Policymaking under Globalization Pressures: Reforming Public Utilities in Latin America

To analyse the role of partisan beliefs and interests, this paper focuses on two industries—telecoms and electricity—which have been subject to strong pressures for policy diffusion and thereby are unlikely candidates for showing traces of partisanship. In the implementation of three dimensions of these reforms in three countries, this paper shows that partisan beliefs and interests influenced policy implementation with the former playing a stronger role when the policies are more easily linked to state regulation of markets facilitating their assessment over distributive expectations. Because the mechanisms for policy preference formation are defined in debates within the government coalition and political survival was a crucial incentive in policy adoption for “converts” to these reforms, electoral competition can easily tip the balance in internal debates over policy preferences. Financial exposure also gives incentives for increasing the incentives to revenue maximization through the creation of rents, which can be distributed to partisan allies. Yet, neither financial exposure, nor technological pressures explain the process of preference formation and need to be complemented by partisan beliefs and interests. [Paper prepared to be presented at the Comparative Politics Workshop, University of Pennsylvania, April 15, 2003.]