Overview

Beyond Technocratic Policies

The history of economic and social development in Latin America is dominated by the search for new paradigms: simplified ways of understanding how the economy and society function that offer governments a variety of policy alternatives. Latin America has ridden the waves of successive paradigms from the State-run, inward-looking development of the postwar era to the macroeconomic discipline and trade liberalization of the Washington Consensus in the 1990s. As with other paradigms, the region’s enthusiasm for the Washington Consensus has waned, and it is now in search of a new paradigm that offers better economic results, more stability, and greater equity.

This report questions the logic behind this search. The Fountain of Youth and the City of Gold were fantasies, and so are magic formulas for accelerating growth and eradicating poverty. Certain simple ideas can help to mobilize society, but they are rarely sufficient for understanding the processes of fundamental change. Sadly, there are no shortcuts to the Promised Land of sustainable development and prosperity for all.

Previous editions of this report have analyzed various aspects of economic, social, and institutional reform and have discussed the pros and cons of diverse policy options. What is clear is that, whatever the policy area, there is no single formula applicable to all circumstances; policies’ effectiveness depends on the manner in which they are discussed, approved, and implemented. Therefore, instead of focusing on the substance and orientation of particular policies, this report concentrates on the critical processes that shape these policies, carry them forward from idea to implementation, and sustain them over time. It takes as its starting point the premise that the processes of discussing, negotiating, approving, and implementing policies may be at least as important as the specific content of the policies themselves.

A strictly technocratic approach toward policymaking short-circuits these steps of discussion, negotiation, approval, and implementation, which have at their core the messy world of politics. This report views the political process and the policymaking process as inseparable. To ignore the link between them when pursuing policy change may lead to failed reforms and dashed expectations.

This study, like the background research and accompanying analysis it draws upon, takes a detailed look at the institutional arrangements and political systems at work in Latin America, as they shape the roles and incentives of a variety of actors (some of them professional politicians, others members of civil society) that participate in the policymaking process. It then goes on to explore the way in which this process contributes to shaping policy outcomes and takes a long look at the political economy of specific countries and sectors: the dynamic between politics and economics that is so central to a nation’s development.

This body of work additionally advances a framework of the policymaking process that helps in understanding the complex variables and interactions that come into play as policies are discussed, approved, and executed. Taken together, the framework, research, case studies, and analysis can help demonstrate that, while some worthwhile changes can take place, not every reform is politically or institutionally feasible.

The hope is that this study will be of use to those who participate in policymaking processes and want to understand the limitations and the potential of public policies and attempts at reform. However, this report does not offer recipes or magic potions. On the contrary, it serves as a warning to those who believe that a policy’s chances for success can be judged abstractly on its theoretical or technical attributes without considering the institutional, political, and cultural context in which it is applied.

This report does not cover countries with parliamentary systems. The core institutional setup of these countries is different from that of the countries in Latin America with presidential systems. Not only do the former have parliamentary political regimes, but they have also inherited, from their institutional tradition, party systems, professional bureaucracies, and justice systems that differ from those in the rest of Latin America. The study of institutions, policymaking processes, and policy outcomes in these countries constitutes a very important next step in the research agenda. This next step has already begun, with a study of policymaking in Jamaica, which is reflected in Box 3.1 in Chapter 3.

A Varied Landscape

For the last 15 years, Latin America has experimented with a wide range of policies and reforms. Nonetheless, the success of those reforms and more generally, the quality of public policy, have varied considerably.

• While some countries can maintain the basic thrust of their policies for long periods of time, thus creating a predictable and stable environment, other countries experience frequent changes in policies, often with every change in administration.
• While some countries can adapt their policies rapidly to changes in external circumstances or innovate when policies are failing, other countries react slowly or with great difficulty, retaining inappropriate policies for long periods of time.
• While some countries can effectively implement and enforce the policies enacted by congress or the executive, others take a great deal of time to do so or are ineffective.
• While some countries adopt policies that focus on the public interest, in others, policies are filled with special treatment, loopholes, and exemptions.

Why this variation? What determines the ability to design, approve, and implement effective public policies? To answer this question, this study brings to bear an eclectic and interdisciplinary approach, described in Chapter 2, drawing on both economics and political science. It also draws on a wealth of background research produced by a network of researchers across Latin America, which provides insights into the workings of the policymaking process and its impact on policy outcomes. This background material includes:

• Detailed studies of the workings of political institutions and policymaking processes in 13 countries.
• Studies that focus on the role of different actors (legislators, political parties, presidents, business, the media, and others) as they participate in the policymaking process in a variety of arenas.
• Comparative studies focusing on the link between policymaking processes and policy outcomes in a number of specific sectors, such as education, health, social protection, decentralization, budget processes, and tax policy, as well as the privatization and regulation of public utilities.

The research agenda and this study build on other work, notably the effort that culminated in the publication by the Inter-American Development Bank (IDB) in 2002 of the book Democracies in Development: Politics and Reform in Latin America.1 That document was primarily concerned with the effect of alternative arrangements of democratic institutions on a broad definition of democratic governability. It focused on a number of distinct institutional dimensions of democratic systems (such as legislative electoral systems), one at a time.

This report is part of a further effort, focusing more explicitly on the process of policymaking and on the characteristics of the public policies that result from different policymaking environments. Rather than taking institutional traits one at a time, it looks into the interactive effects of multiple institutional rules on political practices, as well as the effect of these practices on policymaking.

Since the approach is systemic, this report does not evaluate the performance of individuals responsible for making or implementing policy. However, this does not imply that the report ignores the important role that the leadership and competence of public actors play in policy outcomes. Instead, the systemic approach simply attempts to understand the constraints and incentives that condition the actions of presidents, legislators, judges, public servants, and other actors that participate in the policymaking process.

Given an emphasis on complex interactions, part of the research agenda behind this report takes a country-centered, historically grounded approach. A first output of that effort is reflected in the Political Institutions, Policymaking Processes, and Policy Outcomes project, conducted under the auspices of the Latin American Research Network of the IDB.2

This report takes an additional step in advancing that agenda. It looks deeper into cross-country comparisons of the roles and characteristics of the main actors and arenas of the policy process. It develops new indicators of policy characteristics and of some properties of political systems. And it develops comparative cases in a number of policy areas.

This report should be taken as one stage of a work in progress. It raises more questions than it answers. Unlike previous editions of Economic and Social Progress in Latin America, which presented the culmination of years of research, this report is still writing an agenda. Research, analysis, and synthesis will continue. The main messages of the work to date are summarized in the rest of this chapter.