If export orientation is a goal in a sustainable development strategy, this study argues that public interventions at the sectoral level in a variety of markets can produce economic reorientation that pursues international comparative advantage faster and at lower cost than free market forces can. Pervasive failures in information, credit, input, distribution, and insurance markets can render strictly market-based adjustment both slow and costly. Although Chile's export boom and high growth rates have been associated with its free market economic policies, this article, based on a comparison of the fruit, fish, and forestry sectors, contends that new forms of public intervention were crucial catalysts in shaping a sustained export response.

It is frequently argued that the key to “successful” economic liberalization is to marginalize interest groups that profit from existing regulatory regimes. This paper contends that some established interests can craft public policies to protect their rents in the new market setting. The state may shape the interests of social actors and create proreform constituencies out of old populist and interventionist groups. In Argentina, this coalition building was achieved by constructing reform policies that granted rents in new markets to business and organized labor and by deliberately avoiding unilateral deregulation in sectors where reform would hurt traditionally powerful actors. This argument is developed through a comparative analysis of policy reform in the labor market institutions and protected industrial sectors, areas where the costs of deregulation are said to be unavoidable for the established actors.

Brazil’s 1993 law requiring candidates to report their campaign contributions has generated a new source of data to explore the supposition that Brazilian elections are extraordinarily expensive. An examination of these data from Brazil’s 1994 and 1998 general elections reveals that most money for Brazilian electoral campaigns comes from business sources and that leftist candidates have extremely limited access to such financing. The effect on democracy is that Brazil’s largely unregulated campaign finance system tends to decrease the scope of interest representation.

The choice of exchange rate regime is a continuing challenge to Latin American policymakers, who currently face pressure to dollarize their economies. The constraints imposed by the “dollar bloc,” the informal but powerful currency bloc that ties Latin America to the dominant currency, are central to that choice. Current weak economic performance has called the bloc's norms and principles into question and has made the exchange rate an open issue. Ecuador's full official dollarization is one possible strategy for countries with political stability but poor economic performance to gain access to needed dollar resources. Most of Latin America, however, will continue with variants of managed floating exchange rates, and the periodic foreign exchange crises will provide access to official dollar resources and facilitate renegotiation of the terms of outstanding debt.

Comparative examples of “good government” at the subnational level may underanalyze the “public goods” problem facing politicians. Delegating authority and resources to policymaking agencies is possible when political conflict is low. The benefits can be maintained only if public agencies establish ties of “horizontal embeddedness” with industrial clients. This case study of innovative industrial policymaking in Minas Gerais, which is compared with one from Rio de Janeiro, finds that horizontal, interagency ties were critical to policy success. The contrast leads to an examination of the mineiro system's efficacy in promoting externalities, attracting foreign investment, and planning infrastructure in the state's automotive industry.

Most of the countries of South America experienced two notable institutional phenomena during the 1990s: the reform or rewriting of constitutions and the emergence of direct democracy mechanisms. This paper examines the latter process through a cross-national comparison. The introduction of direct democracy mechanisms is typically driven by traditionally excluded political interests. It takes two forms, both involving the failure of representative democratic institutions. In most cases, these traditionally excluded interests win control over the constitutional reform and rewriting process, although this is not a necessary condition for the emergence of direct democracy. Drawing illustrations from 12 cases of constitutional reform, this paper links arguments about direct democracy in the United States and Western Europe, institutional change, neopopulism, and the decline of the party system in Latin America.

The standard account of military dictatorship in Chile (1973–1990) portrays the case as a personalist regime, and uses the dynamics associated with this type of regime to explain General Pinochet's control of the presidency, the enactment of the 1980 Constitution, and the longevity of military rule. Drawing on records of the decisionmaking process within the military junta, this article presents evidence for a different characterization of the dictatorship. It shows that Pinochet never attained the supremacy commonly attributed to him, that the commanders of the other branches of the armed forces retained significant powers, and that the 1980 Constitution was not enacted to project Pinochet's personal power. More generally, this study suggests that personal power is not a necessary condition for regime longevity; collective systems can also produce cohesion and stability.

Chile's military government replaced the country's universalistic social policy system with a set of market-oriented social policies. Taking evidence from three areas (pensions, education, and health care), this study seeks to explain why the military advanced a policy of deep retrenchment and why reform of health care was less thorough than it was in pensions and education. The radical transformation of policy relates to the breadth of power concentration enjoyed by General Pinochet and his economic team, the policymakers' ideological positions, and the role of veto players. The more limited reform of health care is linked to the actions of a powerful veto player, the professional association of physicians.

The reconfiguration of the global security order since the late 1980s has had a heavy impact on regional security in the Caribbean. Having lost strategic importance, the Caribbean states have been attempting to restructure their relationship with the United States. These small states are interested in building a regional security regime that is inclusive, transparent, and accountable. This analysis shows how the principle of subsidiarity may be employed to achieve that end.

The literature on the origins of democratic institutions is split between bottom-up and top-down approaches. The former emphasize societal factors that press for democracy; the latter, rules and institutions that shape elites' incentives. Can these approaches be reconciled? This article proposes competitive political parties, more so than degrees of modernization and associationalism, as the link between the two. Competitive political parties enhance society's bargaining power with the state and show dominant elites that liberalization is in their best interest; the parties are thus effective conduits of democracy. In the context of party deficit, the prospects for democratization or redemocratization are slim. This is illustrated by comparing Cuba and Venezuela in the 1950s and 1990s.

This article examines, through a two-level game model, the case of the first investment dispute under NAFTA between a private U.S. firm and the Mexican government. It argues that the clue to understanding why the Mexican president could not cooperate with the U.S. president lies in Mexico's domestic “ratification” process. The analysis yields two theoretical propositions. First, federalism represents an important variable in explaining foreign economic policy. Second, two-level game logic should not be applied only to formal international negotiation situations; instead, by specifying the dependent variable as cooperation or noncooperation, these models connecting domestic and international politics can be productively applied to study foreign economic policy.

This study focuses on Nicaragua's transition from a revolutionary state to one oriented toward democracy and the market, through the political lens of agricultural property rights. The national agenda on property rights after 1990 was dominated by elaborate arrangements to accommodate kinship-based factions of the agroindustrial elite, core Sandinista constituents, rural labor groups, and demobilized peasant combatants. Bargains, legislative initiatives, and constitutional reforms failed to clarify legal ambiguity over coveted assets. Persistent conflict thereby became embedded in official efforts to design a robust property regime. The case of Nicaragua suggests comparisons with other countries where protracted confrontation and social violence over property rights pose serious threats to unconsolidated democratic institutions.

In the 1990s, trade liberalization eroded the competitiveness of Caribbean economies as manufacturing export platforms. Proposed new economic strategies favored a shift from vertically integrated, transnationally based segment manufacturing to segments of knowledge-intensive industries and services. This strategy, however, reproduces the economic asymmetries associated with the core-periphery relation (low wages, value-added rates). Postindustrial technologies and economic strategies provide the opportunity to formulate alternative policies to overcome the shortcomings of peripheral postindustrialization and foster sustainable postindustrial development.

The economic embargo against Cuba has been widely promoted as a way to hasten the end of the Castro regime. Historically, however, the connection between embargoes and regime change is mediated by a complex of political, social, and economic conditions. Labormarket bottlenecks and domestic elite opposition, decisive factors in the South African case, are absent from that of Cuba. This study uses the factors derived from an analysis of South Africa to compare the Cuban case and concludes that the embargo against Cuba cannot have its intended results.

Suspecting that his electoral campaign had received contributions from the Cali drug cartel, the U.S. government considered Colombian president Ernesto Samper (1994–98) an enemy in the drug war. U.S. antidrug policy accordingly targeted not just illicit crop cultivation, traffickers, and money laundering but also the democratically elected president himself. In many ways, U.S. policy became obsessed with bringing down Samper, an “explicit narcotization” that had severe consequences for the two countries' relationship. This case study analyzes the often complex interactions between dominant and subordinate states, especially when the dominant state's involvement in the subordinate state is driven by domestic political concerns.

Despite repeated conflict with organized labor, the government of Carlos Salinas de Gortari (1988–94) pushed an aggressive divestment agenda that transformed Mexico into Latin America's leading privatizer. Explanations of Salinas's achievements typically emphasize centralized presidential power (including control over the ruling party) and autonomy; technocratic and political savvy; and weak labor opposition. This article questions such a pure “capacity-outcome” approach. Of equal importance are the learning effects of repeated interaction between the state and labor, which changed the course of divestment struggles and thereby influenced their outcomes. Lessons learned in successive confrontations led to patterns of interaction conducive to widescale privatization. The article develops this argument through comparative analysis of major divestment episodes in the aviation, mining, steel, and telecommunications sectors.