How Predatory Informal Rules Outlast State Reform: Evidence from Postauthoritarian Guatemala

Abstract

ABSTRACT The coexistence of predatory informal rules alongside formal democratic institutions is a defining, if pernicious, feature of Latin America’s political landscape. How do such rules remain so resilient in the face of bureaucratic reforms? This article explicates the mechanisms underlying the persistence of such rules and challenges conventional explanations through process-tracing analysis in one arena: Guatemala’s customs administration. During Guatemala’s period of armed conflict and military rule, military intelligence officers introduced a powerful customs fraud scheme that endured for more than 20 years, despite state reforms. Its survival is best attributed to the ability of the distributional coalition underwriting the predatory rules to capture new political and economic spaces facilitated by political party and market reforms. This illustrates that distributional approaches to institutional change must attend to how those with a stake in the status quo may continue to uphold perverse institutional arrangements on the margins of state power.