During much of its recent history, Latin America has alternated between policies that are state-controlled and those that are market-centered. It has swung from the import-substitution model of the post war era to the liberalization of the Washington Consensus of the 1990s with a host of lesser variations in areas ranging from industry to trade. Yet, significant advances towards key economic and social goals have remained elusive. Poverty and inequality in many countries, to cite two examples, have proved stubbornly resistant to technocratic innovation. Policy flaws may be partly to blame. But perhaps the biggest problem has been the policymaking itself, the sausage-making rather than the sausage.
In the early 2000s, the Research Department of the IDB began to explore the latter possibility, looking deeply into the recipes needed for good governance. Borrowing from economics and political science, it embarked on an innovative new path that emphasized the key ingredients of successful policymaking, such as the existence of well-institutionalized political parties (or coalitions) with long-term platforms and ability to create consensus; an independent judiciary, and a civil service able to enforce agreements. It examined how interactions between key actors in the political process either aided or impeded the cooperation necessary to produce stable, yet flexible, policies in the public interest. And it probed the laws, rules, and incentives that influenced how interactions occurred.
Papers and books published by the IDB culminated in 2008 with Policymaking in Latin America: How Politics Shapes Policies, and a 2010 Spanish translation and update, which provided a detailed analysis in different countries of key institutions. These included the core decision-makers: the executive, legislative, and judicial branches; subnational authorities; political parties and systems; and bureaucracies. But the chapters in those books written around 2006 and based largely on datasets from the early 2000s, are now more than 10 years old. They are in need of revision.
Thanks to a seminar in collaboration with Rice University’s James A. Baker III Institute for Public Policy on Sept 15, 2017 at the IDB, that revision will have its day. The original papers will be evaluated in light of recent developments, new papers will be presented, and the policymakers who wrote the original chapters will discuss the influence of the contribution in their working lives. Moreover, the original analysis, which covered eight Latin American countries, will be expanded to Central America.
There will be significant ground to cover. As described in a study updating material from the two original books, much of the original country analysis remains relevant today. But important changes have occurred. Chile, for example, continues to set the pace as the region’s policymaking leader. It has a president with considerable agenda-setting powers, numerous veto players, an independent judiciary, and an efficient, meritocratic civil service. It is still blessed with many of the elements that contribute to strong government capabilities and solid economic performance. Yet a 2015 reform could mark a legislative shift. The elimination of the binomial electoral system, which sustained two stable electoral coalitions, in favor of a traditional proportional representation system, could lead in the wake of the upcoming 2017 legislative and presidential elections to a far more fragmented congress.
Countries, including Argentina, Brazil, Colombia, Mexico, and Paraguay, while broadly similar institutionally to 2006, have undergone still greater transformations. To cite just a few examples, these include the significantly larger presence of the Argentine state in the market economy; a series of electoral reforms in Colombia that have reduced legislative dispersion and boosted policymaking; and the growing autonomy and power of governors in Mexico.
Some of the greatest changes have come to Ecuador. There a weak policymaking process, characterized by a fragmented congress and frequent legislative gridlock, has given way to a smooth, effective, and highly-disciplined decision-making process. Reforms from 2008 that increased the constitutional powers of the president deserve some of the credit. But advances also are the product of President Rafael Correa’s personal popularity and possession of large congressional majorities. Whether this new cohesion and vigor survives Correa’s departure from office is yet to seen.
High government capabilities, as measured in various studies by the IDB, have long been associated with higher rates of GDP per capita growth, higher quality infrastructure, and a myriad of other positive outcomes. As Latin America suffers through a difficult period, with political scandal on the rise in some countries and economic downturn in many more, the challenge of identifying the institutional factors behind performance and making corrections could not be more urgent.
