The Politics of Economic Adjustment: International Constraints, Distributive Conflicts, and the State

371 Pages·1992·39.86 MB·English

by  Stephan Haggard (Editor)

The Politics of Economic Adjustment

The Politics of Economic
Adjustment
INTERNATIONAL CONSTRAINTS,
D I S T R I B U T I VE CONFLICTS,
AND T HE STATE
Edited by Stephan Haggard and Robert R. Kaufman
WITH CONTRIBUTIONS BY
Peter Evans, Stephan Haggard and Robert R. Kaufman,
Miles Kahler, Joan M. Nelson, Barbara Stallings,
and John Waterbury
PRINCETON UNIVERSITY PRESS
PRINCETON, NEW JERSEY
Copyright © 1992 by Princeton University Press
Published by Princeton University Press, 41 William Street,
Princeton, New Jersey 08540
In the United Kingdom: Princeton University Press, Chichester, West Sussex
All Rights Reserved
Library of Congress Cataloging-in-Publication Data
The Politics of economic adjustment : international constraints,
distributive conflicts, and the state / edited by Stephan Haggard
and Robert R. Kaufman ; with contributions by Peter Evans ... [et al.],
p. cm.
Includes bibliographical references and index.
1. Structural adjustment (Economic policy). 2. Economic stabilization.
I. Haggard, Stephan. II. Kaufman, Robert R. III. Evans, Peter B., 1944-
HD87.P65 1992 338.9-dc20 91-38423 CIP
ISBN 0-691-04300-0 (alk. paper) — ISBN 0-691-00394-7 (pbk.: alk. paper)
This book has been composed in Linotron Times Roman
Princeton University Press books are printed on acid-free paper
and meet the guidelines for permanence and durability of the
Committee on Production Guidelines for Book Longevity of the
Council on Library Resources
Printed in the United States of America
10 9 8 7 6 5 4
Contents
List of Figures and Tables vii
Contributors ix
Preface xi
INTRODUCTION
Institutions and Economic Adjustment 3
Stephan Haggard and Robert R. Kaufman
PART I: International Constraints
CHAPTER ONE
International Influence on Economic Policy: Debt, Stabilization,
and Structural Reform 41
Barbara Stallings
CHAPTER TWO
External Influence, Conditionality, and the Politics of
Adjustment 89
Miles Kahler
PART II: The State and the Politics of
Adjustment
CHAPTER THREE
The State as Problem and Solution: Prédation, Embedded
Autonomy, and Structural Change 139
Peter Evans
CHAPTER FOUR
The Heart of the Matter? Public Enterprise and the Adjustment
Process 182
John Waterbury
PART III: Distributive Politics
CHAPTER FIVE
Poverty, Equity, and the Politics of Adjustment 221
Joan M. Nelson
vi • Contents
CHAPTER SIX
The Political Economy of Inflation and Stabilization in Middle-
Income Countries 270
Stephan Haggard and Robert R. Kaufman
PART IV: Conclusion
CHAPTER SEVEN
Economic Adjustment and the Prospects for Democracy 319
Stephan Haggard and Robert R. Kaufman
Index 351
Figures and Tables
FIGURES
2.1 Trends in Net Transfers to All Developing Countries,
1980-1987 106
2.2 Latin American and Caribbean Trends in Net Transfers,
1980-1987 106
2.3 Sub-Saharan African Trends in Net Transfers, 1980-1987 107
7.1 Sequences of Economic and Political Liberalization 333
TABLES
1.1 World Economic Indicators, 1960-1989 50
1.2 Net Flow of Foreign Capital to Third World Countries,
1961-1989 57
1.3 Debt Indicators: Weight of Debt and Arrears, 1980-
1988 63
1.4 International Monetary Fund Programs Approved,
1971-1990 70
1.5 Periodization of Stabilization Measures, 1980-1990 71
1.6 World Bank Adjustment Loans, 1980-1989 (millions) 78
2.1 Conditionally, Finance, and Policy Change 109
2.2 Government Commitment and Program Outcomes 115
A2.1 Adjustment Decisions and Implementation: A Rough
Typology 134
A2.2 World Bank Policy-based Lending Cases 136
4.1 General Government and State-owned Enterprise Ex­
penditures as a Proportion of GDP: Egypt, India, Mex­
ico, and Turkey 195
4.2 Public Sector and Public Enterprise Deficits: Egypt, In­
dia, Mexico, and Turkey 196
5.1 Electoral Responses to Intensively Adjusting Govern­
ments 255
A5.1 Intensive Adjustment Countries: Annual Percentage
Change in Real Government Expenditure Per Capita 261
A5.2 Selection of National Elections for Analysis 262
A5.3 Electoral Outcomes in Countries Undertaking Intensive
Adjustment 263
A5.4 Economic Performance and Urban Popular Impact Indi­
cators 266
viii • List of Figures and Tables
6.1 Social and Economic Structure and Inflation in East
Asia and Latin America 276
6.2 Cross-national Patterns of Inflation 282
6.3 Political Correlates of Stabilization: Moderate Inflation
Cases 300
6.4 Political Correlates of Stabilization: High Inflation
Cases 301
6.5 Political Correlates of Stabilization: Very High Inflation
Cases 302
6.6 Party Fragmentation, Political Regimes, and Stabiliza­
tion 303
A6.1 Inflation Episodes 314
7.1 Economic Shocks and Regime Change in the 1980s 323
7.2 Regime Persistence and Change in the 1980s 325
Contributors
PETER EVANS is professor of sociology at the University of California,
Berkeley. He is coeditor of Bringing the State Back In (1985) and contin­
ues to do comparative research on the role of the state in industrial de­
velopment.
STEPHAN HAGGARD is professor at the Graduate School of International
Relations and Pacific Studies, University of California, San Diego. He is
the author of Pathways from the Periphery (1990) and coeditor with
Tun-jen Cheng of Political Change in Taiwan (1992). He is currently
working with Robert Kaufman on a project on the political economy of
democratic transitions.
MILES KAHLER is professor at the Graduate School of International Re­
lations and Pacific Studies, University of California, San Diego, and chairs
the Committee on Foreign Policy Studies of the Social Science Research
Council. He is the author of Decolonization in Britain and France: The
Domestic Consequences of International Relations (1984); and editor of
The Politics of International Debt (1988).
ROBERT R. KAUFMAN is professor of political science at Rutgers Univer­
sity. He is the author of The Politics of Debt in Argentina, Brazil, and
Mexico: Economic Stabilization in the 1980s (1988), and coeditor with
Barbara Stallings of Debt and Democracy in Latin America (1989).
JOAN M. NELSON is senior associate at the Overseas Development Coun­
cil. She is author of Access to Power: Politics and the Urban Poor in De­
veloping Nations (1979); coauthor with Samuel Huntington of No Easy
Choice: Political Participation in Developing Countries (1976); and the
editor of the two previous volumes stemming from this research project,
Fragile Coalitions: The Politics of Economic Adjustment (1990) and Eco­
nomic Crisis and Policy Choice: The Politics of Adjustment in the Third
World (1990).
BARBARA STALLINGS is professor of political science and former director
of the Latin American Studies Program at the University of Wisconsin,
Madison. She is the author of Class Conflict and Economic Development
in Chile 1958-1973 (1978); Banker to the Third World: US. Portfolio
Investment in Latin America, 1900-1986 (1987); and coeditor with Rob­
ert Kaufman of Debt and Democracy in Latin America (1989).