1. ECONOMIC POLICIES AND GOVERNMENTAL PERFORMANCE

2. READING Smith, Democracy, ch. 8 Modern Latin America, chs. 11, 12

3. OUTLINE 1. Seeking Keys to Development 2. Declining State Capacity 3. Politics of Economic Growth The Arguments The Findings 4. Democracy and Social Welfare: Infant Mortality and School Attendance 5. Poverty and Inequality

4. IN SEARCH OF SOLUTIONS The Liberal Era (1880s-1920s) Import-Substitution Industrialization (1930s-1970s) The Socialist Alternative (1950s-1980s) Neoliberalism and the Washington Consensus (1980s- present)

5. HYPOTHESES: THE POLITICAL ECONOMY OF DEVELOPMENT H 1 : The greater the prevalence of democratic rule, the greater the provision of material benefits. H 2 : The greater the prevalence of undemocratic (authoritarian) rule, the greater the provision of material benefits. H 3 : The prevalence of democratic or undemocratic rule bears no systematic relationship to the relative provision of material benefits.

7. Patterns of GDP Growth, 1960-2000

8. Table 8-2. Electoral Regimes and GDP Growth, 1960s-2000 | _____________Electoral Regime__________ GDP | Autocracy Semi-Democracy Democracy Growth (%) (%) (%) -----------+-------------------------------------------+---------- Low | 27 26 24 | Med-Low 20 31 29 | Med-High 24 26 26 | High | 30 18 22 | -----------+-------------------------------------------+---------- 101 101 101 N | 306 109 319 | 734

10. Table 8-4. Electoral Regimes and Infant Mortality, 1960s-1990s Infant | _____________Electoral Regime______________ Mortality | Autocracy Semi-DemocracyDemocracy (%) (%) (%) -----------+-------------------------------------------+- High | 48 17 12 | Medium-High 22 32 24 | Medium-Low 22 32 25 | Low | 8 19 39 | -----------+--------------------------------------------+ Total | 100 100 100 | N 128 53 186

11. Table 8-7. Electoral Regimes and Primary School Enrollment, 1980s-1990s Primary | _____________Electoral Regime______________ School | Autocracy Semi-DemocracyDemocracy Enrollment (%) (%) (%) -----------+-------------------------------------------+- Low | 40 27 14 | Medium-Low 15 14 38 | Medium-High 31 14 27 | High | 13 45 22 | -----------+--------------------------------------------+ Total | 99 100 101 | N 67 44 101 Note: Columns may not add up to 100 because of rounding.

12. FOLLOW-UP STUDY Universe=Middle income countries 55 in lower-middle, 41 in upper-middle, N=96 Time frame=1990-2004 Units of analysis=country-years Dependent variables= Annual GDP growth rate (%) Infant Mortality (per 1,000) Primary School Enrollment (%)

13. REGIONAL DETERMINANTS __Growth__ __Mortality__ __Schooling__ (1,091) (280) (370) East Asia (0, 1).8961 -6.7748 5.9032 Eastern Europe (0, 1) -1.9764* -11.3097* -.6376 Central Asia (0, 1) -1.8337* 13.0827* 1.4343 Middle East (0, 1).7693 -1.3313 -.1781 Sub-Saharan Africa (0, 1) -.2954 18.9078* -11.8868* South Asia (0, 0) ---- ---- ---- LatinAmerica & Caribbean (0, 1) -.1103 -2.4558 2.2513 Constant: 3.6313* 71.2188* 82.5390* R 2.0096.6234.3227 *Significant at.05 level or better.

14. REGION AND DEMOCRACY __ __Growth__ __ Mortality__ __ Schooling__ (1,032) (266) (346) Latin American & Caribbean Democracy (0, 1).2373 -11.8388* 8.5104* Other Democracy (0, 1).3569 -10.4353* 4.5804* Nondemocracy (0, 0) ---- ---- ---- Constant: 3.9008* 83.8488* 76.6599* R 2.0690.5336.2027 *Significant at.01 level or better.

15. DEMOCRACY WITHIN LATIN AMERICA __Growth__ __Mortality__ __Schooling_ (240) (48) (80) Liberal (0, 1) 1.1157 -12.5294.3389 Illiberal (0, 1) 1.1872 -.0239 -2.2475 Semi (0, 1) 1.1818 4.2093 2.3719 Nondemocracy (0, 0) ---- ---- ---- Constant: 3.1253 46.8197* 95.7521* R 2.0609.4680.1792 *Significant at.05 level or better.

16. UPDATE: GROWTH RATES 2000+ 4.0 2001+ 0.4 2002- 0.4 2003+ 2.2 2004+ 6.1 2005+ 5.0 2006+ 5.8 2007+ 5.8 2008+ 4.2 2009- 1.8 2010+ 5.9 2011 + 4.8 2012 +2.6

17. UPDATE: POVERTY LEVELS N __%__ __(millions)__ 1980 40.5 136 1990 48.3 200 2002 44.0221 2010 32.1 180

18. UPDATE: INEQUALITY 1980-2000 = rising  increasing lower-higher skilled gap  uneven effects of international trade  absence of public policies 2000-2006 = declining (slightly)  reduced lower-higher skilled gap (due to education)  government programs (including remittances)  2007-09 unclear impact of global crash  still high by world standards

19. ANTI-POVERTY PROGRAMS (CCTs) Goals:  Empowerment of poor, improvement of life chances  Increase of human capital  Reduction of poverty and inequality Features:  “conditional cash transfers”  social contract between state and beneficiaries  typical conditions: children’s attendance at school, of health care, nutrition  payments usually made to women (mothers), not men (traditional heads of family)  requirements for oversight (entry, exit, funding)

20. CASES: MEXICO AND BRAZIL Mexico: “Oportunidades” (1997- )  5 million households  20 % of household consumption  payment to mothers  major impact on school attendance  excellent data collection  0.5% of GDP Brazil: “Bolsa Família” (2003- )  11 million households  $14 USD per child up to 3 children (+ “basic benefit” ≈ $37)  payment through debit card  distribution > human capital formation  20% decline in inequality  0.5% GDP Elsewhere: Argentina, Colombia, Chile, Ecuador, Honduras, Nicaragua, Paraguay, Peru…

21. Perceptions of Poverty in Latin America, Europe and the United States Percentages (%) who believe that: The poor are poor because: “Society is Unjust” “They are Lazy” “The poor have very little chance to escape from poverty” LAC - Average 65.8 28.3 62.0 Mexico 65.8 24.6 56.9 Argentina 74.0 26.0 74.5 Brazil 75.7 20.5 70.5 Chile 55.6 36.9 58.5 Peru 56.5 34.2 47.1 Venezuela 52.9 47.1 59.6 Uruguay 77.2 12.4 73.5 Dom. Republic 68.6 24.5 61.2 Colombia n.a. n.a. 55.8 Continental Europe 63.3 17.1 60.2 United States 38.8 61.2 29.5