Redistributive Conflict and Social Policy in Latin America

World Development Vol. 36, No. 3, pp. 446–460, 2008
Ó 2007 Elsevier Ltd. All rights reserved
0305-750X/$ - see front matter
www.elsevier.com/locate/worlddev
doi:10.1016/j.worlddev.2007.04.010
Redistributive Conflict and Social Policy
in Latin America
JUDITH TEICHMAN *
University of Toronto, Ontario, Canada
Summary. — Inequality has been a long-standing feature of Latin America. This article is an examination of the redistributive and social policy struggles in two countries of the region: Mexico and
Chile. While electoral democracy has propelled redistributive issues onto the policy agenda, redistributive struggles are intense and progress in policy to address inequality is slow to emerge. Attention has been focused on cash transfer programs because of their ability to garner approval from a
cross-section of public opinion, particularly from the most powerful. While such programs have an
important contribution to make to poverty reduction, societal redistributive compromises are
essential to an efficacious strategy to reduce poverty and inequality over the long term.
Ó 2007 Elsevier Ltd. All rights reserved.
Key words — Latin America, Chile, Mexico, poverty, social policy
1. INTRODUCTION
Twenty years ago, market reform held out
the promise for growth and prosperity for
Latin America. But that promise has not been
fulfilled: most countries of the region have
faced recurrent economic crises, continuing
unacceptable levels of poverty, and persistently
high, and often increasing, levels of inequality
(ECLAC, 2005, pp. 317–318; 336–337). 1 A
marked deterioration in already inadequate
social protection regimes occurred as unemployment shot up and social spending plummeted. In recent years, civil society pressure
for involvement in the policy process has increased, as have demands for improved social
protection. Public pressure to address the social
deficit is seen most clearly in the election of left
leaning political leaders, most of whom have
strong backing from civil society organizations. 2 The focus is no longer just on questions
of poverty. Increasingly, economists, including
those working within multilateral lending institutions, have recognized that inequality can
impede economic growth and slow poverty
reduction (Cornia, Addison, & Kiiski, 2004,
p. 47; De Ferranti et al., 2004) while also contributing to increased levels of criminal violence
(Wade, 2004, p. 582). This issue is especially
relevant to Latin America given that it has
446
had historically higher levels of inequality than
elsewhere with a high concentration of wealth
among the wealthiest members of society
(Morley, 2001, p. 66). Mitigating the severe
inequalities that have persisted over centuries
represents an enormous political challenge.
This article is an examination of redistributive struggles and social policy making in Chile
and Mexico. 3 Both countries have undergone
market reform (trade liberalization, privatization), have powerful private sectors, and have
made the transition to electoral democracy.
Both have high levels of inequality. But while
Chile’s export-led growth has been largely
responsible for substantial reductions in poverty, 4 Mexico has faced recurrent economic
crises, stagnant growth and continuing high
levels of poverty. 5 Today, there appears to be
convergence of thinking among top-level policy
makers in the two countries on the efficacy of a
new type of conditional cash transfer program
directed to the extremely poor. These programs
were driven by particular policy contexts: the
combination of a commitment to fiscal constraint, weakened possibilities for popular
* Financial assistance from the Social Science and
Humanities Research Council of Canada is gratefully
acknowledged. Final revision accepted: April 2, 2007.
REDISTRIBUTIVE CONFLICT AND SOCIAL POLICY IN LATIN AMERICA
mobilization, and the failure to reach distributive compromise settlements between contending forces. Furthermore, these programs are
based on a weak and grudging societal consensus, very distant from the kind of redistributive
compromise necessary to reduce poverty and
inequality over the long term.
State mediation of a redistributive ‘‘class
compromise’’ between capital and labor has
been identified as being at the heart of lower
levels of socio-economic inequality (Amenta,
2003). While much of the literature has focused
on developed capitalist countries, discussions of
Latin America have also employed the concept
of ‘‘class compromise’’ and have noted the improved distributive consequences of such settlements (Buchanan, 1995; Neuhouser, 1992). A
class compromise involves an agreement in
which the contending sides (capital and labor)
make real concessions with the objective of
avoiding mutual damage and achieving social
peace within the parameters of the operation
of the capitalist system. The policy areas under
negotiation can be varied: they may include
wage and benefit arrangements, labor protection legislation, price controls, taxation, social
spending, and social protection arrangements.
For this discussion, I employ the notion of
‘‘redistributive societal compromise,’’ a concept intended to capture the heterogeneity of
the contending sides in Latin America. Labor
may not be a central actor in such a compromise because its power has declined in many
countries, the informal sector is substantial,
and civil society organizations have increased
in importance. Moreover, resisters to a new
redistributive settlement may include not just
the business community, but also upper and
middle-income groups, including the members
of trade unions (historically the beneficiaries
of social security schemes), along with technocratic allies within the state.
The achievement of redistributive compromises has certainly been difficult in the Latin
American context. Such settlements are obviously more easily accomplished when economies
are expanding. Sharp economic downtowns
have often produced zero sum conflict and
sometimes unbearable hardship for lower income groups. These developments can trigger
the withdrawal of labor consent from fragile
compromise arrangements, a rise in labor militancy, regime collapse, and a turn to coercion.
In addition, many Latin American countries
lack one of the key ingredients for such compromises: a legitimized, relatively autonomous state
447
not permeated or unduly influenced by particular societal groups (Gough, 2004, p. 21). But
there are historical examples of redistributive
settlements in the region that have had enduring
positive consequences for redistributive outcomes. The two Latin American countries with
the current lowest degree of inequality, Costa
Rica and Uruguay, were characterized by successful redistributive compromises in the first
half of the twentieth century. 6 Widespread
and deep public support (including support at
the elite level) for equitable welfare arrangements prevented their dismantling once the market reform era hit. In Uruguay, near universal
pension, health and educational systems,
although weakened, were not dismantled under
military rule and privatization was fiercely resisted (Castiglioni, 2005, pp. 42–59). With the return to democracy, institutions of trilateral
negotiation were restored and the country has
witnessed a decline in inequality since 1990
(ECLAC, 2005, pp. 335–336). In Costa Rica, reforms to the country’s social welfare arrangements have involved continued commitment to
social protection for the entire population and
increasing levels of investment in pensions, education and health care. Costa Rica is the only
Latin American country to have unified its
health-care system with standardized entitlements that are open to the dispossessed (MesaLago, 2000, p. 288, 298).
In other countries of the region, like Chile
and Mexico, inequalities became entrenched
early in history and they have either gone
unmitigated (Mexico) or attempts to mitigate
them have failed or been overturned (Chile).
Pluralist electoral democracies, elite actors willing to negotiate and compromise along with
equally moderate and autonomous labor, and
other popular organizations strong enough to
push for negotiated settlements, have been in
short supply. Military dictatorships and corporatist and clientelist political manipulations of
popular groups have been among the political
factors perpetuating or even increasing inequality. Highly unequal social protection schemes
have gone to those well organized enough to
demand them, leaving out workers in the informal and rural sectors, often the majority (Barrientos, 2004, pp. 139–140). Inadequate social
welfare arrangements tend to operate in combination with regressive or only mildly progressive tax structures and state failure to collect
even those tax revenues that are on the books
(De Ferranti, Perry, Ferreira, & Walton,
2004, p. 255).
448
WORLD DEVELOPMENT
In recent years, new conditional cash transfer
programs have become a part of the panoply of
public assistance instruments in an increasing
number of countries to some extent mitigating
the need for redistributive settlements. 7 In
their preoccupation with extreme poverty (the
poorest), these programs represent a departure
from past thinking and practices. Their advocates argue that universal social programs are
not possible in Latin America for fiscal reasons
and that traditional social assistance supports
such as subsidies to the poor involve waste
and duplication, and often leave out the extremely poor. Most of these programs have focused primarily on the children of the poorest,
making cash transfer payments to the female
head of the household contingent upon sending
children to school and/or taking them in for
health check-ups. Their claim to efficiency in
state spending makes such programs appealing,
and they offer immediate amelioration to politically embarrassing extreme poverty figures.
Moreover, they come with enthusiastic financial and intellectual support from multilateral
lending agencies. 8
Almost as soon as such programs appeared
on the scene, however, they attracted an avalanche of criticism (discussed in more detail below), much of it directed not only at the
tendency of such programs to exclude some of
the extremely poor, but also at their failure to
address moderate poverty and the poverty
faced by families without children, young people and the elderly. Critics have produced a
plethora of counter proposals aimed at rectifying these various perceived deficiencies. Another response to criticism has been the
expansion of these programs both in financing
and in coverage of more of the poor. 9 Much
of the discussion has focused on the issue of
universal versus targeted social programs.
While there is certainly no reason to assume
these two social welfare strategies are mutually
exclusive, the fiscal weakness of the Latin
American state has encouraged the assumption
that there are trade-offs. Hence, on the one side
are those (mainly the originators of these proposals and their private sector and multilateral
allies) who argue that increased expenditure on
universal programs (particularly subsidies) has
been wasteful, ineffective, and have not reached
the poorest. On the opposite side are those who
argue that such programs leave out far too
many and will be ineffective if payments to
the extremely poor are conditional upon the
use of poor educational and health facilities.
This debate has become central to the discussions of social policy in our two cases despite
the somewhat different social welfare challenges
that each faces.
Chile’s redistributive compromise of the
1950s and 1960s, 10 the product of a militant labor movement, the mobilizational activities of
the left political parties and a functioning electoral system, produced substantial social welfare improvements. Chile’s social security
arrangements came to reach a considerably
higher proportion of the economically active
population than Mexico’s. 11 In addition, during 1970–99, social spending in Chile reached
a high of 22% of GDP and never slipped below
about 14%, while, during the same period,
Mexican social spending never accounted for
more than 9% of GDP (Raczynski, 1994, p.
65; SEDESOL, 2000, p. 5). But as Chile’s economy stagnated by the late 1960s, politics polarized as the left parties challenged private
property rights and the political right’s fears
of a socialist transformation spiked. The ability
to find compromise solutions broke down,
leading to a military coup. Under military rule
(1973–89), market reforms, particularly trade
liberalization and privatization, went rapidly
forward. Political repression and economic decline contributed to a substantially weakened
trade union movement. Income distribution became more unequal and poverty shot up (Edwards & Cox Edwards, 1987, p. 162).
Privatization in health care produced a two-tier
system, involving a private system for the welloff and a public system for the remaining 85%
of the population. A sharp deterioration of
public health services occurred as both government and upper-class financial contributions to
health care dropped.
In Mexico, corporatist/clientelist manipulation of the popular sectors (workers, peasants
and other ‘‘popular’’ groups) allowed for relatively high and steady economic growth rates
of 6% until the late 1960s, but with high
inequality and substantial poverty, especially
in rural areas. Market reforms were carried
out under authoritarian one-party (the Institutionalized Revolutionary Party, PRI) rule during 1985–94, and here, too, poverty (1984–92)
and inequality increased (1989–96). Many of
those covered by social security, who lost their
jobs with the economic crises and the subsequent structural reforms, lost what social protection they had and joined the ranks of the
informal sector which swelled during the
difficult years of the 1980s (Cortés, 2000, p.
REDISTRIBUTIVE CONFLICT AND SOCIAL POLICY IN LATIN AMERICA
38, 49). As in the Chilean case, the political
strength of labor declined (La Botz, 1988).
When crisis hit once more in 1995, the effect
was again socially devastating. The country’s
economic difficulties, the diminished fiscal
capabilities of the state, and increases in unemployment all contributed to the unraveling of
PRI control over labor, peasants and other
popular groups and set the stage for the transition to electoral democracy.
The two countries faced similar redistributive
challenges by the 1990s. Economic crises and
neoliberal reforms, in contributing to income
concentration, had strengthened the political
clout of an already powerful business sector
while weakening labor (Silva, 1996; Teichman,
2001; Thacker, 2000). In both cases, because
weakened labor movements and popular groups
in general were unable to put up an effective
resistance, policy makers had a fairly free reign
in economic and labor policy, and, more recently, in social policy development, particularly in the formulation of the new conditional
cash transfer programs. But the persistence of
high degrees of inequality and insufficient poverty reduction in Mexico, combined with the
emergence of electoral democracy, has opened
the door to growing contestation over this type
of social policy. 12 Given Chile’s greater success
in poverty reduction, one might expect the contestation over social policy to be different, but,
as we shall see below, the two cases share some
remarkable similarities in process and issues. As
we shall see, the similarities have been shaped by
common political features arising from their
periods of neoliberal reform: powerful private
sector interests and entrenched finance sector
officials with a particular view of social welfare
spending.
2. POLITICS AND THE FAILURE
TO RESOLVE DISTRIBUTIONAL
STRUGGLES
The new civilian leaders who came to power
in Chile in 1990 attempted and failed to broker
a redistributive compromise. In Mexico, a leadership that remained closely integrated with
powerful members of the private sector took
no interest in a redistributive compromise, a situation that continued after the transition to
electoral democracy (in 2000) despite demands
from civil society and opposition parties. However, the presence of a much stronger congress
has placed the redistribution issues, particularly
449
social policy issues, at the center of political
contestation.
In Chile, the political agreement that has
maintained the coalition of left-center parties
known as Concertación in power since 1990
has been a minimalist ‘‘pact,’’ one which required labor to respect the right to private
property, the government to promote the neoliberal model and reduce poverty, and the private sector to respect the right of labor unions
to exist (Ruiz-Tagle, 1991, pp. 155–157). The
new government called for ‘‘growth with
equity,’’ and aspired to achieve tax reform, increased social spending, and greater equality
in social services. But, as we shall see, its
achievements would fall persistently short of
its goals.
There is disagreement as to whether the Chilean tax system is mildly progressive or slightly
regressive (De Ferranti et al., 2004, p. 253).
From the beginning, the government’s efforts
to increase the country’s tax base to fund social
programs was stymied by the political right (the
right wing parties and its private sector allies)
which resisted tax increases, favoring more
‘‘efficient’’ forms of social spending. The concerns of the political right were echoed by
bureaucratic allies in the Finance Ministry,
who had both institutional (the responsibility
to keep the fiscal balance intact) and ideological
(a predisposition to state streamlining) motivations. Seeing its tax reform proposals stalled in
the right-dominated congress in 1991, the government negotiated with the right wing National Renovation Party while the rank and
file of its own parties was denied any consultation. As a consequence, it had to live with considerably less than its original objectives.
Instead of a permanent increase in the corporate tax on profits from 10% to 20%, the government agreed to an increase in the tax on
profits of 15% for a limited four-year period
and to the reform of an increase in the value
added tax (VAT) from 16% to 18% (Boylan,
1996, p. 9). 13
With the objective of winning over the private sector to an expanded social program
geared to the reduction of inequality supported
by increased revenues from tax reform, the
Concertación set up a Council for the Elimination of Poverty, to which it appointed a wide
cross-section of Chilean society, including representatives of the major entrepreneurial organization (the Confederation of Production
and Commerce). 14 The effort failed to produce
a redistributive agreement with entrepreneurial
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WORLD DEVELOPMENT
representatives taking issue with the report’s
concern for inequality. Belief in the importance
of fostering business confidence (and thereby
avoiding capital flight) was a powerful constraint on a more vigorous pursuit of the government’s social equality objectives. Indeed,
the extent to which tax policy was driven by
private sector concerns is illustrated by the fact
that, in 2000, the value added tax was increased
from 18% to 19% mainly to boost business confidence by creating a budget surplus of 1% of
GDP, not for the purposes of social spending.
Furthermore, while in 2000 more low-income
families were given tax exemptions, income
tax was also reduced for the highest income
groups from 40% to 35% (Latin American
Weekly Report, 14 August, 2001, p. 377).
Despite these setbacks, steady economic
growth did provide a resource flow that allowed
for increases in social spending that went largely to improve the country’s universal programs (health and education), especially those
in poor areas (Arenas de Mesa & Benavides
Salazar, 2003, p. 38). Two issues related to
equality, labor and health reform, remained
unresolved despite the government’s best efforts
at bringing the parties together to achieve a
compromise. Labor and the left argued that
state regulation of the country’s highly ‘‘flexible’’ (meaning lack of labor protection) labor
code was essential to the reduction of poverty and inequality because it would reduce
poorly paid and precarious employment. The
private sector and the political right, on the
other hand, have taken the position that a flexible labor regime was essential to export competitiveness and, therefore, to employment
growth. Throughout the 1990s, state managers
struggled unsuccessfully to broker a deal that
would satisfy both sides. With the election of
President Lagos in 2000, two early attempts
were made to arrive at a consensus on labor reform through tripartite discussions within a
newly established Council of Social Dialogue,
and both failed. Some relatively minor concessions to labor in 2000 (such as prohibition of
the firing of workers due to union activities)
produced business demands for the resignation
of the labor minister (La Tercera, September
21, 2001; November 15, 2001). Subsequent labor reform initiatives then seesawed between
efforts to placate business and initiatives to improve labor protection.
Under growing public pressure, in 2000, the
government began to address the issue of
inequality in health services, struggling to
bring about an agreement that would involve
a transfer of resources from the resource-rich
private funds to the cash-starved and low quality public sector. The government proposal
called for the establishment of a ‘‘Solidarity
Fund,’’ to support guaranteed coverage for
an expanded basket of health-care services
for all Chileans, to be funded by contributions
from both the public and private health-care
systems. However, as this proposal entailed a
reduction in the inflow of funds to private
health-care providers, it incurred the wrath of
not just the private health-care companies,
but also of the private sector more generally
(La Tercera, November 15, 2001; Estrategia,
April 10, 2002). Business and the political right
eventually succeeded in having the Solidarity
Fund removed from the legislation (La Tercera, August 30, 2004). The socialist parties
continued to campaign for its reinsertion and
began to question the very principle of profitmaking in the health sector (La Tercera,
November 16, 2001). Acquiring the resources
to improve the public health-care system remains highly contentious, with the private sector strongly opposed to tax increases for this
purpose. Taking the position that increased
expenditure on public health is ‘‘irresponsible’’
and ‘‘money lost,’’ the private sector and the
political right have argued, instead, for more
efficient and more targeted spending delivered
through decentralized government and more
private sector involvement (Estrategia, March
4, 2002 and April 12, 2002; La Segunda, July
27, 2001).
In Mexico, once the PRI began to lose power
beginning with its loss of control of congress in
1997, pressure from the opposition left in congress for the state to take on an effective redistributive role increased as did demands that the
executive negotiate with congress. Tax reform
and the inadequacy and marked inequalities
in public health care and education have also
been prominent issues. 15 But with sluggish economic growth and greater fiscal pressures Mexico has been in a much more difficult fiscal
position. For an upper-income country, Mexico
stands out for its low tax receipts, while much
of its spending is regressive (De Ferranti
et al., 2004, p. 273). With the institution of market reforms, tax changes in the early 1990s
aimed at stimulating private investment
provided for tax reductions. 16 With the 1995
economic crisis, the value added tax, at 10%,
was increased to 15%, with exemptions for only
basic food and medicine. Once the PRI lost
REDISTRIBUTIVE CONFLICT AND SOCIAL POLICY IN LATIN AMERICA
control of congress in 1997, this increase in the
VAT became an increasingly contentious issue
with the opposition left party (Democratic Revolutionary Party, PRD), which repeatedly demanded the reduction of the VAT and its
removal from a variety of essential goods not
already exempted (Latin American Weekly Report, July 22, 1997, p. 340). Counter pressure
from the business community ensured that the
VAT would remain at 15% (Latin American
Weekly Report, October 7, 1997, p. 478).
Meanwhile, Mexico’s sharp inequalities in
health care have been more substantial than
Chile’s. An estimated 50% of the population
lacks access to its two social security institutions and must depend on the poorly funded
services offered by the Ministry of Health
(SSA). 17 But on top of that, an estimated one
third of the population need health services
and cannot access them, due to geography
and other barriers (Frenk, González-Block, &
Lozano, 2000, p. 343). Facilities for the insured
are of much higher quality than those available
to the uninsured with expenditure per capita on
health within the social security system 3.9
times that spent in SSA. Expenditure regionally
is also very unequal (Frenk et al., 2000, p. 35).
At the same time, both of the country’s social
security institutions have faced severe financial
crises. Privatization of social security has been
only partial and remains fiercely contested.
Privatization of IMSS (Mexican Institute for
Social Security) pension funds (for private sector workers) was accomplished under the PRI
in 1997, marking a transformation from a system based on solidarity between generations
and, to some extent, between income groups,
to one of individual accounts. On the one hand,
many supporters of a strengthened public system want one in which there is risk pooling
and redistribution between middle and lower
income contributors. 18 On the other hand,
strong opposition to beefing up the public system is coming from the private sector and the
Fox administration which favored privatized
arrangements along the lines of the Chilean
model. Both of these positions are opposed
by entrenched union interests which see any
change as meaning an erosion of their privileged social security arrangements supported
by generous (though unsustainable) state contributions.
In 2004, a new government program to address the needs of those left out of the social
security system was instituted with the Seguro
Popular program. To some extent this new pro-
451
gram was a response to the dilemma faced by
the poor by-passed by the formal social security
institutions, on the one hand, and the new conditional cash transfer program (discussed below), on the other. It ran headlong into the
resource scarcity obstacle, characteristic of a
country without steady economic growth and
a redistributive compromise. The new program
immediately meant an increase to the health
budget to cover the state subsidy needed to support the participation of the poorest families,
and, because the program was predicted to trigger increased use of health facilities, it created
pressures for a substantial increase in resources
for new health infrastructure (Reforma, December 7, 2003 and March 6, 2004). It also immediately generated opposition from within the
state, from those bureaucrats who feared
diminished resource allocation to their programs. 19
Mexico’s pressing financial exigencies and
their redistributive implications should be considered within the context of the government’s
response to the 1995 financial crisis. The 1995
bank rescue operation, known as FOBAPROA
(the Bank Fund for the Protection of Savings)
involved the state bail out of the private banking sector in a highly discretionary fashion in
which the executive negotiated special deals
with those bankers who had made the largest
campaign contributions to the PRI (López
Obrador, 1999, pp. 32–34, 60). There is a consensus that the liabilities incurred by the state
in this massive transfer of wealth to the private
banking sector, estimated at 19.1% of GDP,
will weigh very heavily on government finances
for many years to come, impeding the country’s
ability to increase social spending (Garrido,
2003, p. 114; Nadal, 2003, p. 80).
The bank rescue liabilities in combination
with sluggish economic growth meant that the
fiscal pressures continued into the Fox administration (2000–06) and tax issues continued to be
highly conflictive redistributive issues. Furthermore, President Fox’s relationship with powerful business interests has been even closer than
that of his PRI predecessors 20: upon his election, he immediately incorporated nine of them
directly into top positions, including cabinet level ones, within his government (Teichman,
2002, p. 505). Early in his election campaign,
Fox had proposed a tax on wealth or property
taxes to raise funds for social programs, but
this proposal met with stiff resistance from the
private sector, producing a subsequent proposal to expand the 15% VAT to cover basic
452
WORLD DEVELOPMENT
food and medicine. This new proposal was supported by the private sector, but defeated in
congress, although the executive continued to
push the initiative even after its defeat. A highly
activist congress produced a tax reform bill that
increased the VAT on luxury goods, including
telecommunication services, soft drinks and
cigarettes; the auto industry and the telecommunication sector then challenged the new
taxes in the courts (Latin American Weekly Report, 2 January, 2002, p. 3). As we will see below, the initiatives for the new conditional
cash transfer programs arose and have expanded within the context of ongoing financial
exigencies.
3. ATTEMPTS TO MITIGATE
DISTRIBUTIONAL CONFLICT:
CONDITIONAL CASH TRANSFER
PROGRAMS
In Mexico and Chile, the business community and the political right fiercely resisted tax
increases while, in the case of Mexico, entrenched union interests resisted more redistributive social security arrangements. Meanwhile,
fiscal pressures on powerful technocrats in finance ministries triggered concerns about eliminating inefficiencies and waste in social
spending; while discussions with multilateral
lending institutions reinforced concerns for
‘‘leakages’’ and ‘‘inappropriate’’ subsidies. In
both cases, conditional cash transfer programs
have become the social policy of choice—almost the only one, in fact, despite the fierce debates each generated, able to garner only a
modicum of across-the-board support.
The idea of conditional transfers to poor
families was not new to either Chile or Mexico.
From 1990, Chile has had the Subsidio Único
Familiar (SUF) program with some 900,000
beneficiaries (Arenas de Mesa & Benavides Salazar, 2003, p. 64, 79), a program which provides conditional cash transfer to a variety of
groups, including the mothers of children under
18, conditional upon attendance of children in
school. An earlier Mexican program (1989),
known as ‘‘Niños en Solidaridad,’’ provided
cash and food supplements to families in poor
communities, also conditional upon school
attendance. But both of these programs were
aimed at the moderate and the extremely poor.
Indeed, the bureaucratic initiators of the new
conditional cash transfer programs did not
view such older programs as sufficiently tar-
geted (that is efficient) because they did not focus just on the extremely poor. 21
In Chile, a new cash transfer program, Chile
Solidario, was announced by incoming President Ricardo Lagos in the year 2000 and put
into place in 2003. As a program aiming to confront extreme poverty it is focused on the country’s poorest 225,000 families. At a cost of
approximately $450 (US) per family in 2005,
the program accounted for 6.2% of social
expenditures (Ministerio de Hacienda, 2005,
p. 472; Ministerio de Hacienda, 2006, p. 93),
with a cost equivalent to 0.1% of Chile’s GDP
(2004) (ECLAC, 2006, p. 155).
The program had its origins in the concerns
of two sets of technocrats: the administrative
unit within the Finance Ministry concerned
with expenditures (the Office of Budget Management) and a group of officials in the Planning Ministry. 22 Budget officials were
primarily concerned with finding ways to keep
expenditure under control, an increasing problem due to the 1997 Asian financial crisis and
the economic downturn in 1998 (a growth rate
of only 0.2%). They were also concerned about
poverty figures released in 2000 by the Economic Commission for Latin America showing
that the reduction in extreme poverty had stagnated. The Budget Management officials, therefore, began to consider ways to reduce what
was seen as ‘‘waste’’ and duplication, and
‘‘administrative chaos’’ in social expenditure,
with particular concern directed at the ‘‘leakage’’ of benefits to people who were not the
poorest. In their view, many existing social programs could be eliminated. They initially argued for a simple cash transfer as the most
‘‘efficient’’ method to reduce extreme poverty
and sought out support from the private sector
for such a program. While some members of
the political right initially opposed Chile Solidario, (due to its highly centralized form of
administration), they were, for the most part,
brought on side by the efficiency argument.
Meanwhile, officials within the Planning
Ministry feared that extreme poverty might
creep up without concerted attention to the
problem. 23 Discussions involved top-level officials in the Ministry, the head of the Solidarity
and Investment Fund, FOSIS (an agency within the Planning Ministry that provides funds
for local projects), and officials from the Secretary General of the Presidency. These officials
opposed a strict cash transfer program and
wanted to ensure that the new program would
avoid creating welfare dependency.
REDISTRIBUTIVE CONFLICT AND SOCIAL POLICY IN LATIN AMERICA
These differing concerns were brought together in a consultative seminar of carefully selected academic experts in poverty arranged by
the Secretary General of the Presidency, most
probably at the instigation of those finance officials already engaged in discussions of these issues. 24 Debate focused on whether money
should be simply handed over to the extremely
poor (the position of those experts from the
right wing think tanks and key people within
the Finance Ministry) or whether financial support should be supplemented by other forms of
support. This latter position was the one taken
by key Planning officials and poverty experts
from left-center NGOs. Although the final program is a blend of the two approaches (it provides a small sum of money to the female
heads of households contingent upon fulfilling
a variety of conditions), the sheer number of
the conditions (53, in fact) reflects the substantial policy impact that Planning Ministry officials were able to have. The objective was to
ingrain behaviors that would ensure that families graduate from the program and join the
ranks of the non-poor. Conditions included
not only school attendance and health checkups for all family members but also involved
promises to take a positive attitude toward education, resolve family conflicts using ‘‘appropriate’’ methods and distribute household tasks
fairly. The program assigns a social worker to
each family who is to provide both social–psychological support and guide the family’s integration into existing government programs.
Described as the ‘‘perfection of targeting,’’ the
highly technocratic nature of the program is reflected in the way in which participant families
are selected: through the administration of a
survey which purports to measure with exactitude the extent of poverty in individual families. Importantly, most of the major issues of
concern to NGOs and to the most critical academics were not raised during the consultative
seminar. 25 These included concerns over the
way in which such a program might cause divisiveness among community members, the absence of the opportunity for participation on
the part of those chosen as targets for the program, the failure to invite civil society organizations to monitor and evaluate the program, the
failure to distinguish between rural and urban
poverty (and the failure to use distinct criteria
to assess poverty in each), the use of highly
technocratic measurements of poverty likely
to omit many of the deserving poor, and the absence of community development projects. In-
453
deed, some observers expressed regret at what
they view to be the increasingly targeted nature
of Chilean social policy since 1990, characterized as virtually abandoning any interest in
developing community spirit and solidarity.
NGOs were excluded from both design and
evaluation of the new program. 26
The evolution of Mexico’s conditional cash
transfer program, although differing in program details and certainly in scope, shares some
strikingly similar characteristics in its origin
and general acceptance. Progresa was introduced in 1997 and expanded under its new
name, Oportunidades, during the administration of President Fox. Originally targeted to
400,000 families when it was established, by
2005 the program had been extended to five
million families. It involves the handing over
of small sums of money to the female heads
of households in exchange for children’s regular attendance at schools and health clinics. In
2001, expenditure on the program equaled
0.32% of GDP (ECLAC, 2006, p. 155). In
2004, the program accounted for 2.0% of all social expenditure, and cost about $450 (US) per
family (Presidencia de la República, 2006, pp.
85–86, 278).
The program arose in the context of the 1995
economic crisis and the strong fiscal pressures
generated by that crisis. Its technocratic
market-orientated originators, like their Chilean counterparts, had a strong preoccupation
about the inefficiencies of general subsidies. 27
Since Mexico was not an electoral democracy
at the time the program originated, the policy
development process was even more insulated
than in the Chilean case. The program originated with two groups of technocrats: one
was a team led by Santiago Levy, 28 an economist and Subsecretary of Expenditure in the
Ministry of Finance at the time. The other
was a group led by a close friend of President
Zedillo, José Gómez de León, a demographer
and the head of CONAPO (National Population Council), during the years of the development of the program. 29 The question of
whether poor communities would be involved
in the selection of program beneficiaries was
the key issue that caused friction between Levy
(who wanted strictly enforced technocratic
criteria) and senior Social Development
(SEDESOL) Ministry officials who wanted
community participation. The program was
finally imposed by the President over the strenuous objections of the head of the Social Development Ministry arousing the ire of officials in
454
WORLD DEVELOPMENT
other ministries and of rank and file members
of the political parties in congress (including
members of the then ruling PRI).
Fiscal difficulties drove the development of
the program. For both Levy and Gómez de
León, subsidies on basic foodstuffs were inefficient and wasteful of public expenditures because they did not benefit the poorest. They
argued that most of the beneficiaries of these
subsidies were in urban areas, particularly
Mexico City, while large numbers of desperately poor concentrated in south central Mexico did not benefit (Levy & Rodrı́guez, 2004,
p. 26). The 1995 economic crisis and the extreme fiscal pressures it imposed gave Levy
the leverage he needed to exact policy change.
Indeed, from 1994, Levy had begun to reduce
generalized food subsidies in milk and tortillas.
It was the savings from the reduction and final
elimination of the tortilla subsidy that provided
the funding for the new targeted program in
1998 (Levy & Rodrı́guez, 2004, p. 87). There
was major redistribution from the cities (particularly from Mexico City) toward the rural
areas, particularly the south. By 2000, the south
was receiving one-half of all food subsidies
(through Progresa) and the proportion received
by Mexico City had dropped from 70% in 1995
to 7% (Scott, 2003, p. 27). It is likely that this
change in social programming from basic food
subsidies to Progresa marked a redistribution
toward the rural extremely poor from the urban
moderately poor who saw basic food subsidies
withdrawn and who also lacked access to formal social security arrangements and to the
new Progresa program. Like Chile Solidario,
Progresa was highly technocratic in nature.
The development of an index of marginality under the direction of Gómez de León made possible the selection of the poorest communities.
Then, as in the Chilean case, detailed surveys
allowed for the selection of beneficiary families
within these communities in accordance with
whether their income fell below the value of a
basic food basket.
Progresa, although subject to considerable
criticism, like Chile Solidario eventually gained
widespread, albeit sometimes grudging, support. As in the Chilean case, the program fit nicely into business’ support for big spending cuts,
greater efficiency in government spending and
support for the neediest (Reforma, February
14, 1997; October 2, 2003). At the same time,
the private sector was closely integrated into
the operation of social policy under President
Fox. The Minister of Social Development until
January 2006, Josefina Vázquez Mota, comes
from a prominent Mexican business family and
made a number of private sector appointments
to the ministry. 30 An administrative unit within
the Social Development Ministry, ‘‘Enlace
Empresarial’’ (Business Link), has as its primary
objective that of making the private sector aware
of the situation of extreme poverty in the country and involving it in the social programs set
up to address this problem, including communities served by Progresa/Oportunidades. The
most well known program in which there is private sector participation is ‘‘Piso Firme,’’ a program that involves the private sector in the
construction of cement floors, at below market
prices, in communities of extreme poverty.
However, between the time of its initiation in
1997 and the election of President Vicente Fox
in the year 2000, Progresa received an onslaught of criticism from congress, from the left
and civil society organizations, and from Fox’s
own social policy transition team, which had
engaged in an in-depth consultation of thousands of civil society organizations on social
policy, including Progresa. Most of the criticisms echoed those made of Chile Solidario:
the program’s exclusion of many deserving
poor, the absence of community participation,
the potential divisive impact on poor communities, and the need for parallel support for productive projects. 31 Despite such harsh
criticisms and the association of the program
with the previous PRI administration, President Fox decided to maintain the program
and even expand it. The positive evaluation given the program by the Washington-based
International Food Policy Research Institute
appears to have been instrumental in persuading President Fox to keep the program. These
assessments, which are generally positive, point
to important increases in school attendance and
health among children enrolled in the program
and to short-term reductions in poverty. 32
However, the impact of the program on poverty reduction is a topic of some considerable
debate, and proof that the program breaks
the cycle of intergeneration poverty awaits
much longer-term assessments. 33
As in the Chilean case, civil society participation in the program has been resisted, particularly by officials in the Finance Ministry. While
pressures on public expenditure created by community mobilization are no doubt also relevant
considerations in explaining this resistance, an
additional ingredient, in the Mexican case, is
the strongly held viewpoint that any opening to
REDISTRIBUTIVE CONFLICT AND SOCIAL POLICY IN LATIN AMERICA
community involvement in distributive programs will disintegrate into clientelist forms of
political control by public authorities. 34
While by the year 2004 Progresa/Oportunidades had many critics, it was difficult to find
anyone actually advocating the elimination of
the program; the overwhelming consensus was
that although by itself it was not going to be
sufficient to eliminate even extreme poverty,
the program was making an important contribution. 35 Many congress people, government
officials, and NGO leaders on both ends of
the political spectrum, expressed the viewpoint
that it would be politically impossible to eliminate the program, no matter what one thought
of it. At the same time, it is clear that many
Mexican civil society organizations supported
social policy that went well beyond the limited
targeted concept embodied in Progresa. In recent years, many civil society groups had been
pressing for an expanded concept of human
rights that would include social rights (the right
to food, housing and health care, and labor
rights). Opposition party and civil society restiveness at their exclusion from the formulation
and evaluation of Progresa and fears about
reductions in social policy expenditures in the
future were instrumental in civil society and
oppositional congressional pressure for a new
Social Development Law (2004), which, among
other things, inhibits future reductions in social
spending and requires civil society participation
in social policy evaluation. Sustained social
welfare spending, however, requires an expanded source of state revenue.
4. CONCLUSIONS
Both Chile and Mexico are characterized by
sharp distributional struggles and failures to
reach compromise solutions. Additional indepth studies of other Latin American countries can tell us more about the nature of such
struggles beyond these two cases, but anecdotal
evidence suggests that similar struggles are
operative elsewhere, even in those rare cases
of historically relatively low socio-economic
inequality. 36 Latin American countries are
faced with the challenges of maintaining fiscal
equilibrium, developing social programs to
address poverty and inequality, and finding
the resources for these programs. In general,
countries of the region are characterized by
relatively low and regressive social spending
combined with regressive or only mildly pro-
455
gressive taxation. Unequal access to services
such as health care and labor protection are
additional redistributive issues. The room for
policy improvement is substantial while the
political obstacles are, admittedly, daunting.
In the Mexican case, the integration of the
private sector with the Fox administration produced almost no interest in a redistributive
compromise. As the Chilean case illustrates,
the road to a redistributive compromise is an
extremely difficult one even when the political
elite strives for its achievement. Conditional
cash transfer programs have arisen within this
very difficult context and have their origins
among technocrats and others much more concerned with the narrow, albeit very important
goal, of maintaining fiscal equilibrium. Facing
criticism, conditional cash transfer programs
have undoubtedly expanded in ways not envisioned by many of their technocratic originators. Available evidence from the Mexican
case does suggest that they have a positive impact on human capital development and on
immediate-term poverty reduction. In both
cases, these programs have engendered sharp
criticisms and pressure from civil society to
both expand existing programs and to institute
different types of social programs. This unintended mobilizational impact of conditional
cash transfer programs is a positive development and has the potential to generate greater
government commitment to social programs
and to social spending. However, in the absence
of a redistributive societal compromise involving both increased taxation and social spending,
progress on the social policy front (particularly
increased financial commitment) raises the
specter of a descent into populism unless increased financial resources are forthcoming.
Conditional cash transfer programs can only
be a small part of a larger economic and social
development strategy. It is important to recognize both their political context and the need
for a political solution over the long term. Even
when expanded, such programs are likely to
leave out large segments of the poor. Moreover,
without a commensurate increase in fiscal
capacity, that expansion will inevitably begin
to impinge upon other existing programs or will
impede the emergence of new, perhaps more
effective, ones. Importantly, the efficacy of conditional cash transfers themselves is enormously reduced if there are no resources to
expand and improve health and educational
services. All of this points to the importance
of a redistributive societal compromise. It
456
WORLD DEVELOPMENT
might be argued that such programs represent
such a small portion of social spending that
one cannot expect their impact to be large.
The danger, however, is that these programs
are beginning to acquire a political saliency well
beyond their actual efficacy to such an extent
that other essential economic and social policy
measures, including redistributive ones, may
well be placed on the back burner by politicians. 37 As illustrated by a former Mexican
Minister of Social Development’s claim that social programs, particularly Oportunidades,
were responsible for the recent reduction in
poverty in the country, leaderships may be
tempted to place too much faith in such social
programs (Reforma, June 20, 2003).
Conditional cash transfer programs assume
that improvements of human capital among
the extremely poor will equip them to join the
ranks of the non-poor. This will only be true
if economic growth provides expanded employment opportunities and improved wage levels
over the long term. Conditional cash transfer
programs are likely to be most efficacious if
part of a multifaceted economic and social
strategy that involves an industrial strategy to
promote productive investment, infrastructural
development, human development programs
addressing a much broader spectrum of the
poor, labor rights, and solidly financed, equitable universal programs in health and education.
At the moment, one of the main virtues of
conditional cash transfer programs is that they
are able to garner a very grudging societal consensus—a common remark made by people
across the political spectrum was: ‘‘who can oppose a program to reduce extreme poverty?’’
These are social programs capable of securing
support from the business community and the
political right because of their streamlined nature, technocratic efficiency and disavowal of
both social mobilization and ‘‘populism.’’ They
are also able to obtain, albeit begrudgingly, support from the political center-left and from
NGOs because they do address needs of the
most desperately poor and provide measures
for the long term development of human (if
not social) capital. Within the state, these programs are the darlings of those finance officials
responsible for keeping expenditures in line. Indeed, in both of the cases discussed here, finance
officials were key promoters, if not originators,
of the cash transfer aspect of the programs.
But they may paper over deep underlying
redistributive conflicts which, over the long
term, have the potential to be politically disruptive with possible negative economic implications. The exclusionary way in which cash
transfer programs were developed in the two
cases is probably one of their most disturbing
aspects. This feature suggests a profound distrust of a genuinely open public consultative
process. While electoral democracy has ensured
that redistribution issues are now on the agenda, it does not appear to be capable of producing sufficiently redistributive policy outcomes.
What is required, therefore, are leaderships
committed to building a deeply committed societal equity coalition—necessary to act as a
counterweight to recalcitrant vested interests
which cannot be won over and to ensure continued political commitment to policy reform. 38 Building such a coalition will not be
easy; it will most certainly require a more flexible attitude to public consultation. It is very
likely that the efforts will fall considerably short
of the mark, but it is possible that efforts in the
direction of redistributive settlements may
bring important improvements. Making the effort is surely a step toward overcoming the historical legacy of inequality. Without at least the
attempt at a new societal compromise distributional struggles will fester and less than optimal
policy solutions will continue to be the norm.
NOTES
1. Indeed, some observers have linked market-liberalizing measures to all of these unhappy developments,
particularly inequality (Thorpe, 1998, p. 221, 287;
Morley, 2001, p. 152).
2. Such as Presidents Luiz Inácio Lula da Silva of
Brazil, Nestor Kirchner of Argentina, Tabaré Vázquez
of Uruguay and the former mayor of Mexico City,
Andrés Manuel López Obrador.
3. Some of the data presented here was obtained
through a series of open-ended interviews carried out
in Chile in 2003 and in Mexico in 2004. In Mexico, there
were a total of 46 interviews: 13 of senior officials
(defined as the ministerial level and three tiers beneath
that level), 10 of middle level government officials, 11 of
congressmen, seven of leaders of non-government organizations (NGOs), and five of other government officials.
For Chile, there were 28 interviews in total: nine of
REDISTRIBUTIVE CONFLICT AND SOCIAL POLICY IN LATIN AMERICA
457
senior government officials, five of middle level officials,
seven of NGO leaders, and seven of other government
officials. Since a pledge of confidentiality was a condition
of all interviews, interviewees will be identified by
descriptive terms only. Information attributed to interviewees is that which has been corroborated by at least
two interview sources. These sources are identified as
precisely as possible without revealing identities.
11. By 1980, social security protection in Mexico
covered only an estimated 40% of the economically
active population (Ward, 1986, p. 112) while in Chile, it
reached 70% by 1970 (Borzutzky, 2002, p. 69). Mexico’s
highly capital-intensive economic model failed to generate employment, leaving a substantial proportion of the
economically active population in the informal sector
without social security.
4. The country’s decline in poverty was largely due to
the impact of this export-led growth (Meller, 2000).
12. An important difference is the fact that the Concertación is a center-left coalition with, as we shall see,
considerably greater distance from the private sector
than in the Mexican case. Nevertheless, Concertación
has also distanced itself from labor and resisted the
involvement of civil society in public policy.
5. During 1990–2003, poverty declined in Chile from
38.6% of the population to 18.7% and extreme poverty
from 13.7% to 4.7% while its gini-coefficient (the
standard measurement for income inequality) remained
unchanged at 0.55. In Mexico, during 1989–2004,
poverty declined from 47.4% of the population to
37.7% and extreme poverty from 18.7 to 11.7, while its
gini-coefficient declined slightly from 0.51 to 0.53.
(ECLAC, 2005, p. 317, 318, 336).
6. Costa Rica’s greater degree of equality and its more
developed welfare state is associated with the emergence
of an early agricultural democracy based on a small and
medium producer class, and the visionary leadership of
José Figueres during 1953–58. Uruguay’s social achievements are attributed to the leadership of José Batlle y
Ordóñez (1903–07 and 1911–15) and income redistribution negotiated in trilateral institutions in which an
autonomous and moderate trade union movement
participated. In both of these cases, the redistributive
compromises were facilitated by economic growth.
Other countries with redistributive compromises that
were also successful at mitigating inequality for a time
were Chile and Venezuela. The defeat of these compromises was followed by marked increases in inequality.
7. In addition to Mexico and Chile, such programs
exist in Brazil, Colombia, Honduras, Jamaica, Nicaragua, and Ecuador.
8. Financial support for these programs is either
provided by the World Bank or the Inter-American
Development Bank (IADB).
9. Mexico’s program has expanded from the rural to
the urban sector and from coverage of primary school
children to those in the upper levels. Brazil’s ‘‘Bolsa
Familia,’’ which consolidated numerous existing cash
transfer programs, is now the largest program in terms
of both coverage and financing (Rawlings, 2005, p. 135).
10. Inequality in Chile was considerably lower than in
Mexico: in 1968, Mexico’s gini-coefficient stood at 0.59;
in 1971, Chile’s was 0.47 (Thorpe, 1998, p. 352).
13. VAT is normally considered regressive unless there
are exemptions for products used by the poorest.
14. Unless otherwise indicated, the information in this
paragraph is taken from two interviews with participants
on the Council, one with a former minister of the
government and the other with a leader of a poverty NGO.
15. Reform of the labor code has been much less of an
issue in Mexico largely because there is considerable de facto
‘‘flexibilization’’ (and hence it is not an issue for business),
while a weakened trade union movement has not been able
to make labor protection an important public issue.
16. In 1991 corporate income taxes were reduced, and
in 1993 both personal income tax and corporate tax were
reduced (Mexico and NAFTA Report, January 17, 1991,
p. 7; October 28, 1993, p. 4).
17. Mexico’s government ministries are known as
‘‘secretaries’’ (‘‘secretarios’’) while Chile’s are ‘‘ministries’’ (‘‘ministerios’’). The term ‘‘ministry’’ and ‘‘minister’’ will be used in the discussions of both cases.
18. This is the position taken by several left and center
politicians in congress. PRD members, however, keep
their views relatively low profile given the anticipated
reaction of labor (Interviews, four members of congress,
three from the PRD, one from the PRI).
19. The immediate concern of the Mexican government
officials in charge of that country’s conditional cash
transfer program was whether the new program would
impinge on resources allocated to their program. Clearly,
in a situation of finite economic resources the success of
new programs depends on the reallocation of resources.
Material in this section is drawn from interviews with four
senior level government officials, three from the Social
Development Ministry and one from the Health Ministry.
458
WORLD DEVELOPMENT
20. Conglomerate executives were generous contributors to the PRI, gained policy access through new
organizational mechanisms (especially in trade negotiations), and served as close advisors to both President
Salinas and President Zedillo (Thacker, 2000, p. 126;
López Obrador, 1999, p. 60).
29. In 1994, President Zedillo asked Gómez de León to
begin work on a program of direct transfers to the poor.
21. Nevertheless, as we will see below, these bureaucrats did not get exactly what they wanted. Other
pressures weighed in on the development of conditional
cash transfer programs. In the Chilean case, SUF
became one of the programs linked to Chile’s conditional cash transfer program insofar as the new program
sought to incorporate more members of the extremely
poor into SUF.
31. The data in this paragraph was obtained from the
interviews of five members of congress and four NGO
leaders. Two of the congress people were members of the
right wing Popular Action (PAN) Party, two were
members of the left Democratic Revolutionary Party
(PRD) and one was a member of the PRI.
22. The information in this and the following
paragraph is drawn from interviews with two senior
level finance officials close to the policy development
process.
23. The information in this paragraph comes from two
senior level officials and one middle level official of the
Planning Ministry.
24. The material in this paragraph is drawn from five
interviews: three of senior level officials in the Finance
Ministry, the Office of the Presidency and the Planning
Ministry, two of the members of two different think
tanks, one regarded as right wing, the other, left-ofcenter. The meeting involved 12 people from outside the
government and 10 from within the government and was
presided over by President Lagos himself.
25. The information in this paragraph is drawn from
interviews with five NGO leaders.
26. This policy exclusion is corroborated by the fact
that senior Planning officials expressed the viewpoint
that NGOs had no right to involvement in policy design
as they had not been elected and could not be held
accountable. Subsequently, the World Bank, which
provides funding for the program, succeeded in persuading the Chilean government to allow civil society
evaluation of the program.
27. The information in this paragraph comes from
interviews with three senior level Finance Ministry
officials and two senior Social Development Ministry
officials.
28. Levy published a book with the World Bank in
1992 entitled Poverty in Mexico, which contained one of
the main elements of Progresa: the linking of transfer
payments to visits to health clinics.
30. Such as the appointment of Antonio Sánchez Dı́as
de Rivera, an ex president of the entrepreneurial
organization, Copermex (Reforma, January 8, 2001).
32. An 11-volume evaluation of the program was
published in 2000 by IFPRI. For a summary of those
reports, see Emmanuel Skoufias, (2000).
33. Some poverty experts challenged the government’s
poverty reduction figures while others attributed only a
part of the decline in poverty to various social programs
(among them Mexico’s conditional cash transfer program, Oportunidades)—perhaps 25%—while identifying
improvements in real salaries, remittances from the
United States and other factors, as accounting for most
of this reduction. The debate was covered extensively in
the Mexican daily Reforma. See, especially, June 20,
2003, September 10, 2003 and September 25, 2003.
34. The information in this paragraph was obtained
from interviews with three senior level finance ministry
officials.
35. Unless otherwise indicated, the material in this and
the following paragraph draws from interviews of seven
NGO leaders and eight congressmen: two from the
PRD, two from Convergencia, two from the PRI and
two from the PAN.
36. On Uruguay’s struggle to find increased resources
for social programs see Canel (2004).
37. Bolsa Familiar, for example, is believed to have
produced a shift in President Lula’s support from
industrial laborers and, to a certain extent, the urban
middle class, to the beneficiaries of the new program
(Zibechi, 2006).
38. The precise nature of such a coalition would vary
from country to country but would obviously have to
include some upper-income groups, including members
of the private sector, trade unions in those cases (the
majority) where redistribution within existing social
security arrangements is called for, and civil society
organizations. While left-center parties need to attempt
REDISTRIBUTIVE CONFLICT AND SOCIAL POLICY IN LATIN AMERICA
to shape such a coalition during electoral campaigns,
settlements stemming from government-mediated negotiations involving major social groups (negotiations at
the state level) and political parties (negotiations at the
legislative level) would be needed to ensure that redis-
459
tributive initiatives stay the course. All of this assumes
sufficient extra state public pressure (even mobilization)
which is sufficient to secure policy change but not so
radical so as to polarize politics and render discussion
and compromise impossible.
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