Kurt Weyland

Bounded Rationality and Policy Diffusion: Social Sector Reform in Latin America

Preface vii Abbreviations xi Chapter 1: The Puzzle of Policy Diffusion 1 Chapter 2: Toward a New Theory of Policy Diffusion 30 Chapter 3: External Pressures and International Norms in Pension Reform 69 Chapter 4: Cognitive Heuristics in the Diffusion of Pension Reform 97 Chapter 5: External Pressures and International Norms in Health Reform 142 Chapter 6: Cognitive Heuristics in the Diffusion of Health Reform 181 Chapter 7: Bounded Rationality in the Era of Globalization 215 References and Interviews 239 Index 283

Politics in Developing Countries: Comparing Experiences with Democracy . Second Edition. Edited by Larry Diamond, Juan J. Linz, and Seymour Martin Lipset. Boulder, Colo. and London: Lynne Rienner Publishers, 1995. 592 pp.

Chile - Emergence, Breakdown, and the Renewal of Democracy, A. Valenzuela Brazil - Inequality Against Democracy, B. Lamounier Mexico - Sustained Civilian Rule Without Democracy, D.C. Levy and K. Bruhn Turkey - Crises. Interruptions and Re-equilibrium, E. Ozbudun India - Democratic Becoming and Combined Development, J. Das Gupta Thailand - Democratic Turbulence and Evolution, C.A. Samudavanija South Korea - in Quest of Consolidation, D. Steinberg Nigeria - Pluralism, Stalinism and the Struggle for Democracy, L. Diamond Senegal - the Development and fragility of Semidemocracy, C. Coulon South Africa - The Birth of a new Democracy?, S. Friedman.

23.50 (paper).

Why have political populism and economic liberalism coexisted under Presidents Menem in Argentina, Collor in Brazil, and Fujimori in Peru? In order to elucidate this surprising convergence, which established conceptions of populism did not expect, this article stresses some underlying affinities between neoliberalism and the new version of populism emerging in the 1980s. Both neopopulism and neoliberalism seek to win mass support primarily from unorganized people in the informal sector, while marginalizing autonomous organizations of better-off strata and attacking the “political class.” They both apply a top-down, state-centered strategy of wielding political power. Finally, neoliberal efforts to combat Latin America’s deep economic crisis yield some benefits for poorer sectors, to which neopopulist leaders appeal, while imposing especially high costs on many of the better-off opponents of neopopulism.

Neopopulism and neoliberalism in Latin America: Unexpected affinities

1. The performance of leftist governments in Latin America: conceptual and theoretical issues Kurt Weyland 2. The repeating revolution: Chavezs new politics and old economics Javier Corrales 3. The challenge of progressive change under Evo Morales George Gray Molina 4. The Chilean left in power: achievements, failures, and omissions Evelyne Huber, Jennifer Pribble and John D. Stephens 5. From Cardoso to Lula: the triumph of pragmatism in Brazil Peter R. Kingstone and Aldo F. Ponce 6. Lulas administration at a crossroads: the difficult combination of stability and development in Brazil Pedro Luiz Barros Silva, Jose Carlos de Souza Braga and Vera Lucia Cabral Costa 7. The policies and performance of the contestatory and moderate left Raul Madrid, Wendy Hunter and Kurt Weyland.

Leftist governments in Latin America : successes and shortcomings

Prospect theory, a psychological theory of decision making that has shed new light on foreign policy choices, maintains that people tend to take high risks when facing losses, while proceeding with great caution when anticipating gains. This article introduces prospect theory to the study of comparative politics in order to account for the bold economic policy choices that presidents made in crisis-ridden Argentina, Brazil, and Peru, and the surprising degree of popular support that such risky and costly measures commanded in these countries; and conversely, to explain the cautious course of reform recently pursued in Chile, a country with better economic prospects. Theories based on rational choice, the leading approach to political decision making, did not anticipate these decisions. Particularly, these theories predicted that fear for their political survival would prevent democratic leaders from enacting tough economic policies. This article thus suggests that hypotheses derived from prospect theory serve as a useful alternative to extant rational choice explanations in elucidating decision making during crises. Why did democratic governments in contemporary Argentina, Brazil, and Peru run enormous risks by enacting tough shock programs of neoliberal adjustment and restructuring?1 These reforms impose high costs on many sectors of society, can elicit fierce resistance from powerful groups, and have a low likelihood of success. Why did governments in fledgling democracies jeopardize their fate by embarking on such risky measures? And why did large numbers of people who knew they would be hurt by neoliberal reforms endorse their adoption? Why, on the other hand, did many Venezuelans protest violently against similarly harsh adjustment measures which their president, Carlos Andres Perez, boldly enacted in 1989? Why, by contrast, has the government in Chiles new democracy avoided all risk and accepted the basic outlines of the free-market model imposed by General Augusto Pinochet (1973-1990), which it had severely criticized before coming to power? And why have most Chileans supported this highly cautious stance?

Risk Taking in Latin American Economic Restructuring: Lessons from Prospect Theory

What accounts for the surprisingly widespread popular approval that painful neoliberal reforms elicited in several Latin American countries? This article compares the explanatory power of two rival hypotheses, which draw on conventional rational choice and psychological decision theory. The compensation hypothesis claims that governments can engineer support for costly reforms by compensating the losers through targeted social benefits. The rescue hypothesis questions this claim and maintains that draconian adjustment only finds support if it promises to revert a deep crisis and avert further losses. Data from Argentina, Bolivia, Brazil, Mexico, Peru, and Venezuela suggest that the rescue hypothesis accounts much better for the initial endorsement of neoliberal shock programs immediately after their enactment. When these shock programs bring about economic stabilization and recovery, targeted social benefits help consolidate support for neoliberalism, which a statistical analysis of the impact of social spending on voting in Argentinas and Perus presidential elections of 1995 reveals.

Swallowing the Bitter Pill Sources of Popular Support for Neoliberal Reform in Latin America

Prominent scholars have highlighted important similarities between the Arab Spring of 2011 and the “revolutions” of 1848: Both waves of contention swept with dramatic speed across whole regions, but ended up yielding rather limited advances toward political liberalism and democracy. I seek to uncover the causal mechanisms that help account for these striking parallels. Drawing on my recent analysis of 1848, I argue that contention spread so quickly because many people in a wide range of countries drew rash inferences from the downfall of Tunisias dictator. Applying cognitive heuristics that psychologists have documented, they overrated the significance of the Tunisian success, overestimated the similarities with the political situation in their own country, and jumped to the conclusion that they could successfully challenge their own autocrats. This precipitation prompted protests in many settings that actually were much less propitious; therefore problems abounded. Cognitive shortcuts held such sway because Arab societies were weakly organized and repressed and thus lacked leaders from whom common people could take authoritative cues. The decision whether to engage in emulative contention fell to ordinary citizens, who—due to limited information access and scarce experience—were especially susceptible to the simple inferences suggested by cognitive heuristics.

The Arab Spring: Why the Surprising Similarities with the Revolutionary Wave of 1848?

Abstract This paper shows how institutional factors shape the strategy and condition the success of a social movement. In Brazils new democracy, a movement of health professionals tried to reform the medical system, which failed to provide adequate health care to the poor. Pervasive clientelism, however, prevented the movement from gaining firm mass support in society. Movement leaders therefore sought top positions inside the state to launch equity-enhancing reform. Yet this state-centered strategy exposed them to severe institutional obstacles, especially bureaucratic politics with its divisive impact, and stubborn opposition from clientelist networks. As a result, the movement achieved few improvements.

Social movements and the State: The Politics of health reform in Brazil

What accounts for the spread of political protest and contention across countries? Analyzing the wildfire of attempted revolutions in 1848, the present article assesses four causal mechanisms for explaining diffusion, namely external pressure from a great power (such as revolutionary France after 1789); the promotion of new norms and values—such as liberalism and democracy—by more advanced countries; rational learning from successful contention in other nations; or boundedly rational, potentially distorted inferences from select foreign experiences. The patterns in which revolutionary contention spread and eyewitness reports from all sides of the ensuing conflicts suggest that bounded rationality played a crucial role: cognitive heuristics that deviate from fully rational procedures drew attention to some experiences but not others and induced both challengers and defenders of the established order to draw rash conclusions from these experiences, particularly the French monarchys fall in February 1848. My study also shows, however, that other factors made important contributions, for instance by preparing the ground for the wave of regime contention.

The Diffusion of Revolution: ‘1848’ in Europe and Latin America

This article analyzes the analytical limitations of rational-choice institutionalism for the study of Latin American politics. Adherents of this approach have made important contributions by analyzing topics that Latin Americanists traditionally neglected, such as the political impact of electoral rules and the processes of legislative decision-making. But rational-choice institutionalism has difficulty explaining the complicated, variegated, and fluid patterns of Latin American politics. It overemphasizes the electoral and legislative arenas and—in general—the input side of politics; it overestimates the importance and causal impact of formal rules and institutions; it does not explain the origins of political change and often suggests a static image of political development; it offers an incomplete analysis of institutional creation by neglecting the importance of political beliefs; it cannot fully account for crisis politics; and it puts excessive, analytically arbitrary emphasis on “microfoundations.” The article questions whether these limitations can successfully be overcome, arguing that rational-choice institutionalism—while an important addition to the debate—is not inherently superior to other approaches applied in Latin American Studies.