Sarah M. Brooks

When Does Diffusion Matter? Explaining the Spread of Structural Pension Reforms Across Nations

When and where is cross-national diffusion an important determinant of policy innovation? I posit that the characteristics of a policy innovation—whether it imposes high or low “sunk” costs on adopters—and country attributes such as wealth, mediate the importance of diffusion in domestic policy choices. Competing risks analysis of two structural pension reform models in 71 developing and industrialized countries supports these hypotheses. Peer diffusion weighs heavily in the adoption of the costly “funded” defined-contribution pension reform model, and does so principally among middle-income nations, while the less-costly “notional” defined-contribution pension reform is not governed by diffusion.

Social Protection and Economic Integration The Politics of Pension Reform in an Era of Capital Mobility

In the past two decades of the 20th century, governments around the world began to apportion greater responsibility for old-age income provision to individuals and market forces through the privatization of pension systems. This article examines the political and economic foundations of the turn to private pension systems through a quantitative analysis of 57 countries around the world. I offer a causal model to explain the likelihood and degree of pension privatization based on the unique incentives and constraints created by domestic political and economic structures in each country. I show that the likelihood and degree of structural pension reform are shaped by the cost of the existing pension system, political party structures, domestic investment and debt levels, and geopolitical networks.

Conditioning the “Resource Curse”: Globalization, Human Capital, and Growth in Oil-Rich Nations

Since the 1990s it has become conventional wisdom that an abundance of natural resources, most notably oil, is very likely to become a developmental “curse.” Recent scholarship, however, has begun to call into question this apparent consensus, drawing attention to the situations in which quite the opposite result appears to hold, namely, where resources become a developmental “blessing.” Research in this vein focuses predominantly on the domestic political and economic institutions that condition the growth effects of natural resource wealth. Less attention, however, has been paid to whether or how the context of economic integration has conditioned the domestic political economy of natural resource development. This article specifically addresses this theoretical disjuncture by arguing first that the developmental consequences of oil wealth are strongly conditioned by domestic human capital resources, which, where sizeable, make possible the management of resources in ways that encourage the absorption of technology and development of valuable new economic sectors. In the absence of robust human capital formation, however, the archetypal “resource curse” is likely to result. The authors argue moreover that international economic integration further amplifies the divergence between these outcomes by simultaneously raising the growth-enhancing effects of large stocks of human capital and by directly facilitating economic growth. Analysis of global data on growth and oil abundance (1979-2007) supports their main hypotheses that natural resource wealth can be either a “curse” or a “blessing” and that the distinction is conditioned by domestic and international factors, both amenable to change through public policy, namely, human capital formation and economic openness.

Explaining Capital Account Liberalization in Latin America: A Transitional Cost Approach

In the past three decades governments around the world have lowered barriers to international capital flows. This movement is widely attributed to the forces of globalization, as developed nations moved toward relative convergence on international financial openness. Yet developing nations with much to gain from openness to foreign investment moved only hesitantly and inconsistently in this direction. Analysis of two decades of capital account liberalization in Latin America and the OECD reveals that nations in Latin America with weaker domestic financial sectors face higher risks of transitional dislocations following liberalization and move less aggressively toward openness. In the OECD, by contrast, financial weakness is associated with greater movements toward capital account opening, as transitional costs are lower and governments are better equipped to ameliorate them. Examination of the transitional costs of liberalization thus helps to explain how market pressures may impede, rather than promote, market-oriented reform in Latin America.

Paths to Financial Policy Diffusion: Statist Legacies in Latin America's Globalization

The dominant approaches to the study of capital account liberalization have highlighted institutional barriers to reform and have also demonstrated an important role for interdependence, or the diffusion of a policy innovation from one country to another, as a causal force. Our approach contrasts with the institutional approach and seeks to clarify the political mechanisms of international policy diffusion. Specifically, we develop and test hypotheses that posit that structural economic legacies of the pre–reform era both condition the way in which international diffusion operates, and create the societal and economic interests that help produce varying capital account policy outcomes in the domestic political sphere. Analysis of capital account liberalization strategies in post–debt-crisis Latin America (1983–2007) reveals that capital account opening and the channels through which this innovation diffuses are conditioned by the legacy of a countrys pre–debt crisis economic development model. Specifically, the degree to which advanced import-substituting industrialization was pursued prior to the reform era affects capital account policy by shaping both the relevant international peer groups through which policy models diffuse, and the sorts of domestic interests that are likely to influence the liberalization process. International diffusion also varies in its impact depending on domestic political and economic conditions.

Globalization and Pension Reform in Latin America

While financial globalization has created powerful incentives for Latin American governments to privatize old age pension systems, reliance on short-term capital flows has also constrained the ability of cash-strapped governments to enact that reform. Analysis of the technocratic process of pension reform in Argentina and Brazil provides evidence. Instead of simply generating unidirectional pressures for structural pension reform, financial globalization has created a double bind for Latin Americas capital-scarce governments, fostering long-term incentives to privatize pension systems while heightening the risk of punishment in the short term.

Social Protection for the Poorest

Conditional cash transfers (CCTs) represent an innovation in social assistance policy by conditioning welfare benefits on recipients’ behaviors associated with human capital development. Although social assistance has expanded throughout the developing world in the 21st century, the political logic guiding CCT adoption differs sharply from that of unconditional cash transfers, and from the politics of social insurance development. Striking spatial and temporal correlations in their adoption also raise the specter of policy interdependence. A dynamic logit analysis of social assistance reforms in developing nations from 1990 to 2011 reveals that although CCTs have been impelled by democratization in developing countries, the model is not embraced systematically by the left or the right of the political spectrum. Rather, CCTs are more likely to be adopted in contexts of divided government and where regional neighbors, and more democratic countries in the region, have previously adopted them.

Lashed to the Mast? The Politics of Notional Defined Contribution Pension Reforms

Over the past decade, a number of countries have adopted a new form of pension system known as “notional defined contribution” (NDC) pensions. Like traditional defined benefit (DB) pensions, NDC pensions operate largely on a pay-as-you-go basis, but base benefits on total lifetime contributions rather than those in a specified number of peak earnings years. Payroll tax rates are (at least in theory) permanently fixed, while adjustments necessitated by demographic change and slow economic growth are automatically made on the benefit side. The authors argue that adoption of NDC-based reforms reflects political as well as policy considerations. The article analyzes a variety of conditions that have led some countries to adopt NDC-based reforms while such reforms have not even reached the agenda in others. The authors point out a number of problems that may arise during implementation of NDC-based reforms that undercut their potential benefits, and argue that erosion of NDC-based reforms is more likely than outright reversal.

Oil and Democracy: Endogenous Natural Resources and the Political “Resource Curse”

By the end of the twentieth century, a scholarly consensus emerged around the idea that oil fuels authoritarianism and slow growth. The natural abundance once thought to be a blessing was unconditionally, and then later only conditionally, a curse for political and economic development. We re-examine the relationship between oil wealth and political regimes, challenging the conventional wisdom that such natural resource rents lead to authoritarian outcomes. We contend that most efforts to examine the causal linkages between natural resource abundance and political regime have been complicated by the likelihood that both democracy and oil revenue are endogenous to the industrialization processes itself, particularly in its developmentalist form. Our quantitative results, based on an analysis of global data from 1970 to 2006, show that both resource endogeneity and several mechanisms of intraregional regime diffusion are powerful determinants of democratic outcomes. Qualitative evidence from the history of industrialization in Latin America yields support for our proposed causal claim. Oil wealth is not necessarily a curse and may even be a blessing with respect to democratic development.

Insecure Democracy: Risk and Political Participation in Brazil

In recent decades, developing countries around the world have undergone dual transitions to democracy and more open markets. Such reforms often have coincided with the retrenchment of state-sponsored social insurance, even as unemployment, crime, and informality have risen. This article examines how insecurity associated with lack of adequate protection against the risks of income loss and violent crime affects patterns of political engagement in Brazil. Although it is often assumed that insecurity is mobilizing, analysis of an original household survey reveals that those lacking the means to ensure against livelihood risks are systematically more likely to forbear from active political participation. Insecurity and poverty, moreover, reveal divergent effects on political participation, wherein it is not the poorest, but rather the most insecure citizens who are most likely to forbear from active citizenship. Emerging democracies thus may be more deeply riven by cleavages of insecurity than by income when...