The Case of Leftist Governments in Chile and Uruguay
In this article, Juan Bogliaccini and Aldo Madariaga explore leftist governments in peripheral economics — the topic of their recently published article, “Leftist governments, distributive strategies, and the politics of balance of payments-constrained growth in Chile and Uruguay,” in Competition and Change.
Governments in peripheral economies have usually faced problems fulfilling their distributive mandate. Because of their difficulty in earning foreign exchange to pay for imports or service their debt, these governments often ended in the balance of payments crises and renounced their electoral programs while embracing stabilization and fiscal austerity. The authors underline that this reflects that economic growth and distribution in peripheral economies are fundamentally balance-of-payments-constrained. When exports are mostly based on primary products that depend on international prices, balance of payments constraints emerge as a major limit to distributive strategies. This is the case in Latin America, the focus of the article, but also in peripheral economies around the globe.
The article focuses on the group of economically orthodox left governments, shedding light on how we can understand variation in growth and distributive strategies within this group in the context of such common external constraints. External constraints, as the Dependency Theory once noted, do not determine internal dynamics but set diverse settings in which domestic actors can advance their development strategies, leading to diverse situations of dependency. Aim to advance our understanding of this perennial issue, this how question is answered through a description of relevant categories and of the theorized associations between them.
The article makes three contributions to the literature on growth models. First, it incorporates the analysis of Latin American countries in the discussion around the politics of growth models. Second, it incorporates ideas from structuralist and post-Keynesian economics traditions that have already conceptualized peripheral growth. As we argue below, this allows consideration of left governments’ growth and distributive strategies as constrained by specific macroeconomic conditions that link the evolution of the domestic economy to international capital flows. Third, to better understand the room for agency within these constraints, we offer a conceptualization of the variation in the political determinants of left governments’ growth and distributive strategies. We suggest that the strength of left parties’ societal linkages, especially with organized labor, and the room that institutions leave for technocratic or political macroeconomic management, may be associated with the type of growth and distributive strategies that left governments can pursue.
Bogliaccini and Madariaga invite further digging into the plausible hypothesis that the confluence of specific growth and distributive strategies bind government responses to the constraints derived from their balance of payments in specific ways. This article moves in that direction by providing a detailed description of plausible relationships between growth and distributive strategies.
