The politics of policy stability: explaining the levels of volatility in economic policymaking in Argentina and Brazil between 1990 and 2010

ABSTRACT

This article will examine economic policy stability in Argentina and Brazil, where by “policy stability” I refer to “the level of fluctuation in policies”. Countries in which policies change frequently would be characterized as having low policy stability, whereas countries which maintain a consistent set of laws over a long period of time would be deemed to have high policy stability. Throughout the 1990s and 2000s, whereas Brazil demonstrated a very high degree of policy stability, Argentina was characterized by highly volatile, constantly fluctuating economic policies. I analyze two root causes of this divergence in policy stability between these countries: the strength of institutions of horizontal accountability, and the levels of fragmentation in the party systems. I will show in this article that the higher levels of policy stability in Brazil were the result of: a) a stronger congress and judiciary (these institutions were considerably weaker in Argentina); and b) a significantly more fragmented party system (the party system was less fragmented in Argentina). After linking these two independent variables to policy stability on a theoretical level, I will use a case study to illustrate this correlation, namely pension reform.

RESUMEN

En este artículo se examinará la estabilidad de las políticas económicas en Argentina y Brasil, donde por la “estabilidad de las políticas” quiero decir “el nivel de fluctuación en las políticas.” Los países donde las políticas cambian frecuentemente serían caracterizados como de poca estabilidad en sus políticas, pero los países que mantienen una serie constante de leyes durante un periodo largo de tiempo serían caracterizados de tener alta estabilidad de sus políticas. Durante los años 1990 y 2000, aunque Brasil tuvo mucha estabilidad en sus políticas, Argentina estuvo caracterizada por políticas económicas volátiles que fluctuaban constantemente. Yo analizo dos causas de la divergencia en la estabilidad de las políticas entre estos países: la fortaleza de las instituciones de rendición de cuentas horizontal y los niveles de fragmentación en los sistemas de partidos. En este artículo mostraré cómo la mayor estabilidad de las políticas en Brasil fue el resultado de: a) un congreso y un sistema judicial más fuertes (estas instituciones fueron considerablemente más débiles en Argentina, y b) un sistema partidario más fragmentado (el sistema de partidos fue menos fragmentado en Argentina). Después de la vinculación de estas dos variables independientes con la estabilidad de las políticas en el plano teórico, utilizaré un estudio de caso para ilustrar esta correlación, la reforma de pensiones.

KEYWORDS:

• Policy stability
• Argentina
• Brazil
• institutions of horizontal accountability
• veto players
• party system fragmentation

Acknowledgments

I would first like to express my gratitude to Steven Levitsky at Harvard University, who helped advise this project from the beginning. I also want to thank the Weatherhead Center for International Affairs at Harvard University for a grant which made it possible to conduct fieldwork. I would additionally like to express my gratitude to the numerous people who read this article at various stages and gave me constructive feedback, including members of Princeton University’s Latin American Politics Discussion Group. Last but not least, I would like to thank my parents, whose love and support has been a guiding force throughout my life.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. “The Index of Coalitional Necessity is obtained by multiplying the effective number of parties by the inverse of the percentage of seats held by the president’s own party, then dividing by ten for ease of interpretation” (Power 2010, 25).

2. This refers to a situation in which a politician has credibility in advocating for an initiative because he/she either opposed it in the past or comes from a party/movement which traditionally opposed it. In this case, Lula had more credibility than Cardoso in advocating for pension reform because Lula was a member of the PT, which traditionally opposed reform in this area.

Additional information

Funding

This work was supported by the Weatherhead Center for International Affairs, Harvard University.

Notes on contributors

Dan Berbecel

Dan Berbecel is a PhD Candidate in Politics at Princeton University who studies comparative politics in Latin America. He graduated magna cum laude from Harvard College in 2012, and finished high school in 2008 at the University of Toronto Schools.