former communist countries: the World Bank initially embraced Czech voucher privatization firmly and pushed it on other nations but later recognized its serious flaws; see Appel (fn. 4), 3-4.
198. As reported in Octavio Enríquez and Juan Carlos Bow, "Réquiem a nueva Ley de Pensiones," El Nuevo Diario, July 22, 2004.
199. On the possibility of Nicaragua backing away from pension privatization, see author's telephone interview with Alejandro Bonilla chief, Studies and Operations Branch, International Social Security Association, Geneva, January 25, 2005.
200. See, e.g., Banco Mundial - Proyecto de Reforma al Sistema de Seguridad Social de Largo Plazo en Bolivia, Restructuración del Sistema de Seguridad Social de Largo Plazo en Bolivia (The restructuring of Bolivia's social security system) (La Paz: CIEDESS, December 1993);
201. Comisión para la Reforma al Sistema de Pensiones, "Propuesta de Reforma al Actual Sistema de Pensiones" (San Salvador: Comisión para la Reforma, 1996);
202. "Créase Sistema Privado de Pensiones complementario al Sistema Nacional de Pensiones a cargo del IPSS. Decreto Legislativo No 724," El Peruano (November 11, 1991).
203. For Colombia, see Santos (fn. 78), 42;
204. for Mexico, Argentina, and Colombia, see Madrid (fn. 5), 79, 116, 175.
205. Raúl Madrid, "Ideas, Economic Pressures and Pension Privatization," Latin American Politics and Society 47 (forthcoming), 14-15, based on an interview with Hermann von Gersdorff, World Bank staff economist, Washington, D.C., May 15, 1998.
206. Mario Roggero, Escoja Usted (You choose!) (Lima: N.p., 1993), 22-24, 58-59, 185, 190, 200-202.
207. In a substitutive model, the new private pension scheme completely replaces the old public social security system. On similarities and differences of Latin America's reformed pension systems along a number of specific rules and issues, see especially Stephen Kay and Barbara Kritzer, "Social Security in Latin America: Recent Reforms and Challenges," Economic Review (Federal Reserve Bank of Atlanta) 86 (first quarter 2001);
208. José Devesa-Carpio and Carlos Vidal-Meliá, The Reformed Pension Systems in Latin America (Washington, D.C.: World Bank, May 2002), 47-59;
209. and Robert Palacios, "Pension Reform in Latin America: Design and Experiences," in International Federation of Pension Fund Administrators (FIAP), ed., Pension Reforms: Results and Challenges (Santiago de Chile: FIAP, 2003).
210. Author interview with Alberto León, pension reform team member, Lima, July 2, 2002.
211. Interview with Salinas (fn. 34);
212. similar interview with Ramírez (fn. 48).
213. See, e.g., for El Salvador: Carmelo Mesa-Lago and Fabio Durán,
214. Interview with Ramírez (fn. 48).
215. Eduardo Morón and Eliana Carranza, Diez Años del Sistema Privado de Pensiones (Ten years of the private pension system) (Lima: Centro de Investigación - Universidad del Pacífico, 2003), chaps. 4-5.
216. For a comprehensive assessment of these kinds of problems in all of Latin America's private pension systems, see the new World Bank study by Gill, Packard, and Yermo (fn. 91).
217. Author interview with Francia Brevé, former political leader of pension reform team (1995-97), San Salvador, July 7, 2004.
218. For instance, the IFIs make extraregional models available. In this way, they facilitated the relatively rapid "jump" of pension privatization to Eastern Europe; see Orenstein (fn. 8), 185-90.
219. These arguments may be more persuasive in other policy areas, however, such as highly competitive economic markets (Simmons, fn. 19)
220. or (effectively) distributive decision making (Finnemore, fn. 1).
221. See recently Gowda and Fox (fn. 25).
222. The other leading approach, institutionalism, cannot offer a satisfactory explanation of diffusion because it focuses on actors' institutionally defined capacities and the constraints they face, but - unless combined with rational choice or culturalism - lacks an account of actors' motivations.
223. Contra Tsebelis (fn. 55), 32-38.