Corporatism, Liberal Democracy and Post-Neoliberalism: The politics of redistribution in Argentina and Uruguay.

• In Event: Political Parties Origins, Nation Building and Social Policies

Abstract

How does liberal democracy influence income distribution in Latin America? I argue that the institutions of liberal democracy, i.e., competitive elections, an independent judiciary, and a consensus on the inviolability of liberal democracy, play an important role influencing the politics of income redistribution after the financial crisis of 2001-02 in Argentina and Uruguay. Post-crisis governments were elected in both countries to address high levels of income inequality generated by the crisis. Both governments restored corporatist, sector-level collective bargaining to reduce income inequality. Although both countries’ policies converged and experienced similar levels of economic and employment growth, there was a divergence in the labour share of national income: the Argentina’s labour share surpassed pre-crisis levels, while Uruguay’s has not recovered. 
 The paper proposes that the historical legacies of labour incorporation in Argentina (state corporatism) and Uruguay (social corporatism) during the mid-twentieth century can be best compared in the post-crisis period as both countries now have, for the first time, corporatist institutions coexisting with a consolidated liberal democracy. I argue that with a consolidated liberal democracy in Argentina, the statist corporatist model that shielded labour leaders from their bases has been facing an existential challenge both legally and politically by workers. As a result, salaries in certain sectors are increasing from bottom-up pressures. In Uruguay, the social corporatist model has not faced such existential challenges. With relatively little pressure from the base, labour conflict has been low, and this has helped temper salary growth.

Author

• Anibal N Saldias, University of Toronto