Post-Neoliberalism in the Americas (International Political Economy)

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Post-Neoliberalism in the Americas

International Political Economy Series General Editor: Timothy M. Shaw, Professor and Director, Institute of International Relations, The University of the West Indies, Trinidad & Tobago Titles include: Ann Denholm Crosby DILEMMAS IN DEFENCE DECISION-MAKING Constructing Canada’s Role in NORAD, 1958–96 Jerry Haar and Anthony T. Bryan (editors) CANADIAN–CARIBBEAN RELATIONS IN TRANSITION Trade Sustainable Development and Security R. Lipsey and P. Meller (editors) WESTERN HEMISPHERE TRADE INTEGRATION Laura Macdonald and Arne Ruckert (editors) POST-NEOLIBERALISM IN THE AMERICAS Robert O’Brien SUBSIDY REGULATION AND STATE TRANSFORMATION IN NORTH AMERICA, THE GATT AND THE EU Leonard Seabrooke US POWER IN INTERNATIONAL FINANCE The Victory of Dividends

International Political Economy Series Series Standing Order ISBN 978–0–333–71708–0 hardcover Series Standing Order ISBN 978–0–333–71110–1 paperback (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and one of the ISBNs quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England

Post-Neoliberalism in the Americas Edited by

Laura Macdonald Carleton University, Canada

Arne Ruckert University of Ottawa, Canada

Selection and editorial matter © Laura Macdonald and Arne Ruckert 2009 Individual chapters © their respective authors 2009 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6-10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2009 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN-13: 978-0-230-20207-8 ISBN-10: 0-230-20207-1

hardback hardback

This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Post-neoliberalism in the Americas / edited by Laura Macdonald and Arne Ruckert. p. cm. — (International political economy series) Includes bibliographical references and index. ISBN 978-0-230-20207-8 1. Neoliberalism—United States. 2. Neoliberalism—Latin America. 3. United States—Social policy. 4. Latin America—Social policy. I. Macdonald, Laura, 1960– II. Ruckert, Arne. JC574.2.U6P66 2009 320.51—dc22 10 9 8 7 6 5 4 3 2 1 18 17 16 15 14 13 12 11 10 09 Printed and bound in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne

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Contents Acknowledgments

vii

List of Abbreviations

viii

Notes on Contributors

xii

Post-Neoliberalism in the Americas: An Introduction Laura Macdonald and Arne Ruckert

1

Section I Theoretical and Conceptual Issues 1

2

3

4

The Contradictions and Transformations of Neoliberalism in Latin America: From Structural Adjustment to “Empowering the Poor” Marcus Taylor Post-Neoliberalism and the New Left in the Americas: The Pathways of Economic and Trade Policies Pablo Heidrich and Diana Tussie Struggling between Autonomy and Institutional Transformations: Social Movements in Latin America and the Move toward Post-Neoliberalism Ulrich Brand and Nicola Sekler Post-Neoliberalism and the Emergence of Human Rights Politics in International Finance Elizabeth Friesen

21

37

54

71

Section II Post-Neoliberalism in Latin America 5

6

7

Hugo Chávez and the Search for Post-Neoliberal Policy Alternatives in Venezuela Judy Meltzer From Naked Barbarism to Barbarism with Benefits: Neoliberal Capitalism, Natural Gas Policy, and the Evo Morales Government in Bolivia Jeffery R. Webber Is There a Post-Neoliberal Policy toward Foreign Direct Investment in Argentina and Chile? Paul Alexander Haslam v

89

105

120

vi Contents

8

9

The World Bank and the Poverty Reduction Strategy of Nicaragua: Toward a Post-Neoliberal World Development Order? Arne Ruckert The “Re-Branding ” of Neoliberalism: Competing Hegemonies and Systemic Dilemmas Impacting Educational Development in Heavily Indebted Latin American States Adam Davidson-Harden

135

151

Section III Transformations of Neoliberalism in the Americas 10 Neoliberalism and the Micropolitics of Domination in the United States Mary Hawkesworth

167

11 Poverty Policy and Politics in Canada and Mexico: “Inclusive” Liberalism? Rianne Mahon and Laura Macdonald

184

12 The Shaping of Motherhood through Social Investment in Children: Examples from Canada and Mexico Lucy Luccisano and Glenda Wall

199

13 Neoliberalism’s Agnosticism: Domestic and Immigration Policies and the Model Family in Canada and the United States Lois Harder 14 Colombia’s Neoliberal Regime of Governance: Securitization by Dispossession Cristina Rojas

215

231

15 Afterword: Post-Neoliberal Politics and Pathways Laura Macdonald and Arne Ruckert

246

Bibliography

250

Index

280

Acknowledgments The authors would like to acknowledge the helpful comments from reviewers, the editorial assistance from Janna Ferguson, comments from all the participants in the International Studies Association panels that led to this book, and the support of Tim Shaw and Alexandra Webster. We also acknowledge the financial assistance of the Social Sciences and Humanities Research Council of Canada.

vii

Abbreviations AD

Acción Democrática

AFDC

Aid to Families with Dependent Children

ALBA

Alternativa Bolivariana para los Pueblos de Nuestra América

AO

Advocacy Organizations

AYASA

Aguas y Saneamientos Argentinos S.A.

AUC

Auto Defensas Unidas de Colombia

BIT

Bilateral Investment Treaty

BRIC

Brazil, Russia, India, and China

BTU

British Thermal Unit

BWI

Bretton Woods Institutions

CA

Christian Aid

CCT

Conditional Cash Transfer

CDF

Comprehensive Development Framework

CND

National Democratic Convention

CNI

National Indigenous Convention

Conycet

Comisión Nacional de Investigación Cientifica y Tecnológico

COPEI

Comité de Organización Politica Electoral Independiente

CORFO

Corporación de Fomento de la Producción

CPIA

Country Policy and Institutional Assessment

CSO

Civil Society Organizations

CTA

Cooperativas de Trabajo Asociado

CWEP

Community Work Experience Project

DAS

Administrative Security Department

DDS

Defense and Democratic Security

DfID

Department for International Development

DOMA

Defense of Marriage Act

viii

Abbreviations

ECLAC

Economic Commission for Latin America and the Caribbean

EFA

Education for All

ENEL

Empresa Nacional de Electricidad

ENITEL

Empresa Nicaraguense de Telecomunicaciones

EPL

Ejército Popular de Liberación

EPS

Empresas de Producción Social

ESAF

Enhanced Structural Adjustment Facility

EURODAD

European Forum on Debt and Development

FACTA

Argentinean Federation of Self-Managing Workers’ Cooperatives

FARC

Fuerzas Armadas Revolucionarias de Colombia

FCC

Collective Capitalization Fund

FDI

Foreign Direct Investment

FOSIS

Fondo de Solidaridad de Inversión Social

FSLN

Frente Sandinista de Liberación Nacional

FTA

Free Trade Agreement

FTAA

Free Trade Area of the Americas

GCAP

Global Call to Action against Poverty

GDP

Gross Domestic Product

GNP

Gross National Product

GO

Grassroots Organizations

GRSO

Grassroots Support Organizations

HIPC

Heavily Indebted Poor Country

ICFfD

International Conference on Financing for Development

IDA

International Development Association

IDB

Inter-American Development Bank

IDP

Internally Displaced People

IDH

Impuestos Directos a los Hidrocarburos

IEG

Independent Evaluation Group

ix

x

Abbreviations

IFC

International Finance Corporation

IFI

International Financial Institutions

IMF

International Monetary Fund

Incoder

Instituto Colombiano de Desarrollo Rural

INEA

Instituto Nacional para la Educación de los Adultos

ISI

Import Substitution Industrialization

JPL

Justice and Peace Law

KWS

Keynesian Welfare State

LOTSJ

Ley Orgánica del Tribunal Supremo de Justicia

MAS

Movimiento al Socialismo

MBR-200

Movimiento Bolivariano Revolucionario 200

MC

Monetary Consensus

MDG

Millennium Development Goals

MDRI

Multilateral Debt Relief Initiative

MNC

Multinational Corporation

MNER

National Movement of Recovered Companies

MNFRT

National Movement of Manufacturing Plants Recovered for their Workers

MVR

Movimiento V República

NAFTA

North American Free Trade Agreement

NGO

Nongovernmental Organization

NUDES

Nuclei of endogenous development

OAS

Organization of American States

OBIE

Observatorio Boliviano de Industrias Extractivas

OECD

Organization for Economic Co-operation and Development

OPEC

Organization of the Petroleum Exporting Countries

PAN

Partido Acción Nacional

PDVSA

Petróleos de Venezuela, SA

PP

Polo Patriótico

PPT

Patria para Todos

Abbreviations

PRD

Partido Revolución Democrática

PRGF

Poverty Reduction Growth Facility

PRSC

Poverty Reduction Support Credit

PRSP

Poverty Reduction Strategy Paper

PRT

Partido Revolucionario de los Trabajadores

PRWORA

Personal Responsibility and World Opportunity Reconciliation Act

PSD

Private Sector Development

PWC

Post–Washington Consensus

SAP

Structural Adjustment Programs

SILC

Severely Indebted Low-Income Countries

SO

Service Organizations

SOE

State-Owned Enterprise

TANF

Temporary Aid to Needy Families

TNC

Transnational Corporation

UDAPE

Unidad de Análisis de Politicas Sociales y Económicas

UDHR

Universal Declaration of Human Rights

UN

United Nations

UNESCO

United Nations Educational, Scientific and Cultural Organization

UNIREN

Unit for the Renegotiation and Analysis of Public Sector Contracts

UP

Unión Patriótica

WB

World Bank

WC

Washington Consensus

WEED

Welwirschaft, Okologie and Entwicklung

WSF

World Social Forums

WTO

World Trade Organization

YPFB

Yacimientos Petrolíferos Fiscales Bolivianos

ZRC

Zones of Rehabilitation and Consolidation

xi

Notes on Contributors Ulrich Brand studied political science and economics in Frankfurt am Main, Buenos Aires, and Berlin and previously taught at the Universities of Kassel, Rutgers-Newark and at Bremen University for Applied Sciences. He is currently Professor of International Politics at the Institute of Political Science at Vienna University, Austria. His recent publications include Fit für den Postfordismus? Theoretisch-politische Perspektiven des Regulationsansatzes [Fit for Post-Fordism? Theoretical-political Perspectives of Regulation Theory] (Westfälisches Dampfboot 2003), which he coedited with Werner Raza, and Conflicts in Global Environmental Regulation and the Internationalization of the State (Routledge 2008), coauthored with Christoph Görg, Joachim Hirsch and Markus Wissen. Adam Davidson-Harden (PhD, Education, the University of Western Ontario) is a Social Sciences and Humanities Research Council of Canada (SSHRC) postdoctoral fellow at the Faculty of Education, Queen’s University. His principal research focus is on the political economy of education in the era of neoliberal hegemony. He is also active in research on broader themes of equity and social justice with respect to issues of water, international trade, international development and peace building. Elizabeth Friesen is a doctoral candidate at Carleton University in Ottawa, Canada. Her research interests revolve around the structural power of market relations and the role of social and normative forces in supporting, as well as contesting, the rules which govern international economic relations. Her recent work includes a study of the campaign for debt cancellation and reform of the international financial system. At present, she is researching the World Economic Forum. Lois Harder is an associate professor of political science at the University of Alberta. Her current research considers the politics of intimate life in Canada and the United States. She has published on this subject in Social Politics and Signs. She has also published various journal articles and book chapters on neoliberalism and feminist politics. She is the coeditor, coauthor and author of three books on politics in Canada and North America. xii

Notes on Contributors xiii

Mary Hawkesworth is Professor of Women’s and Gender Studies and a member of the Graduate Faculty in Political Science at Rutgers University. Her teaching and research interests include feminist theory, women and politics, contemporary political philosophy, philosophy of science and social policy. Her most recent works include War & Terror: Feminist Perspectives (2008), Globalization and Feminist Activism (2006) and Feminist Inquiry: From Political Conviction to Methodological Innovation (2006). She is currently serving as the Editor of Signs: Journal of Women in Culture and Society. Paul Alexander Haslam is an assistant professor in the School of International Development and Global Studies at the University of Ottawa, Canada. His current research focuses on state-firm relations in Latin America, the international regulation of foreign direct investment, corporate social responsibility and the political economy of institutional reform in the Americas. He has recently coedited Governing the Americas: Assessing Multilateral Institutions (Lynne Rienner 2007) and Introduction to International Development: Approaches, Actors and Issues (Oxford University Press 2008). Pablo Heidrich is a senior researcher on trade and development at the North-South Institute in Ottawa, Canada. He previously worked at the Latin American Faculty of Social Sciences in Buenos Aires. His current research focuses on the political economy of trade and finance, energy integration in the Americas and regional trade agreements. His recent publications have appeared in Foreign Affairs (in Spanish), and in various books, such as América Latina 2010, and Economía Política de la Integración Energética y de Infraestructura, edited by Biblos, in Argentina. Lucy Luccisano is Associate Professor of Sociology at Wilfrid Laurier University where she teaches in the areas of poverty, gender and international development. Her current research focuses on Mexico’s conditional cash transfer program, Progresa/Oportunidades, examining the policy’s impact on regulation, subjectivity, mothering and citizenship. She has also compared Canadian, U.S. and Mexican welfare-reform and antipoverty policies. Her recent articles have appeared in Politics and Policy, Canadian Journal of Latin American and Caribbean Studies and Journal of Poverty. Laura Macdonald is a professor in the Department of Political Science and the Institute of Political Economy at Carleton University, Chair of the Department of Political Science and a codirector of the Center on North American Politics and Society. She is the author of Supporting Civil Society

xiv Notes on Contributors

(Macmillan/St. Martin’s 1997) and coauthor of Women, Democracy, and Globalization in North America: A Comparative Study (Palgrave Macmillan 2006). Her current research covers such issues as citizenship struggles in Latin America, the political impact of the North American Free Trade Agreement (NAFTA) on human rights and democracy in the three member states and social citizenship in North America. Rianne Mahon is Director of the Institute of Political Economy and a member of the School of Public Policy and Administration and the Department of Sociology and Anthropology at Carleton University in Ottawa, Canada. While her earlier work focused on unions and labor market restructuring in Canada and Sweden, over the past decade she has produced numerous articles and book chapters on the politics of child care. Her new research project looks at the OECD’s “reconciliation of work and family” agenda and “policy learning” in Canada, Korea and Sweden. Judith Meltzer is a doctoral candidate and Instructor in the Department of Political Science at Carleton University. She holds an MA in international affairs from the Norman Paterson School of International Affairs and an Honours BA in anthropology from McGill University. She was formerly Senior Analyst for the Andean Region at the Canadian Foundation for the Americas, and a research officer at the International Development Research Centre (IDRC). She is the author of numerous research and policy papers on political and social development in the Andes, including coeditor of the book Elusive Peace: International, National and Local Dimensions of the Conflict in Colombia (Palgrave Macmillan 2005). Her current research focuses on citizenship and social accountability in Latin America. Cristina Rojas is a professor in the Norman Paterson School of International Affairs at Carleton University, Ottawa. Her most recent books are Civilization and Violence: Regimes of Representation in NineteenthCentury Colombia (University of Minnesota Press 2002) and the coedited collection Elusive Peace: International, National and Local Dimensions of Conflict in Colombia (Palgrave/St. Martin Press 2005). Her articles have been published in Globalizations, Canadian Journal of Development Studies, Revista Venezolana de Economía y Ciencias Sociales, Review of International Political Economy and Alternatives. Arne Ruckert is a postdoctoral fellow in the School of Political Studies at the University of Ottawa, Canada. He has published widely on the international financial institutions (IFIs) and their evolving aid paradigm, and is currently undertaking research on the impacts of Poverty Reduction Strategies and the role of the IFIs in transnational governance.

Notes on Contributors xv

His recent work has appeared in Studies in Political Economy, the Canadian Journal of Development Studies and Labour, Capital, and Society. Nicola Sekler obtained a Master of Arts degree in Global Political Economy at the University of Kassel (Germany) in 2006. She is currently working, as part of her PhD research, on post-neoliberal concepts and strategies of social movements in Argentina. Since June 2008, she is an academic staff member at the University of Vienna in the Department of Political Science. Her main research interests are global political economy, hegemony, civil society, social movements and Latin America. Her most recent publication is Solidarische Ökonomie, which she coedited with Elmar Altvater (Hamburg 2006). Marcus Taylor is an assistant professor in the department of Global Development Studies, Queen’s University, Kingston, Canada. He has worked on a range of issues related to the political economy of development, including neoliberalism in Latin America and the changing theory and practice of the World Bank. He is the author of From Pinochet to the ‘Third Way’: Neoliberalism and Social Transformation in Chile (Pluto 2006) and the editor of Global Economy Contested: Power and Conflict Across the International Division of Labour (Routledge 2008). Diana Tussie heads the Department of International Relations at FLACSO/Argentina and directs the Latin American Trade Network (LATN). Her recent books include The Politics of Trade: Research and Knowledge in Trade Negotiations (Martinus Nijhoff Publishers, Forthcoming); Trade Negotiations in Latin America: Problems and Prospect (Palgrave Macmillan 2003); El ALCA y las Cumbres de las Américas:¿Una nueva relación públicoprivada? (with M. Botto) (Flacso Sede Academica de Argentina 2003). She has also recently served as a junior secretary for trade negotiations in Argentina. Glenda Wall is Associate Professor of sociology at Wilfrid Laurier University where she teaches family sociology. Her current research centers on cultural constructions and experiences of motherhood, fatherhood and childhood. Her recent articles have appeared in Gender & Society and Atlantis: A Women’s Studies Journal. Jeffery R. Webber is a PhD candidate in political science at the University of Toronto. His most recent articles on the political economy of Latin America have appeared in Historical Materialism, Latin American Perspectives, Monthly Review, Third World Quarterly, Latin American Politics and Society, Socialist Studies/Études Socialistes and Review of Radical Political Economics.

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Post-Neoliberalism in the Americas: An Introduction Laura Macdonald and Arne Ruckert

Introduction Future historians may well look back upon the beginning of the twentyfirst century as a major turning point in the social and economic history of the Americas. In quick succession, left-wing political parties were elected to office in the majority of Latin American countries, and close to 60 percent of Latin America’s total population is currently governed by leaders who consider themselves to be on the left of the political spectrum (Arnson 2007b: 3). This shift to the left started when, in Venezuela, Hugo Chávez ascended to power in a landslide victory in 1998 with a strong commitment to progressive social policy and the promise of developing a “new socialism for the 21st century.” This was followed by the election of Ricardo Lagos, leader of the Socialist Party of Chile in 2000, and the electoral victory of Lula da Silva’s Worker’s Party in Brazil in 2002, both promising to address the dismal situation of their countries’ poor and to modify prevailing neoliberal policies. In South America, Argentina and Bolivia followed suit, with Nestor Kirchner ascending to power in Argentina in 2003 and Evo Morales, leader of the first indigenous socialist movement in Bolivia—El Movimiento al Socialismo (MAS)—entering office on an anti-neoliberal platform in 2005. However, the critique of aspects of the neoliberal legacy is not limited to the southern part of the hemisphere. The concept of a “third way” first emerged in the North, among governments such as those of Tony Blair in the United Kingdom, Bill Clinton in the United States, and Jean Chrétien in Canada. It can be argued that the less radical New Left governments in South America have much in common with the attempts of these pragmatic reformers to redeem neoliberalism by retaining the effort on inflation targeting and deficit cutting, while experimenting 1

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with progressive social policy alternatives. In the United States, the election (and reelection) of George W. Bush signified a return to hard-line neoliberalism, but recent debates among Democratic contenders for Congress suggest this policy stance may soon be abandoned. Canada and Mexico are also currently governed by convinced neoliberals, but have retained some degree of policy autonomy from the U.S. regime. In consequence, the United States in the Bush years was increasingly isolated in the hemisphere, an isolation that was accentuated by the U.S. decision under Bush to go to war in Iraq. These recent developments suggest that after two decades of neoliberal hegemony and profound institutional restructuring, various cracks have recently surfaced in the neoliberal edifice, and neoliberal restructuring processes have been transformed in both North and South as a result of the evident shortcomings in the neoliberal model. This volume provides an overview of recent and ongoing policy trends and transformations in the Americas. We pose the question of whether the widespread critiques of neoliberalism and the shift to the left in the southern part of the hemisphere represent the “death of neoliberalism,” or whether neoliberalism has transmogrified into a new (post-neoliberal) body. The book brings together a diverse group of scholars from different geographical and theoretical backgrounds to interrogate emerging alternatives to neoliberal policy practice in the Americas; to highlight some of the inherent contradictions and limitations of post-neoliberal policy; and to discuss whether these unfolding post-neoliberal practices represent a genuine break with the neoliberal political era, or merely amount to a reconstitution and rearticulation of neoliberal policy in a somewhat gentler and kinder form. While individual authors differ in their evaluation of the nature and extent of change, the coeditors propose the term “post-neoliberalism” to refer to the range of policy experiments currently occurring throughout the Americas. We use this term to emphasize the discontinuity within continuity in the policy practices of many progressive governments. The book also represents an original and unique contribution in the way it brings together parallel policy shifts in both the northern industrialized states and the southern developing states within the Americas, highlighting the ways in which policy communities are connected and processes of political learning are taking place across the North-South divide. This introduction begins with a brief discussion of the ascendance of neoliberalism in the Americas and neoliberalism’s failure to deliver on its multiple promises, before turning to the growing resistance to neoliberal policies. Next, it discusses the ways in which governments

Laura Macdonald and Arne Ruckert 3

have responded to the complex failures of neoliberalism, in particular in the realm of social policy, through the emergence of a “new social agenda” of inclusion ( Jayasuriya 2006). The concept of postneoliberalism is introduced in order to conceptually grasp the elements of continuity and discontinuity in many of the policy responses emerging as part of the recent transformations of neoliberalism in the Americas.

Neoliberalism and its critics While conservative intellectuals had for long launched sustained attacks against the welfare state and the Keynesian conceptual edifice that supported state interventions into the economy (see Hayek 1960), conservative governments started to incrementally introduce neoliberal policies to roll back the state, liberalize and deregulate the economy, and increase the size of the private sector in the early 1980s. The U.S. government under President Ronald Reagan (1981–9) was the first to adopt these policies in the Americas, and the Canadian government followed suit, with deepest cuts occurring in the 1990s. Neoliberal policies were exported to Latin America in the aftermath of the debt crisis in 1982 through the implementation of structural adjustment programs (SAPs) directly overseen by the World Bank and the International Monetary Fund (IMF). This period thus saw a profound restructuring of the political economy of the Americas, characterized by a shift to neoliberalism. However, the term “neoliberalism” has been subject to intense academic debate since its appearance in the Americas in the early 1980s, and little consensus has been reached on how to define neoliberalism. For some, neoliberalism can be reduced to a set of economic policies, also known as the “Washington Consensus,” which crystallized in the 1980s in response to the crisis of Keynesianism. This consensus consists of “the ten neoliberal commandments” of fiscal discipline, reorientation of public expenditures, tax reform, financial liberalization, unified and competitive exchange rates, trade liberalization, openness to foreign direct investment (FDI), privatization, deregulation, and secure property rights (Williamson 1990). For others, however, neoliberalism is much more than a set of economic policies. As David Harvey (2005: 2) maintains, neoliberalism is “in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong property rights, free markets, and

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free trade.” Still others claim that neoliberalism should rather be seen as a new form of social rule under which elite class power and the profitability of capital have been successfully restored (Panitch and Gindin 2004). What is certain is that neoliberalism is more than a set of macroeconomic policies as it implies deep structural and societal transformations, in which the state is a key agent (see the chapters by Taylor and Hawkesworth in this volume). Opinions also diverge widely over whether neoliberalism has been successful in its goal of greasing the wheels of the world economy. Profitability has been largely restored in the developed world and economic growth rates have been respectable in North America under the neoliberal policy regime (Panitch and Gindin 2004), but growing U.S. debt under Bush means that the neoliberal model may increasingly become discredited in the United States as well. At the same time, many developing countries have experienced historically low rates of economic growth under neoliberal policies. Even the most ardent supporters of neoliberalism now concede that growth has been below expectations in many parts of the developing world (World Bank 2001). During the reign of neoliberalism from 1980 to 1998, overall Latin American GDP grew by a disappointing 6 percent, compared to a staggering 75 percent in the period from 1960 to 1980 (Weisbrot et al. 2000). Thus, Latin America under neoliberal rule has lagged far behind its economic performance of the period of 1960–80, under the now largely discredited model of import substitution industrialization. Moreover, much of neoliberal accumulation is driven by historically unprecedented high levels of private indebtedness which raises serious question about the sustainability of the neoliberal accumulation model, especially in light of the unfolding credit crisis in the United States. As well, poverty levels have not receded noticeably in the Americas. In Latin America and the Caribbean, the rate of poverty increased from 40 percent in 1980 to 48 percent in 1990, before falling back to 40 percent by 2005 (ECLAC 2006d). This led the Economic Commission for Latin America and the Caribbean (ECLAC) to comment that “the region has taken 25 years to reduce poverty to 1980 levels” (ECLAC 2006d: 59–60). The absolute numbers of people living under conditions of poverty and extreme poverty, at 205 million and 79 million respectively, have actually increased since 1980 (Daudelin 2007: 5). At the same time, there has been no progress on achieving a more equal distribution of income and wealth, and Latin America remains the most unequal region in the world (Moreno-Brid and Paunovic 2006: 2). Thus, it is not surprising that Latin American citizens increasingly view neoliberalism as a


discredited dogma used by the rich to promote their own interests, while blaming “neoliberal economic policies for slow growth, no improvement in poverty rates, and sparse investment in human capital through education and health” (LeoGrande 2005: 32). In addition, in both North and South, feminist critics of neoliberalism have charged that the policies adopted in the 1980s and 1990s have a clear gender dimension. A fundamental flaw of the economic calculus carried out by neoliberal advocates is that it fails to take into account women’s unpaid labor. As a result, the policies of economic retrenchment adopted by governments throughout the hemisphere thrust societies into crisis, as women, already overburdened, were forced to take on increasing responsibility for the costs of social reproduction. As Diane Elson suggests, cuts in public spending and social programs increase women’s unpaid household labor, and tend to increase the existing social and economic inequalities between men and women (Elson 1995). Feminists also note that as a response to this critique, gender relations figure prominently in the post–Washington Consensus policies of the World Bank; unfortunately, the new policies associated with the post–Washington Consensus do not necessarily favor women or result in a clear reduction in inequalities between men and women (Bedford 2007; Bergeron 2003). The dismal economic performance of much of the developing world under neoliberal influence and the negative social consequences and severe distributional implications in both the North and the South of the hemisphere are key factors responsible for the decline of neoliberalism. However, another fundamental element has been the mounting protests against neoliberal globalization and the vocal opposition to neoliberal policies from diverse social movements. Protests against neoliberal policy in the developing world began to emerge in the early 1980s, such as in the famous anti-IMF riots. In Canada, a diverse, multisectoral alliance emerged in the late 1980s in opposition to the Free Trade Agreement with the United States. This movement gained allies opposed to the negotiation of the North American Free Trade Agreement (NAFTA) in both the United States and Mexico in the early 1990s (Ayres 1998). While both of these phases of opposition to free trade were unsuccessful in preventing the negotiation of the agreements, they created the basis for the emergence of later, more globally oriented, protests which garnered tremendous media attention in the late 1990s. The massive protests at the World Trade Organization (WTO) meeting in Seattle in 1999 initiated a series of protests against neoliberal globalization and for social justice in the global economy. These protests

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followed the innumerable struggles in Latin America against the policies of privatization and liberalization which are increasingly led by indigenous social movements (Cameron 2007). As well, social movement opposition to the Free Trade Area of the Americas (FTAA) was instrumental in the derailing of that initiative to create a hemisphere-wide free trade area (Ayres and Macdonald 2006). Thus, both within individual countries and across borders, contentious political actors have continued to oppose many elements of neoliberal policy, and to push their governments to address the growing gaps between rich and poor, as well as the threats to the environment associated with free trade. In the countries of Latin America, the emergence of the New Left must be understood in this context of constructive engagement with failed neoliberal policies by counterhegemonic social forces, which ultimately translated into a search for progressive policy alternatives among New Left governments. In response to the crisis of neoliberalism, the New Left has not, however, presented a coherent alternative to neoliberalism, but rather developed a very diverse and heterogeneous set of post-neoliberal policies and strategies (Cameron 2007: 2).

Post-neoliberalism: Discontinuity within continuity While there is a substantive literature on the emergence of neoliberalism in the Americas and a growing body of academic work documenting the contentious opposition to neoliberal policies, the unfolding of post-neoliberal practices in the Americas has just started to attract academic attention. Most prominently, Jorge Castañeda has suggested that there are two distinct variants of leftist post-neoliberal regimes: on the one hand, the “bad” populist kind of Hugo Chávez and other more “radical” leaders and, on the other, the social democratic kind of Lula da Silva and other more “responsible” leaders (Castañeda 2006). While it is true that there are significant divergences between different New Left governments in the hemisphere, we nevertheless suggest that we can speak of a generalized post-neoliberal turn. Before, however, outlining what we mean by post-neoliberalism, perhaps it is best to first demarcate what post-neoliberalism is not: postneoliberalism should not be understood as an era “after” neoliberalism. Rather, we suggest that the post-neoliberal era is characterized mainly by a search for progressive policy alternatives arising out of the many contradictions of neoliberalism. These progressive alternatives contain remnants of the previous neoliberal model, as neoliberalism does not


suddenly disappear. At the same time, post-neoliberal policies emerge from within neoliberalism, in reaction to many of the shortcomings and contradictions of neoliberal forms of governance. Thus, the concept of post-neoliberalism speaks to the idea that neoliberal practices are at the same time preserved and overcome; neoliberal policy has lost its dominance but is not annihilated. More concretely, post-neoliberalism is meant to capture the discontinuity within the continuity of policies that are currently implemented by a wide range of governments in the Americas. The continuity lies predominantly in the realm of macroeconomic policy where most countries, with the exception of perhaps Venezuela, continue to adhere to the well-known macroeconomic core of neoliberal prescriptions, such as moderate inflation rates, balanced budgets, and trade liberalization (see the chapters by Heidrich and Tussie, Webber, and Ruckert in this volume). As widely noted, New Left governments distance themselves from the irresponsible and populist public-spending experiments that characterized previous generations of left leaders in the region (Moreno-Bri and Paunovic 2006: 1). The main elements of discontinuity which unite this emerging postneoliberal group are the governments’ willingness to use state power to stimulate the economy and correct widespread market failures; to substantially deepen democracy by engaging citizens more directly; to use state institutions to reduce social inequalities through redistributive measures; and to renationalize some parts of the economy, especially in the energy and minerals sector (Roberts et al. 2007: 10). Other key elements are South-South trade agreements, such as the Alternativa Bolivariana para los Pueblos de Nuestra América (ALBA—the Bolivarian Alternative for the Americas), that counteract the FTAA and promote regional integration based on an anti-neoliberal and anti-imperialist logic, and the launching of a Latin American development bank, El Banco del Sur, to free financially dependent countries in the hemisphere from the shackles of the international financial institutions (IFIs). Moreover, many governments see an increased role for themselves in the social sphere through the activation of the capacities of their citizens, the provision of human and social capital, the subsidization of consumption by the poor, and other social investments (see the chapters by Macdonald and Mahon, and Luccisano and Wall in this volume). These new social investments are aimed at making it easier for citizens to be included in and benefit from capitalist market transactions. For example, governments have recently acknowledged the need to play a stronger role in the generation of human capital. Investments

8


in people by “the social investment state” are increasingly touted as garnering significant social and economic returns in the future ( Jenson 2006). Governments in the developed world have become more actively engaged in providing opportunities and enabling the development of individual capabilities. At the same time, developing countries with strong IFI support have similarly emphasized the provision of health care, education, and basic social safety nets as important sources for the formation of human capital, which, in turn, is seen as a key factor in jump-starting developing country economies. However, in contrast with the Keynesian welfare era, these postneoliberal interventions attempt to produce “active” (labor market participating) rather than “passive” welfare-dependent citizens, and the interventions are framed within the boundaries of the market model, and tend not to question the commodification of all aspects of life. Moreover, social investments are generally highly targeted (toward the poor) rather than universalistic, as in the case of a model based on social citizenship (Marshall 1950). Thus, in post-neoliberal policy practice, the social has returned to the agenda of the state as a key site for state engineering, and new ways of connecting the market with the social sphere are being proposed, within the parameters of “sound macroeconomic policy.” This creates a new post-neoliberal terrain of engagement for social issues that arguably breaks with both the Keynesian decommodification paradigm and the asocial neoliberal market model ( Jayasuriya 2006). Nevertheless we want to refrain from providing a narrow definition of post-neoliberalism, since the term can refer to a host of variegated social practices and discourses that strategically engage with contested forms of neoliberal governance and have not yet crystallized into a clearly definable body of material practices, and thus do not present a coherent alternative to neoliberalism. Indeed, a major element of postneoliberalism is governments’ and social actors’ rejection of the policy homogeneity imposed in the Washington Consensus era (see Brand and Sekler in this volume). Most governments are experimenting in an idiosyncratic manner with different ways of reconnecting the social with the market sphere. What is more, while neoliberalism is undoubtedly going through a period of transformation in the northern parts of the hemisphere, the extent to which we can speak of post-neoliberalism in North America, in contrast with Central and South America, is much more limited. In particular, as discussed in Mary Hawkesworth’s contribution to this volume, the United States, as the world’s hegemonic power, has been a leading actor promoting neoliberalism in the region.


Successive U.S. governments, particularly under George W. Bush, have remained strongly committed intellectually to the neoliberal paradigm. Nevertheless policy practice in the United States has not always conformed to neoliberal prescriptions; this is especially the case with the amassing of huge amounts of debt to support a now unpopular war in Iraq, which directly contradicts the policy advice the United States has promoted so vigorously elsewhere in the hemisphere. As discussed in the chapters by Mahon and Macdonald, and Luccisano and Wall in this volume, Canada and Mexico have also adopted some heterodox policies that depart from hard-line neoliberalism. As discussed in these chapters, both Canada and Mexico have moved beyond the cutting and slashing of the early neoliberal period, to adopt elements of “active” social policy, designed to cultivate both human and social capital. This shift is a result of a recognition in both countries that their competitiveness and social harmony were threatened by rising poverty levels resulting from neoliberal policies of the late 1980s and early 1990s. There have been numerous isolated attempts to conceptually grasp these modifications in neoliberal governance in the northern parts of the hemisphere, such as Peck and Tickell’s concept of “rollout neoliberalism” (2002) and Craig and Porter’s notion of “inclusive neoliberalism” (2004 and 2006). Both concepts suggest that neoliberal practices have entered a new phase of more socially interventionist and ameliorative forms, so that those marginalized and dispossessed by the processes of neoliberal reform in the 1980s can better be regulated and controlled (Graefe 2005). Thus, following the rolling back of state institutions under earlier forms of neoliberalism, we are currently witnessing the development of a “roll-out neoliberalism” that seeks to stabilize and further entrench neoliberalism through the introduction of new social institutions, policies, and governmentalities (Peck and Tickell 2002). However, to what extent these transformations will lead toward a generalized post-neoliberal turn in the North remains to be seen. An important continuity between neoliberalism and post-neoliberalism lies in the way in which the state is actively engaged in the construction of political identities and subjects under both policy regimes. Though neoliberalism is often identified with the retreat and withdrawal of the state from the allocation of economic goods and greater individual freedoms, in reality, neoliberal states have always been actively involved in the construction of identities and subjectivities and the molding of bodies and minds. As both Mary Hawkesworth and Cristina Rojas document in this volume, the neoliberal system of governance has been far more interventionist than the notions of laissez-faire or

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the night-watchman state might suggest. Similarly, post-neoliberalism consists of new forms of deep conditioning and social engineering that attempt to create capable market participants by way of strengthening the entrepreneurial skills and personal capabilities of citizens so as to successfully integrate them into the marketplace. These processes also have clear gender dimensions, as the chapters by Mahon and Macdonald, Wall and Luccisano, and Harder in this volume display. While the policies of neoliberalism were superficially gender blind, in practice the transfer of the responsibilities of social reproduction from the public to the private sphere entailed the increase of the burden on women (Elson 1995). In contrast, and at times in direct response to feminist critiques, post-neoliberal policies are often explicitly gender conscious (Bedford 2007). Nevertheless this new attention to the role of women, the family, and the community, in social reproduction, does not necessarily have liberatory implications for those involved. As Luccisano and Wall note in the case of conditional cash transfer programs in Mexico, “being included” can translate into higher workloads and increased responsibilities for women, while children and men reap most of the benefits from the programs. Finally, it should be noted that post-neoliberal era has coincided with the decline of the United States’ historic hegemony in the southern part of the hemisphere. After 9/11, Canada and Mexico have been increasingly integrated into U.S. economic and security agendas, within what is sometimes called a North American security perimeter. At the same time, though, under Bush, Washington has paid little attention to Latin America. While, globally, U.S. hegemony has declined with the rise of other powers such as China, Russia, India, and Brazil, Latin American states have grown increasingly independent of U.S. power and influence. In particular, Venezuela’s rising oil wealth plays an important role in reducing U.S. financial power in the region. The decline in U.S. power in the region has thus created a geopolitical environment in which policy diversity has flourished.

Organization of the book: Part I—conceptual and theoretical issues The book is divided into three sections. After this introduction, the first section of the book lays out some of the conceptual debates concerning neoliberalism and the shift to post-neoliberalism in the Americas, and discusses some of the general trends in global and regional politics that have led to this new phase. In Chapter 2, Marcus Taylor takes issue with


the editors’ claim that recent trends do mark a significant new phase in capitalist development in the region. He acknowledges that recent policy practices such as the new focus on institution building, the regulatory role of the state, and the empowerment of the poor do represent a significant shift, but argues that they do not signify a fundamental break from the objectives and internal contradictions of the neoliberal project. Instead, neoliberalism, understood as a far-reaching project of social engineering, is now engaging in an even more far-reaching process of institutional restructuring in order to preserve and maintain the neoliberal project in the face of challenges that have emerged over recent decades. Echoing themes found elsewhere in the book, Taylor notes that the creation of institutions during the period of neoliberal restructuring created a strong path-dependent dynamic that significantly limited the capacity of later, center-left regimes, to enact fundamental reform away from neoliberal principles. As well, while the World Bank has adapted some of its central precepts in light of the extensive failures of the neoliberal agenda, the agency remains wedded to many of the basic assumptions of neoliberalism. As a result, in Taylor’s view, the current phase is more a culmination of the neoliberal project than a distinct new phase. In Chapter 3, Pablo Heidrich and Diana Tussie survey the range of New Left governments that have been elected in recent years in Latin America under the post-neoliberal shift. Their chapter looks for the commonalities and differences between various regimes in the area of economic policy, and examines how different governments seek to handle the contradictions inherited from the neoliberal era. New Left governments were elected on ideals and values inherited from the populist era, but, according to Heidrich and Tussie, the policies they adopted in order to attain these aspirations have been transformed as a result of changes in Latin America’s insertion into the global economy during the neoliberal era, the political learning that occurred when many of these parties gained experience governing at the municipal level, and their newfound commitment to electoral politics. The main policy shift is a strong commitment to fiscal conservatism, and a desire to show the public that the left can be not only more socially sensitive but also more financially responsible. While all of the post-neoliberal governments share these broad traits, there is also a great deal of variation in the policies adapted by specific governments. Heidrich and Tussie thus distinguish between those governments “perceived” as leftist, such as Kirchner in Argentina, those “self-defined” as leftist, such as Lagos and Bachelet in Chile, Lula in Brazil, and Tabaré Vázquez in Uruguay, and

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those “claiming to be true leftists,” such as Chávez in Venezuela and Morales in Bolivia. Overall, apart from Chávez, these governments’ policy choices are marked by a high level of economic and political pragmatism that distinguishes them from their populist forefathers, and which may shelter them from some of the turbulence of that period, but that may also act as a limiting force on the achievement of greater social and political sustainability. While Heidrich and Tussie’s chapter focuses on the decision making of New Left leaders, the next two chapters turn to evaluating the impact of an upsurge of popular organizing, both locally and globally, that eroded the power of neoliberalism and led to the eventual turn to post-neoliberalism in the Americas. Chapter 4, by Ulrich Brand and Nicola Sekler, lays out a neo-Gramscian perspective on the changes that have emerged in the relationship between state, market, and civil society, over the last several decades. Following Gramsci, they argue that the shift from one system to another usually does not take the form of a sudden breakdown, but that “other worlds” come into being over a long period of time, through a molecular process of destabilization of hegemony and the emergence of an alternative common sense. Also, their approach implies that the outcome of these struggles will not be a unified monolithic post-neoliberal project, but rather an open and contradictory process, involving diverse actors with contradictory objectives and practices. The shift from neoliberalism to post-neoliberalism is therefore necessarily messy, contingent, and protracted. Brand and Sekler draw upon examples of civil society struggles in Argentina, Venezuela, and Mexico to illustrate their arguments. The piqueteros in Argentina, the cooperatives in Venezuela, and the Zapatistas in Mexico display different methods of struggle, objectives, and relationships with the state, but all of them emphasize the importance of autonomy. The struggles of social movements to attain political and social citizenship rights have played a fundamental role in the emergence of the postneoliberal alternative in Latin America. While these types of struggles were occurring at the grassroots level across the Americas, other forms of dissent from neoliberalism were emerging at the transnational level. In Chapter 5, Elizabeth Friesen lays out the battle that has occurred over international finance and the practices of the IFIs, both in the form of transnational civil society organization (CSO) alliances and in the corridors of the Bretton Woods institutions themselves. She documents the apparent shift away from the Washington Consensus among the IFIs that has emerged from the accumulation of evidence about the negative social effects of IFI policy.


She argues that CSOs have played a crucial role in shifting attitudes and influencing policy at both national and transnational levels, elevating normative concerns, to make human rights a legitimate subject of discussion in the previously exclusively technocratic domain of global finance. Her chapter focuses on the emergence of a global movement against the debt that brought together a wide range of actors opposed to neoliberal policies and advocating economic justice. As well, she discusses the emergence of cracks in the neoliberal edifice after the Asian financial crisis brought to light concerns about the failure of the Washington Consensus to achieve its stated goal, financial stability. These parallel movements (inside and outside the IFIs) have achieved considerable progress in the canceling or rescheduling of debts, and have contributed to the discrediting of neoliberal precepts.

Part II—post-neoliberalism in the Americas The next section of the book provides a series of case studies to explore in greater detail the nature of post-neoliberal regimes in the Americas. This section focuses on examples only from Latin America, since it is here that we have seen post-neoliberal regimes emerge in recent years. In Chapter 6, Judy Meltzer takes up the controversial case of Venezuela, where President Hugo Chávez’s efforts to establish a “21st century socialist revolution” financed by soaring oil revenues, represents the apparently clearest case of post-neoliberalism to date. Meltzer’s chapter aims to move beyond the demonization of Chávez by the United States and some actors in the region to examine in greater detail the roots of the Chávez phenomenon and some of the contradictions in his policies. Consistent with the argument of the editors, she views even the Venezuelan case as not a clear-cut break with neoliberalism but rather as containing some remnants of the neoliberal agenda. In Chapter 7, Jeffery Webber analyzes the case of Bolivia under the leadership of Evo Morales. Webber’s argument is similar to that of Taylor’s, since he casts doubt on the view that the Bolivian administration represents a radical break with neoliberal capitalism toward postneoliberalism. The Morales government took power in January 2006 after years of protest against the neoliberal policies of the previous administration, and Morales heads a left-indigenous party closely tied with radical social movements in his country. However, in a detailed examination of the hydrocarbons industry, Webber argues that the policies of the new administration show considerable continuity with those of earlier neoliberal regimes. He argues that the Morales regime has

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announced social-spending policies contingent on higher gas revenues that, if enacted, could shift Bolivia closer to a post-neoliberal model, but current social-spending levels are quite austere, despite significant current levels of economic growth. This element of state pragmatism among New Left governments is also clear in Paul Haslam’s chapter on policies on FDI in Argentina and Chile. Haslam notes that FDI policy is a crucial element for evaluation of state behavior because of the centrality of liberalization of investment in the Washington Consensus, and the concerns traditionally raised by more statist approaches about the impact of unregulated inflows of investment on national economies. Policies in both Argentina and Chile show considerable discontinuity from the neoliberal era, increasing pressure on foreign investors to bring investment more into line with national priorities. He does see in both cases considerable continuity with neoliberalism as a result of the path dependency of national legislation in both countries inherited from the neoliberal period. Nevertheless, according to Haslam, there has been a significant change in policymakers’ perspectives on regulation of foreign companies, as well as in foreign firms’ increased vulnerability as a result of the obsolescing bargaining model, that indicate a more significant transformation away from neoliberalism than the relative pragmatism of policy reform to date might indicate. Chapter 8, by Arne Ruckert, provides an evaluation of the move to post-neoliberalism in the Americas by examining the poverty reduction strategy papers (PRSPs) that have been adopted in the most highly indebted states of the region under the auspices of the World Bank. The negotiation of PRSPs has been a precondition of receipt of financial support toward debt reduction in these countries. Ruckert suggests that the World Bank has attempted to respond to many of the charges raised by critics of the Washington Consensus through the introduction of the PRSP approach. The PRSP approach purports to involve greater emphasis on poverty reduction, country ownership, and inclusion of civil society actors, all weaknesses identified by IFI critics. Ruckert argues that the PRSP strategy does represent a significant shift toward the adoption of “inclusive neoliberal” (Craig and Porter 2004) techniques to manage the legitimacy crisis of neoliberalism. By examining the specific case of Nicaragua (primarily during the period prior to the Sandinistas’s reelection), Ruckert surveys both the continuities and discontinuities between the Washington Consensus and post–Washington Consensus periods. He argues that contrary to World Bank rhetoric about a shift to “country ownership,” policy conditionality has actually increased in


recent years. However, there is increased (although still limited) emphasis on social spending and civil society participation. The last chapter in this section, by Adam Davidson-Harden, takes this critique of PRSP strategy further by examining the educational policies that have been promoted by IFIs as part of the PRSP process. DavidsonHarden argues that although the IFIs have placed increased emphasis on education in the post–Washington Consensus period, this has involved a persistent attachment to market mechanisms and the reframing of the citizen as the “consumer of educational services,” in a manner promoted by economistic human capital and public choice theories. This approach thus further promotes the disembedding of the market from society, and diverges from more socially embedded approaches to education that view citizens as bearers of social and economic rights that states are obliged to promote. Thus, continued restricted spending on investment and preference for “privatized” and “marketized” modes of educational delivery continue to limit progress toward improved educational achievement in the region.

Part III—The transformation of neoliberalism in the Americas Finally, the last section of the book examines the persistence of neoliberalism in the Americas, particularly in the countries of North America. This section underlines the point that despite the shift toward New Left or post-neoliberal governance in many countries, neoliberalism retains a hold over many countries. Nevertheless even in these countries, we see the emergence of new forms of neoliberalism, or cracks in neoliberalism and the adoption of some elements of “inclusive neoliberalism” (Craig and Porter 2004). The main architect of neoliberal policies in the Americas, the United States, is also one of the main holdouts in the shift toward post-neoliberalism. Indeed, the rise of post-neoliberalism reflects in part the decline of U.S. interest and influence in the hemisphere in recent years. However, the United States still retains an important role in the IFIs and in many states of the region, and its impact cannot be ignored. As Mary Hawkesworth discusses in Chapter 10, while the United States has been the major proponent of neoliberalism, its own domestic policies have deviated in important ways from Williamson’s “ten neoliberal commandments.” Hawkesworth argues, drawing upon governmentality theories, that in contrast to the laissez-faire policy prescriptions that it has advocated elsewhere in the hemisphere, the U.S. state has

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in fact been adopting a much more interventionist “micropolitics of domination” within its own borders, in pursuit of neoliberal objectives. She documents the exclusionary race and gender politics historically associated with the emergence of the liberal state in the United States. While resistance from women, blacks, and other marginalized groups eventually resulted in more inclusionary policies, a full-scale welfare state never emerged in the United States. Nevertheless the Reagan revolution of the 1980s did result in a substantial shift to the right in U.S. politics and a significant increase in inequality, as well as the enactment of highly interventionist “workfare” policies. Hawkesworth also surveys a range of government policies associated with homeland security and “biopower” that result in increased surveillance and regulation of the lives of many Americans. In Chapter 11, Rianne Mahon and Laura Macdonald examine the poverty policies in Canada and Mexico, the United States’ closest allies. They argue that despite high levels of economic integration in the North American region, and the broadly neoliberal orientation of current governments in both countries, both countries have adopted poverty policies characteristic of “inclusive liberalism.” In both Mexico and Canada a “rollback” phase occurred, in the 1980s and 1990s respectively. This period, however, has more recently been followed by a shift to policies characterized by a mix of elements characteristic of inclusive liberalism. These include “active” rather than “passive” approaches to equipping the poor with the means to successfully (re)enter the labor force, using a mix of carrots and sticks, in contrast with the more punitive approach adopted in American workfare policies. As well, in both cases, there is a heavy emphasis on the development of poverty policies that will result in the investment in the “human capital” of the next generation. What is more, women and the family figure prominently in poverty approaches in both countries, in ways that are not necessarily empowering for women. While both Canada and Mexico remain neoliberal, this confluence is one sign of the diversity and transformation in neoliberal rule toward greater inclusion that has occurred in recent years. Chapter 12, by Lucy Luccisano and Glenda Wall, provides further exploration of these themes, focusing in particular on their gender implications. Luccisano and Wall also examine the cases of Mexico and Canada, and provide a closer analysis of programs aimed at promoting children’s education in both countries. Based on interviews with mothers who participate in these programs, the chapter probes the ways in which these inclusive liberal policies regulate and transform the experience of motherhood in both Canada and Mexico. They argue


that these policies are designed to promote their countries’ future integration into, and success in, the global economy. In Canada, earlychildhood development initiatives have been premised on the idea that brain development in the early years is fundamental to later development. In Mexico, the Oportunidades antipoverty program makes receipt of benefits conditional on mothers’ ensuring their children’s school attendance. While both programs bring benefits to the recipients, they also result in increased state surveillance over mothers’ behavior (as is discussed in Hawkesworth’s chapter) and increased stress among mothers. Despite the differences in the two contexts, neoliberalism in both cases is thus being transformed in contradictory ways. The ambiguity of state intrusion into the intimate realm of the family under transformed neoliberalism is also evident in the chapter by Lois Harder on Canadian and U.S. domestic and immigration family law policies. Harder asks whether neoliberalism has a preferred family form, and examines the ways in which the preferred model is promoted in public policy in different ways in Canada and the United States. Harder argues that while neoliberalism may be agnostic in the abstract on the preferred family form, in practice neoliberal governance nonetheless relies on a specific set of ideas about the role of families, including a fetishized distinction between the private and the public, self-support, and self-sufficiency. Neoliberalism’s agnosticism on the specific form adopted by the family helps explain the marked divergence in Canadian and U.S. policy on the specific form adopted by the family. Nevertheless while neoliberalism may not depend on sanctioning of the nuclear family as the preferred family form, families do play an important function in neoliberalism, since increased work and responsibility has shifted to the family away from the state under neoliberal reforms. These dynamics become even more complex in the case of immigration policy, where Canadian and U.S. states display intense interest in family form and associated financial requirements associated with the family. Immigration rules thus tell us much about how the liberal state views the family and the functions it performs in the neoliberal economy. Finally, the last chapter, by Cristina Rojas, turns to a Latin American state that has clung to neoliberal policy precepts, Colombia. As Rojas notes, the case of Colombia clearly acts as a useful corrective to the idea that all of Latin America is turning to the left. President Álvaro Uribe has maintained the neoliberal policies designed to promote capital accumulation, and remains a close U.S. ally. Nevertheless Rojas argues, Colombia has seen a notable shift in neoliberal governance under his presidency. Uribe’s “democratic security policy” reflects a shift in

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neoliberalism toward an emphasis on military victory over the guerilla forces as the main state objective and as the key to economic prosperity. Rojas terms Uribe’s strategy as “securitization by dispossession,” a process whereby some citizens, including the paramilitary, multinationals, and big landowners, see their rights and security expand, while others, including peasants, indigenous groups and Afro-Colombians, and disproportionate numbers of women, are deprived of their property, means of subsistence, and security. Instead of representing a shift to postneoliberalism, as seen in other states of the hemisphere, Uribe’s military policies, facilitated by the United States through Plan Colombia, result in the deepening of neoliberal rule.

Conclusion While the chapters in this volume do not suggest that all policy transformations currently under way in the Americas can be adequately captured through the lens of post-neoliberalism, we nevertheless hope that the ideas they articulate can help make sense of the recent transformations of neoliberalism. As post-neoliberal policy alternatives slowly but surely take shape, the volume also corroborates the view that the hemisphere is currently at a crossroads, with the emergence of various competing visions of how to better organize society. This represents a stern rebuttal to the oft-repeated slogan that there is no alternative to neoliberalism, and challenges the notion that history, and with it struggles among competing ideologies, has come to an end (Fukuyama 1992). The success stories of post-neoliberal regimes and policies in Latin America, such as Argentina’s and Venezuela’s phenomenal economic growth rate, at 10 percent more than twice that of the regional average in recent years, cannot remain unnoticed indefinitely in the northern parts of the hemisphere and among those populations of the South that remain under neoliberal rule. At the same time, the emergence of post-neoliberal policy alternatives will undoubtedly be infused with political conflicts, mistakes, backlashes, and unanticipated events as various countries move forward along relatively uncharted pathways, and experiment with largely untested policies (Weisbrot 2007b). However, the most challenging task for post-neoliberal leaders will be to articulate country-specific economic policies, to find idiosyncratic institutional set-ups, and to tailor development strategies to the unique needs of each and every country, after more than a quarter century of implementing the one-size-fits-all policies characteristic of the monoeconomics of the Washington Consensus.

Section I Theoretical and Conceptual Issues


1 The Contradictions and Transformations of Neoliberalism in Latin America: From Structural Adjustment to “Empowering the Poor” Marcus Taylor Introduction The editors of this volume have posed the challenging question of whether Latin America is moving into a “post-neoliberal” era. Without doubt, the rise of populist socialism in Venezuela and Bolivia, the uncertain politics of post-crisis Argentina, and the continentwide rise of anti-neoliberal social movements have thrown a stern rebuttal to the oft-repeated adage “there is no alternative” (Veltmeyer 2007). Simultaneously, during the 1990s and beyond, numerous changes were noted in the discourse and policy prescriptions associated with neoliberalism in countries as diverse as Brazil and Honduras. Although not formalized in the World Bank until the late 1990s, the contours of neoliberalism in Latin America have been consistently yet unevenly shifting in response to prolonged socioeconomic dislocation since the mid-1980s. Mexican President Carlos Salinas, for example, preempted much of the rhetoric of contemporary neoliberalism when introducing his program of “social liberalism” or “neoliberalism with a human face” in the late 1980s (Soederberg 2002). Moreover, the evolution of neoliberalism gathered pace in the continent under the mantle of “second generation reforms” that looked to build more efficient institutions for a market society, coupled with a new social agenda that would transcend the notion of “safety nets for the poor” (Ffrench-Davis 2000; Pastor and Wise 1999). In response to these changes, some authors have talked of a “Third Way for the Third World” as part of a shift to an “inclusive neoliberalism” (Craig and Porter 2005). The emphasis on macroeconomic fundamentals and “getting the prices right” that were staples of the original neoliberal prescription have been displaced by a new emphasis on the 21

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Contradictions and Transformations of Neoliberalism

institutional and social prerequisites for a successful market society. This shift incorporates a broad set of development objectives and offers new tools for achieving them, including proactive state intervention to tackle issues from market failure to poverty alleviation (World Bank 2001, 2002). Such trends appear quite distant from the original focus of liberalization, deregulation, privatization, and state retrenchment that characterized the early rhetoric and practice of neoliberal policy, and this raises the question as to whether Latin America stands at the edge of a brave new world of “post-neoliberalism.” The answer to this question evidently depends on how we conceptualize neoliberalism. If we conceptualize it in the narrow sense of a set of macroeconomic reforms—the “ten commandments” of the Washington Consensus, for example—then it is indeed plausible to suggest that the era of neoliberalism has passed. Simply put, policymaking has become more pragmatic, addresses wider concerns, and incorporates procedural novelties such as “ownership” and “empowerment” that deviate widely from the original prescriptions and methods of neoliberal structural adjustment. Moreover, the rhetoric of retrenchment has been replaced with a vision of a proactive state that secures market efficiency and the framework for social development through the promotion of gender equity, empowerment, and environmental sustainability (World Bank 1997, 2002, and 2004). For authors such as Joseph Stiglitz, this shift is captured in the notion of the “post–Washington Consensus” that has superseded the ideological dogmatism of neoliberalism (Stiglitz 2000). In this chapter, however, I suggest that we should be altogether more cautious in pronouncing the transcendence of neoliberalism or the arrival of a “post-neoliberal” era. Policy practices such as institution building, the new regulatory role of the state, and the empowerment of the poor do not mark a fundamental rupture with the central aims of the neoliberal project, nor have they solved its internal contradictions. To make this argument, I suggest that we need to conceptualize neoliberalism beyond the level of specific policies, as an ambitious project of social engineering. Emerging in a period of sustained political-economic crisis, neoliberalism was a program of institutional transformation that sought to embed market relationships as the predominant form of social organization through which societies reproduce themselves on a day-to-day level. Neoliberalism therefore involved a wide-reaching reconstruction of the institutional basis of society in an attempt to fashion a depoliticized, individualistic, and market-driven society that, according to the predictions of neoclassical theory, would be rational, harmonious, and ultimately ensure shared prosperity.

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Deep flaws in both theory and practice, however, ensure that the neoliberal project is replete with contradictions. Latin America has faced escalating social polarization, profoundly uneven development, and repeated economic and social crises during the neoliberal era (see Petras et al. 1997; Saad-Filho 2005). Given that the basis of a new and harmonious society did not emerge spontaneously from neoliberal structural adjustment, the neoliberal project began to explore evermore expansive forms of institutional restructuring in an attempt to consolidate the original project. Without relinquishing its essential emphasis on the rationality of the market as the foremost organizing principal of social life, contemporary neoliberalism has dramatically broadened the scope of its social engineering in order to address its internal contradictions and attempt to mediate the ensuing social conflicts that have sharpened over the last 3 decades. Paradoxically, as I discuss in the final section, the cutting edge of neoliberal theory professes the need for collective action from below (“empowering the poor”) in order to secure its utopian vision of market individualism. Unsurprisingly, such developments do not resolve the underlying contradictions of neoliberalism but rather juxtapose them into new arenas of social practice and, in so doing, engender new contradictions and sites of struggle.

Neoliberalism as a response to crisis Neoliberalism in Latin America was the child of the deep crisis that afflicted the continent in the 1970s and early 1980s. The remarkable rapidity by which it became embedded across Latin America derives not only from the coercive power of international financial institutions but also from the particular nature of the social, political, and economic malaise that Latin American countries encountered. In the era of “national-developmentalism” following the Second World War, the Latin American political economy was characterized by the expansion of state institutions intended to fortify economic development by promoting industrialization and to mediate social conflicts by regulating industrial relations and social reproduction (see Anglade and Fortin 1985 and 1990). In the economic sphere, these state institutions included protectionist tariff regimes, industrial credits, and currency regimes geared to aid technology imports as a spur to domestic industrialization. More widely, the expansion of the state incorporated the uneven development of a range of institutions that sought to mediate the social conflicts that wracked Latin American societies. These included corporatist arrangements between state, capital, and labor to dampen

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industrial conflict (Carrière et al. 1989); price controls to cheapen food and other consumables for the urban working classes; various agrarian reform initiatives (De Janvry 1981); and the expansion of social provisioning for health, education, and social security as a response to the demands of increasingly mobilized occupational groups and social movements (Mesa-Lago 1989). During the first two decades of national developmentalism, high prices for raw material exports buoyed the region’s economies and provided revenue for ambitious import-substitution industrialization (ISI) strategies and the expansion of social programs. For the duration of these so-called golden years of relatively sustained economic growth, the expansion of the state seemed a necessary spur to capital accumulation because it stimulated industrial growth and appeared able to contain social tensions by distributing resources to social groups through corporative state institutions as a form of material and political compromise. When supportive global conditions came to a halt with the oil shock of 1973, however, the escalating contradictions of national developmentalism were thrown into sharp relief. On the one hand, import-substitution encountered serious difficulties, and the stagnation of the industrialization project manifested itself in pressure on profits and wages, which in turn exacerbated industrial conflicts (Saad-Filho 2005). On the other hand, propelled by the demands of popular movements for expanded social provision, the expansion of state expenditure became a mounting fiscal burden (Mesa-Lago 1989). This crisis, however, was far from simply an economic crisis driven by internal inefficiencies and external shocks that required a correlated shift in economic policies. Inseparable from the economic manifestations of crisis was the growing politicization of Latin American societies. State institutions that had proliferated as part of national developmentalism—including welfare institutions, labor regulations, and agrarian reform processes—no longer appeared able to mediate social conflict but instead became conduits of social struggle driven by the contradictions of capitalist development. For example, the institutional frameworks intended to mediate industrial strife became points of contestation between national unions, employer associations, and state bodies, therein drawing the state further into industrial conflicts and wage setting (Carrière et al. 1989). Similarly, as the welfare institutions of the national-developmentalist state expanded, the state became deeply involved in regulating social reproduction and politicized the ways in which it intervened in distributional questions. Pressured by various social movements to expand its forms of provision, the

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institutionalization of diverse welfare policies developed in a conflictdriven and profoundly uneven manner (Duhau 1997). As a consequence, far from diffusing social conflict, the institutional forms of the state politicized the contradictions of capitalist development. With the expansion of state interventionism, the barriers between economics and politics appeared to be crumbling and many of the key institutions of capitalist societies, such as the sanctity of private property, appeared to be under strain. Sharp political divisions over how to respond to these challenges frequently led to political paralysis, and Latin American countries suffered repeated military interventions, with state coercion deployed to suppress wage and social demands from popular movements. Concurrently, public debt escalated as governments sought to borrow money to alleviate fiscal pressures. Following a sharp rise in international interest rates in the early 1980s, the dramatic increase in debt burdens culminated in the 1982 debt crisis (Körner 1986). Within this environment of escalating economic and political crisis, the salience of neoliberalism was that it offered a program of reforms that, by breaking down and replacing the social institutions constructed in the postwar years of national developmentalism, promised not only to resolve the symptoms of crisis but also to eradicate their social and political roots. Neoliberal reformers envisaged a rapid end to both the economic woes of the continent and the spiral of politicization and crisis through a program of social engineering that sought to subordinate state and society alike to the abstract and seemingly neutral disciplines of market forces. Moreover, the project was promoted and sustained by the coercive power of finance and debt alleviation wielded by international institutions such as the IMF and the World Bank.

Neoliberalism as social engineering To better understand neoliberalism’s political project, it is useful to examine its theoretical roots in the neoclassical tradition of economics. As Arnsperger and Varoufakis (2006) have argued, while neoclassical economics has evolved in complex ways over the last 3 decades, it remains characterized by the foundational assumptions of methodological individualism, methodological instrumentalism, and methodological equilibration through which the dynamics of capitalist society are conceptualized as the outcome of interactions between rational individuals who act in an instrumental manner by exchanging goods to satisfy a relatively stable set of preferences. Rationality is designated

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as the essential quality of the individual who is able to calculate and choose between different courses of action so as to best satisfy stable preferences, and the end result of these exchanges is to impose equilibrium upon the economic system whereby market forces marshal individual rationality into a socially optimal whole. The theory is therefore rooted in what Milton Friedman termed the “elementary proposition” that both parties to an economic transaction benefit from it, provided the transaction is bilaterally voluntary and informed (Friedman 1962: 55). Exchange is therefore a rational occurrence that reconciles the scarcity of goods with the diverging tastes, desires, and wants of individuals. Concurrently, the market emerges as a spontaneous coordinating mechanism that aligns the atomized pursuit of self-interest (Friedman and Friedman 1980; Hayek 1973). Given its foundation in rational individual action, market exchange generates the optimal distribution of society’s resources as supply and demand equilibrate, while price signals ensure that individuals invest surplus capital in the areas of unmet demand and highest productivity that offer highest returns. Three important further propositions were built on these initial assumptions and were enshrined in the political project of neoliberalism. First, given the finite provision of material goods (the condition of scarcity), the institution of private property is derived as the rational solution to restrict potential conflict and anarchy. The sanctity of private property not only sustains the system of exchange, and therefore facilitates social rationality, but also upholds the relationship between contribution and reward that promotes the entrepreneurship integral to a dynamic economy. The fundamental task of the state is therefore to ensure the exercise of property rights and the soundness of the contracting system that permits the exchange of property. Neoliberal political practice consequently seeks to retrench or remove state institutions that weaken the sanctity of private property and strengthen those that fortify it. This includes generalizing the commodity form into areas of social life that had previously been organized around collective provision. Second, money—the instrument of exchange and account—is seen as the social oil that facilitates the rationality of the system. The stability of money itself is pivotal for the sound communication of information to and between market actors in the form of prices and must be protected above and beyond alternative political and economic motivations (Clarke 1990). Third, if the market is presumed to be rational and to lead naturally to the optimal distribution of resources, the distortion of market

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transactions by extra-market forces is deemed to infringe on overall efficiency by rupturing the formal rationality of the market imposed by the price mechanism. Based on the methodological individualism of the neoclassical tradition, collective subjects are seen as special interest groups that inhibit rational individual decisions based on utility maximization. The latter are conceived as artificial and illegitimate impediments upon a condition in which individual rationality and freedom is maximized to the benefit of the common good. In this respect, judging institutional configurations on the basis of neoclassical economics, “generally leads to the conclusion that the only institutions we should have are those—such as property rights and the rule of law—which enforce the roles of competition and exit, and hence limit the role of bonding or groups” (Storper 2005: 35). Neoclassicism therefore provides the theoretical justification for governments to ensure a stable institutional framework for market transactions and to refrain from interventions that would alter market outcomes. Such actions distort natural market prices by interfering with the free and rational movement of capital, goods, and labor, leading to suboptimal investment decisions and a drop in overall economic output as capital. Moreover, state interventions break the nexus of effort to reward that the market is seen to promote and foster dependence on discretionary and politically motivated decisions rather than on the neutral, efficient, and harmonizing mechanism of the market. It is not difficult to see how such a political program could be heralded as the direct response to the various social, political, and economic manifestations of crisis facing Latin American countries in the late 1970s. Neoclassical economists argued virulently that the interventionist state had perverted the natural market order and thereby introduced rampant inefficiencies across developing-world economies, resulting in economic stagnation and ultimately deep crisis (Lal 1985). As such, and despite being contrary to 30 years of mainstream development thought, neoliberalism began to resonate in some circles within the political right in Latin America because it offered legitimacy to those on the looking to reform the interventionist state. As a host of political economists have pointed out, however, the restrictive initial assumptions of neoclassical economics—including but not limited to the notion of the utility-maximizing individual, the tendencies toward equilibration, and assumptions regarding information and perfect competition—undermine its ability to explain actually existing capitalist society (see DeMartino 2000). The strength of neoclassical economics for policymakers in the 1980s, however, was not its

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analytical precision or the uncertain benefits of its economic prescriptions, but its political implications. As Simon Clarke (1991) emphasizes, the original intention of establishing economics on foundations akin to the natural sciences was to offer an ideal type against which society could be judged according to scientifically grounded ideas of rationality and efficiency. This explicit normative dimension, wrapped in the trappings of a formalistic and “value-free” science, lies at the heart of neoclassicism and is directly incorporated into the core of the neoliberal project. Far from being deterred by the gap between abstract models and social reality, neoliberal proponents use the divergence to justify reforms that are envisioned to make reality more closely approximate the ideal type. At its essential core, therefore, neoliberalism is an ambitious project of social engineering that seeks to coerce reality into the axioms of human interaction projected by neoclassical economics. Neoliberal reform involved state-led “creative destruction” through which existing social institutions that sanctioned nonmarket forms of social interaction could be destroyed and replaced with those that facilitate a society conforming to the methodological individualism of neoclassical theory. As the theory ran, society could be harmonized—and crisis tendencies extinguished—by forcibly restraining social aspirations within the seemingly objective limits of rational markets. So long as individuals submit to the play of market forces mediated through monetary relations, the optimal conditions for economic growth and individual satisfaction will predominate to the benefit of both individual and common good. Figures on the political right began in Latin America began to rehearse neoliberal arguments in the 1970s, particularly where neoclassicism had a strong basis—such as in Chile where exchange agreements between the Universidad Católica and the economics department of the University of Chicago had established a strong clique of technocrats known as “the Chicago Boys” (Valdés 1995). For most civilian and military political leaders in Latin America, however, the radical projections of neoliberalism were greeted with much suspicion despite the evangelical pronunciations of economists such as Friedman and Hayek. On the one hand, neoliberal reforms threatened to alienate key constituencies—including sections of the industrial bourgeoisie—whose social reproduction was embedded in the functions of the interventionist state. On the other, neoliberalism appeared counterintuitive to policymakers schooled in an era of Keynesianism and development economics that emphasized the necessity of state intervention to overcome market failures. It also ran counter to the corporatist tendencies of the older social conservatism influenced by Catholicism.

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Notwithstanding these reservations, the depth of the crises across Latin America in the early 1980s, combined with the coercive financial power of the International Monetary Fund (IMF) and the World Bank, proved integral to the spread of neoliberalism across the continent. In practice the proliferation of neoliberal policymaking was uneven and took notably different forms across different national spaces. Chile, for example, was subjected to neoliberal restructuring from 1974 onwards when General Pinochet aborted ISI policies in favor of a neoliberal strategy that dovetailed with his wider goal of depoliticizing Chilean society (Taylor 2006). In contrast, neoliberalism came to Peru some 15 years later when Alberto Fujimori entered the presidency promising to overcome political deadlock and economic stagnation. Despite assurances to the contrary, the rapid introduction of a neoliberal reform program proved to be his solution to these quandaries (Ruiz Torres 2005). What we encounter in much of contemporary Latin America, therefore, is a plethora of “actually existing neoliberalisms,” each of which has evolved differently owing to the unique nature of the political environment, the particular character of the institutions that neoliberalism sought to reform, and the contingent outcomes of political and social conflict over restructuring.

Neoliberalism in practice In spite of such variation, it is useful to highlight certain key aspects of neoliberalism at a general level in order to shed light on its subsequent evolution. In contrast to the prevalent antistate bias of neoliberal rhetoric, the state stood as both the primary subject and object of neoliberal restructuring. Neoliberalism rests on systematic state interventions that seek to reshape social institutions while mediating the political and social tensions that arise from this restructuring. As Karl Polanyi (2001: 140), who examined an earlier period of market liberalism, observed long ago: “the road to the free market was opened and kept open by an enormous increase in continuous, centrally organized, and controlled interventionism.” From its inception, therefore, neoliberalism has been a project of institutional restructuring that involves not only “rolling back” the state but also transforming, strengthening, and creating new institutions. This point is key to understanding continuities within the subsequent evolution of neoliberal policymaking into its “neo-interventionist” forms. Initially, the destructive aspects of this process were most prominent. In the name of the neutrality and rationality of the market, neoliberalism endorsed a state-led assault on institutions that were seen to distort

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market outcomes or facilitate collective social action. This involved dismantling the institutions of the interventionist state through privatization, liberalization, retrenchment, and deregulation, with a particular focus upon the institutions that had formed around economic planning, labor relations, and social policy. Shock therapy was central to this project. By engineering a brutal recession that broke down productive structures and their underlying social relations, it obliterated existing institutional forms to create an environment in which market order could be inscribed. As I have argued elsewhere, this constituted a strategy of state-led “creative destruction” in which the destructive elements were pronounced and whose worst effects were born by urban working classes (Taylor 2006). While collapsing the institutions of the interventionist state, however, neoliberal restructuring simultaneously created and strengthened institutions that are essential to the functioning of markets. Specifically, the legal system that upholds the sanctity of private property was fortified, often through constitutional amendments that ended a growing trend in Latin America of expropriating land and industries for redistribution or nationalization. Other institutions were remodeled, such as the redesign of taxation systems to promote entrepreneurship and a more regressive tax burden (Taylor 2006). Furthermore, many new institutions were created specifically to uphold markets—and the social discipline they entail—such as the formation of independent central banks that would control monetary policy to ensure that price stability would supersede all other social and political concerns. Indeed, the stability of money was a key moment in the project to subordinate the society to the limits of the market. Friedrich Hayek (1973) had emphasized how monetary stability was not simply a technical question of economic management but was the center point of a political struggle to assert the rationality of the market system over those who would seek to restrain it. In this way, the cripplingly high interest rates that characterized the anti-inflationary measures of shock therapy programs represented a fundamental shift in power relations. As Andrew Gamble (2001: 131–2) elaborates: Making sound money once again the cornerstone of policy meant being prepared to take on politically all the vested interests which had grown up through the extended state and helped perpetuate the policies which were restricting the rights of managers to manage and were tying capital down in increasingly ossified economic and organizational structures.

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The overall goal of such neoliberal restructuring, therefore, is to create a strong state that, suitably disengaged from political pressures, is able in the name of the common good to discipline both society and its own institutional bodies to adhere to the process and outcomes of marketized social relations (World Bank 1997 and 2004). It also underscores the tendency toward the technocratization of neoliberal government in Latin America, a process under which politics was to be reconstituted as the depoliticized and technocratic exercise of governance—that is, responding to economic “facts” such as inflation rates, balance of payments, capital account fluctuations – in accordance with the dictates of “sound economics.” Such institutional reform had a strong path-dependent quality owing to both the difficulties of undoing constitutionally embedded institutional changes and operating within the changed power structures they create (Brenner 2002). Where center-left governments came to power during the 1990s in Latin America, they often found their programs curtailed owing to the barriers provided by the institutions created through neoliberal restructuring and the correlate shift in the distribution of power. By tenaciously enforcing the social power of money across Latin American societies, neoliberal reform augmented exponentially the power of capital—both domestic and foreign—and strengthened the disciplinary role of finance. For example, the liberalization of capital markets has redefined the exercise of power in countries such as Brazil and Mexico, wherein the threat of capital flight and financial crisis currently serves as a notable moderating influence on governmental policy choices (Lemco and MacDonald 2001). In Chile, the reform of the state, implemented by Pinochet, placed important governance mechanisms outside of public control and concentrated vast resources—such as the control of collective pension savings—in the private sector (Taylor 2006). Neoliberalism attempted to constrain the political process in Latin America within strict limits as designated by the stable reproduction of the market order. These are precisely the limits, however, that the recent populist governments of Chávez and Morales and numerous popular struggles across the continent are challenging.

The contradictory evolution of neoliberalism The failure of political opposition and social conflict to disappear under the auspices of the presumed rationality of neoliberal restructuring is not surprising. Despite its ascendance across Latin America in the 1980s and 1990s, neoliberalism is predicated upon a number of contradictions that have undermined its political project and shaped its subsequent

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evolution. Guided by the empty abstractions of neoclassical economics that reduce capitalist social relations to the sum of individually rational market exchanges, neoliberal reformers are frequently blinded to the substantive and conflict-inducing irrationalities of capitalist development, as manifested in the subordination of social need to profit, the conflicts generated across production and distribution, the pervasiveness of human resistance to processes of commodification and exploitation, and the continual crisis tendencies of social relations that stubbornly refuse to conform to general equilibrium models. Accordingly, neoliberal reform has proved unable to achieve the economic and social goals its proponents heralded. Structural adjustment tended to exacerbate social crisis across the continent, driving a new degree of polarization and impoverishment during the “lost decade” of the 1980s and which proved largely intractable during the 1990s (SAPRIN 2004a). Concurrently, social conflict did not melt away under the auspices of a radically depoliticized new society but was transposed into alternative arenas and sites of struggle (Petras et al. 1997; Veltmeyer 2007). The result has been a transformation of neoliberalism—both in theory and in practice – driven by the unanticipated outcomes of existing policies and shaped by the contours of ongoing social and political struggles. Indeed, international organizations such as the World Bank have been caught between the need, first, to extend restructuring across evermore social realms in order to fortify the neoliberal project and, second, to respond to the conflicts that restructuring has unleashed. Unsurprisingly, the evolution of neoliberalism has been profoundly uneven, and new theories have often been a posteriori rationalizations of policy changes. In Latin America the political response to the ongoing disruption of structural adjustment quickly arose in the dual strategies to engage in second-generation reforms and to give neoliberalism a “human face” (Pastor and Wise 1999). At an international level, the World Bank’s policy prescriptions have undergone constant reinvention yet remain unable to shed the underlying contradictions of neoliberalism. These remain manifested in its fragmented policy prescriptions and practices that have emerged in a reactive mediation to the struggle-driven and crisis-torn course of uneven capitalist development in the present era (Taylor 2004b; Taylor 2005; and Ruckert in this volume). The expansion of institutional restructuring, including an emphasis on the political structures (“good governance”) and the requisite forms of economic regulation (“sound investment climate”) to catalyze a market society, has been ongoing since the initiation of structural

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adjustment. Within the current discourse, the familiar end of a market society is to be pursued by new, and often contradictory, means. First, neoliberal theory and practice has drawn heavily on the theoretical lineage of information-theoretic economics and the “new institutional economics,” popularized by Joe Stiglitz and Douglas North respectively, in order to rethink the role of the state. While not duplicating the functions of markets, the newly interventionist state must go beyond its original forms of restructuring to construct a sound regulatory environment that can align the expectations of actors within a framework of market rationality and mitigate informational imperfections that might undermine the efficiency of markets outcomes. In this manner, as the World Bank (2002: 22) stresses: The efficiency of markets, which are themselves institutions, depends on the strength of supporting institutions that help align the expectations of agents regarding the procedures that govern their transactions. Nonetheless despite these revisions, the primary assumptions of neoclassical economics remain, and the ultimate goal of reform is to solidify—not modify—the underlying thrust of neoliberal structural adjustment. As Ben Fine (2001) has demonstrated, methodological individualism remains the assumption of this “post-Washington Consensus” formulation. The new framework retains the basis of a perfectly competitive market composed of rational self-maximizing individuals, yet it charts how information imperfections or imperfect institutional configurations produce deviations from this state. Such imperfections are considered to be prevalent and therefore necessitate a much fuller role of the state in establishing institutions that impartially enforce the rules of the game and that channel information about market conditions, goods, and participants than the initial restructuring models suggested (World Bank 2002: 8). Revisions of this nature provided both a convenient rationale for prior failures and a program of new reforms, yet they did not mark a break with the underlying market ontology of neoliberalism. More interesting transformations have arisen through struggles over poverty alleviation. Within the neoliberal cannon, it became expedient to develop new theories to explain why poverty rates were not falling and to direct policy practice. Remaining wedded to the notion that market activities are mutually beneficial and will therefore help raise the poor out of poverty, neoliberal theory since the 1990s has developed

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the hypothesis that numerous social and institutional factors obstruct poor people from effectively exchanging assets in markets and thereby perpetuate their poverty (see World Bank 2000, 2002, and 2004). It is not, therefore, the substantive irrationalities of marketized social relations that are causally related to the creation and reproduction of poverty, but rather the failure of poor people to adequately access and participate in markets owing to institutional and social impediments, such as lack of information, corruption, discrimination, and political voicelessness. Poverty is therefore conceptualized as the result of cumulative human, social, and political failures external to capitalist social relations and that can be remedied by correcting institutional forms. Whereas the initial neoliberal reformers promoted sound macroeconomic policy, market liberalization, and expanded commodification that helped to expand economic opportunities, they underestimated the range of social institutions that needed reform before market activities could improve the lot of the poor. In the words of the World Bank (2002: 61): “Societies have to help poor people overcome the obstacles that prevent them from freely and fairly participating in markets.” Hence, poverty alleviation is reconceptualized as a process of dismantling social and political institutions that prevent poor people from reproducing themselves via the medium of the market. In practice, this has resulted in an emphasis on greater resource provision to facilitate improvements in the social and institutional infrastructure of poor communities. Most dramatically, poor people are to be “empowered” to manage such interventions themselves. In the neoliberal usage, “empowerment” refers to the need for poor people to act collectively to apply political pressure to guarantee the quality of state services and peer monitoring of their delivery, thereby mitigating the possibilities of development resource capture by elites. In an apparent reversal of power relations, for example, the World Bank lauds the empowerment of poor people to “monitor and discipline service providers” (World Bank 2004). Collective action beyond ensuring accountability and a superior quality of service delivery, however, is not welcome. Political movements that might threaten the status quo as enshrined by property rights and the primacy of free markets are symptomatic of poor people who do not recognize their own best interests. Unionization, for example, is antithetical to true empowerment because it forms a barrier to the flexibility of labor markets and prohibits the formation of a marketclearing price for labor that will ensure optimal levels of employment and productivity (World Bank 1995). Empowerment, therefore, is the

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harnessing of the poor to help remove barriers to their participation in market relations. In short, and with no small degree of irony, poor people should act collectively to enforce free markets and good governance and therein create the conditions in which market individualism can reign supreme. Within the Latin American context, social funds—such as the Fondo de Solidaridad e Inversión Social (FOSIS) in Chile and Oportunidades in Mexico—have become the primary vehicle of antipoverty policy. Despite their increasing sophistication, they remain intrinsically neoliberal in formulation. They do not offer a form of decommodification in the manner suggested by social policy theorists such as Gøsta EspingAndersen: namely, a mediation between individual and market that reduces the dependence of the former on the latter (see Esping-Andersen 1990, and Ruckert in this volume). Rather, their aim is to provide the physical and human infrastructure to promote market participation as the means to socioeconomic development. Rather, they attempt to provide the means through which marginalized communities can reintegrate with capitalist social relations which primarily means reinserting themselves into labor markets that have been suitably “flexibilized” (see Taylor 2004a; World Bank 1995). The contradictory dimension of this process is that, in the name of empowerment, individuals are inserted into impersonal globalized market relations over which they have no control, in which they face profoundly uneven power relations, and which repeatedly enter into frequent crisis periods that marginalize significant portions of the population. Moreover, such programs deliberately obfuscate alternative antipoverty strategies—such as strong redistributive measures—that have been used with success elsewhere (Øyen 2001).

Conclusion: Toward post-neoliberalism? The above sections have argued that many of the innovations associated with contemporary policymaking in Latin America—such as a more active role for the state and new models of social policy delivery and antipoverty programs—do not mark a rupture from the political project of neoliberalism. These trends, particularly evident in postPinochet Chile, Lula’s Brazil, and Fox’s Mexico, are a testament to the path-dependent qualities of neoliberal restructuring. By recasting institutional structures and the distribution of resources, neoliberalism reshaped power relations across the continent in an enduring manner that has frustrated the aims and strategies of many political movements

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that sought to break with the market ontology of neoliberalism. When we think of post-neoliberal futures, therefore, attention is necessarily drawn to contemporary transformations in Venezuela and Bolivia. Debates will rightly continue over the aims and methods of these movements toward “Twenty-first century socialism.” Nonetheless both cases serve as important examples of political processes that counter the notion of the market being the only efficient form of social organization and that seek to halt the relentless commodification of all aspects of social life. In so doing, careful and critical analysis of these ongoing transformations can help construct pathways toward a post-neoliberal future across Latin America.

2 Post-Neoliberalism and the New Left in the Americas: The Pathways of Economic and Trade Policies Pablo Heidrich and Diana Tussie

Introduction Two decades of technocratic reforms in the Latin America and a series of elections have brought fresh administrations to power, indicating the tenor of a new epoch. This seems to be a response to two sets of related challenges: on the one hand, rising mass mobilization and, on the other, social (but not elite) discontent with previous reform strategies, questioned for their failure to generate acceptable levels of growth, to incorporate disenfranchised groups and to promote more equitable patterns of income distribution. The main objective of this chapter is to dissect these questions and place them in the context of the larger debate surrounding the transformations of neoliberalism. Is there an economic policy intrinsic to post-neoliberalism? If so, what are its goals and policy instruments? We assume that such policies require a new balancing act that can address popular dissatisfaction and social equity as issues fully integrated in economic policies. In that light, economic and trade policies should both be central to the identity of post-neoliberalism. New figures have stood up as representatives of the mobilized masses and are battling for the hearts and minds of Latin Americans pushing for a new social contract. But these figures differ in the ambition of their ideas as well as in their political roots. As such, Nestor Kirchner in Argentina comes from the Peronist party, one that, given its capacity to control the electorate and organized labor, over a fifty-year time span has been able to go from the historical populist nationalism of Peron to the neoliberal right-wing policies of Carlos Menem.1 Kirchner is, however, to many observers today, a post-neoliberal and even leftist president by virtue of the economic policies he has espoused. In contrast, 37

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Post-Neoliberalism and the New Left in the Americas

Lula da Silva in Brazil, Tabaré Vázquez in Uruguay and Michelle Bachelet in Chile are all presidents elected on leftist and center-left tickets who have been systematically accused of holding on to orthodox or neoliberal economic policies by domestic and foreign critics ( Jaguaribe 2006). In addition, Chávez in Venezuela, Morales in Bolivia and Correa in Ecuador claim the role of modernizing and boosting up “true socialism to the XXI century in the region” (Touraine 2006). They have introduced significant reforms and employed radical discourses. In the remainder of the chapter, we mainly address the following questions: Are there any discernible trends in the economic policy of post-neoliberal governments? Can detected particularities be aggregated into a trend? Have specific leftist practices been adapted, and if so, how? The objective here is thus to reground the contemporary discussion in a manner that understands differences over time and between countries, to account for how current economic policies straddle the tensions and limitations inherited from neoliberalism.

A conceptual framework: Feeding on populist roots with economic learning and adaptation along the way Historically, the political left in Latin America has been identified with goals of social justice, economic development, national emancipation and socioeconomic equality. They advocated policies of redistribution of wealth through progressive taxation, structural reforms (such as agrarian reform), the expansion of welfare services, the protection and expansion of workers’ rights, strong participation of the state in the process of industrialization and hostility to foreign capital (Panizza 2005a). All left administrations tried to adopt economic policies with these goals, but were victims of financial mismanagement, unfavorable external interventions and political destabilization. These experiences had high costs precisely for those populations they had meant to favor. Judged by this past trajectory, one might have thought that leftist economic policies were a dead end and that their proponents would most likely never return to office in Latin America. In fact, from the ashes, these parties (and on occasion the same leaders) have been voted back into office. Their ultimate goals may remain nominally the same, but their old policies to attain them have been replaced. Not only are the new left governments taking account of the interplay over time of the collapse of socialisms and broad structural economic changes. There has also been a sizeable learning process that started in the late 1980s due to two watershed experiences. One was a

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promarket set of reforms implemented by neoliberal or centrist technocratic governments in the 1990s under the Washington Consensus, which changed the political economy of the region, specifically the relations between states and markets, as well as capital and labor, and increasingly opened these countries to international trade and financial flows. The second is that the political left was able to retain local government postings during that same period, managing states or provinces such as Rio Grande do Sul in Brazil and large metropolises such as Buenos Aires. These experiences prompted an adjustment of perceptions to the new reality, in which the policies to achieve the objectives of social justice and economic development necessarily had to be adapted (Panizza 2005b). Finally, there was a regionwide shift in electoral terms, which modified and increased the dimensions of political accountability, prodding the left to adapt to electoral politics. The structural adjustments of the 1990s drastically reduced (but did not eliminate) state ownership in the economy, liberalized prices for essential goods and services, and most importantly, opened economies to external competition. In addition, the leftist parties’ experiences with local government during that decade provided lessons on what an effective agenda for social policy should be, even though its extrapolation to the national level could still be difficult. The outcome was the translation of lessons learned into new economic conditions and a new climate of opinion composed, on the one hand, of a positive consensus from experiences in local government about the need to step up public investment in health and education, to bring the state back in to coordinate the provision of physical infrastructure and energy and other measures assisting the overall competitiveness of the economy; and, on the other, of a negative consensus derived from the critique of neoliberalism, including a moratorium on privatizations, stricter regulation of private monopolies and a halt to further unilateral trade liberalization. But the learning by the new left has been much more impressive and far-reaching. The main lesson is that massive fiscal deficits, just as current and trade deficits, are unsustainable over time. No amount of continuous promarket reform can feed the expectations of future gains of foreign and local investors forever. That is the lesson learned from Menem’s Argentina, Battle’s Uruguay, Cardoso’s Brazil, Frei’s Chile, Salinas’s Mexico and others. In all those cases, financial crises provoked by these governments’ systematic lack of concern for deficits or contagion from crises in countries with similar vulnerabilities brought them political disfavor. This is precisely the juncture at which the political left came to power in most Latin American countries. In a period shorter

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than 2 years after each financial crisis, leftist parties or candidates won the first presidential elections that took place. The alternative of the new left has thus been to construct a government that can uphold an agenda with a leftist heart, with policies that emphasize local responses to cover social deficits, but remain fiscally conservative, not merely due to the primacy of previous lessons of the 1970s and 1980s left, but also to compete with the party that was previously in office, showing the electorate that the left can be both more socially sensitive and more economically responsible.

Trade policy: The wild side of post-neoliberalism Trade policy has unique distributional features which we need to take into account when thinking about political regimes. Under import substitution in Latin America, it was politically easier to turn to high tariffs to protect mobilized working and middle-class constituencies from international market shocks than to implement efficient systems of social welfare in times of crises. The emphasis on the domestic market justified measures destined for all types of wage support. Business and labor were able to fix a price structure that favored the Keynesian social compact, drawing together domestic producers and workers. The international distributional effects of trade were at that time lost from sight; if and when they emerged, business and labor met on the same side in favor of retaining protection, sustaining high wages and domestic consumption. But when layers of trade protection were shed in the 1990s, the international price structure became internalized and the international negotiations that followed had an evident and immediate impact on income distribution. With liberalization, gains in efficiency were absorbed and productivity for surviving sectors was impressive. Latin America changed from a region with a few primary products as exports to one with a widening range of manufactured and processed commodities. Such strong development has, however, fallen short in at least three important dimensions: exports have grown less than those of other developing regions, especially East Asia and Eastern Europe, resulting in less global importance for Latin America; exports have remained very sensitive to North American and European competition; and most importantly, the growth in Latin American exports have not been able to finance the stronger growth in imports, product of the 1990s unilateral opening, making debt financing an essential support for these policies. This triple challenge was taken on by private actors, pushing governments to improve their policymaking. The conditions for change were


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ripe when Latin America was overridden by financial and economic crises in the period from 1998 to 2002, and trade deficits further contributed to its vulnerability. This showed that the previous policy of just opening unilaterally and promoting “open regionalism” with neighbors was insufficient to generate balanced trade accounts. Therefore, governments started to focus on signing preferential and reciprocal trade agreements at bilateral and subregional levels. The main drivers of this approach are export-oriented firms, which lobby governments on which preferences to seek and what markets to target. In Latin America, these firms were often, but not always, the traditional “export oligarchies” of yesteryear, linked to the exports of commodities, and new ones such as those linked to construction and telecom. Beyond that symbolism, there is a requirement for governments to seek reciprocity in all negotiations, bringing new teeth to Latin American negotiators, which should not be confused with leftist militancy. In addition, the incidence of reciprocity means that the gains obtained abroad for a given export require a “concession” in the domestic market. Hence, this process leads to import competition and increased domestic sensitivity to the adjustment process, a combination that, in a democratic setting, cannot be wished away (Gilligan 1997). Current trade negotiations are thus no longer just about trade, as most tariffs are already very low, but about exchanging concessions in areas such as investors’ rights, intellectual property rights and government procurement. That is the case not only in the Free Trade Area of the Americas (FTAA) and in the bilateral deals bargained with the United States but also in those between MERCOSUR and the European Union. To the extent that Latin American countries still have a willingness and capacity to employ those policy instruments, they are relevant bargaining chips to obtain market access in the markets their exporters desire. The current governments of Brazil and Argentina, in particular, have often been portrayed as reluctant participants in trade negotiations, and especially in the U.S. project to create the FTAA. Why has this been the case? In the first place, both are sizeable economies with dense domestic markets and the least open economies of the region with the highest average regional tariffs (14.3 percent) and with exports accounting for less than 20 percent of GDP. A referendum in 2002 in Brazil by more than 60 NGOs with the support of the National Confederation of Catholic Bishops revealed that more than 90 percent of the people who cast a vote were opposed to the FTAA. These countries’ demands for attention to these issues in international negotiations are not necessarily completely antiliberalization. While the

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export gains may be embraced, they are not done at all costs, but with a demand to obtain access to markets which could conceivably generate some economic growth, perhaps in exchange for limited openings of some segments of the market. At the core, this is a developmentalist reaction to the repackaging of trade adjustment. This concern with distribution accepts the inevitability of trade liberalization but seeks to manage its potentially destructive aspects with continuous counterproposals, as was often expressed by Brazil and the other MERCOSUR countries in the Doha Round. Ultimately the aim is to bring together the external face of the government with the concern for development and social justice at home in order to ensure consensus with the new players capable of holding the balance. All through these negotiations, the Brazilian posture toward the United States has been critical but knowledgeable and never as confrontational as Venezuela’s. The distinction is important. Economic isolation is not on the cards. The aim is to preserve the domestic market while opening access for business abroad. Such a policy direction is evident in Brazilian efforts to build the South American Community of Nations, bringing together the countries of the Andean Pact with those of MERCOSUR, through initiatives of energy integration and development of physical infrastructure. While it might constitute a direct challenge to U.S. desires for hemispheric free trade, it is seen in Brazil as the simple projection of national exporters’ interests in regional markets. This initiative has the support of Argentina, which is also interested in expanding its exports throughout the region, while it waits out U.S. agricultural protectionism; this search for balance is long standing in Brazil and predates the present administration. The fact that these initiatives were put together by right-of-center governments in Brazil (Cardoso) and Argentina (De la Rúa) has not stopped new leftist administrations from following them, with strong public support. Such continuity shows the increase in export lobbying as the engine of policy, a general trend at the heart of our argument. With disparate degrees of intensity, it has acquired force in all countries, even directing some to make alliances with the United States. The rationale of these lobbyists is clear. For example, Chile, Peru and Uruguay have strong exporting interests that see themselves able to enter the United States’ market in spite of American protectionism. Their production mix, anchored in fresh produce, as opposed to traditional agricultural exports, and small size, for the case of Uruguay, are the basis for this understanding. Chile was an early mover, signing a free trade agreement with the United States in 2003. Peru negotiated from


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2004 onward and the new leftist government of Alan Garcia, elected in 2005, voted the agreement through congressional approval. Uruguay had tried negotiating with the United States as well, since 2003, and the government of Tabaré Vázquez has continued that policy in spite of strong domestic and MERCOSUR opposition. As a consequence of such resistance, Tabaré Vázquez recently reshuffled the initiative to signing a trade and investment framework agreement. The turn to open economies, in sum, is seen as quite a good thing in the long run by almost all leftist governments in Latin America. But their different directions, toward a regionalist or a bilateralist posture in trade negotiations, is to be read in function of their exporting interests, much beyond the political colors of their governments. What remains intrinsically political are the ways of dealing with the transitional costs and the collective action problems derived from trade negotiations. In highly unequal societies with an impaired tax base, such as in Latin America, these costs place major limitations on the capacity of governments to deal with the distributive pressures that stem from sudden income loss resulting from trade openness. By way of comparison, in the small open Scandinavian economies the expansion of welfare transfers has been tied to liberal trade policies, to even out the differential gains and losses associated with international market shocks and trade shifts (Gourevich 1986). Since such models, and the taxation policies they require, are difficult, if not impossible, to implant in Latin America, the new left-leaning governments must seek to redress social imbalances with a patchwork of policies: some social transfers, some public goods and some political limits to the free reign of market forces. Governments juggle with the two competing forces characterized by Karl Polanyi (2001) as a “double movement” in which economic liberalism and social protection interact with one another. Although social policies are not at the core of this chapter, we contend that this double movement, or “a political economy of the possible” (Santiso 2006), may be the hallmark of the post-neoliberal age in this region.

Looking at the colors of leftist administrations This section compares the national experiences of leftist governments in Latin America, starting with those perceived as leftist, such as Kirchner in Argentina, continuing with those self-defined as leftist, such as Lagos’s and Bachelet’s Chile, Lula’s Brazil and Tabaré Vázquez’s Uruguay and ending with those claiming to be true leftists, such as Chávez’s

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Venezuela and Morales’s Bolivia. In all cases, there is a marked distinction made between intending to carry out a leftist agenda of social justice and self-determination at the microlevel, and macrolevel policies employed to manage the economy. The result is that while the first provides improvement in social indicators—those can also be achieved by across-the-board macro policies—the results of the latter could be much strengthened by having an accompanying social policy. We start with Argentina, where Nestor Kirchner took office in May 2003, with an economy just beginning to recover from its deepest crisis in history, with the consequent levels of poverty and unemployment this brought. His macroeconomic administration has focused on pumping up fiscal surpluses, even after accounting for debt payments, keeping the currency undervalued to help the recovery of local industry and to maintain a trade surplus, and controlling the inflationary adjustments of the devaluation by the previous administration of Eduardo Duhalde. These three policies account for the dramatic upswing in2 the economy, growing at 9 percent yearly until 2007. Such growth recoups the losses accrued in the recession that marked the last years of the Carlos Menem and Fernando De la Rúa administrations and the final meltdown of the Convertibility scheme. The achievement of the fiscal surplus necessitated a very hard renegotiation of the foreign debt, which had been in default since 2002. Kirchner managed to get over 76 percent of bondholders of debt, totaling over $100 billion, to accept a reduction of 65 percent in the value of their bonds, thus reducing the weight of the total debt of Argentina to less than 60 percent of the GDP (EIU 2006a). This made it possible for the government to expand its budget for public investment in infrastructure and to provide subsidies for transportation and energy services at the same time that it restarted paying its reduced debts, all while maintaining a fiscal surplus. Notoriously, public employment has expanded less than 5 percent since 2003, also underlying the emphasis on putting monies on public works to promote the private level of economic activity (EIU 2006a). Investments in public infrastructure have accompanied increases of private investment in manufacturing and services, eventually reducing unemployment from 20.4 percent in 2003 to 8.9 percent in 2007. The ensuing policy reaction has been a dramatic reduction in welfare expenses, especially in the plan designed by the previous administration of Eduardo Duhalde, which provided a minimum income for unemployed people, from 2.5 million beneficiaries to just 800,000. Such trust in the benefits of a private-led recovery are partially confirmed by


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a reduction of poverty from 57 percent in 2003 to 31 percent today, a level still considered too high given historical standards in Argentina. As the economy is visibly overheating from the yearly growth of 9 percent, the government since 2005 has applied price controls to those goods measured in the state’s inflation index. It has also created certain export controls, to reduce the translation of international prices, measured in dollars, into domestic prices, for similar goods, measured in devalued pesos. Those sectors are beef, corn and wheat, accounting for over 10 percent of total exports. Adherence to fiscal tightness has prevented tax reductions, which had increased during the agonizing efforts to prop up Convertibility in 2001, and to manage the aftermath of its demise, in 2002. Most visible are taxes on exports of primary goods, such as soybeans and petroleum. The Argentine state maintains such macroeconomic conventionalism— strong fiscal accounts, competitive currency and emphasis on physical infrastructure—without going into any neoliberal measures, such as further privatizations of state banks or nuclear plants, as demanded by the International Monetary Fund (IMF) since 2002 but patently also, without adopting large-scale nationalizations, currency controls or large real wage increases that might be expected from leftist regimes (Ramirez Gallegos 2006). In fact, railing against the IMF’s role in Argentina’s crisis, and the complicity of international banks against debt renegotiations stands in the strongest of possible contrasts with the government’s mainstream macroeconomic policies and the visible neglect of an active social policy to reduce poverty. Markets seem to be the answer, as a way to accelerate economic growth under rather severe “guidance,” in the guise of selective price controls and export taxes. This approach is criticized by the IMF and the international business press for its lack of adherence to neoliberal orthodoxy. These actors confuse populism with traditional Keynesian economics, in the past often used to lead the way out of recessions. Lula da Silva provides the starkest possible contrast to Kirchner, reflected in the uneasy relationship between the two presidents, visibly affecting the lack of progress in MERCOSUR. Since Lula da Silva took office in Brazil in 2003, his promotion of socially conscious policies has radically changed the role of the state, which now provides minimum income levels to some 44 million people, or 25 percent of the population, through the Bolsa Familia program (Hall 2006). His government has also made very systematic efforts to direct the few fiscal investment monies available at the federal level to building schools and providing running water in the most impoverished areas of the Northeast of the country.

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Such efforts have translated into a reduction of poverty nationally from over 30 percent to less than 25 percent in the last 3 years, a remarkable achievement when one considers that unemployment increased from 8 percent to 12 percent in that same period, according to official figures. These efforts to carry out a leftist agenda have, however, been accompanied by economic policies that have mostly benefited the richest segments of society, especially those related to the financial sector. Lula da Silva has maintained extremely high interest rates in an effort to reduce inflation levels, from a high level of 17 percent when he took office to barely 3 percent today. The price is sky-high interest rates in real terms that have increased the financial sector profits to record levels, while manufacturing and agricultural businesses suffer increasing costs just to borrow operating funds, turning them away from further productive investment (EIU 2006b). In fact, the economy of Brazil, long known for its vitality, has grown just 2.3 percent per year during the presidency of Lula da Silva, the second-lowest rate in the whole of Latin America, better only than Haiti, which is immersed in a civil strife.3 While the economy barely expands at the rate of population growth and cannot possibly generate enough jobs for its new workers, short-term financial flows have moved into the country, now accounting for over 50 percent of the financing of the Brazilian state domestic debt. The profits of these investors were made tax-free by Lula da Silva in 2006, a benefit not even local investors receive (Cortes and Magalhaes 2006). To finance such growing debt, now totaling over 65 percent of the GDP, Lula’s government has had to issue more and more bonds, eventually paving the road for a large crisis in the coming years. The only way out would be a reduction of fiscal expenditures on items other than debt payments, such as state wages and pensions, but Lula da Silva has emphasized that such changes will not happen on his watch. In fact, during his presidency, state employment has grown at 2 percent per year, especially in state enterprises, such as Petrobras (25 percent of the firm’s workforce), Banco do Brazil and others. Brazil, with one of the youngest populations in South America, already has a large retirement pension deficit, equivalent to 2 percent of GDP. Still, Lula da Silva, after initially limiting pension benefits in 2003, has increased pensions since by over 17 percent, more than compensating total inflation rates since 2003 (Bloomberg 21 July 2006). In sum, Lula da Silva’s government has followed a leftist agenda to deal with social problems, especially in terms of giving aid to the poorest sectors of the population, generating state jobs and increasing pensions. In macroeconomic policy, his fiscal largesse has, however,


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contributed to increasing debt, which now consumes over 8 percent of GDP and 20 percent of total fiscal expenditures (IMF 2006). To sustain that, he has increased the size of the state expenditures to over 40 percent of GDP, though without investing much in public infrastructure or in production-friendly measures, such as softer credit terms (do Prado 2006). His monetary policy has attracted foreign investors ready to provide financing in return for high, quick profits, at the cost of an overvalued Brazilian currency. That, in turn, has lowered employment and reduced Brazilian competitiveness. Only high export prices for Brazilian primary goods, such as soybeans, sugar, iron ore and coffee, have reduced the impact of these policies on the overall sustainability of Brazil (EIU 2006b). His government seems to believe that repeating some of the irresponsible management measures of previous neoliberal administrations of the 1990s can today be electorally forgiven if social policies are put in place, on a scale unseen before in Brazil. This vision was certainly confirmed by his reelection in 2006, when, for the first time, the Northeast voted massively for his party, after decades of supporting conservative clientalist parties, while the industrialized South and the agriculturalproduct exporting Center voted strongly against him (Hunter and Power, 2007). Only the fear Lula da Silva awoke of the supposedly privatizing tendencies of his neoliberal opponent allowed him to win in a second round. This was the political verdict on his policies and, as such, it is very valuable. It remains to be seen whether he will keep markets’ favor or, as has happened to other governments before, market forces will turn on him when they decide he cannot continue to afford favoring the poorest and the richest at once, and in such a radical manner. Ricardo Lagos and Michelle Bachelet’s administrations offer a rather moderate lesson on what being leftist might be like. Lagos had a much more difficult time to rule than Bachelet, as the Chilean miracle looked definitely gone or suspended in 1998, when its economy went into recession. After 15 years of growing at 7 percent, the GDP fell 3 percent in 1998, and has grown at only 3.2 percent per year on average ever since. The response of Lagos was to reduce capital controls for financial flows, allow the currency to devalue and argue strongly against the monetarist approach of his central bankers, who were bent on increasing interest rates to contain inflation. He held a strong preference for higher inflation if that reduced the effect of the recession on unemployment, following the logic of classical Keynesianism. Due to the insignificant indebtedness of the Chilean government, he also supported fiscal deficits to finance public investments.

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However, Lagos was not able to advance more of a truly leftist agenda, such as the modernization of labor laws (enacted by Pinochet’s dictatorship) or large increases in the budget for education and public health, due to the weakness of his Concertación coalition. His partners in the alliance systematically vetoed those initiatives, just as much as the rightist opposition parties did, afraid that more rights for workers and more state expenditures could stifle the hand of the market in Chile. The strong reaction from the business community against those measures, and Lagos’s critical rebukes to them, definitely affected the investment climate in the country, and contributed to its slow recovery from 1998–9 crisis, which was finally completed in 2003. The good fortune of high commodity prices has assisted Chile more than any other state in the region.4 The price of its main export, copper, which accounted for over 60 percent of total exports in 2006, has skyrocketed, growing by 310 percent since the lows of 2001. Bachelet arrived in that rapidly improving context but has not continued her predecessor’s policies, focusing instead on cosmetic measures to improve the efficiency of social expenditures. She has refused to provide any substantial increases to public education and health expenditures, producing the largest demonstrations in Chile’s history, in 2006, when over half a million students protested against her education policy. In contrast to Lagos, she has not acted to halt the appreciation of the currency, to the detriment of noncopper exporters (wine, fruit and textiles), nor the very high interest rates that favor the financial over the productive sectors. As in Brazil, the economy is growing timidly, and while poverty is low in Chile by regional standards, at around 20 percent, there have been no improvements since 2001, a standstill that breaks the tendency of previous Concertación governments that eventually brought poverty levels down from over 40 percent in 1990 (ECLAC, 2006 b). It was therefore no coincidence that in the 2004 elections her opposition mounted a very serious challenge with a populist billionaire, Sebastian Piñeira, who campaigned credibly on the failures of the Concertación to reduce poverty and, especially, to deal with increasing social inequality (COHA 2005). Interestingly, Piñeira made the argument that slowness in the reduction of poverty and inequality were relevant causes for the slower economic growth of the country in the last years, an idea that belongs to the most traditional critiques of the Latin American left of neoliberal governments, but more recently has also found its way into World Bank publications. Tabaré Vázquez in Uruguay illustrates an interesting mix of features already described. Like Lula da Silva and Bachelet, he follows a careful


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line in welcoming foreign investment and promoting the benefits of a careful management of fiscal and trade accounts. This is reflected in the strong flows of financial capital back to Montevideo since he took office, appreciating the currency, just as in Brazil and Chile, against the U.S. dollar. Building on the measures taken by the previous centrist government, Vázquez has overseen a recovery of the economy and important reductions in unemployment. That, combined with strong investments in social services and subsidies, in the range of $100 million, has contributed to a reduction in poverty from 22 percent to 17 percent (ECLAC 2006b). But just like Kirchner, the main thrusts of his government are the provision of public infrastructure to accelerate economic growth, such as optic fiber for telecommunications, seaport improvements and roads to assist the development of the new surging sector, cellulose plants. Like Lula da Silva and Bachelet, Vázquez must carry on the weight of having been chosen on an officially “leftist” ticket and thus being expected to follow leftist policies. He therefore shares the fate of being strongly criticized domestically by sectors of the electorate and his own party for following policies that do too little to reduce social inequality, favor foreign financial capital and in trade, as explained before, seem too close to the United States (COHA 2006). These nuances are impossible to apply to the administrations of Hugo Chávez and Evo Morales as both claim to be socialist, and to engage in radical institutional changes of their countries’ politics and economics. Their political discourse emphasizes the achievement of strong changes in the distribution of wealth and income, setting strict limits on the influence of foreign capital, and the threats posed by the United States. Their deeds, in economic policy, provide an interesting window to assert their claim to be “true” leftists. As discussed in the chapter by Judy Meltzer in this volume, Chávez first took office 8 years ago, in the context of a deep recession induced by very low oil prices ($12 per barrel in 1999, compared to $72 in August 2007), and popular dissatisfaction with the political and economic establishment that had ruled the country since the 1950s. In his first years he made radical reforms in institutional arrangements, with a new constitution, filling the judiciary with supporters and attempting to organize new labor unions; he maintained the economic policies of the previous administration, gradually reducing trade tariffs, keeping the Bolivar convertible and real interest rates high to curb inflation via orthodox measures. Foreign investment kept flowing in, at a pace of US$3 billion per year from 1999 until 2001, largely due to the oil

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industry, and regulations were not significantly tightened. The struggle to attack poverty was from the beginning very decisive, with hikes to expenditures in public education and health, the establishment of a system of transport subsidies and, most importantly, a system of stateowned and worker-operated food markets and drug stores, to provide cheap basic goods for the poorest sectors of the population. In contrast, all public funding for physical infrastructure such as roads, ports and energy transportation was slashed; these projects were historically privileged by Venezuelan governments to buy support from the elite (Ellner and Hellinger 2003). These socioeconomic policies, plus his verbal sparring and aggressive rhetoric against the establishment, soon brought the open support of Fidel Castro, who offered to exchange doctors and teachers to attend the poorest sectors of Venezuela, for oil. They also brought a radicalization of the opposition, which promoted a strike in Petrólos de Venezuela, SA (PDVSA, or Venezuelan Petroleum, SA), the state oil company, and soon after, in 2002, brought a coup d’état, headed by the main business leaders. Even though the coup did not succeed, the conflict continued, as Chávez’s main response to these threats has been to radicalize his economic plans (Fletcher 2003). Since 2002, he has followed a three-pronged strategy: first, to redefine the contracts with foreign oil companies; second, to foster the growth of cooperative state-owned industrial and agricultural firms; and, third, to “migrate” Venezuela from the Andean Community to MERCOSUR. These measures are accompanied by the overvaluation of the currency to maximize private consumption by salaried workers (of imported goods, ironically), currency controls to impede capital flight, and very lax fiscal and monetary policies to accelerate economic recovery from the depression of 2002. This cocktail has produced a dramatic economic recovery, achieving GDP growth of 8 percent per year since 2004. High oil prices have certainly helped, mostly to expand the budgets allocated to social policies and the funding for the new cooperative sector. As often happens with such U-turns, the short-term results are very impressive: unemployment has fallen from 25 percent in 2003 to just 11 percent today; poverty has dropped from over 60 percent in 2002 (52 percent in 1998) to less than 35 percent and there are unprecedented booms in consumption and construction driving the economy to the point of overheating, evidenced by an inflation rate of over 15 percent for 2006, despite strict price controls (ECLAC 2006b). The apparent success of this policy is most evident in the fact that, for the first time, Chávez faced a serious challenger to the presidency this December,


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Manuel Rosales, who is an avowed populist, promising to expand social expenditures even more and converting the increased funds for public education and health into cash vouchers to be given directly to the poorest sectors of the population, thus fuelling the consumption boom even more. This would have been a rather “privatized” but equally populist end to the supposedly socialist Bolivarian revolution of Chávez. In Bolivia, Evo Morales’s first year in power has seen very few changes in economic policy, and several of the changes that have occurred have been in counterintuitive directions (see also Jeffrey Weber in this volume) OK For example, he decreed the nationalization of the oil and gas industry, calling on foreign investors to accept new contracts that would turn them from owners of hydrocarbon reserves into providers of extraction and exploitation services. After months of heavy bargaining, Morales eventually achieved his goal, with all foreign companies accepting the new rules. This, plus the increase in taxes on the industry he had promoted while in opposition, has finally turned around the fiscal deficit of 2.3 percent of the GDP in 2004 to a surplus of 5 percent in 2006 (ECLAC 2006a). As discussed in Webber’s chapter, this massive increase in fiscal income has not been accompanied by a corresponding increase in government expenditures. Morales has voiced his preference for following Bachelet’s example, setting up a stabilization account abroad with the surplus funds (The Economist December 13, 2006). After decades of pumping in aid, foreign agencies have withdrawn much of their technical assistance, leaving central government offices bereft in some aspects, such as the capacity to channel surplus funds to social policy. Morales is bent on redistributing not income, but wealth, and proceeding with plans to nationalize mining, and redistribute agricultural land in the eastern provinces. Whether the administration has the capacity to implement those changes, as opposed to policies for gradual social improvement, remains an open question.

Conclusions The examples provided here imply that there is a search for a new balance between states and markets. Post-neoliberalism in the Americas incorporates a wide diversity of partly contradictory policies. Domestic demands and the timing of the countries’ recoveries from the neoliberal experiments of the 1990s are at the root of these differences. For example, the countries most negatively affected by crises, such as Bolivia, Ecuador and Venezuela, are moving toward quite radicalized

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experiments; others, such as Argentina, to milder expressions of reform and intervention; Uruguay and Brazil stand out as persisting with inherited economic and trade policies, albeit with much stronger social policy components. Only Chile still appears to lack the addition of socially sensible ingredients in its macroeconomically sound climate. Neither exaggerating nor minimizing the merits of all these efforts, the picture drawn shows the emergence of a fresh ideational disposition which clearly contrasts with the agenda of the 1990s. There are also very stark differences with pre-neoliberal times, which were associated with import substitution, state capitalism and overexpansionary (populist) macroeconomic policies. Considerable social learning explains the extent to which the specific policies of post-neoliberalism have pragmatically been adapted to new structural conditions. A return to protectionist predecessors is not noticeable, but especially the fiscal and monetary policies espoused by newly elected governments show a strong awareness that despite the current bonanza of high commodity prices, volatile world markets can only be ignored at their own peril. Two conclusions can be drawn from this progression. One is of an orderly prudence, while another shows some efforts to put limits to markets. We have argued that in the realm of economic policies there is a pragmatism that is neither excessively friendly nor totally ignorant of markets. To take the example of Morales: while bent on renegotiating state contracts with foreign firms, his administration shows no distaste for a bilateral trade agreement with the United Sates. Pragmatic policies are those that package sound economic principles around national constraints and opportunities. Since these national circumstances vary, so do the policies that work. True, the shadow of Chávez, not quite the pragmatic figure, looms large in the Americas today. But Chávez’s Venezuela is in a league of its own, partly because of its massive oil revenues, and is not a safe benchmark from which to draw generalizations. All told, if we are to point out the single coincidence in this diversity, there is a very significant one: the search for a new social contract and the emergence of a pragmatic belief in a role for state management combined with prudent macroeconomics. This points to a road where, within the context of a continued market liberal regional order and a mostly market liberal global economy, the scope for real clashes of interest and of values will remain wide, and it is in fact here that we will continue to see the deepest changes. The contours of post-neoliberalism will depend on how these tensions are managed over time, directing the debate over alternatives to neoliberalism (and more activist


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development policies away) from the question of economic desirability to that of political sustainability. This issue deserves to be evaluated in its own right.

Notes 1. Weyland (1999) and others have advanced the argument that Menem’s administration as well as Salinas’s in Mexico and Fujimori’s in Peru were in fact populist governments with neoliberal agendas. While we look at the inclination of some new left governments in Latin America to populist strategies, the possibility of an amicable relationship between populism and neoliberal economic agendas is not denied. 2. Convertibility of the peso had fixed a one-to-one peso-dollar exchange rate. 3. According to some sources, Brazil can no longer be considered part of the Brazil, Russia, India and China economic group, grouped together because they are the largest and most dynamic of the developing world, due to its low rate of growth and continuous deficits (Financial Times September 13, 2006). 4. According to ECLAC annual trade report, high commodity prices explain for the 2003–6 period over 70 percent of the growth in Chilean exports, 60 percent of Venezuela’s, 50 percent of Brazil’s and close to 20 percent for Uruguay and Argentina (ECLAC 2006c).

3 Struggling between Autonomy and Institutional Transformations: Social Movements in Latin America and the Move toward Post-Neoliberalism Ulrich Brand and Nicola Sekler It was effectively the social mobilisation which succeeded in overthrowing corrupt or unpopular presidents, in modifying power relations in various countries, in delegitimizing neoliberal politics and especially privatizations, and which contributed decisively to progressive political sectors reaching government. Nevertheless, the movements’ achievements do not stop here. A new world is emerging on the territories of the movements. … It is not only one world, but different worlds. (Zibechi 2006: 123)

Introduction Since the middle of the 1990s, and more visibly since the beginning of the new century, governments, parties and social movements in Latin America are attracting attention with their explicitly anti-neoliberal discourse. How can this shift to the left be interpreted? In our contribution to this volume, we intend to interrogate from a Gramscian perspective the multidimensionality, dynamics and contradictions of post-neoliberal societal (re)construction processes in Latin America, as well as the role of social movements and civil society organizations in them. We aim less to retell the success stories of individual social movements in changing official policies than to highlight different dynamics, problems and structuring moments of post-neoliberal processes. We argue that in many Latin American countries, neoliberal strategies face 54

Ulrich Brand and Nicola Sekler

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growing resistance from emancipatory social forces and, thus, cannot be implemented as easily as during the heyday of neoliberal hegemony. Ruling forces, in their attempts to overcome the functional and legitimation crises of neoliberalism by means of “passive revolution,” in concert with emancipatory forces create a post-neoliberal discursive and institutional field, which itself represents a novel social context for all actors. After briefly outlining our theoretical point of departure, we demonstrate, though a selective discussion of the experiences of social movements in Argentina, Venezuela and Mexico, how post-neoliberal strategies and practices are unfolding and how social movements relate to institutional transformations in the region. Particular emphasis will be put on the relationship between social movements, the state and autonomy.

Post-neoliberalism as a deconstructive perspective What do Zibechi’s new worlds, outlined above, look like? Where do they emerge, how do they interact with each other and how do they relate to the “old” world of neoliberalism? Below, we articulate a deconstructive perspective which will help to demonstrate the multiplicity of actors, practices and strategies in their complex interactions, as well as throw light on the contradictions inherent to the ongoing struggles for social transformation. Hegemony as a social process In the Gramscian tradition, hegemony refers to the capacity of ruling social forces to impose their own material interests in such a way that these are acknowledged by other social forces, in particular subaltern ones, as legitimate and representative of the general interest of society. Thus, hegemony is not based on the repressive performance of ruling forces and institutions, but rather on the consensual integration of subaltern interests by active agreement or passive acceptance. Hegemony is not only constituted and consolidated within official political institutions at the national level but at multiple scales and operates at different societal levels and grounds, reaching deep into the inner fabric of society and the consciousness of people. Gramsci sees the relative stability of hegemonic conditions as rooted in the effectiveness of everyday consciousness (PN 1: 209; quotes are our own translation); hegemony must be thought of as “practices which are immanent to the living and working conditions” (Adolphs and Karakayali 2007: 123). The more “plausible” and coherent a societal

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Post-Neoliberalism and Social Movements

power constellation, the less obvious it becomes that “[s]ocial relations are shaped in and through political struggles” (Torfing 1999: 70), and the more difficult the repoliticization of these relations becomes. Gramsci’s notion of hegemony has often been misappropriated in a mechanical and descriptive fashion to examine momentary power constellations in an effort to determine the solidity of a given hegemony. Following Gramsci, who saw the production of hegemony “as a continuous formation and overcoming of unstable equilibriums” (PN 7: 1584), we emphasize the procedural aspects in creating hegemony in a society characterized by ever-existing contradictions which require regulation.

Civil society as the “Arena of Struggle” of diverse actors Civil society is the socially determined “place” for disputes over hegemony, for social struggles over interpretations and “truths” and for organizational forms of society, thus for the stabilization and the questioning of hegemony. Gramcsi’s understanding of civil society differs from normative or liberal civil society concepts in at least three ways (see, for example, Cohen and Arato 1992): firstly, civil society is conceptualized not as a sphere which is opposed to the state, but as an integral part of the state, signifying that hegemony is deeply rooted within civil society. The state, as a specific societal relationship and institution, solidifies hegemonic power relations and the connected balances of compromise, and “armours” them through financial, administrative, legal, discursive and physical means. This implies, secondly, that civil society, as the platform where disputes over hegemony are solved, is not a neutral realm as the “rules of the political game” form part of the hegemonic frame which either have to be largely accepted by actors within civil society or actively opposed. Thirdly, consensus within civil society is produced through complex processes where the power to reach a consensus is neither equally distributed nor can it be clearly determined whether acceptance occurs “out of inner conviction, due to coercion produced by societal conditions, or the fear of the use of violence” (Scherrer 2003: 481). What then is the added value of a Gramscian view of (civil) society and civil society organizations? A central insight is that civil society actors are seen as socially embedded, as contributing through variegated practices and strategies to either the stabilization or destabilization of hegemony. Moreover, neither civil society nor civil society organizations are “progressive” as such, evidenced by the fact that corporate lobby groups, paramilitary groups and racist organizations, in their struggles


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for hegemony, also form part of civil society. However, in the following examination of the “post-neoliberal field,” our focus will be on who we consider to be progressive civil society actors. Our case studies will deal with those nongovernmental organizations which are situated close to social movements and with social movements themselves.1 Social transformation, we argue, is also, but not exclusively, a process in which the molecular structures of society are displaced as a result of everyday practices located beneath the (visible) surface. This bears methodological consequences: sometimes underestimated in state and social theory inspired by Gramsci, the recent experiences of Latin America, firstly, highlight the decisive role of processes and structures of societal self-organization as part of the struggle for autonomous social spaces. Linked to this is, secondly, the idea that unobservable societal developments and actors, which have not yet crystallized into organizations and movements and might never do so, also need to be included in the analysis. While these are difficult to identify, we nevertheless suggest taking this methodological problem seriously.

Counterhegemonic strategies, practices and projects How can we then comprehend the complex relationship between existing hegemony and attempted “counter-hegemony”? From a Gramscian viewpoint, profound social transformations tend not to take the form of sudden breakdowns, but are rather preconditioned by previous developments. Following Zibechi (2006: 124), “other worlds” are shaped into a specific form over a long period of time, in a molecular process of inner destabilization of hegemonic social relations, leading to changes in everyday consciousness and engendering a breeding ground for “a different view of things.” In times of (legitimation) crises, as can currently be observed in many Latin American countries, the “defence” of the existing hegemony and the “attack” against it through the construction of elements of a new hegemony are taking place at various “front lines.” Schematically outlined, the dominating group tries to reestablish its rule by means of passive revolution. Following Gramsci, this implies “that ‘progress’ [comes about] as a reaction of the ruling classes to the sporadic and non-organized ‘revolutionist behaviour’ of the popular masses” (PN 8: 961). In this process, the dominant group takes up some of the demands of the “revolutionists,” without however providing substantial material concessions or integrating central counterhegemonic figures into a new compromise.

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The “revolutionists,” on one the hand, must offer resistance against these co-optation attempts. On the other hand, they aspire “to develop a new praxis of politics, which is dissymmetrical vis-à-vis the [hegemonic] praxis of politics” (Adolphs and Karakayali 2007: 125). Although counterhegemonic practices, strategies and diverse far-reaching and short projects often uniformly take neoliberalism as their point of reference for developing alternatives, they, in fact, address very specific problems, for example environmental issues and consumption behavior, and differ in levels, contexts and scope of action (see the introduction to this book). The degree of rupture with “the old” is very dissimilar and highly idiosyncratic, and, in the end, even if they intend to, not all counterhegemonic practices are really challenging institutional and state policies (Zibechi 2006: 125). Thus, the reconstitution of hegemony and the establishment of counterhegemonies occur at the same time, on multiple levels and at countless points, thereby creating a plurality of political spaces and struggles.

Toward a deconstructive perspective Analyzing the transformation of society in Latin America and the role of social movements from a deconstructive perspective involves three basic elements, each located at a different level of abstraction. Firstly, from a Gramscian point of view, both destructive-destabilizing and constructive-stabilizing processes are developing at multiple scales and with contradictory dimensions at the discursive, political and economic levels, at times solidifying into a hegemonic bloc. Secondly, applied to progressive actors, this means that, to establish a new hegemony, old elements have to be deconstructed and disarticulated, co-optation attempts averted (destructive aspect) and new social norms established (constructive aspect) by means of practices, strategies and projects. In these contradictory processes, partly occurring at the molecular level, either more destructive or more constructive elements will prevail, depending on the social context and the actors involved. Thirdly, a deconstructive perspective also implies that, presupposing the permanent existence of contradictions, we do not look for a unitary, postneoliberal project (“socialism of the 21st century,” etc.); we rather consider post-neoliberalism as an open process, which contains different and contradictory struggles of a variety of actors, including both continuities and discontinuities with previous social formations (see the introduction to this volume). But despite our emphasis on the molecular and ambiguous character of post-neoliberalism, we are looking for


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instances of the solidification of post-neoliberalism, where diffuse protests are converted into joint strategies, small projects or lived alternatives: a “post-neoliberalism under construction” (Borón 2003).

Diversity and contradictions: Post-neoliberal practices and strategies In contradistinction to the radical social and political movements of the 1960s and 1970s, which predominantly focused on class concerns and how to conquer state power, contemporary social movements have abandoned the assumption that there is one privileged actor—the working class—which is to be steered by a political party in close cooperation with unions. In the changed political, socioeconomic and cultural context of the early twenty-first century, a class- and state-centered approach would be too exclusionary, ignoring other conflicts and the emancipatory claims of farmers’ and indigenous peoples’ movements; too “unrealistic,” given the diminishing role of formal labor relations and trade unions, on the one hand, and the increase of precarious and informal labor along with an uprising of movements of the unemployed, on the other hand; and too much focused on the national level, considering that the nation-state is now less representative of the central political-institutional and symbolic level of the sphere of politics. Instead, by focusing on central sites of conflict in Argentina, Venezuela and Mexico, we will highlight the limits and prospects of different views on and approaches toward social transformation through counterhegemonic social strategies and practices, which we consider to be at the heart of emancipatory variants of a post-neoliberalism. Our interrogation of particular post-neoliberal experiences will be guided by the following questions: How have post-neoliberal practices emerged and what are their main objectives? If, as we have argued above, emancipatory movements and organizations act in a deconstructive manner, what does this mean in practice? Which forms of organization, decision-making and action have they developed and how do they understand social transformation? Material reproduction as a process of self-organization All over Latin America, the growing precarization and informalization of labor relations, the increase in unemployment levels and the (economic, political and social) marginalization of growing parts of the working population under neoliberal policy regimes have led to the search for and discovery of alternative forms of material reproduction.

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These efforts are, moreover, accompanied by alternative forms of political organization and subjectivities which are distinct from established political forms and actors, as our following discussion of the Piqueteros in Argentina and cooperatives in Argentina and Venezuela will demonstrate. The Piquetero movement The Piquetero movement emerged in the mid-1990s in Argentina out of diverse social contexts: in the heartland of the country they form part of las luchas de los sin (the struggles of those without) (Favaro et al. 2006: 96), organized struggles of the unemployed, the homeless and illegal immigrants, while in the Buenos Aires region they built on the land struggles of the 1980s and more recent anti-privatization struggles. The movement was sparked in both cases by the participants’ loss of their jobs, their main source of economic survival, and the social disintegration that followed. Some of the Piquetero organizations went far beyond the goal of securing wage labor and integration into the “normal” wage system, and they started to question the dominant form of social relations as a whole, demanding the radical reconstruction of society (Campione and Rajland 2006: 309–10). Claiming that the categorization of the Piqueteros as “unemployed” risks degrading and depoliticizing their typical forms of resistance, they emphasize that road and supermarket blockades are not simple acts of desperation and destruction committed by marginalized victims but rather political, spontaneous and, at the same time, goal-oriented actions (MTD Solano 2003: 95). On the one hand, typical social actions in the form of traffic blockades attempt to make visible and public the protests against mass unemployment. On the other hand, state subsidies—achieved through social struggles—are used to establish alternative forms of economic organizations, such as cooperatives, popular kitchens, communal health care offices and other community centers (see Svampa and Pereyra 2004; Oviedo 2004). Initially, the struggle of the Piquetero movement took place mainly outside of the traditional realm of political and social institutions (Colectivo Situaciones 2003: 71). However, the Piquetero movement is currently facing significant fragmentation, caused by the successful cooptation of leaders of some of the Piquetero organizations by the government of Nestor Kirchner. This helped Kirchner not only to stabilize and normalize capitalism in Argentina but also to establish a consenso anti-Piquetero, based on the division of the movement into constructive sectors, open for dialogue, and “radical” and “criminal” ones, seen as


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“combative” organizations (Campione and Rajland 2006: 307). At the same time, traditional leftist parties and groups successfully took over parts of the Piquetero movements and contributed to further deepening the existing differences in ideological and political-strategic orientations, including the organizational and decision-making structures of Piquetero organizations. While some organizations are supportive of vanguardist and elitist ideas, and think about creating an effective organization for the eventual socialist revolution, others have from the very beginning supported basic democracy, autonomy and horizontal forms of organization as the basis for societal transformation from below, as they do not believe in “a revolutionary change in favor of the majority of the population” from above (MTD Solano 2003: 100–1). In general, the “post-neoliberal” scenery in Argentina contains a number of contradictory elements. The economic recovery of Argentina in recent years—based on nuanced changes in official economic policies accompanied by a strong anti-neoliberal official discourse—has contributed to the material enrichment of a growing sector of the population. In consequence, the Piquetero movement has lost public support, as evidenced by the declining number of affiliated organizations. The Piqueteros currently concentrate on deepening the autonomous social structures in their own barrios and achieving broader legitimacy within civil society, by building alliances with partners in other sectors of society (such as workers, in stable and precarious labor conditions alike, and students), while some have started to rethink and redefine their identities beyond their roots as Piqueteros (Berger 2007: 34). Cooperatives and self-organization Forms of self-determination and self-organization of production are also emerging in a range of other social contexts, as the examples of cooperatively organized occupied firms in Argentina and cooperatives in Venezuela show. The occupation of production sites in Argentina started in the mid-1990s, but increased during the economic crisis of 2001–2. In a context in which owners and management were clearly defying the law, for example by not complying with their commitments to pay employees, the occupation of factories and the questioning of the norms of property seemed to be “justified” (Rebón 2004; Ruggeri 2005). Many different approaches and processes have been termed “occupations” which were initially neither necessarily politically motivated nor fundamentally oriented against property or capitalist production forms. Thus, debates about what the new “world of work” emerging from “the ruins of the old” (Zibechi 2003: 135) should look like occurred in

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different forms in the approximately 160 “re-conquered” firms.2 Starting with the question of legal status—state-ownership under workers’ control against self-administrated cooperatives—a political debate unraveled about the concrete forms of organizing self-control and, in a broader sense, societal transformation. While the old notion of nationalization is linked to a state- and party-centered concept of revolution, frequently combined with the continuity of hierarchical organization of the labor process, the concept of self-government questions the Fordist division of labor and attempts to transform everyday practices (Zibechi 2003: 137–8). After experiencing long-standing “normal” labor conditions, one of the biggest difficulties facing workers is “starting to think again,” learning to make decisions democratically and taking over responsibility from the former management (Zibechi 2003: 144). The heterogeneity of the processes of taking over production sites led to the coexistence of different national alliances: while the Movimiento Nacional de Empresas Recuperadas (MNER—National Movement of Recovered Companies) holds on to the vision of an overall social transformation reflected in the integration of cultural and educational centers on production sites, the Movimiento Nacional de Fábricas Recuperadas por sus Trabajadores (MNFRT—National Movement of Worker’s Recovered Factories) limits itself more to economic and work place-centered concerns. The Federatión Argentina de Cooperativas de Trabajadores Autogestionados (FACTA—Argentinean Federation of Self-Managed Workers’ Cooperatives), which emerged out of the MNER environment in 2006, reflects a new trend in this movement toward a more pragmatic solution for everyday problems, without overemphasizing ideological differences. Most of the occupied enterprises are largely integrated into the production and distribution chains of capitalist markets. But incoherent state policies, the amount of financial indemnification that has to be paid to the state and the possibility of the return of former factory owners contribute to a precarious financial and legal situation. A deconstructive praxis here results not only in selfdetermination by workers but also in self-exploitation and the lack of social benefits. The aims of FACTA therefore include the passage of a national law governing expropriation that would replace the individual and precarious solutions currently employed, and the improvement of the networks linking occupied enterprises and other self-organized companies, helping them to better cope with the requirements of the capitalist market (Rebón 2007 and 2004; Ruggeri 2005). It remains to be seen whether the movement of occupied enterprises in Argentina is stabilizing or destabilizing capitalism. It contains


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destabilizing, post-neoliberal and even anticapitalist moments, not only because of the daily experience of self-management but also because self-organized production sometimes goes “beyond the factory doors” (Zibechi 2003: 139). This means that, as a result of positive experiences, other societal projects emerge in the surroundings of occupied firms, such as self-organized popular kitchens, cultural and health centers and so on. At the same time, some argue that factory takeovers contribute to a real shift in the distribution of power in Argentina, insofar as the threat of factory closure, traditionally used by owners to downsize wages, has become less effective because self-management by workers has become a viable alternative (Campione and Rajland 2006: 306). In view of the recent economic recovery and a certain “normalization” of capitalism, it has to be seen to what extent the experiences of “postneoliberal” labor organization which are rooted in everyday experiences will carry forward, and to what extent they actually represent post-neoliberal projects able to broaden their effects and challenge the hegemony of neoliberalism. In contrast to Argentina, where cooperatives emerged in opposition to the state, in Venezuela, the majority of the more than 180,000 existing cooperatives were created with strong support from Hugo Chávez (Müller and Lambert 2007). As the Bolivarian constitution outlines, “[the state] promotes and protects those associations, whose aim is to improve the basic and alternative economy” (Article 118).3 The support given to cooperatives through the comprehensive training project Vuelvan Caras (Mission About-Face) is embedded in the larger transformation of the whole society toward a model of endogenous development, labeled “21st century socialism” (see the chapter by Meltzer in this volume). Therefore, cooperatives form part of the state’s overall development strategy, and promote the establishment and stabilization of the socialist project. The Venezuelan state is the initiator of this process as it guarantees the initial financing of cooperatives and makes available monetary resources for training offered to all members. The organizational structure of cooperatives—with a president, a secretary and a general assembly, which meets once a month—is regulated by the state and formally identical in all state-subsidized cooperatives. How strongly this process, initiated “from the top,” contributes to a broader transformation of society and to the greater independence of initiatives is again unclear. If support programs turn out to be an “instrument for private appropriation” (Arps and Zelik 2006: 126) and if personal enrichment prevails, as suggested by some observers, they do not necessarily act to promote the stabilization of the socialist project.

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Evaluation As different as the described examples of “self-governed” material reproduction might be, they are all contributing to a (molecular) restructuring of labor relations as a field of conflict, and to the redefinition of the concept of work, as well as of the relationship between labor and capital. This is reflected, for example, in the creation of new trade unions, and the reorientation of existing ones, in Argentina and Venezuela. The goals of self-organization might be diverse—out of necessity, related only to a certain project or part of a search for overall societal change— and might alter over time toward a “visible” reintegration into the normal schemes of production and reproduction. But if we take Gramsci and our initial remarks on social transformation seriously—considering such transformation as a long-term and molecular process—we have to emphasize these largely invisible processes. “Upheavals” at the level of everyday consciousness and subjectivity are part of self-organization attempts, with all their contradictory character and their precariousness. Thus, continuous negotiations and mediations are required between individual necessities, personal well-being and profit seeking, on one hand, and common goals and the politically motivated and desired social transformation, on the other hand (Rebón 2006: 271). The Piquetero movement, in its honeymoon period, was able to connect with and to build on existing networks, demonstrating that formerly established consciousness and structures continue to linger beneath the surface, waiting to be invoked. The examples above also afford us the opportunity to discuss how state institutions have been restructured and reshaped during “postneoliberal struggles” by means of the co-optation of key subaltern forces, and how the state has returned to being an important site for social struggles and compromises. In Argentina more radical movements are trying to defend their autonomous structures; to resist cooptation attempts; to broaden their base of supporters; and to struggle for their political, socioeconomic and cultural place within society. In contrast, in Venezuela, the state acts as co-initiator of material and discursive-symbolic changes, continuously intervening and rebalancing the societal and political fields of power.

Autonomy and transnationalization of the Zapatistas Another example of post-neoliberal social transformation has occurred in the southern Mexican state of Chiapas. The Ejército Zapatista de Liberación Nacional (EZLN—Zapatista Army of National Liberation)


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refers to its transformative project as an island of autonomy which seeks to meet with many other islands (Subcomandante Marcos 2003: 10). Since the beginning of the rebellion on January 1, 1994, the Zapatistas have become global icons of the critique of neoliberalism. When the “Intercontinental Encounter against Neoliberalism and for Humanity” was convened in 1996, the Zapatistas made links with many other leftist movements and organizations, and developed a unique understanding of politics which rarely refers positively to institutional political processes. Instead, the Zapatistas’ ultimate goal is to create self-determined social spaces, alternative subjectivities and, emanating from this, a different kind of society (most explicitly theorized by Holloway 2005 and Ceceña 2004; for a critique see Borón 2001). As a consequence of their centuries-old experience of exploitation, disdain and marginalization, the issues of autonomy and indigenous identity lie at the center of the claims of indigenous communities in Chiapas. The Zapatistas stand not only for far-reaching autonomous practices and the transformation of socioeconomic and cultural living conditions but also for a radical critique of the ideas of political representation. In 2005, alternative practices of mandar obedeciendo (leading by obeying) were established in the region in form of caracoles and juntas del buen gobierno (a radical democratic form of government with rotating mandates). While initially the neoliberal project was the central reference point of their struggles, the Zapatistas started articulating anticapitalist ideas beginning in 2006. They have also recently renounced the use of military violence and, instead, aim to “struggle with words” in order to undermine hegemonic ideas within society about the impossibility of social transformations (Huffschmid 2000; Kasnabish 2004). Concerning indigenous identity—which is analytically combined with class and gender issues (Millán 1996)—the Zapatistas act deconstructively in a number of ways. They attempt to attack secular racism, which converted the Mexican indigenous inhabitants into indios de mierda (“fucking indigenous”), located at the lowest end of the social division of labor. One of the goals of the Zapatistas was (and continues to be) to inspire Mexico’s civil society—understood as a (potentially) politicized totality of discontented people in the country—to organize itself in an emancipatory way. However, the Convención Nacional Democrática (CND—National Democratic Convention), launched in 1994 to consult with the progressive forces of civil society, and other similar initiatives did not last long. Only the Congreso Nacional Indígena (CNI—National Indigenous Congress), which was co-initiated by the

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Zapatistas and was conceived as a counterpart to the paternalistic state organization, remains in place. Between 1994 and 2001, the Zapatistas attempted to change politicalinstitutional relations in Mexico in the interests of the indigenous and marginalized, in addition to their efforts to create autonomous living spaces and to initiate societal self-organization. A highlight of this was the San Andrés Agreement of 1996, which called for the inclusion of indigenous rights in the constitution. However, once the Senate had ratified a significantly watered-down version, the Zapatistas withdrew from the process of constitutional change and started concentrating on the construction of autonomous political structures in Chiapas. Although the state actively attempted to deprive the Zapatista rebellion of its emancipatory potential and to reduce social struggles to the issue of indigenous rights, in the end, it did not cave in to the Zapatistas’ demands, even on this central conflict ground of indigenous rights. In the summer of 2005, the Zapatistas launched another public campaign, La Otra Campaña (“The Other Campaign”), aiming to provide an alternative to the presidential candidate of the Mexican left-liberal Party of the Democratic Revolution (the PRD), Manuel López Obrador. The campaign’s main goal was to raise the issue of and reconceptualize the relationship between emancipatory movements, leftist parties and the state, a key consideration for many social forces in post-neoliberal times, with new left governments in power in many Latin American countries. The campaign dealt mainly with the question of how to engage López Obrador, and other leftist leaders, who do not seem to be willing or able to meaningfully break with the dominant neoliberal project, but rather seek to promote a gentler, more inclusive version of neoliberalism within the limits of the existing, and highly exclusionary, parliamentary model of democracy (see the chapters by Macdonald and Mahon, and Ruckert in this volume). Although the Zapatistas’ initiative may have weakened the position of the PRD during the election campaign, depriving López Obrador of his victory, the relative strength of the PRD nonetheless indicates a political shift to the left for which the Zapatistas are partly responsible. Even though its origins are rooted in specific experiences in Chiapas, from the very beginning the Zapatista movement has evoked resonance in the whole of Mexican society and even at the transnational level (Holloway and Pelaéz 1998; Brand and Hirsch 2004). Indeed, the Zapatistas became an important reference point and catalyst for other social movements and processes. Some consider them to be the point


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of origin of the social justice movement and demands for a more just form of globalization, which received worldwide attention at the protests against the World Trade Organization (WTO) in Seattle in 1999. Zapatismo, understood as a search for emancipatory practices, develops in interaction and dialogue with other parts of (civil) society, both locally and transnationally. Seattle, Genoa and many other visible, and less visible, forms of resistance are strengthening the struggles in the mountains of the Mexican southeast (Huffschmid 2000; Brand and Hirsch 2004). It remains to be seen to what extent the Zapatistas will be able to fundamentally transform the Mexican society. In collaboration with others, they succeeded in discrediting the corporatism of the Partido Revolucionario Institucional (PRI—Instituional Revolutionary Party) in Mexico. They also are the main critics of various neoliberal development projects, such as the Plan Puebla Panamá or the Corredor Mesoamericano which seek to link southern Mexico with the economies of Central America (López Ramírez 2005). At the same time, the Zapatistas can provide little opposition to neoliberal strategies outside of Chiapas and their project remains permanently threatened, especially by state repression and attempts at co-optation. An important factor promoting the Zapatistas’ survival from the very beginning was the support of a transnational public. The Zapatistas demonstrate clearly that a politically radical and emancipatory approach can be developed through learning processes and concrete actions, which allowed them to overcome, again and again, their own limits as well as obstacles from the outside. This is the sense of the Zapatista slogan “preguntando caminamos” (asking we move forward), a slogan difficult to live by in the militarized context of southern Mexico (Ceceña 2006). It can be concluded that the Zapatistas have been relatively successful in establishing autonomous structures in parts of Chiapas and in organizing Mexican indigenous people. These are the counterhegemonic and “revolutionary” aspects of their rebellion. Additionally, on a worldwide scale, they have had a catalytic effect on the international critique of neoliberal globalization. However, on the level of Mexican civil society, they have only been partially successful in promoting greater popular self-organization. In the formal political sphere, they strongly contributed to the destruction of the PRI one-party rule; though the renovation of party and state has been led by an alliance of neoliberal-conservative forces, including the Partido de Acción Nacional (PAN—National Action Party) of current President Felipe Calderón. Nevertheless political space has been opened up since 1994 for the leftist party PRD, partly due to

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the fact that the Zapatistas have had a lasting impact on the shifting power relations in Mexico.

Conclusion: Autonomy, social movements and the state From a Gramscian perspective, post-neoliberal practices, experiences and actors cannot be measured in positivist terms as they remain largely invisible and brew under the surface. Nevertheless as we have demonstrated earlier in our discussion of political movements in Argentina, Venezuela and Mexico, at certain points these practices become visible, and as they articulate with each other, their deconstructive content is revealed. This process has arguably played a fundamental role in the emergence of post-neoliberal alternatives in Latin America. For many emancipatory civil society actors in Latin America, questions of autonomy are of central importance, particularly those regarding “separation,” “self-government” or “self-determination” (Gabriel and LATAUTONOMY 2005: 73). Moreover, research in the area of cultural politics has demonstrated that the demand for autonomy is often connected to struggles for social and political citizenship rights and the transformation and expansion of cultural-political spaces as can be seen in the Zapatistas’ struggles for indigenous rights and alternative social spaces (Alvarez et al. 2004; Kaltmeier et al. 2004a, for a critical perspective see Bruckmann and Dos Santos 2006: 21). Closely connected with autonomy is the concept of “social territoriality,” understood as the point where social, productive and reproductive relations crystallize and build the context for alternative forms of economy, decision making and organization in the barrios and rural communities.4 However, autonomous spaces are not to be understood as isolated spaces, nor are self-determined practices and strategies of resistance necessarily antistatist or anti-neoliberal. Autonomy as concept and practice can indeed be articulated with neoliberal ideas and can potentially amount to the self-organization of misery (see Kaltmeier et al. 2004a: 15–17). In a broader sense, the relationship between social movements and the state, institutional politics and traditional forms of representation plays a crucial role—even though this area was not analyzed in much depth in this chapter. Interestingly, the search for “post-neoliberal” and nonimperial alternatives in many Latin American countries is not focused on the state and traditional political institutions, as recent historical experiences of corruption by state, party and trade-unionist elites are too deep rooted. For many movements and NGOs, the state


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has predominantly been experienced in the form of patronage systems, repression and exclusionary discursive and institutional practices. At the same time, recent developments in Venezuela and Bolivia, and the emergence of new left governments more broadly, illustrate that the state also represents a site of engagement, where emancipatory goals can be advanced and strengthened. This ambiguous view of the state is also evident in the contradictory relationship between social movements and “their” progressive center-leftist governments. In fact, progressive civil society organizations position themselves differently in relation to the state, from recognizing the state and its local and national apparatuses as an essential site for conflict and compromise, and as guarantor of rights, to completely rejecting the state, based on the view that it is too heavily entangled with the interests of international capital and imperial states. This division in opinion is also present in evaluations of traditional forms of representation, through political parties, big lobbyist associations and trade unions (Bruckman and dos Santos 2006: 20). A sometimes strong critique and consequent rejection of representative democratic structures is partly related to the neoliberal transformation of the state and the undermining of liberal-democratic structures and processes, which, for historical reasons, were never particularly “inclusionary” and participatory in Latin America. To conclude, the analysis of emancipatory forces within Latin American civil society poses enormous epistemological challenges (Zibechi 2006: 142–7), given the absence of any concrete blueprint for post-neoliberal societal transformations. Various recent examples demonstrate that problems have been tackled in a pragmatic manner and in specific contexts, and, for that reason, to identify postneoliberalism in Latin America cannot mean to seek out a coherent post-neoliberal blueprint. The notion of post-neoliberalism is more usefully understood as capturing manifold processes demarcated from neoliberalism, processes in which social movements and NGOs always run the risk of being converted into a “Trojan horse for new forms of domination” (Kaltmeier et al. 2004a: 20). However, if the various post-neoliberal practices and strategies are turned into an emancipatory direction, they might be able to follow the Zapatista postulate: a world is required in which many worlds fit. Yet this signifies not only a simple coexistence between different projects of social transformation but also moments of generalization, in the sense of developing common rules of coexistence and conflict settlement which are accepted by all. This is no small objective and there is no fixed goal. Preguntando caminamos.

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Notes We would like to express our gratitude to Miriam Heigl, Daniel Kumitz, Bernhard Leubolt, Arne Ruckert, Stefan Schmalz and Anne Tittor for providing useful comments. Special thanks go to Stefan Armborst for the translation of this chapter into English. 1. In the peripheral countries, John Clark (1991) differentiates between selforganized Grassroots Organizations (GOs), supporting Grassroots Support Organizations (GRSOs) and Service Organizations (SOs) on one hand, and regional, national and international active Advocacy Organizations (AOs), which exist above all in the First World, on the other hand. 2. Figures vary enormously, depending on whether the self-organized firms, which have not been directly reconquered by the employees, are included or not. 3. One of the best-known pre-Chávez cooperative is Cecosesola, emerged out of a collectively organized funeral services company 40 years ago, including at present, 80 mostly agrarian, basic collectives, and 2000 associated members. 4. The concept of “territoriality” derives its political explosiveness from the fact that neoliberal-imperial projects are currently characterized by the increasing control of territory (Ceceña 2006).

4 Post-Neoliberalism and the Emergence of Human Rights Politics in International Finance Elizabeth Friesen

Introduction Capitalism is an evolving and adapting form of political economic organization with variations which differ with time and place but which are drawn together by the common threads of private property and the market mechanism. Antonio Gramsci’s concept of hegemony and counterhegemony and Polanyi’s concept of movement and countermovement both point to the dynamic and adaptive character of capitalism (Polanyi 2001). Some recent academic work has also explicitly addressed this adaptive capacity of neoliberal capitalism. For example, Doug Porter and David Craig discuss the emergence of a new phase of “inclusive” neoliberalism (2004: 391), while Jamie Peck and Adam Tickell examine the transition from “roll back” to “roll out” neoliberalism (2002: 384). In their views, neoliberalism has undergone a transformation and is being replaced with an apparently gentler version of its former self. How has this been accomplished? Arguably the battle over the rules and values governing international finance has played an important part in accomplishing this. This chapter looks at the ongoing debate over the structure of international finance and, in particular, the impact of the introduction of human rights politics into the debate around debt cancellation. In the last two decades, norms and values have played an increasingly important part in the struggles to determine the rules governing global finance and debt. This chapter traces the history of the apparent shift away from the Washington Consensus (WC) within international financial institutions (IFIs) and examines the origins and strategies of the multitude of civil society organizations (CSOs) that have challenged the WC. I contend that transnational civil society actors have 71

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Human Rights Politics in International Finance

played a crucial role in shifting attitudes and influencing policy at both national and transnational levels. This account provides an example of the tension between the outcomes of capitalist market dynamics and the social reactions to these outcomes—a process of contestation that, while apparently presenting a challenge to neoliberalism, at the same time, contributes to the resilience and the adaptive capacity of capitalist systems. While this chapter focuses on challenges to the global financial system, these challenges have played an important role in the emergence of post-neoliberal regimes and dynamics in the Americas. As discussed by Brand and Sekler in this volume, social movements in the Americas were key actors in challenging the dominant neoliberal paradigm at both the national and regional levels.

Historical background The negative effects of structural adjustment programs (SAPs), intended to remedy the Third World debt crisis, eventually brought the WC-based norms and values underpinning the international financial system into question. These effects, interpreted and publicized by transnational CSOs, politicized the terrain of the debate, and popular pressure, coupled with the use of “boomerang politics” (Keck and Sikkink 1998: 12), slowly effected change in the policies of the IFIs. The background to the debt crisis is a familiar story. The demise of the Bretton Woods order in 1971 led to the development of international financial markets and the reemergence of global finance. At the same time, the oil shocks of the 1970s resulted in substantial sums of “petrodollars” seeking new international investment opportunities. Finally, policies which sought to alleviate poverty through economic development were enthusiastically embraced in the postwar period and, ironically, the lending associated with this was an important part of the dynamic which led to the Third World debt crisis. Driven by attractive profits, international lending took off in the 1970s and, as long as debt could be rescheduled and serviced, commercial banks continuously ignored danger signals (George 1988; James 1996; Escobar 1995). The end of the debt boom came suddenly with the Mexican financial crisis in the summer of 1982. In only a few days it became clear that, contrary to the prevailing wisdom, countries could indeed go bankrupt and, in the process, threaten the stability of the entire global financial system. These events marked the official onset of the debt crisis. In the early 1980s, the goal of adjusting the structure of the economies of the developing world in line with neoliberal theory began to

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take hold within governments and inside the Bretton Woods institutions (BWIs) (Escobar 1995: 93). It was not until 1985, however, that the Baker Plan was launched. Under this plan, debtor countries would receive funds to restructure their debt provided they restructure their economies according to the neoliberal policy prescriptions of the International Monetary Fund (IMF). In theory, structural adjustment would allow unencumbered market processes to generate wealth, and enable debtors to service their debts and thus end the chronic cycle of crisis and default. By the late 1980s, even though it was becoming increasingly obvious that SAPs were failing, the neoliberal point of view retained its theoretical persuasiveness within expert circles, as failures were attributed to shortcomings in the application and implementation of SAPs (James 1996: 399). Finance was seen as an elite activity, confined to the realm of experts and too important to be left to the uninitiated. Although there were significant protests against SAPs, such as the notorious “IMF riots,” these focused primarily on specific grievances within individual states (George 1988: 80–222; James 1996: 534–41). However, the failure of SAPs contributed to growing resistance within civil society, eventually leading to the reframing of the debate over the organization of international finance from a narrow, technical debate driven by experts to one which included questions bearing on fundamental human rights. As transnational CSOs joined forces with local and regional groups, they stressed that the organization of international finance was too important to be left to experts.

Early challenges to the neoliberal financial architecture The 1948 Universal Declaration of Human Rights (UDHR) provided a statement of human rights including a number of economic rights. Numerous secular, as well as religious, nongovernmental organizations (NGOs) embraced these ideals. At first, most NGOs focused predominantly on international relief work, but a number of these have gone on to become important actors in the struggle over the international financial architecture.1 Dependency theory provided a compelling critique of “bourgeois development economics” from the perspective of the developing world (Escobar 1995: 80), and environmentalist critiques cast doubt on the capacity of the institutions of Western capitalism to deal with environmental issues (Escobar 1995: 193; TOESUSA 2004). By extension these critiques suggested that capitalist institutions were not capable of adequately addressing a number of externalities, in particular

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issues of social justice. However, at this point, these arguments had little influence in official circles. States also presented early challenges to neoliberal restructuring. As debts required extensive restructuring and international lenders negotiated to impose conditionalities, individual debtor states attempted to resist these new terms. In June 1984, 11 Latin American countries met at Cartegena and formulated a charter to promote the general default on their external debt. In the end, however, this effort failed. Similarly, in 1987 Burkina Faso’s president proposed the creation of an African Coalition for Debt Cancellation. This effort came to an abrupt end when he was assassinated shortly after the meeting and no other African government leader took up the cause (CADTM 2003: 7). In 1988 Brazilian President Sarney observed that “the fact is we [Brazil] cannot destroy the international system … We can scratch it, but it can destroy us” ( James 1996: 400). This observation sums up the dilemma of most of the states caught in the debt crisis, and in 1994, after years of resistance, Brazil became the last of the major debtors to accept a long-term debtrescheduling plan.

Foundations of civil society activism, 1982–94 As the expert community inside the IFIs was increasingly convinced that the way forward lay in neoliberalism, a profound skepticism was growing among civil society groups, both in the developing and the developed world. This skepticism incorporated a sense of moral outrage. On the secular side, the UDHR set the tone, while on the religious side, transnational faith groups added religious understandings of human rights to the debate. By focusing on the impact of neoliberal policies in human terms, the debate surrounding international finance was reframed and the measures of success (and failure) were redefined. In Latin America, the campaign for the nonpayment of foreign debt expanded rapidly (CADTM 2003). The 1985 Havana Conference on Debt left an important legacy as an ideational frame for understanding the debt crisis ( Jubilee Research 2005). In Havana, Brazilian trade union leader and later president Luis Ignacio de Silva (Lula) described the debt crisis as a war against the people of the Third World in which interest was the main weapon (George 1988: 238). At the same time, as resistance to SAPs spread, transnational church organizations facilitated communication from their members in the South to those in the North (Reitan 2007: 71), while in the early 1980s, a number of northern NGOs started to interest themselves in the international economy. This led to

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the creation of a number of new NGO networks determined to address the debt crisis and force a reassessment of the rules governing international finance (Jubilee Debt Campaign 2007a). Based in civil society and with transnational connections, these networks were able to force the issue of international debt onto the official agenda at the G7 and G8 summits. Research institutes were increasingly active in framing the subsequent debate, linking debt cancellation and human rights issues. For example, Susan George, a fellow of the Transnational Institute, took finance out of the realm of the abstract by arguing that debt contributed to increased hunger in the developing world (George 1988: 1). This period also marked the beginning of the tactic of popular demonstrations targeting international finance, as evidenced by mass protests at the 1985 G7 summit in Bonn. At the 1988 IMF and World Bank (WB) meetings in West Berlin, 50,000–80,000 people filled the streets calling for debt relief for the poorest countries and reform of the IMF (Dissent 1989; George 1988: 238). In 1990 the All African Council of Churches called for a year of Jubilee to cancel Africa’s debts (Jubilee 2000 Coalition ( JC) 1999). Following this, more groups specifically concerned with international finance, debt and economic justice were founded, while existing NGOs devoted additional resources to addressing the structural causes of poverty in the South.2 Finally, two other events contributed to bringing human rights politics into this debate. The response to the 1985 Ethiopian famine politicized actors who would later become important forces in the movement and provided a model of how a popular transnational movement might work to address human rights abuses. At the time initiatives such as “Band Aid” and “Live Aid” marked the first intersection of celebrity, transnational social activism and relief work. AIDS had a similar impact as many activists who were first radicalized in the bitter campaigns surrounding the AIDS epidemic subsequently became active in the debt cancellation movement. At the same time, the potential link between the cutbacks in public healthcare spending associated with SAPs and the rapid spread of AIDS in Africa became an indictment of the negative effects of neoliberal policy prescriptions (Lewis 2005: 5–15).

Growth period from 1994 to 1997 In 1994 the fiftieth anniversary of the BWIs focused attention on their successes and, more to the point, their failures, and in reaction a number of NGOs critical of the IFIs were founded.3 In a key development, the Debt Crisis Network UK organized a speaking tour for Kenneth

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Kaunda of Zambia and Archbishop Makhulu of Central Africa, both speaking to large audiences in London, Manchester, Edinburgh and Glasgow. A coalition of aid agencies, trade unions, churches and campaigning groups was involved in organizing this tour, and this involvement raised the profile of debt issues among their own members. Jubilee 2000 UK later acknowledged the importance of this in “building an informed and motivated (and angry) mass movement” (Jubilee Debt Campaign ( JDC) 2007a and 2007b). The supporters of the Jubilee 2000 campaign were indeed angry and indignant at the violation of human rights that, in their opinion, was epitomized by the Third World debt crisis. They were determined to “do something” to “right the wrong” and, for many, achieving Jubilee became a matter of conscience. April 1996 saw the official launch of the Jubilee 2000 campaign in the UK, and in 1997 Jubilee 2000 UK launched its first Web site, while Jubilee campaigns were also established in the US, Germany and Scotland ( JC 1999; 2001). Within the Jubilee movement there is a strong faith element which is used to strengthen the human rights claims of the movement. Also, by linking debt with slavery the Jubilee movement brought moral legitimacy to calls for debt “forgiveness” or cancellation. Jubilee framed debt as a violation of human rights and started to shift conventional wisdom from the conviction that repayment of debts was a moral obligation to the view that it was, on the contrary, immoral to demand debt repayment if this meant “enslaving” people in the name of debt servicing. Perhaps, even more importantly, while Jubilee insisted that the system had to change, it did not put forward a blueprint of exactly how this change might be accomplished. This meant that the Jubilee campaign was less vulnerable to charges of economic naivete. As Jubilee chose to fight its campaign on the high road of human rights, this was not a battle that neoliberal pundits were well equipped to win, at least not in the eyes of popular opinion. At that time a number of other NGOs and debt advocacy networks were also becoming increasingly organized and active in the South. For example, Focus on the Global South was founded in 1995 (Focus on the Global South 2005). In 1996 the Uganda Debt Network (UDN) was formed (UDN 2005). Ties grew between CSOs in the North and the South. Oxfam, the European Forum on Debt and Development (EURODAD), the Bretton Woods Project, Bread for the World, The Africa Faith and Justice Network, and Jubilee 2000 UK, all supported UDN with funding and capacity building (Collins et al. 2001). In the face of these pressures, the IFIs slowly began to acknowledge that poverty, inequality and human suffering had

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increased in countries implementing SAPs; however, they continued to insist that these effects could best be resolved by stricter adherence to neoliberal policies.

Turning point in official circles, 1997–9 In 1997 the Asian financial crisis started in Thailand, spread through East Asia and, eventually, threatened financial stability in Brazil and Russia. In financial terms, this was another brush with global disaster similar to the Mexican financial crisis of 1982. This time around, however, the IMF’s response provoked a split in expert opinion (Sachs 1997). As a result, after 1997 there were two parallel reform movements at work in international finance. One was located in civil society and had economic justice and debt cancellation as its focus. The other, centered in the community of experts in the IFIs, was primarily concerned with stability and transparency, and for the most part its priorities remained in line with the WC (G7 1998). However, some mainstream experts became increasingly critical of the policy prescriptions of the WC and focused on the poverty and economic justice outcomes linked to these policies. Their criticism provided a tremendous boost to the credibility of civil society campaigners. In January 1998, Joseph Stiglitz, Chief Economist at the WB, argued that the dogma of financial liberalization had become an end in itself instead of a means to a better financial system (Stiglitz 1998a), and later renamed the WC “market fundamentalism” (Stiglitz 2002: 221). This term had a tremendous impact: this simple phrase dispelled neoliberal claims to rationality and highlighted the fundamentally dogmatic and irrational “faith” in the rules of liberal free market economics that underpinned neoliberal theory. Suddenly human rights campaigners could no longer be easily dismissed as out of touch with the painful, but necessary, choices of the “real” world. The use of the phrase “market fundamentalism” by Stiglitz, a recent Nobel Laureate in economics, reframed the contest as one of competing worldviews and belief systems. Throughout 1997 and 1998, CSOs critical of the organization of international finance continued to multiply and increase their capacity to strategize and network, and activism took popular and innovative forms. In February 1998 Erlassjahr, the German Jubilee movement, and Christian Aid (CA) launched a joint campaign. As Ann Pettifor, one of the founders of the Jubilee 2000 campaign, noted, “thousands of CA postcards were sent, calling on the German people to remember that their debts had been cancelled in 1953. That debt write-off had given

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German children a future. Could African children be given the same hope?” (Pettifor 1998). In April 1998 the Jubilee 2000 Afrika Campaign was launched. In May 1998 at the Birmingham G8, the Jubilee 2000 coalition mobilized 70,000 people in a peaceful protest (JDC 2007b). In October the defeat of the Multilateral Agreement on Investment (MAI) demonstrated the power of carefully targeted and orchestrated social movement politics (Clarke and Barlow 1997: 8). In November 38 national Jubilee campaigns and 12 international organizations met in Rome to decide a common policy and campaign strategy ( JC 1998b and 1999). In the same month Jubilee South, “a network of jubilee and debt campaigns, social movements, people’s organizations, communities, NGOs and political formations” that would enable the articulation of a united perspective, position and agenda on the issue of debt and aid in the construction of a global campaign, was formally constituted ( Jubilee South ( JS) 2007; and JC 2007). At this point, Jubilee took off as a transnational campaign for debt cancellation and economic justice. The Jubilee movement located itself at an intersection of the religious and the secular, willing to accept support where it could find it, yet unwilling to ally itself with any specific faith perspective (George 1989: 212; Engler 2005b; JC 1999; and World Council of Churches 1998). The faith connection helped the campaign in several ways. First, it underlined the moral basis on which the campaign to forgive Third World debt was built, highlighting that this struggle was not over efficiency or inefficiency but rather about “doing the right thing” with respect to fellow human beings, an argument very difficult for the IFIs to address. Second, the faith group involvement gave the debt cancellation movement access to ready-made organizational networks ideally suited to mobilize public opinion and coordinate activism. Finally, it connected the movement with a number of individuals who were comfortable campaigning at the intersection of idealism and pragmatism. This is not to deny that the material interests of many voices in the debt cancellation movement were conveniently served by debt cancellation; however, there were many others whose immediate material interests were not promoted through their involvement. Many advocates, who can be described as “conscience adherents,” were drawn to the movement by the conviction that to do nothing would be a betrayal of their values (McCarthy and Zald 1977: 1222). Secular human rights campaigners as well as faith group adherents fell into this category. After Birmingham, an increasing number of CSOs continued to pursue opportunities to network, strategize, publicize and educate. Public

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education, especially the demystification of popular knowledge on complex financial mechanisms, was emphasized as an important strategy in generating active popular mobilization at the grassroots level. Demonstrations and other actions designed to attract attention to the campaign continued through the spring of 1999. At the G8 summit in Cologne in 1999, 50,000 Jubilee 2000 supporters demonstrated to demand deeper cuts to debt and throughout the following summer and fall the campaign pressure continued to build ( JC 1999). The main protest event of 1999 took place at the World Trade Organization (WTO) Ministerial Conference in Seattle, Washington. Jubilee was an important actor in this protest but, as has been well documented elsewhere, Seattle was a group effort (Barlow and Clark 2001: 11). Participants ranged from labor unionists to anarchists, all drawn together by a conviction that “something” was seriously wrong with the impact of the world economic system on human rights and the environment.

After Seattle The protests captured public attention and, in the following year, campaigners worked hard to build on this. The technique of targeting major world meetings continued. In April 2000 10,000–15,000 people participated in protests, panels and teach-ins at the IMF/WB meeting in Washington where protesters were heartened by supportive statements by Stiglitz, Sachs, and James Wolfensohn, the president of the WB (Barlow and Clark 2001: 33–4). Protests also continued at the IMF/WB meeting in Prague in September 2000. In spite of tight security, over 15,000 protesters took part, and Jubilee 2000 delivered its final petition with 24,319,181 signatures from 161 countries (Barlow and Clark 2001: 35–9; JC 1999). On December 31, 2000, the Jubilee UK Coalition ceased to exist but other Jubilee campaigns continued to operate ( JC 2000). The determination, not only to achieve debt cancellation but also to address the underlying structural causes of human rights abuses in the global economic system remained a powerful motivation (Pettifor 2000). After Seattle CSOs continued to consolidate their research and networking capacities (IFIwatchnet 2007). The failures of the policy prescriptions of the WC were documented and publicized while connections between financial structures, debt, human welfare, the environment and the AIDS epidemic were made increasingly explicit (Marshall and Pravda 2001; WDM 1999; UNNGLS 2001). After the events of September 11, 2001, it became increasingly difficult to mount large demonstrations and campaigning groups sought

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other means to mobilize support. The World Social Forums (WSFs) provided a valuable space to network, publicize and develop working relationships ( JS 2003). In the fall of 2004 a new kind of transnational CSO started to take shape. The Micah Challenge and the Global Call to Action against Poverty (GCAP) were launched. They created a network of virtual spaces and made activism more accessible by means of the Internet. By July 2005 debt cancellation had become a cause célèbre.

The United Nations (UN) and the human rights-finance nexus reform In addition to the UDHR, a series of UN declarations have been important in reinforcing the connection between human rights and economic structures. The 1995 Copenhagen Declaration called for people to be put at the center of development (UN 1995). The 2000 Millennium Declaration led to the articulation of eight specific Millennium Development Goals (MDGs) (UN 2005). Goal 8—to develop a global partnership for development—has provided an important source of legitimacy for CSOs. Since civil society campaigners are not selected through a conventional democratic process, their claims to speak for “the people” are rightly subject to skepticism, but invoking the UDHR and the MDGs has helped to address this particular democratic deficit. In 2002 the Monterrey Consensus (MC) was adopted at the International Conference on Financing for Development (ICFfD), a conference that was in part conceived as a means of engaging civil society in efforts to meet the MDGs (Soederberg 2005; UN 2000). However, while the MC may appear to provide an alternative to the unapologetic neoliberalism of the WC, views on the MC are mixed (UNNGLS 2001; Soederberg 2005). Many civil society representatives have argued that it will not make the IFIs “more accountable to human rights and democratic standards but will instead see the UN trying to put a human face on globalization and ‘marketization’ of developing countries” (UNNGLS 2002). The MDGs have provided CSOs with an important means of reinforcing their campaigns, but the MC may be an obstacle. If it is widely accepted that demands for economic justice can be met by putting a human face on neoliberalism, then gaining the levels of popular support necessary to challenge the rules of international finance—the rules which generated the debt crises in the first place—will be made more difficult.

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Discontinuities in the financial architecture The most important success of bringing human rights politics into the debate around debt cancellation has been the shift in the discourse produced by this campaign and the subsequent opening of economic debate to concepts such as justice, conscience and the morality of economic policies. Debt rescheduling and debt cancellation have long been part of the tool kit for maintaining a stable international financial system and a healthy international economy, and the IMF has taken an active part in coordinating the provision of financial resources necessary to deal with balance of payments problems and to stabilize the international financial system.4 The last 25 years of the twentieth century were marked by ongoing debt rescheduling and increasing amounts of debt cancellation, but this was the result of prudent financial management and not evidence of any ethical squeamishness or concern for the impact of the debt burden on the citizens of debtor states.5 The WC was eagerly embraced as the means to finally end chronic debt problems and ensure growth, stability and profitability in the developing world. By 1987, accepting IMF conditionality was a requirement for any state seeking to reschedule debt. After the Asian financial crisis, however, the chronic debt problems in the developing world started to be seen as evidence of the failures of the policy prescriptions of the WC. Furthermore, after 1997, a growing unease with the human costs of the debt crisis was apparent. After the 1999 Cologne G8 summit, a number of developed countries, including Canada, the US and the UK, announced plans to cancel their bilateral debts with many Highly Indebted Poor Countries (HIPCs). In the enhanced HIPC debt relief initiative the link between debt and poverty was made explicit (WB 2007b). There was a growing concern with the social impact of debt and structural adjustment policies in official circles and even within the IMF (for example, IMF 2001). The efforts of transnational civil society campaigners were central to this shift (Barlow and Clarke 2001: 18; UNNGLS 1999). The economistic, empirically oriented methodologies of those who forged the policies of the WC had little respect for the messy, anecdotal objections raised by early debt cancellation campaigners and yet the movement took off. There is a growing body of work which explores the power of ideas in the construction of international finance (McNamara 1998; Hall 1989; Blyth 2002; de Goede 2005; Keck and Sikkink 1999). CSOs seeking to reform international finance targeted the economistic assumptions underpinning the WC. They campaigned to put human rights at the

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center of the debate and, in order to do so, put a human face on the negative outcomes of the neoliberal rules governing the international financial system. By emphasizing that the rules governing international finance were political constructions, the campaigns opened the door to a new way of renegotiating these relations. Employing “boomerang politics,” debt cancellation campaigners from around the world worked to mobilize social movements within states, to push these states to pressure the IFIs for reform (Keck and Sikkink 1998: 8–13). The shift in the language around debt cancellation is important. Early campaigns called for debt “forgiveness” but later campaigns called for debt “cancellation” and some even demanded reparations. At present the term “cancellation” has largely replaced “forgiveness,” indicating that this is not an act of charity but rather an act of justice. The use of the terms “odious” and “illegitimate” debt as a means to justify demands for debt cancellation indicate a further implicit criticism of the international financial system since these terms are used to refer to debt that should not be collected because it should never have been made. By the spring of 2005 debt cancellation seemed to have won the day. “That the legitimacy of the 100% debt cancellation is now widely accepted represents a dramatic reversal in the debt debate” (Engler 2005b). At the Gleneagles G8 leaders agreed to the Multilateral Debt Relief Initiative (MDRI) created to support HIPCs efforts to reach the MDGs by the cancellation of 100 percent of their debts owed to the WB, IMF and the African Development Bank (G8 2005). However, while some declared victory others did not agree (Monbiot 2005). Although the terms appeared generous, qualifying for the MDRI was still tied to neoliberal conditionality. Gleneagles seemed like a breakthrough, but 1 year later criticisms abounded (Hallinan 2006; Beattie 2006). At the moment the campaign to reform international finance stands at a difficult crossroads. The popular success of the debt cancellation campaign has eclipsed other aspects of international financial reform. Now that debt cancellation, the most intuitively appealing aspect of financial reform, appears to have been achieved at Gleneagles and poverty is, apparently, well on the way to being “ended,” it is increasingly difficult to maintain popular pressure for reform with respect to the underlying causes of the debt crisis. In addition, the IMF is running the risk of becoming irrelevant as borrowers, increasingly wary of its power, seek to distance themselves by paying off loans early and not seeking new ones (Bello 2006: 2–3). Hugo Chávez, the president of Venezuela, has announced plans to create the Banco del Sur as an alternative to the IMF. For all their faults, the IFIs have provided useful targets for civil

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society campaigners, as financial markets are more elusive targets. CSOs face a difficult task in maintaining momentum for financial reform, yet this task is arguably more crucial than ever.

Conclusion This chapter has outlined the emergence of human rights politics in the debate over international finance. A multitude of CSOs campaigned for a reformed international financial system but, within this crowded scene, this chapter has focused primarily on debt cancellation. While some of the CSOs campaigning for debt relief can be understood as acting in pursuit of the material interest of their members, others are more puzzling. Arguably many of the organizations and individuals involved were motivated by their values—for them the effects of the debt crisis, especially when linked to hunger or epidemic, were intolerable. Furthermore, after the Asian financial crisis, support within the IFIs gave additional momentum to the campaign. While the CSOs never lacked expertise and were well grounded in research institutes, the apparent conversion of people like Stiglitz and Sachs added additional authority to their cause. The strategies of the campaigning CSOs were innovative and effective. Thanks to advances in communications and travel they were able to create networks of activist organizations. Modern media and the use of celebrity reinforced the message. Documentaries and interviews with those negatively affected by the international financial system aroused feelings of empathy and anger. In short, the campaigning organizations shifted the discourse. A measure of their success is that, by 2005, the connection between human rights and debt seems obvious. This was not the case 30 years earlier. Understanding this dynamic matters, as it demonstrates the battle between two competing logics: the social and the economic. This competition is important in understanding the adaptive capacity of capitalist systems. In liberal economic theory the social and the environmental side effects of economic activity are considered to be externalities, in other words, external to the costs or benefits of a given economic outcome. However, the costs of ignoring these effects are substantial. The potentially catastrophic consequences of a shift in climate provides an example of the dangers of excluding environmental factors from the economic equation. Similarly, the social effects of economic relations are often neglected, but the social has a means of expressing itself in unrest, insurrection or even elections. This process is described by Polanyi as the “double movement” (Polanyi 2001). Liberalized market

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forces run freely (the movement) until they create socially intolerable outcomes and, at this point, society pushes back (the countermovement) with regulation and constraint. This countermovement continues until a successful case is made for the efficiencies of unfettered markets processes, at which point market liberalization reoccurs and the whole process begins again. The story of the campaign for debt cancellation is the story of a countermovement, based in a transnational society as defined by the UDHR and the MDGs, taking on the WC on the basis of human rights and dignity. Previously the WC, or at least the neoliberal movement which inspired it, had taken on embedded Keynesian liberalism and the Bretton Woods order in the name of economic efficiency. Arguably, these contests are seldom decisive. Movements can be partial and incomplete and yet, as long as catastrophic disruptions, in the form of world wars or environmental disasters can be held at bay, this dynamic has the capacity to allow capitalist economic systems to adapt indefinitely. The emergence of post-neoliberalism, whether it be called “rollout” neoliberalism or “inclusive” neoliberalism marks another stage in this process. The shift in the intellectual climate that has resulted from disaffection with the record of neoliberal reforms both inside the IFIs and among civil society actors has created the context that has made possible the post-neoliberal reforms discussed in other contributions to this volume. Whether or not this marks a success of human rights politics remains to be seen. As critics of the MC noted, there is a great danger that what is emerging is just a more public-relations savvy form of neoliberalism that will be even more difficult for CSOs to challenge effectively. It remains to be seen if “inclusive” neoliberalism, a neoliberalism which ironically accepts exclusion—but only for those who “deserve” this fate (Porter and Craig 2004: 393)—will emerge the winner from the latest stage of this ongoing contest.

Notes 1. For example, Oxfam, War on Want, Catholic Agency for Overseas Development and Christian Aid. 2. For example, the European Network on Debt and Development (EURODAD), Comité pour l’annulation de la Dette du Tiers Monde (CADTM—Commitiee for the Cancellation of Third World Debt), Welwirschaft, Okologie & Entwicklung (WEED—World Ecology, Economy and Development), Réseau pour la réforme des institutions financières internationales (RIFI—Network for the Reform of International Financial Institutions) and Oxfam.

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3. These included the Reinventing Bretton Woods Committee, the Rethinking Bretton Woods Project, 50 Years is Enough, “FMI, Banque mondiale, OMC: 50 ans, ça suffit!,” the Halifax Initiative, the Bretton Woods Project and the Structural Adjustment Participatory Review International Network (SAPRIN). 4. In 1974 the IMF created the Extended Fund Facility, in 1979 the Supplementary Financing Facility. In 1986 the WB and the IMF created the Structural Adjustment Facility (SAF) and in 1987 the Extended Structural Adjustment Facility (ESAF). In addition the IMF took a leadership role in the resolution of the 1982 Mexican financial crisis and participated in both the Baker Plan (1985) and the Bradley Plan (1989) to address the debt crisis. 5. The IMF-ensured credit was available to debtors through the SAF and the ESAF. After 1988 the Paris Club offered special concessions for cancellation and rescheduling of bilateral official debt to severely indebted low-income countries (SILICs). In 1996 the IMF and the WB launched the Debt Relief Initiative for HIPC (WB 2007a).


Section II Post-Neoliberalism in Latin America


5 Hugo Chávez and the Search for Post-Neoliberal Policy Alternatives in Venezuela Judy Meltzer

Introduction Venezuela is considered by many to be at the vanguard of postneoliberal politics in Latin America and internationally, as President Chávez takes ever-greater strides toward implementing his twenty-first century socialist revolution. Among both policy analysts and academics, debates on Venezuela remain polarized, with Chávez either “demonized or deified” (Cameron 2006)—as a dangerous populist demagogue or an anti-neoliberal/anti-imperialist crusader. This chapter moves beyond this dichotomy to highlight some of the contradictions and complexities of post-neoliberal politics in Venezuela, and asks to what extent they represent a break with neoliberalism in the region—both earlier orthodox forms and more centrally with contemporary variants that are the focus of this book. It argues that as Chávez has consolidated his power, Venezuela’s adoption of increasingly radical reforms, including the expansion of Social Missions, the creation of Community Councils, and the implementation of new models of production, represents a break with both the neoliberal economic orthodoxy that prevailed in Venezuela in the 1990s and the modified forms that persist throughout the region. Contemporary forms of neoliberalism in Latin America are no longer characterized by the structural adjustment policies of the 1980s and 1990s that packaged together such policies as privatization, deregulation, and liberalization of trade and finance with a reduced role for the state in social service provision, collectively coined as the Washington Consensus. The repercussions of these orthodox reforms triggered a metamorphosis of the neoliberal project (Peck and Tickell 2002), marked by a reinstitutionalization of the state and the normalization 89

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and extension of a market logic to encompass new spatial and social frontiers (Perreault and Martin 2005). From this view, renewed national and international attention to social policy agendas to redress poverty and promote inclusion remains, in many cases, congruent with neoliberal economic logic. Jayasuriya (2006) refers to this incorporation of social problems into the economic realm as the socialization of the neoliberal market model. Evidence for Venezuela’s status as an exception to this trend is found in the growing subordination of private capital to national interests, state ownership of key economic sectors, and the renewal of public provision of social services—politicized in terms of social justice rather than as technical questions of economic management. The “active citizen,” promoted in both Venezuela’s “participatory and protagonistic” model of democracy and in international financial institutions’ (IFI) development agendas, is ideally empowered to be autonomous and engaged in the economy. However, in the case of Venezuela, in contrast to how these ideas have been promoted elsewhere, this entails alternate models of production, such as community-based cooperatives, that counter neoliberal economic principles. While Venezuela continues to be reliant on oil exports, international markets, and private investments, its alternate social and economic agenda nonetheless places it at the forefront in the “search for progressive policy alternatives” in the region, and as such makes it a poster child of post-neoliberal policy practices (see Introduction, this volume). In addition, Venezuela’s provision of substantial economic assistance to other Latin American regimes has been influential in the shift to post-neoliberalism in other countries of the region. The first section of this chapter reviews Chávez’s rise to power and initial program of reform, highlighting the disjuncture between early economic policies and anti-neoliberal discourse. The second section focuses on the more radical turn taken with the consolidation of political power post-2004, and looks at specific sociopolitical and economic reforms constitutive of Chávez’s “21st century socialist revolution.” The final part of this chapter distinguishes between the promotion of participation, community, and “active citizenship” in Chávez’s political project and in IFI-sponsored models of development in the region.

From Punto Fijismo to Bolivarianismo Chávez’s rise to power marked an end to Venezuela’s enduring pacted democracy or Punto Fijismo—named after the 1958 Accord that

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initiated one of the longest unbroken periods of democratic rule in the region, dominated by two parties: the social democratic Acción Democrática (AD—Democratic Action) and the social Christian Comité de Organización Política Electoral Independiente (COPEI—Committee for Independent Electoral Political Organization). Avenues for political participation narrowed under the Punto Fijo Pact, channeled through the signatory parties that “colonized” unions, professional groups, and other civil associations. Revenues from oil, nationalized in 1976, sustained the social spending that was central to the persistence of Punto Fijismo, described as “the distribution of oil rents through a system of clientelism” (Hellinger 2003: 27). This centralized, exclusionary structure or “partyarchy” was paradoxically the source of both its initial stability and subsequent demise. The Punto Fijo Pact began to crumble in the 1980s, with its “embedded weaknesses”—including a reliance on oil profits as well as elite factions and the marginalization of urban poor and middle classes—exposed in the wake of economic crisis, leading to popular mobilization and the emergence of autonomous social actors (see Myers 2004; Canache 2004). Whereas the 1970s oil boom had brought about a period of relative prosperity, by the 1980s high levels of public spending, increases in international borrowing costs, and oil price volatility initiated a period of extended economic recession and popular discontent—increasingly manifest in the mass urban protests that heralded the decline of the Punto Fijo regime (Buxton 2003; Kelly & Palma 2004). A first round of neoliberal reforms was implemented in 1989 under President Carlos Andrés Pérez, leader of the AD, and entailed an orthodox “shock therapy” that included restrictions on public expenditures and wage levels, reduction of price controls and subsidies, and market liberalization (see Lander 1996; Kelly & Palma 2004). This resulted in a dramatic drop in incomes and social spending and significant increases in poverty, triggering a landmark mass uprising in February 1989 (the Caracazo) and a “cycle of protests” that extended through the 1990s (Lopez Maya 2003). The Caracazo became an important symbol of resistance to neoliberal reforms and a watershed in Venezuelan politics, marking the loss of legitimacy of traditional parties and politicians, and leading to limited but significant measures for political decentralization that opened spaces at local and regional levels for new political actors to emerge. A second IMF-funded orthodox adjustment plan, “Agenda Venezuela,” was implemented by President Perez’s successor, COPEI’s Rafael Caldera, exacerbating poverty and real wage decline. Despite efforts to renew

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their leadership, the AD and COPEI were increasingly held responsible for the growing crisis. Antigovernment protests proliferated in the latter half of the 1990s, as did support for anti/alternate party politics, including Chávez’s newly formed Movimiento Quinta República (MVR—Fifth Republic Movement) (Hellinger 2003: 35).

The emergence of Chávez in the 1990s Chávez had begun to politically organize in earnest in the early 1980s, while teaching at the military academy in Caracas (Gott 2005: 36–9). By 1992 he had generated sufficient support within the ranks to initiate a military coup, preempted by the authorities who had received early warning. Despite its failure, the attempted coup was considered to be pivotal to Chávez’s future success—allowing him to broadcast his “Bolivarian message” to the nation with the promise that he would return. Chávez announced his intention to run for the Presidency in April 1997, transforming the Movimiento Bolivariano Revolucionario-200 (MBR200—the Revolutionary Bolivarian Movement-200) into the MVR, incorporating new civilian supporters and fielding candidates in all the elections held in December 1998. With the support of other left-leaning parties, including the Movimiento Al Socialismo (MAS) and the Patria Para Todos (PPT—Fatherland for All), Chávez formed an alliance—the Polo Patriótico (PP—Patriotic Pole)—and won the Presidential election with over 56 percent of the vote (Hellinger 2003). He moved quickly to hold a Constitutional Assembly, first holding a referendum to generate popular support for the process followed by elections of assembly representatives, with PP members winning almost 90 percent of the seats. The new Bolivarian Constitution came into force in March 2000, with “mega elections” held the following July, in which all elected officials were required to stand again. With an increasingly weak and divided opposition, Chávez won an even greater majority (close to 59 percent); the PP gained a majority in the newly created unicameral legislature, although abstention rates were relatively high (see Hellinger 2003: 43–4).1

Early reforms under Chávez: Pragmatism or protagonism? Chávez’s first few years in office brought about significant political reforms entrenched in the new Constitution; however, economic policy was initially characterized by a third-way pragmatism, despite strong anti-neoliberal rhetoric. The consolidation of his political power

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through subsequent elections gave rise to a more radical socioeconomic agenda, culminating in the announcement of a “21st Century Social Revolution” in 2005, marking a break with persistent forms of neoliberal economic development in the region. Political reform: Toward a “Protagonist & Participatory” democracy The 1999 Constitution embodied significant political and institutional reforms that revolved around increased popular participation, a stronger executive, a deeper role for the military in domestic affairs, and a central role for the state in economic and social life. These reforms concentrated power both above and below: executive power was strengthened at the expense of Congress, which was reduced from a bicameral model to a single national assembly; the presidential term was extended from five to six years, allowing for single, consecutive reelection, and the legislative power of the President increased, granting, for example, the power to dissolve Congress under specific circumstances. Congressional influence on judicial appointments and military promotions was also restricted (Ellner 2001: 18). While enhancing executive authority, the new Constitution mandated parallel reforms to strengthen power from below through new mechanisms for popular participation, with “the people” (el pueblo) understood as the protagonists in a new model of participatory democracy. “Protagonist and participatory democracy” was to be enacted through several mechanisms, ranging from the direct removal of public officials via referendum to public participation in municipal councils and to the creation of citizens assemblies. Autonomous as well as state-created forms of social organization were to be engaged in these processes, including preexisting grassroots initiatives, as well as new groups formally instituted by government. Of the latter, the most well known were the “Bolivarian Circles,” initially tasked with community-level social development, but as politics polarized through 2001, the Circles became central mechanisms through which to mobilize popular sector support for government (see Canache 2007). As Chávez consolidated power with victories in the 2004 referendum and 2006 election, new and more encompassing forms of participation emerged, directly facilitated through the office of the President, including Social Missions and Communal Councils, discussed later. The new Constitution included an extended section on rights that, in addition to traditional civil and political rights, recognized economic, cultural, social, environmental, and indigenous rights, representing

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some of the most comprehensive rights in the hemisphere. Whereas these extensive rights have been lauded, reforms to the judiciary, considered to compromise its independence, have been criticized by national and international human rights organizations.2 Also controversial were reforms related to the military, that increased its role in domestic affairs, as well as its presence within government. This shift was set out in Plan Bolivar 2000, a three-stage civil-military economic and social development project that deployed the armed forces to work with local community groups to improve social services and infrastructure (see Trinkunas 2004; Ellner 2001). Early economic reforms: “Third Way” pragmatism? Although Chávez’s strong stance against “savage neoliberalism” was central to his rise to power in the late 1990s on the wave of protest against the neoliberal reforms of his predecessors, his early economic policies were not as radical as his rhetoric. Early in his campaign, Chávez had set out an “Alternative Bolivarian Agenda” (AAB) as a direct challenge to Caldera’s neoliberal “Agenda Venezuela,” that included a reversal of the privatization of social programs and the oil sector and an overall greater role for the state, subordinating private interests to national development objectives. Yet, in contrast to the relatively more far-reaching institutional and political reforms, the 1999 Constitution did not embody a dramatically different economic model, and Chávez’s first period in office was characterized by policy persistence and pragmatism that included retaining M. Izaguirre as Finance Minister from Caldera’s government and adopting a “mixed approach” that continued to recognize the importance of private capital, albeit at the service of national interests (Buxton 2003: 124). Fiscally, Chávez adopted relatively orthodox measures, prioritizing the growth of international reserves, limiting inflation through exchange rate and price controls, and repaying foreign debt. Also, as Haslam (this volume) points out, there was significant continuity in the promotion and protection of foreign investment. This relatively prudent economic agenda was explicit in his first presidential speech in February of 1999, in which he stated: Our project is neither statist nor neo-liberal; we are exploring the middle ground, where the invisible hand of the market joins up with the visible hand of the state: as much state as necessary, and as much market as possible. (Chávez cited in Gott 2005: 174)

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However, the primacy of national interests over those of private capital, and the greater role assigned to the state in regulating the economy, institutionalized in the 1999 Constitution, marked an important shift away from the neoliberal economic orthodoxy that had prevailed in the first part of the decade. Echoing pre-1980 policies, the state was to assume a key role in strategic industrial sectors, in providing social security and services; in promoting more selective, regulated privatization; and in collectively grounding economic development in terms of national interest and redistribution. This renewed role for the state relied upon 59 legislative reforms, decreed under the “enabling powers” granted to Chávez in late 2000. Two of the most significant of these were the Land Law, which limited the size of agricultural landholdings based on productivity and gave the state powers to expropriate and redistribute “idle” lands, and the Hydrocarbons Law, which increased royalties from oil production, prevented the future privatization of Petróleos de Venezuela, SA (PDVSA—Venezuelan Petroleum), and guaranteed the state majority-shareholder status in all ventures with foreign capital. Oil has long been fundamental to the national income and imaginary, constituting over 80 percent of Venezuelan exports and upward of 50 percent of government revenue as Venezuela remains among the leading ten oil producers in the world. Early in his term, Chávez renewed Venezuela’s relationship with Organization of the Petroleum Exporting Countries (OPEC), bringing oil production and pricing in line with OPEC regulations, and implementing measures to reassert government control over PDVSA. One of Chávez’s central campaign promises had been to fulfill the long-standing vision of “sowing” oil revenues, with benefits reaped by the Venezuelan population as a whole. Key to this was the restructuring of the PDVSA, referred to as the “state within a state” (Mommer 2004), which had operated almost autonomously since the 1980s. The new laws were heavily protested by the opposition, and created fractures among the PP coalition supporting Chávez, and ultimately, following a series of general strikes and violent standoffs, led to a short-lived military coup on April 11, 2002. In a bizarre series of events, the coup was quickly reversed on April 13, in part as a result of mass demonstrations by Chávez supporters, limited military support for the coup, and widespread disapproval of the appointed interimPresident Carmona’s rapid dismantling of democratic institutions, including the suspension of the National Assembly. Although the coup had failed, the opposition continued to mobilize, initiating an extended general strike from December 2002 through to February 2003, leading

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to oil shortages and economic crisis. The standoff was diffused through an agreement to initiate steps to trigger a recall referendum on the Presidency, which Chávez won with almost 60 percent of the vote, and a turnout of nearly 68 percent, thus consolidating power and paving the way for more radical reforms (ICG 2007).

From the “Third Way” to the “21st Century Socialist Revolution” The “21st Century Socialist Revolution,” was first publicly announced by Chávez at the World Social Forum at Porto Alegre, Brazil, in January 2005. Although ambiguous in content, it was broadly defined by its emphasis on democracy, pluralism, and participation. It became a central part of Chávez’s 2006 election campaign, and was elaborated to some extent following his win, conceived of as being driven by five “motors”: 1. The Enabling Law, which granted greater power to the executive for a period of 18 months to enact political and economic reforms by decree, including the nationalization of new economic sectors; 2. Constitutional reforms, enacted through an assembly process in order to, according to Chávez, rid the Constitution of the residual influence of the “old regime,” and institutionalize state control over key economic sectors; 3. Bolivarian popular education based on “socialist” versus “capitalist values” of individualism and accumulation; 4. A new “geometry” of power, described as a socialist “reordering” of national geopolitics; and related to this, 5. An “explosion of communal power” through the creation of Community Councils (Ministerio del Poder Popular para la Comunicación y Información). The programs for social reform embodied in these “revolutionary motors” were to be enacted in large part through proliferating social missions and the deconcentration of power from municipalities to Communal Councils. Under the 1999 Constitution, the institutional terms and terrain of decentralization shifted with the creation of parallel mechanisms, linked directly to the executive, bypassing existing municipal and regional government institutions. Although municipalities were still recognized as primary political units, new mechanisms were created to manage local development and service delivery, ranging from Bolivarian Circles and Local Planning Councils to Social Missions and Community Councils. The latter are considered fundamental to “participatory and protagonist” democracy and considered among the five engines of the twenty-first-century Socialist Revolution.

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Social Missions The first Social Missions were created in 2003–4 and entailed Cubaninspired initiatives to combat illiteracy and deliver free health care and affordable food, financed by increasing oil revenues. The Missions provided a new mechanism for service delivery that bypassed traditional institutions, and within 3 years had rapidly expanded in number (to 21 missions by 2006), allocating over 20 percent of the government’s annual budget (Buxton 2007). One of the earliest and most well known of these is the Misión Barrio Adentro health initiative set up to provide free health care and medication, becoming a principle mechanism for national health care delivery by 2003, reliant on more than 20,000 Cuban physicians and health care workers who live in situ. Previous publicly funded health care in Venezuela had eroded under neoliberal structural adjustment policies; health reforms in the 1990s restructured health care in favor of private financing and decentralization. Early analyses indicate that Misión Barrio Adentro has succeeded in extending health care access and provision, particularly for the poor (Muntaner et al. 2006: 808). Its breadth of coverage and full public funding of care distinguish it from health initiatives elsewhere in the region framed in terms of targeting and private-public partnerships, and a recent report estimates that the number of primary care physicians has increased from 1628 in 1998 to 19,571 in 2006 (Weisbrot & Sandoval 2007). Social Missions have also played a key role in distributing subsidized food (Misión Mercal) and leading campaigns to expand literacy (Misión Robinson). Misión Mercal, created in 2003, subsidizes food through price controls, reducing the cost of basic goods by as much as 25–50 percent, and constitutes one of the largest government holdings, receiving close to $25 million in monthly subsidies; it was estimated that in 2006 over 40 percent of the population bought subsidized food (Wagner 2005; Weisbrot and Sandoval 2007). Despite the emphasis on food sovereignty and local production, Venezuela continues to be reliant on food imports, and subsidies have led to growing staple food shortages. However, as Buxton (in Youngers 2007) points out, collectively the Social Missions embody many of the principles promoted by mainstream development, including an emphasis on citizen participation and empowerment, equity and access to credit, and an orientation toward the poorest sectors of the population. Cuba’s contribution to the Social Missions reflects the close ties between Castro and Chávez. Fidel Castro is undoubtedly one of Chávez’s closest allies and one of the strongest supporters of the Bolivarian Socialist Revolution; their close personal relationship, which grew through the

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mid-1990s, is manifest in the exchange of Venezuelan oil for substantial Cuban human investments in health, education, sports programs, and so on. Chávez has openly borrowed from the Cuban experience in modeling alternate social policies and programs, including the health and literacy campaigns. Despite these close ties and a common antiimperialist, anticapitalist, and anti-U.S. platform, there are important differences between the Cuban and Venezuelan projects: Venezuela’s strong economy and high level of integration in international markets, its democratic institutions, and the primacy placed on participatory democracy collectively distinguish it from the Cuban experience (see Youngers 2007). Participatory democracy in Venezuela is increasingly enacted through the Communal Councils that have become the central “hub” of deconcentration. Communal Councils Legislated in 2006 with the passing of the Communal Council Law, Communal Councils have become the principal form of political organization. The Councils work directly with the executive, rather than through the existing municipal and state structures, and now receive the bulk of funds allocated to local government (in a 2007 budget, Chávez allocated $5 billion to Communal Councils) (Wilpert 2007). The Councils are governed by Citizen Assemblies, defined in the Law as “… the primary instance of popular empowerment, participation and protagonism” wielding binding decision-making power over the Council. The Councils constitute the hub around which other social groups are organized, coordinating the various popular movements and organizations in providing social programs and services through the missions and sectoral committees. They have become the principal funnel for government funding to the local level, accounting for over 40 percent of the total funds to all state and local government bodies (Agencia Bolivariana de Noticias 13-07-2007). In principle a Communal Council is created for every 200–400 families in urban settings and for every 20–30 families in rural areas (Ley de Consejos Comunales 2006). It was estimated that by the end of 2006 there were over 16,000 Community Councils managed by national, regional, and local branches of the Presidential Commission for Popular Power (Buxton 2007).3 Currently, there is an interesting discursive convergence between Chávez’s model for community-based citizen participation and those promoted by mainstream development organizations and IFIs. Both are contingent upon an “active” and “responsibilized” citizen engaged at the local level. Unlike the Venezuelan version, the “active” citizen

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advocated by the IFIs is often constituted interchangeably as a responsible client/consumer, called upon to make informed, calculating choices as a consumer in the “market place” of services. As a case in point, the 2004 World Development Report Making Services Work for Poor People envisioned citizen participation unequivocally in terms of “client power.” In contrast, discourse on the “active citizen” and citizen participation in Venezuela is more aligned with republican virtues of active involvement in civic affairs, although a greatly expanded version. Participation in the Venezuelan context goes beyond a greater involvement in political decision making traditionally associated with participatory democracy, but extends it to voluntary responsibilities for management, implementation, and oversight. The prioritization of participatory mechanisms and the concomitant strengthening of executive power at the expense of intermediary institutions have led to growing concerns over the curtailment of representative democracy in Venezuela. These concerns have sharpened with the pending referendum on Constitutional reform, that would cement Chávez’s control in several ways: by extending his term and removing limits on consecutive terms; by granting Presidential control over the Central Bank and the appointment of regional authorities; in making it harder to initiate a citizen-led referendum to modify the Constitution; by expanding the scope of executive powers during a state of emergency that can persist indefinitely, with the sole approval of the National Assembly (rather than requiring Supreme Court approval) and removal of guaranteed rights to information in this context. Domestically there is widespread opposition to these reforms among students, the Church, and some former Chávez supporters. While these concerns are subject to widespread scrutiny, less attention has been given to issues of difference and dissent in the context of emerging neocommunitarianism, and the ways in which the “fixing” of forms of citizen participation can constrain negotiations over the rules of governance themselves, considered fundamental to democratic citizenship (Tully 1999). As Taylor (2004) points out, the “granting” of benefits in the context of paternal populism promotes a clientship in the form of “favors” on the basis of personal ties versus citizenship based on autonomous political agency bestowed on the basis of rights. Collectively, however, Venezuela’s new forms of political organizing and publicly funded social service provision undoubtedly represent a break with neoliberal and post–Washington Consensus models that prioritize private, partnered, and targeted modes of service delivery. This shift is also reinforced through the promotion of a “New Model of Production” announced by Chávez in 2005.

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A new model of production and regional integration Although the country is still heavily dependent on foreign investment and oil exports, the consolidation of political power post-2004 also gave rise to an economic reorientation based on a “New Model of Production” that has become a cornerstone of Chávez’s twenty-firstcentury socialist project. This model centers upon increased state ownership and endogenous development through cooperatives and other alternate forms of production, based on collective ownership associated with a social versus capitalist economy. Further steps to regulate private investment were taken in 2007, granting the state up to 60 percent share of equity in key economic sectors, including oil. Although this resulted in the departure of some of the largest international investors, many have agreed to the new terms, although the long-term economic effects of reregulation and nationalization remain to be seen. To date, endogenous economic development has been implemented largely through the promotion of cooperatives. Although cooperatives have a long history in Venezuela, they were relatively few in number until the advent of the new Cooperatives Law in 2001 and significant increases in public funding in 2003, which led to a veritable boom. Venezuela is now considered to have more cooperatives than anywhere else in the world, with an estimated 180,000 registered by the end of 2006, the majority of which are in goods and services and agricultural sectors (Buxton 2007; see also the chapter by Brand and Sekler in this volume). This surge reflects the incentives created by the Cooperatives Law, which allows any group of five or more to register as a cooperative through a fast-track process, bypassing previous bureaucratic hurdles; cooperatives also receive preferential financing and access to credit through low-interest loans, have had tax barriers removed, and are prioritized in the allocation of public contracts.4 Other social economic experiments underway include the “nuclei of endogenous development” (NUDES) which provide credit to small and medium industrial development initiatives (in 2007 there were an estimated 130 NUDES) and Social Production Enterprises (EPS). The latter are defined as “community production units,” mandated to produce goods and services to satisfy the basic needs of the community, prioritizing values of “solidarity and sustainability above profitability” (Decreto N.3895 Desarollo Endógeno y Empresas de Producción Social, 2005). Similar to cooperatives, they receive preferential financing and access to public contracts; as a form of cooperative, they are in principle distinguished by their integration within the local community; however, in practice there is ambiguity in distinguishing between the various

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dimensions of the “new productive model.” These initiatives represent a break from orthodox as well as “softer” neoliberal models that maintain the primacy of private capital and individual ownership. Paradoxically, these initiatives rely on sustained oil revenues that are key to not only Chávez’s domestic agenda but also his vision for regional integration, embodied in the Bolivarian Alternative for the Americas (ALBA). ALBA was put forth as an alternative, anti-neoliberal model for regional integration, antithetical to the Free Trade Area of the Americas (FTAA), in its emphasis on social issues, solidarity, and cooperation in public service provision. Originally signed by Cuba and Venezuela in 2004, ALBA set a framework for cooperation between the two countries whereby Venezuela provides preferentially priced oil in return for a variety of in-kind resources, including health care personnel and education programs implemented via the Social Missions. ALBA’s membership has since grown, with Bolivia and Nicaragua joining in 2006 and 2007 respectively, and Ecuador and Haiti showing growing interest in becoming full members. The promotion of regional energy agreements is a cornerstone of the ALBA, echoing previous regional arrangements for assisting nonoil producers in the region—including the San Jose Agreement (1980) and the Caracas Energy Agreement (Wilpert 2007). Other large infrastructural projects such as the trans-Amazonian pipeline are also anticipated as part of these agreements. Its projected scope for regional integration is broader than oil and gas, however, and includes proposals for agricultural agreements (to guarantee food security and counter northern subsidies); equalization payments among members, similar to the precedent set by the European Union’s subsidies to Ireland and Spain, for example; regional public health and literacy initiatives, as well as regional financial arrangements, including an emergency fund, a Development Bank of the South, and a regional oil company (see Kellogg 2007; Wilpert 2007). Although Venezuela’s economy remains heavily reliant on private investment and integration within global markets, ALBA represents an important symbolic and substantive break with the FTAA and other integration initiatives that rest on tenets of liberalization, privatization, and deregulation.

Final reflections A central question posed in this chapter is the extent to which the political, economic, and social reforms underway in Venezuela represent a break with neoliberalism, not just with the orthodox economic policies

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of the 1990s but also with the varying “softer” forms of neoliberalism that have emerged through the region. Certainly, the trend toward state reinstitutionalization (neodesarollismo) and locally led development is not unique to Venezuela but has gained primacy as a regional and international norm, premised upon citizen participation. A widespread consensus around decentralization and (re)regulation makes it hard to understand projects underway in Venezuela as inherently radical. For example, both the World Bank and Venezuelan government emphasize community-driven development, empowerment of the poor, and autonomy of local institutions (Helling et al. 2005: i). Similarly, the principles of efficiency, accountability, transparency, and oversight—so central to mainstream conceptions of “good governance”—receive equal emphasis in political reforms in the Venezuelan context, for example in the Communal Councils Law. Craig and Porter understand this turn in IFI strategy in terms of “inclusive neoliberalism,” defined by the grafting of a positive liberal emphasis on empowerment and participation onto neoliberal macroeconomic models of development (2006: 12), creating a new hybrid that allows neoliberal reforms to persist by way of a shallow reembedding of markets through the promotion of greater citizen participation. This model not only allows the market to retain its priority status but also ensures that empowerment through participation is implemented as a technical institutional solution, which fails to politicize problems of poverty and exclusion or the political-economic model that produces them. Jayasuriya (2006) suggests that this socialization of the market model, in which social problems are aligned with market imperatives, distinguishes contemporary forms of social democracy and the leftleaning leaders that have emerged in Latin America from earlier models of postwar welfarism or the developmentalist state. Evidence for this is found in new social policy agendas that neither fundamentally disrupt neoliberal economic models nor redress inequality through significant redistribution, for example in Brazil under Lula or in Argentina under Kirchner ( Jayasuriya 2006; Tavolaro & Tavolaro 2007). However, the social and economic projects underway in Venezuela are not usefully construed as just “softer” variants of neoliberalism, despite a shared emphasis on citizen participation and communityled development. Not only has Venezuela severed its dependence on the International Monetary Fund (IMF) and the World Bank by putting its debts to rest in 2006 but markets have been subordinated in varying degrees to national interests through increasing state regulation and ownership. Alternate forms of production are promoted

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largely through cooperatives and increased access to credit. Moreover, problems of poverty and inequality have been repoliticized, drawing explicit links between these and the failure of previous governments, traditional institutions, and neoliberal economics to share Venezuela’s “natural wealth” with the larger population. Unlike new social agendas elsewhere in the region that seek to “include” and empower citizens by enhancing their capacity to participate in the market, Venezuela’s social policies and programs prioritize redistribution, a social economy, and a free provision of public services. From this perspective, the reforms implemented under Chávez represent a potentially more authentic reembedding of the market (although their durability may be undermined with further concentration of presidential power in pending Constitutional reforms that have triggered increased polarization and popular protest). This does not imply a complete break with previous models, however, as private capital continues to play a key role in Venezuela’s economy, and the dramatic growth experienced since 2003 is largely an outcome of high oil prices on the international market. This reliance on a single export potentially jeopardizes the sustainability of reforms underway, although Venezuela’s substantial international reserves, low foreign debt, and conservative estimates in oil-pricing budgets might mitigate the impacts of any price decline (Weisbrot & Sandoval 2007). Unlike many other countries in the region, Venezuela’s economic growth has been accompanied by significant increases in social spending, from 8.2 percent of GDP in 1998 to 13.6 percent in 2006, in addition to growing PDVSA funding for social programs (estimated at 7.3 percent of GDP in 2006) (see Weisbrot & Sandoval 2007). While the longer term effects remain to be seen, Venezuela’s policy agenda places it at the forefront in the search for progressive social and economic alternatives, and marks, with the exception of Cuba, the most radical discontinuity with neoliberal policies in the region to date.

Notes 1. Chávez’s populism reflects a recurring tradition in Venezuela, and Latin America more generally. Characteristic of populist appeals, Chávez’s politics were highly personalist/paternalist, hinging upon a Bolivarian-inspired nationalist appeal to el pueblo, unified against the oligarchy, and reaching out to previously marginalized “unorganized” sectors of the population with promises of radical reform. His brand of populism shares more with the so-called classical or radical populists of the 1940s and 50s, exemplified by Venezuela’s AD or Vargas and Perón, than it does with the neopopulism

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typified by Fujimori or Menem or the “second generation” neopopulists, such as Uribe, Fox, and Toledo, who relied on populist-style politics without fundamentally disrupting neoliberal principles (Weyland 2003). 2. The judiciary had a long-standing history of corruption and political influence reflecting party interests (with Supreme Court judicial nominations reflecting the balance of power in Congress), and was notoriously slow and inefficient (Human Rights Watch Report 2004). One of Chávez’s early moves during the 1999 Constitutional Assembly was to declare a judicial state of emergency, which enabled the suspension of judicial tenure and created an emergency commission, empowered to remove judges on evidence of corruption (Human Rights Watch 2004). This reform had widespread political support due to the extreme lack of public confidence in the judiciary. In 2004 a new Organic Law of the Supreme Court (Ley Orgánica del Tribunal Supremo de Justicia—LOTSJ) was passed which expanded both the number of Supreme Court judges (from 20 to 32, selected by a simple majority vote in the National Assembly) and the ability to suspend them, both of which are considered to compromise judicial independence (see Human Rights Watch Report “Rigging the Rule of Law” 2004). 3. Participation via deconcentration has a long history in the region, as popular participation was also a priority for the revolutionary struggles in Central America in the 1970s and 1980s. In Nicaragua the Sandinista National Liberation Front (FSLN) undertook extensive deconcentration of political authority, implementing mechanisms for popular participation through the Sandinista Defense Committees which were responsible for public service delivery, including food distribution, as well as health and education programs (Vilas 1989). These evolved into Communal Movements, with greater independence from the FSLN, and reforms in the 1990s have further institutionalized citizen participation. There are of course important differences between various initiatives; deconcentration through the creation of Communal Councils in Venezuela, for example, is creating parallel, vertically linked structures that overlap with existing municipal institutions (Morales et al. 2006; Lander 2006). However, these types of precedents are important to consider in historicizing the current reforms underway in Venezuela. 4. The promotion of cooperatives and accessible credit as an alternate form of economic development has a long history in the region; the current reforms under Chávez are largely “radical” only in relation to the neoliberal orthodoxy that they oppose.

6 From Naked Barbarism to Barbarism with Benefits: Neoliberal Capitalism, Natural Gas Policy, and the Evo Morales Government in Bolivia Jeffery R. Webber

Evo Morales, leader of the Movimiento al Socialismo (Movement toward Socialism MAS), became President of Bolivia on January 22, 2006, following five years of massive protests by left-indigenous popular movements (Hylton and Thomson 2007; Webber 2005b).1 While many left-wing intellectuals contend that the new administration represents a radical break with neoliberal capitalism (Borón 2005; Dieterich 2005; Lemoine 2005; Sader 2006; and Stefanoni and Do Alto 2006), this chapter demonstrates that there is little empirical evidence to support this view (see also CEDLA 2006; Lora 2006a and 2006b; Orellana Aillón 2006a and 2006b; Spronk 2007; Webber 2006a and 2006b; and Zibechi 2007). Indeed, in terms of its mining, agricultural, and labor market policies, and in its commitments to fiscal austerity, low-inflationary growth, and central bank independence, the Morales administration shows a considerable degree of continuity with the inherited neoliberal model. The economic framework of the new government takes for granted, and therefore depoliticizes, most of the foundational precepts of neoliberal economic management (Peck and Tickell 2002: 389). This chapter focuses on the hydrocarbons industry in Bolivia, and argues, first, that the privatization of the industry under previous neoliberal regimes has had deleterious outcomes for the majority of the Bolivian population. My second contention is that the nationalization decree issued by Morales on May 1, 2006, did not result in the actual nationalization of the industry, but rather signaled a moderate reform to the regime of royalties and taxes owed to the Bolivian state by transnational petroleum companies so that the state now receives a larger share of the profits than it did during the preceding neoliberal 105

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governments. It would therefore be premature to call the natural gas policy of the Evo Morales government “post-neoliberal”; this is significant because it is the sector in which the biggest challenge to neoliberalism is generally understood to have occurred. In reality, neoliberal continuities heavily outweigh discontinuities in this sector. However, a third contingent argument is advanced: if recent social spending announcements, dependent on gas revenue, actually come to fruition, they could represent a more significant challenge to neoliberalism, and might correspond closely to Macdonald’s and Ruckert’s notion of post-neoliberal political regimes which seek to activate the capacities of their citizens through a more substantial provision of human and social capital, without breaking with the inherited neoliberal macroeconomic framework. Actual social spending patterns at the time of writing (August 2007), however, are austere, especially given the relatively high levels of economic growth.

Naked barbarism: Hydrocarbons and accumulation by dispossession New discoveries of natural gas since 1997 have solidified Bolivia’s status as having the second-largest reserves in South America, after Venezuela. Proven and probable natural-gas resources grew to 48.7 trillion cubic feet by 2005, and future discoveries are highly probable (Chávez and Lora 2005). Oil is far less important, with proven and probable reserves of only 856.6 million barrels in 2005 (EIU 2006: 28–30). Demand for natural gas in neighboring Argentina, Brazil, Chile, and Uruguay has been steadily increasing over the last 10 years and is predicted to continue to grow. The combination of large reserves and growing regional demand has meant that Bolivia is the only country with the capacity to serve the growing Southern Cone market (Villegas Quiroga 2004: 25–9). Under the first administration of Gonzalo Sánchez de Lozada (1993–7), the hydrocarbons sector was privatized through the Law of Capitalization and the Hydrocarbons Law of 1996 (Miranda Pacheco, 1999; Shultz, 2005: 16). The Sánchez de Lozada government was committed to deepening the neoliberal project in Bolivia through extensive privatizations, while the World Bank and the International Monetary Fund (IMF) applied high-level pressure from the outside (Hindery 2004: 288–91). As in the railroad, airline, and telecommunication sectors, the Bolivian government preferred to describe the privatization of hydrocarbons as “capitalization” in an effort to dampen popular criticism of the initiative. The capitalization of the state-owned oil and gas company,

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Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), entailed the sale of 50 percent of the enterprise to various foreign petroleum multinationals. Under the new arrangements, the role of YPFB was restricted to supervising and administering contracts with private investors. The state company was prohibited from actively participating in production and could only enter into exploration and extraction through concession contracts with private companies (McGuigan 2007: 24–5). Moreover, the new hydrocarbons legislation reduced wellhead royalties owed to the state by transnational corporations from 50 percent to 18 percent in all “new” discovery sites. The process of privatizing hydrocarbons involved a dramatic transfer of power and profit to transnational petroleum corporations (Spronk and Webber 2007: 33–5). Prior to its privatization, YPFB had been “on the verge of completing a contract to build a pipeline to connect Bolivian gas fields to Brazilian markets,” which would have increased its profits “by at least $50 million a year for 40 years. These earnings, instead, were largely transferred to private firms that borrowed capital from the same international institutions that had previously offered loans to YPFB” (Kohl 2004: 904). Aspects of Hydrocarbons Law concerning “existing” and “new” fields of natural gas in 1996 were also manipulated to allow for giveaways to foreign petroleum companies. Hydrocarbons Law No. 1731, passed on June 26, 1996, altered Hydrocarbons Law No. 1689 of April 30, 1996. The new law changed the definitions of the largest fields from “existing” to “new” and therefore subjected the companies operating in these fields to dramatically reduced royalties (Spronk and Webber 2007: 34). Reducing the royalties in new camps from 50 to 18 percent is designed to compensate the company for risks assumed in exploration, and more foreign capital, it is maintained, will consequently be attracted to the sector. In the case of the June 1996 Hydrocarbons Law, however, no new risk was being assumed by the benefiting companies. The new law primarily affected the major natural gas deposits of San Alberto and San Antonio. Each was redefined from existing (according to the April law) to new and therefore subject to the lesser royalty (Villegas Quiroga 2004: 84–5). In Benjamin Kohl’s estimation, this constituted “a giveaway that could cost the nation hundreds of millions, if not billions, of dollars over the next 40 years” (Kohl 2004: 904). Royalties paid directly to the Bolivian Treasury are also eliminated in the “new” category. This had negative implications for inequality across regions because departmental royalties continued to be paid from activities in new fields, but the royalties went directly and exclusively to the departmental prefectures in departments which were already wealthy

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from their natural gas rents. Only the Bolivian Treasury is in a position potentially to distribute natural gas rents more evenly across the country by diverting funds to the poorest departments. In order to do so, however, it needs to receive royalty payments directly (McGuigan 2007: 28). A final component of transferring power and profit to transnational capital through the privatization of Bolivia’s hydrocarbons sector was the undervaluation of YPFB at the time of sale. The $US 834,944,022 sale price of YPFB seems remarkably low. YPFB was the most profitable stateowned enterprise (SOE) in Bolivia in 1996 (Kohl and Farthing 2006: 118). It had substantial proven reserves, high probability of discovering new reserves, and secure and growing markets in neighboring countries. It is true that levels of foreign direct investment (FDI), exploration, production, and export of hydrocarbons accelerated quite dramatically following privatization (Kohl and Farthing 2006: 120). Between 1997 and 2001, private investment in the industry increased from US$ 296 million to US$ 401.3 million (Hindery 2004: 282). The investments of private hydrocarbons companies also accounted for over half of FDI in Bolivia after 1996 (Kohl and Farthing 2006: 98). Despite all the activity, job creation has been scant. The hydrocarbon sector is capital-intensive and therefore primarily creates a small number of highly paid technical and professional jobs for skilled workers—engineers, lawyers, managers, and the like. By 2000, the most recent year with reliable numbers, only 6000 Bolivians worked in the hydrocarbons sector, which represented only 1.4 percent of the country’s employment (McGuigan 2007: 31). It is also worth remembering that mass firing of unionized employees was part and parcel of capitalization in the industry, as it was in the other capitalized sectors (Kohl and Farthing 2006: 112). Because FDI in hydrocarbons does not provide jobs for the great majority of population, it is all the more important to derive benefits from royalties and taxes. Royalties and taxes increased between 1999 and 2004. However, a couple of remarkable features spring out immediately from available figures. Only US$ 6.9 million was paid in taxes in 1999 compared to US$ 99 million in royalties. No company paid the Surtax between 1999 and 2004, and corporate taxes were a mere 1 percent of the sector’s turnover in 2004, as they were in 1999. In concrete numbers, corporate taxes amounted to a meager US$ 3.8 million in 1999, compared to an estimated turnover in the sector of US$ 290.8 million that year; in 2004, the respective figures were US$ 15.1 million to US$ 1172 million (McGuigan 2007: 32–5). These are paltry levels of taxation. The total contribution of the multinationals to the Bolivian state between 1996 and 2004 through royalties and taxes was US$ 1238.59 million (McGuigan 2007: 35).


Even more important is the declining proportional take of the Bolivian state over time as production in new reserves (at 18 percent royalty rates) increased relative to existing reserves (at 50 percent royalty rates), and the international prices of oil and gas increased. Absolute state revenues accrued through royalties and taxes rose by 198 percent between 1999 and 2004, but the state’s share of the sector’s turnover systematically declined (McGuigan 2007: 35). Most damning to the neoliberal hydrocarbons model is a comparison of contributions to the Treasury by YPFB between 1990 and 1996 (prior to privatization) and the contribution of private companies between 1999 and 2004 (after privatization, and before Morales’s moderate reforms). Between 1990 and 1996 the YPFB contributed $US 1790.6 million to the Treasury, compared to US$1238.6 million contributed by the companies between 1999 and 2004, a difference of $US 552 million (McGuigan 2007: 52). The costs associated with privatization were not lost on the massive left-indigenous popular movements that began to reawaken in 2000. Hundreds of thousands of protesters participated in the Gas War of October 2003, calling for the full nationalization of natural gas and the resignation of Sánchez de Lozada. After the successful ouster of Sánchez de Lozada, his former Vice-President, Carlos Mesa Gisbert, took over the presidency. In an attempt to appease the popular movements, and at the same time to meet the demands of the IMF, the World Bank, and the foreign petroleum companies, Mesa passed a new hydrocarbons law in May 2005 which returned the hydrocarbons industry to a situation similar to that of the early 1990s, pre-privatization. Mesa introduced an additional 32 percent flat tax on the value of oil and gas production which, in addition to the 18 percent royalties (EIU 2006: 29), meant an ostensible return to a 50/50 take, split evenly between the state and the transnationals. The social movements rejected the reform measures and continued to demand full nationalization of hydrocarbons. Hundreds of thousands mobilized in May and June of 2005, leading to the resignation of Mesa and a new date for general elections in December of that year (Webber 2005a, 2005b, and 2005c). When Evo Morales was elected on December 18, 2005, he had an unambiguous mandate to nationalize the hydrocarbons sector.

Barbarism with benefits: The “Nationalization” of hydrocarbons On May 1, 2006, amidst celebrations and marches commemorating the international day of the working class, the Bolivian government announced the nationalization of hydrocarbons with presidential supreme

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decree 28701 (La Prensa 2006d, 2006e, 2006g; La Razón 2006b and 2006e; and Padilla 2006). Vice-President Álvaro García Linera declared the measure, “the first nationalization of the 21st century. After today the hydrocarbons will belong to all Bolivians. Never again will they be in the hands of transnational corporations. Today the country—la patria—stands up. This is a patriotic and heroic decision that takes back our soul and dignity.”2 However, with time, the dubious content of the “nationalization” of hydrocarbons has risen to the surface. A sober analysis of the decree and the negotiations with transnational oil corporations that follows will lead to the conclusion that we should not use the term “nationalization” to describe the process, but rather acknowledge that the MAS was simply able to negotiate moderately better terms for the operation of transnational corporations within Bolivia that will provide substantial new revenue to the Bolivian state but leave control of the industry in the hands of transnational corporations. The preamble to decree 28701 points out the important fact that, according to the fifth section of article 59 of Bolivia’s constitution, contracts concerning the exploitation of the country’s national wealth must be authorized and approved by Congress.3 Between 1997 and 2005, under the conditions of the Capitalization Law, 72 contracts of 20 petroleum companies were entered into illegally because they were never approved by Congress, but rather by the President alone (La Razón 2006f ). Article one of the decree includes the following assertive passage: “the state reclaims the property, possession and total and absolute control of these resources.” Article two states that, as of May 1, 2006, all petroleum companies currently active in the production of gas or petroleum within the national territory are obliged to hand over to the Bolivian state’s oil and gas company, YPFB, the entire production of hydrocarbons. Article three gives all petroleum companies operating in Bolivia 180 days to sign new contracts with the Bolivian government, to be approved by Congress as required by the constitution, or to cease operations in the country. Article four states, “During the period of transition,” gas fields whose average certified production of natural gas in 2005 was more than 100 million cubic feet daily will be subject to taxes that see 82 percent of the value of gas produced go to the Bolivian state and only 18 percent to the company. San Alberto and San Antonio, the two largest gas fields—operated by Petrobras (Brazil), Repsol (Spain), and Total (France)—were the camps that met these criteria. The smaller camps, according to article four, would continue under the existing 50/50 tax


and royalty regime established by the Mesa government in May 2005. Audits of transnational corporations conducted through the Ministry of Hydrocarbons and Energy, according to the decree, will provide guidelines for the new contracts between Bolivia and each company over the following 180 days. Article five indicates that the state will take control and direction of production, transportation, refinancing, storage, distribution, marketing, and industrialization of hydrocarbons in the country. The Minister of Hydrocarbons and Energy is made responsible for regulating these activities until new rules are established by law. Article six dictates that the state will transfer the shares of Bolivian citizens that form part of the Fondo de Capitalización Colectiva (Collective Capitalization Fund, FCC), in those companies “capitalized” under Sánchez de Lozada—Chaco, Andina, and Transredes—to YPFB. Previously, in these cases, “foreign companies had 51% with 49% split between private pension funds and the government, which used the dividends to pay a pension to older Bolivians” (The Economist 2006). Article seven stipulates that the state will reclaim full participation in the entire production chain in the hydrocarbons sector. It will “nationalize” the necessary shares to control 51 percent of Chaco, Andina, and Transredes, Petrobras Bolivia Refinación, and Compañía Logística de Hidrocarburos de Bolivia. Wrapping up the decree, articles eight and nine proclaim that within 60 days YPFB will be restructured into a transparent and efficient state company under social control. Three central ambiguities were immediately raised in the financial press. First, the government misled Bolivians with its emphasis on the concept of 82 percent of hydrocarbon profits for the state and only 18 percent for the transnationals. For example, Manuel Morales Olivera, then-adviser to the president of YPFB, stated, “On May 1 the [existing] contracts died, and now there are new game rules” (Padilla 2006). VicePresident García Linera likewise emphasized how the situation after the decree precisely reversed the old neoliberal scenario under ex-presidents Bánzer and Sánchez de Lozada when the state took 18 percent, and the companies 82 percent (La Prensa 2006h). However, absent from the initial pageantry of the nationalization was a public acknowledgment that the new 82/18 arrangement was a transitory measure, a bargaining chip meant to pressure gas companies operating in the largest gas fields to enter into new contracts in which there would be no guarantee that the 82/18 allotment would be maintained (La Razón 2006a). A second ambiguity of the decree was striking. It was unclear what the government meant by nationalization without expropriation. There

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were only two limited areas in the decree where the state seemed to be reasserting its presence. The implications of article seven were that the gas refineries of Gualberto Villarroel in Cochabamba, and Guillermo Elder Bell in Santa Cruz, owned and operated by Petrobras since 1999, would be brought under majority state control. The article indicates that the state will buy 51 percent of shares at market value. The other limited area is referenced in article six, which indicates that the state will increase to 51 percent the state’s share in the “capitalized” publicprivate companies of Chaco, Andina, and Transredes. At the time of the decree, Bolivian citizens already owned up to 49 percent of shares in these companies, regulated through the FCC; consequently the decree stipulates that the state will transfer shares from the FCC to YPFB and buy the necessary shares—from 3 to 17 percent depending on the capitalized company—to raise the state presence to 51 percent. Together these companies control only 9.7 percent of the reserves of natural gas in Bolivia today, and 9.8 percent of the less important reserves of oil (CEDLA, 2006: 6). Third, there were complicated juridical issues raised by the decree, particularly pertaining to the sections which contradict Hydrocarbons Law 3058 (still in effect since its passage in May 2005 under Mesa) (La Prensa 2006f). Some advocates of nationalization worried that where contradictions between the decree and the law existed, the decree would be diluted to conform to the law. According to one journalist, unsympathetic to nationalization of any sort, “A decree cannot change a law” (Molina 2006). Over the next number of months, the confusion around these and other technical issues bred discontent among radical supporters of nationalization and, at the same time, provided fodder for the political right in their campaign to portray the Morales administration as incompetent and deceitful. Almost immediately following the decree, the road to “nationalization” proved to be full of hazards. Corruption scandals wracked YPFB, and the state company admitted publicly its inability to reassert public control over fuel distribution in the weeks following the decree. A temporary suspension of the process was subsequently announced by the government due to lack of sufficient economic resources. In August 2006, YPFB’s president, Jorge Alvarado, was forced to resign after being accused of violating the decree. This was followed in September by the resignation of Hydrocarbons Minister Andrés Soliz Rada—one of the more left-wing members of the MAS cabinet (Luoma and Gordon 2006). Soliz Rada’s resignation was perceived by many on the Bolivian left as a power maneuver by the most conservative sector of the MAS party,


grouped around the Vice-President, to assert their control over government policy in hydrocarbons and lock out more radical currents within and outside the government. Nonetheless the Morales government orchestrated a major political coup in late October 2006 when it announced 44 new major contracts with 12 petroleum companies for a period of 30 years (La Razón 2006g). Evo Morales proclaimed his “mission accomplished.” The two most important players in Bolivia’s natural gas sector, Petrobras and Repsol, were among the foreign companies signing on to new contracts. Major infusions of new revenue to the state are predicted. It is expected that the hydrocarbons revenue “the state receives will surpass the $282 million a year received from 1998–2002, to a total sum of $1.3 billion a year in 2006. According to Evo Morales, this figure will reach $4 billion a year by 2010, which represents approximately 100% of Bolivia’s annual GDP and will allow the MAS-led government to undertake ambitious social projects” (Zibechi 2007: 1). According to some analysts, the new contracts stipulate that foreign companies will hand over the oil and gas they extract to YPFB in return for compensation covering production, costs, investment and profit. There are variations in the contracts based on each company’s level of production and the extent to which it has recovered previous investments: “The government claims its take will range between 50% and 80%, although questions remain about how it will be calculated” (Luoma and Gordon 2006). In addition to securing these new contracts, increased state revenue will also be generated through new export agreements arrived at with neighboring Argentina and Brazil. In June 2006, Bolivia and Argentina agreed to a new project of Argentine-Bolivian energy integration, Convenio Marco. The agreement confirmed that 7.7 million cubic meters of gas will be transported to Argentina daily until 31 December 2006 at a fixed price of $US 5 per million British Thermal Units (BTU). Beginning in January 2007, a commission was established between both countries to establish the prices in coming years (OBIE 2006a). Some argue that Convenio Marco will result in a 48 percent increase in the gas sale price to Argentina and will translate into an increase of $US 110 million a year in state revenue (Luoma and Gordon 2006). In mid-February 2007, Bolivia and Brazil also came to an agreement which the Bolivian government claims will increase state revenues from exports of gas to Brazil by $US 144 million annually. However, the details of how the prices will be determined had not yet been disclosed at the time of writing (La Razón 2007). There is no doubt that these agreements negotiated by the MAS have prevented the continuation of the wholesale robbery of

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Bolivia’s natural resources that had reigned since the late 1990s. That is to say, the reforms introduced by the MAS have restored a modicum of decency to the rate of royalties and taxes. At the same time, however, the new contracts have not meant the nationalization of hydrocarbons and, while providing revenues in the short term, they continue to reinforce the primary-export model of development in Bolivia and prevent the development of an effective industrialization policy in the long term by making the reconstitution of YPFB unviable. One of the best studies of the contracts currently available was conducted by the Observatorio Boliviano de Industrias Extractivas (Bolivian Observatory of Extractive Industries, OBIE). According to their inquiry, the first fundamental flaw of the new contracts is that the Bolivian government recognized the validity of the existing shared-risk contracts signed by Sánchez de Lozada without Congressional approval, which were therefore illegal (OBIE 2006b: 1). This is crucial because it is widely believed that the foreign petroleum companies exaggerated the amount of their investments during this period. Under the new contracts, the foreign companies are guaranteed to recoup these investments and make a profit. Royalties and taxes to be paid to the state are partly dependent on the weight of past investments; therefore, if these are inflated, revenue that should be going to the state will be diverted into private hands. In relation to the earlier discussion of the juridical ambiguity between the nationalization decree and existing Hydrocarbons Law 3058, the OBIE report argues that the new contracts “imply the application of Hydrocarbons Law 3058, leaving behind the nationalization demanded by social movements in the sense of expropriating the property of the transnationals, and achieving in this way a state monopoly in the hydrocarbons industry, which would permit the industrialization of the country” (OBIE 2006b: 1). The OBIE report further contends that government rhetoric is intended to have Bolivians believe that under the new contracts the transnationals are simply providing a service for the Bolivian state which it cannot, by itself, currently provide; the government suggests the new agreements with the transnationals are service contracts, rather than operations contracts or shared production contracts. In a typical service contract, a petroleum company provides its specialized skills in a particular area of geoscience, petroleum engineering, or some other related technical area of expertise. Service contracts do not provide the company with exploration rights, proprietary rights over hydrocarbons, exploitation rights, or rights to production. Furthermore, companies do not assume any of the market risks associated with exploration, and


consequently their service fee is not tied to the value or volume of production. Service contracts typically expire in 3 years or less by which time the specific service has been rendered (OBIE 2006b: 2). In operations contracts, transnational participation reaches a higher level of breadth and intensity. According to Hydrocarbons Law 3058, in operations contracts, companies win concessions that give them the exclusive right to explore and exploit in a given area, assuming all the geological and market risks entailed. The company provides all the capital, installations, equipment, materials, personnel, and technology required. The payment the company receives is calculated based on a percentage of production, covering operational expenses and profit (OBIE 2006b: 2). The highest degree of transnational participation in hydrocarbons under the Law 3058, however, is covered by shared production contracts. The latter contractual type is the kind which best matches the new contracts signed with the Bolivian state, according to public statements made by Petrobras. According to the Brazilian company, under the new contracts of October 2006, each petroleum company executes the entirety of its operations at its own expense and receives direct payment defined in relation to recuperation of costs, prices, volumes, and investments, all the elements stipulated by shared production contracts in Law 3058 (OBIE 2006b: 2). In the case of Petrobras, this means that the company will continue production in the San Alberto, San Antonio, and Caranda gas fields, and exploration in Río Hondo, Ingre, and Irenda. The new contracts ensure that Petrobras maintains ownership of all its current shares and that all reserves in the relevant gas fields can be included in the declared value of the company on the stock market at an international level. According to OBIE (OBIE 2006b: 2), this holds true for the gas reserves in all the concessions of all petroleum companies active under the new contracts. Three other concerns stand out. First, to what extent do the new contracts have built-in incentives for consolidating the export of primary gas and accelerating devastating ecological destruction at the expense of industrialization and servicing the internal market? According to the OBIE study and other critiques, the transnational control of exploration and production under the new contracts, the components of calculating the varying rates of royalties and taxes—from 50 percent to 80 percent according to the government—as well as the export agreements inked with Argentina and Brazil, all solidify a tendency to perpetuate the primary export model in the hydrocarbons sector (Bolivia Press 2006: 5–6; OBIE 2006b: 5–6). A second concern is that it appears highly

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improbable that YPFB will be meaningfully reconstructed under the new arrangements. This is in part due to the basic finances of YPFB. If we take the two largest gas fields, San Alberto and San Antonio, the royalties and taxes are divided as follows: 18 percent in royalties paid to the departments in which the fields are located, 32 percent in impuestos directos a los hidrocarburos (Direct Hyrocarbons Taxes, IDH) to the central government and another 32 percent to YPFB. The current contracts guarantee the 50 percent composed of royalties and IDH, but the remaining 32 percent allotted to YPFB is contingent upon the pace at which transnationals recuperate costs and past investments as well as the volume of their production (Bolivia Press 2006). This raises serious questions regarding the reliability of funds designated for the reconstruction of YPFB. Moreover, while YPFB is supposedly the principal agent of commercialization and prime regulator of petroleum operations in Bolivia under the new contracts, in reality, its regulatory role is a small one. It is formally true, for example, that Petrobras must give the hydrocarbons to the state company once it has extracted them from the ground. However, when the payments are made for the gas, the buyer deposits the money directly into the Petrobras accounts without the mediation of YPFB (OBIE 2006b). Similarly, the transnational petroleum companies determine their own basic expenditures and employee salaries, all of which constitute part of the calculations of costs that must be recuperated. YPFB has no authority to determine these expenditures and employee salaries. The state company simply verifies the validity of the declared “recuperable costs” presented to them by the private company (OBIE 2006b). The experience of YPFB’s weak regulatory capacity during the period following privatization in the late 1990s and early 2000s does not bode well for the prevention of fraud and abuse on the part of the foreign petroleum companies operating in the country in the current setting. Third, it is important to note that the implications of article seven of the May 1, 2006, nationalization decree have not been realized thus far. As noted, article seven indicates that the Bolivian state would buy 51 percent of shares in the refineries that Petrobras has owned since 1999. There has been no progress on this front, although negotiations reportedly continue.

Social spending Given the substantial increases in state revenue arising from the reforms in natural gas policy and high gas prices on the world market, it is


important to examine where this revenue is going. The Morales government has promised to improve access to education and health care as part of its overall development project (Weisbrot 2007a: 2). According to figures from the Education Ministry there have been 172,314 graduates of a national literacy program in Spanish, and an additional 328,933 ongoing participants. Another literacy program in Aymara and Quechua—the two most widely spoken indigenous languages in Bolivia—registered 17,000 participants and graduates (Weisbrot and Sandoval 2007: 2). The government has also approved a new health insurance program for Bolivian citizens under 21 and over 60 years of age. An expansion of health clinics in rural areas has increased access to health services for the poorest sectors of society (Weisbrot 2007a: 2). Health Ministry records suggest that more than 100,000 eye surgeries have been performed on individuals suffering from cataracts and other vision problems since Morales took office. Six new national hospitals were introduced in 2007, as well as a “zero malnutrition” campaign focusing on children. Most importantly, the Bolivian congress is currently considering legislation for the introduction of universal health insurance coverage (Weisbrot and Sandoval 2007: 2). Nonetheless it is still premature to label the Morales government post-neoliberal. The resources for the rural health care initiatives, eye surgeries, and literacy campaign are provided by the Venezuelan state, while Cuban doctors are implementing the care and treatments (La Prensa 2006a, 2006b, and 2006c; La Razón, 2006c, 2006d, and 2006h). Of the US$ 8 billion Venezuelan president Hugo Chávez has pledged in aid, financing, and energy funding to Latin American and Caribbean countries for 2007, Bolivia is set to receive US$ 809 million, second only to the US$ 4.6 billion destined for Nicaragua (Pearson and James 2007). If the universal health insurance legislation is passed, it would represent a significant step toward post-neoliberalism in the country. However, thus far Morales has stuck to a program of tight austerity, despite major revenue gains. Gross domestic product (GDP) grew 4.6 percent in 2006, with hydrocarbon revenues increasing from 5 percent of GDP in 2004 to 13.3 percent in 2006. Figures available for 2007 through the month of May show that hydrocarbon revenue has increased a further 26 percent relative to the same period in 2006 (Weisbrot and Sandoval 2007: 1). Demand from Brazil, Bolivia’s biggest export market for natural gas, is expected to reach the capacity of the pipeline linking the two countries by the third quarter of 2007 (EIU 2007a). The country closed 2006 with a fiscal surplus of 4.6 percent of GDP (Weisbrot and Sandoval, 2007: 1), “an unnecessarily high level of savings

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for a country with immense investment needs,” according to the conservative Economist Intelligence Unit (EIU 2007b). In 2006, according to Unidad de Análisis de Políticas Sociales y Económicas (Unit for Political, Social, and Economic Analysis, UDAPE), there was a year-on-year rise in infrastructure investments, but social investment actually fell by 6 percent (EIU 2007b). Government expenditures (combined public sector) increased by a mere 2.6 percent of GDP between 2004 and 2006, from 33 to 35.6 percent. These low levels of spending are accompanied by soaring hydrocarbons revenues, high prices for other Bolivian commodities on the international market, and a relatively low total foreign debt amounting to 16 percent of GDP after recent debt cancellations by the Inter-American Development Bank and the World Bank. In this context, Bolivia recorded a current account surplus of 11.9 percent of GDP and amassed $3.9 billion in international reserves, equivalent to 32 percent of GDP. Official poverty levels, meanwhile, have decreased at an underwhelming rate, from 63.1 percent in 2003 to approximately 59.9 percent in 2006 (Weisbrot and Sandoval 2007).

Conclusion This chapter has focused on the hydrocarbons industry in Bolivia in an attempt to chart continuity and change between the period of privatization (1996–2005) and the period of moderate reform initiated first by Mesa in May 2005 and carried further by Morales in May and October 2006. The privatization of hydrocarbons was shown to be a process through which the extraction of Bolivian resources provided enormous profits for and extended considerable power to transnational petroleum companies, at the expense of the majority of the Bolivian population. It was also demonstrated that the reforms under Mesa and Morales have not yet amounted to a post-neoliberal transition. Rather, higher levels of royalties and taxes have been secured for the Bolivian state even while the foreign petroleum companies retain ultimate control over the industry. Neoliberal continuities in natural gas policy clearly outweigh discontinuities. At the same time, the MAS government has been in office for a very short period of time, and therefore the assessments made here are necessarily preliminary. Moreover, the administration has announced a number of social spending projects that could move the MAS administration more closely toward Macdonald’s and Ruckert’s conceptualization of post-neoliberalism elaborated in the introduction to this volume. It must be stressed, however, that the actual spending patterns of the


Morales government to date do not provide significant evidence for a post-neoliberal turn.

Notes 1. I would like to thank Laura Macdonald, Arne Ruckert, and Susan Spronk for their comments on earlier versions of this chapter. 2. This statement was made during a speech from the Presidential Palace. The speech was televised on all major Bolivian television networks. 3. These legal criteria were reiterated in Bolivian Constitutional Tribunal Judgment No. 00 19/2005, March 7, 2005. All references made to decree 28701 in the following paragraphs are based on an examination of the document in its entirety, and all translations of the text are my own; see Gaceta Oficial de Bolivia, Decreto Supremo 28701, Evo Morales Ayma, Presidente Constitucional de la República, Héroes del Chaco.

7 Is There a Post-Neoliberal Policy toward Foreign Direct Investment in Argentina and Chile? Paul Alexander Haslam

Introduction The armed takeover of foreign-owned natural gas plants ordered by Bolivian president Evo Morales on May 1, 2006, and Hugo Chávez’s forced renegotiation of Venezuelan oil exploration contracts were the first major nationalizations announced in Latin America since the economic crisis of the early 1980s. In a less dramatic fashion, postneoliberal governments in Argentina and Chile also recently increased the fiscal pressure on foreign investors, the former through the renegotiation of public service contracts with private enterprise and the “renationalization” of several firms, and the latter through increased taxation of foreign mining firms. These manifestations of “back to the future” policies, until recently considered relics of the import substitution era, appear to be a direct challenge to the neoliberal policy consolidated throughout Latin America over the last 25 years. The encouragement of foreign direct investment (FDI) inflows, the liberalization of regulations for establishment and operation of foreign firms, and the explicit recognition by governments of investors’ rights to stability and predictability of the rules of the game were key pillars of John Williamson’s Washington Consensus policy prescriptions and broadly accepted practice throughout Latin America. Washington Consensus points (7), “liberalization of inward foreign direct investment,” (8), “privatization,” and (9), “deregulation,” all argued in favor of increasing the access, role, and liberty of transnational corporations (TNCs) in the economies of the region (Williamson 2002). The importance of policy on FDI as a cornerstone of the Washington Consensus makes it an ideal case to investigate the extent to which the New Left in Latin America has departed from orthodox neoliberalism 120

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and adopted a post-Consensus policy agenda. The principal purpose of the chapter is to describe how FDI policy has changed under New Left governments in Argentina (2003-present) and Chile (2000-present). The chapter argues that FDI policy in these two countries in the post-neoliberal era may be described as tinkering at the margins of the Washington Consensus model. The continuity between both eras is largely explained by the legal path dependency of legislation dating from the neoliberal period. Within this broad continuity, however, there have been some significant changes explained by, first, a change in policymaker perceptions regarding the opportunity cost of regulating foreign companies; and, second, an increase in the objective vulnerability of transnational corporations in the early 2000s corresponding to the predictions of the obsolescing bargaining model. Interestingly, only the first point is related to the ideological orientation of the New Left, suggesting that elements of FDI policy identified by this chapter may be generalizable beyond the post-neoliberal governments of Latin America.

Investment policy and development in Latin America Policy toward FDI is about how foreign investment can contribute to economic growth and development. It typically includes a complicated set of legal instruments, bureaucratic oversight, and political bargaining processes that may be broken down into three distinct policy categories: domestic legislation and international treaties, regulation of TNC activities, and state-firm bargaining over the benefits from FDI. Within each category, however, policy may be either more interventionist (statist) or more liberal (free market). The literature has framed this dichotomy as either the interventionist state bargaining with multinational corporations in order to overcome market failures or the pursuit of an endogenous growth strategy based on natural, market-based spillovers from FDI and the absence of structural distortions caused by state policy. Historically, the former was associated with the policy of import substitution industrialization (ISI) and the latter with classic liberalism and neoliberalism. ISI began in light manufacturing in Argentina and Chile in the 1920s but did not develop into a coherent industrial policy until at least the late 1930s. Although transnational corporations played a significant role in commerce, transportation, public services, and mining at this time, deliberate attempts to harness FDI in the service of second-stage industrial deepening into heavy industry and intermediate goods only occurred in the late 1950s and 1960s. Much of the literature produced in

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the 1970s and early-1980s, looking back on this period, described (and even celebrated) the ability of the interventionist state to channel FDI into its development priorities through a variety of techniques, including high tariffs, performance requirements, fiscal incentives, subsidies, regulation, and obligatory joint ventures or creeping national ownership (Bennett and Sharpe 1985; Gereffi 1983). State-owned enterprises, in particular, brokered joint ventures with foreign and local firms in heavy and intermediate industry (Evans 1979). Thus, the state sought to channel the behavior of transnational corporations, described in the literature as “bargaining,” in ways that maximized their contribution to economic development, while the TNC sought to minimize any government intervention that conflicted with its strategy and profitability (Vernon 1971). It was also argued that the original terms upon which foreign investment was permitted “obsolesced” over time to the benefit of the state which was able to make increasing demands on the investor once the investment was sunk, and as the technical and managerial capacities of the state apparatus improved (Moran 1974). Thus, in state-firm bargaining, the state was generally viewed as the stronger party, over time. However, studies conducted in the 1980s showed that TNCs had become particularly innovative in avoiding attempts to renegotiate the original investment bargain and disposed of a wide range of strategies to frustrate government restrictions (Grosse 1989: 46; Kobrin 1987: 613). The advent of neoliberalism and the observable absence of statefirm bargaining in the 1990s led theorists to assert that bargaining no longer defined the TNC-host country relationship (Dunning 1991; Luo 2001: 402–3). Governments and firms were viewed as increasingly interdependent in realizing wealth and competitiveness in the global marketplace (Stopford and Strange 1991: 24–5). Neoliberal governments in Latin America, during the 1990s, legislated in conformity with this perspective in the expectation of increased FDI flows and developmental spillover, standardizing liberal investment legislation with few restrictions, legally restricting the permissible range of state interference with foreign firms, reducing government regulation, and privatizing state-owned enterprises.

The New Left and investment rules The legal framework that governs FDI in a given country is principally determined by the national statutes on FDI and international agreements, such as bilateral investment treaties (BITs), the investment chapters of trade agreements, and multilateral agreements (for example, the


World Trade Organization’s Trade-Related Investment Measures). Both national legislation and international treaties lay out the obligations of host states toward foreign investors regarding the definition, admission, establishment, operation, and withdrawal of foreign-owned companies, as well as specifying dispute settlement procedures. With the advent of neoliberalism, the principal purposes of such legal frameworks were to provide stability and security for foreign investors by limiting the range of legitimate government intervention in their affairs and providing for compensation should these norms be violated (as was common during the ISI period) (Vandevelde 1998: 632). Developing country governments tended to view liberal legislation as signaling devices in their efforts to attract foreign capital—signifying both the liberalization of investment rules and, in the case of international investment agreements, offering access to international arbitration as proof of their commitment. The following section demonstrates that the rules on FDI applied by post-neoliberal governments in Argentina and Chile are strongly path dependent on legislation inherited from the neoliberal period. Domestic legislation on FDI Under democratic governments since the mid 1960s, investment policies had become increasingly restrictive toward TNCs in both Argentina and Chile. In Chile, these policies culminated in Salvador Allende’s nationalization of foreign firms (copper and banking) and the adoption of the restrictive legal framework of the Andean Pact on foreign investment known as Decision 24. In Argentina, the state took on a direct role in intermediate goods projects in the early 1970s. However, beginning in 1974 with the adoption of DL600 in Chile, and quickly followed by Argentina in 1976 with Law 21,382, foreign investment rules underwent a remarkable liberalization, in which almost all restrictions on ownership and the repatriation of dividends and capital were removed. The initial adoption of these foreign investment regimes was a direct consequence of the coups d’état that brought right-wing dictatorships to power in both countries, as well as a response to poor economic conditions, the fiscal crisis of the state, and a sharp decline in FDI inflows which accompanied the pervasive social crises experienced in both countries in the early 1970s. In this context, restoring foreign capital inflows was desperately needed to balance the national accounts, restore growth, and legitimate the military governments. It was reasonable to expect that liberalization of FDI rules would enhance investor confidence, as had occurred in earlier crises.

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The strategy toward foreign capital was a key element of General Pinochet’s economic plan which saw FDI inflows as complementary to domestic savings and as essential to developing the mining sector (Behrens 1992: 37). The transition to democracy in 1983 in Argentina and 1990 in Chile did not significantly affect the legislation, as the neoliberal model promoted by the military authorities in Chile and Argentina was much more dependent on external sources of financing for economic growth than the ISI model which preceded it (Behrens 1992: 25). TNC investment also had the potential to reduce the countryrisk rating and the interest rate at which both the sovereign authority and local firms could borrow on international markets. Reducing debt payments (through debt swaps and privatizations) and stimulating the supply of domestic credit through a reduction in the country risk premium were explicit goals of the Carlos Menem government, from 1989–99 (Argentina 1998: 1). Likewise, the modernization of crumbling infrastructure that the state could not afford to develop and the financing of persistent government deficits through capital inflows were essential in Argentina. External creditors saw the TNC presence as a confirmation of both governments’ commitment to liberalization (Chudnovsky et al. 1997: 176). Increased foreign participation in the economy also offered the advantage of making it more difficult to reverse the liberalization process, and reduced the perception of political risk. In this sense, the increasing economic power and political embeddedness of foreign corpor ations mitigated against major policy changes (Marín and Rozas 1988: 183). This domestic legislation, DL600 and Law 21,382, has continued basically unaltered into the post-neoliberal period. In part, this may be interpreted as the result of a redefinition of the state’s approach to economic development in the post-ISI era: namely, the belief that all foreign investment was intrinsically good for development and did not need to be channeled as it was in the ISI era. International investment treaties The neoliberal period was, moreover, characterized by a vast and rapid expansion of international commitments to investment protection, represented in international investment agreements, and particularly in the BITs signed by Latin American governments. This was part of a global trend toward the liberalization of the governance of FDI. The United Nation’s World Development Report confirmed these observations in its overview of trends in FDI legislation: of the 1035 regulatory changes to national legislation governing FDI recorded between 1991


and 1999, only 5.9 percent were in the direction of greater restrictions on foreign investment (UNCTAD 2000: 6). Within Latin America the trend was evident: between 1982 and June 2006 Argentina had signed 58 BITs, and Chile 53. Overall, there is a great deal of convergence in the provisions of international investment agreements in the Americas. Much of Latin America has followed the broad format of U.S. agreements, although certain provisions of intra–Latin American investment treaties differ from the more classically liberal U.S. model, particularly those with substantial impact on the policy flexibility of developing countries. This divergence is seen principally in the sections on establishment and admission, and performance requirements which affect the ability of the state to channel FDI within the framework of an industrial policy (Haslam 2004). The post-neoliberal period has certainly seen a waning enthusiasm in the region for bilateral investment treaties. On the one hand, this follows a global trend, as BITs and other investment instruments came increasingly under scrutiny as potentially undermining domestic policy autonomy in environment and social welfare due to a burgeoning number of arbitration cases (UNCTAD 2006b). In Latin America, 42 known cases against Argentina have been brought by investors to international arbitration—most of which relate to its devaluation of January 2002 (UNCTAD 2007). The opposition of Luiz Inácio “Lula” da Silva’s Brazil to the “neoliberal” project of expanding existing bilateral investment disciplines to multilateral agreements such as the Free Trade Area of the Americas (FTAA) or the World Trade Organization’s Doha Trade Round is also well documented. It is also worth asking if the few agreements signed in the New Left period represent a qualitative break with neoliberalism. Since the election of Ricardo Lagos, Chile has continued its aggressive strategy to diversify its integration into world markets with a series of BITs and free trade agreements (FTAs). The BITs signed since Ricardo Lagos assumed office in March 2000 with the Dominican Republic, Spain, and Switzerland followed the pattern of “neoliberal” treaties of the mid-1990s. The investment provisions in the FTA with the United States (2003) also follow the same basic lines as in earlier agreements. Similarly, other New Left governments such as Tabaré Vázquez’s Uruguay have signed contentious investment agreements with the United States (a BIT in 2004). The BIT between Venezuela and France, signed in 2001 and entering into force in 2004, also follows the standard “neoliberal” pattern of investment protection.

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Many of Argentina’s foreign investors damaged by the 2002 devaluation have resorted to the binding international arbitration permitted by bilateral the BITs signed during the 1990s. Argentina has chosen not to reject the accords it has signed, but to contest the accusations of foreign investors on a case-by-case basis. Although tribunals have found Argentina to be liable for violating the principle of “just and equitable” treatment of foreign investors, the absence of case law and binding precedent in international arbitration has permitted the Republic both to prevail in cases having similar facts to those which it has lost and to continue to demand annulment of those awards it has lost (UNCTAD 2006a: 4–7). Argentina has proven particularly skillful at putting pressure on plaintiff firms domestically and forcing them to renounce their arbitration claims. However, it is also worth noting the emergence of South-South cooperation agreements based on the political signaling of solidarity. The opening of Mercosur to Venezuela may be viewed in these terms. Perhaps more interesting is Chávez’s Alternativa Bolivariana para las Américas (ALBA—the Bolivarian Alternative for the Americas) which, between 2004 and 2006, generated seven integration agreements involving Venezuela, Cuba, Bolivia, and the Caribbean Community. These agreements agree on friendly relations; trade liberalization; and cooperation in economic, political and social (particularly health and education) objectives. Strictly speaking, the ALBA accords are not about foreign investment, but rather direct state-state investment (facilitated through state-owned firms), resulting in the reconstruction or creation of new state-owned enterprises in the extraction; processing; and commercialization of natural resources, media, and financial sectors. Overall, the post-neoliberal legal framework for FDI in Argentina and Chile, both domestic and international, shows considerable path dependence from the neoliberal period. In terms of the content of international investment agreements and investment provisions of FTAs, there is no indication of policy change between neoliberal and post-neoliberal periods. Instead, the reluctance to sign new BITs seems to mark an increasingly pragmatic approach to the costs and benefits of investment agreements rather than a clear break with neoliberal patterns.

Regulation, taxation, and state-firm bargaining Whereas there have been few significant changes in the legislation governing FDI in Chile and Argentina, changes in policymaker perceptions regarding TNCs are evident in the renegotiation of contracts with


private providers of public services (Argentina) and the increase in the tax burden on the mostly foreign firms that operate in the large-scale mining sector (Chile). It is principally through these limited forms of state-firm bargaining that the contours of a post-neoliberal policy toward foreign investors can be identified. Argentina: Renegotiation of contracts with privatized utilities The renegotiation of public service contracts of firms privatized during the neoliberal period of the 1990s has raised questions regarding the extent to which the post-neoliberal government of Nestor Kirchner is seeking to redefine the relationship between the state and foreign investors. Although in some respects the contractual renegotiations do not appear to be a significant departure from past practices, it is worth noting the change in state priorities revealed in the course of the renegotiations, and the progressive (although largely unintentional) nationalization of some public utility sectors, particularly water and sanitary services. The renegotiations themselves are the direct result of the politicaleconomic crisis that enveloped Argentina in December 2001 and the devaluation of January 2002. The Public Emergency and Reform of the Exchange Regime Law of January 6, 2002 (No. 25,561), took Argentina off its decade-long “Convertibility” Regime which had pegged the Argentine peso to the U.S. dollar at a value of 1:1 and dictated the “pesofication” of the national economy—including the conversion of all public service rates to pesos at the rate of 1:1 and the nullification of any indexing clauses in public service contracts. Bearing in mind the massive devaluation of the Argentine peso, falling from parity to 4:1 against the U.S. dollar, this meant a significant reduction in the revenue collected by the firms operating public services. The legislation also set out a framework for renegotiating these rates with the mostly foreign companies operating public services. In the meantime, however, companies were forbidden to renege on their contractual obligations (investments, extension of service, and so on) (Azpiazu and Bonofiglio 2006: 32–68). A Unit for the Renegotiation and Analysis of Public Sector Contracts (UNIREN) was created to bring this process to a conclusion. Little progress was made in the first two years, and the original time limits for renegotiation (until end of 2003) were extended until December 31, 2007. As of July 2007, of the 64 renegotiations, 35 had signed agreements, and another 18 had reached provisional agreements (UNIREN 2007).

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Although neoliberal proponents typically assert the need to maintain stable rules, the renegotiation of public utility contracts was relatively common in Argentina during the 1990s. Regulatory agencies in Argentina exhibited poor technical and administrative capacities, but most importantly suffered from a lack of autonomy from the executive (Manzetti 1999: 89; Abdala 2001: 223–6). Consequently, most contract renegotiations tended to benefit firms over consumers, as expressed in lower reductions in rates than stipulated in original contracts, monopoly extensions, acceptance of unfulfilled coverage targets, and increased tariffs (Abdala 2001: 232, 242–7). In this respect, foreign firms tended to benefit from the political discretion that existed within the system. What does appear to be a qualitative break from the neoliberal period is the willingness of the state to engage in “hard bargaining” with foreign firms—up to the point of rescinding concessions. Argentina has made the successful conclusion of contract renegotiations dependent on the prior withdrawal of investor claims before international commercial arbitration tribunals such as International Center for the Settlement of Investment Disputes. Furthermore, the focus of negotiators on keeping rates down (or minimizing increases), when the governing law suggests that both consumer prices and firm profitability should be taken into consideration, does represent a major change from past practice. However, success in the compression of prices for consumers (which undermines the profitability of the firm) appears to have shifted the burden onto industrial and commercial users, and consequently the state has had to compensate firms through subsidies and through transferring private external debt to the public sector (Azpiazu and Bonofiglio 2006: 34; Cufré 2006). Indeed, the continuity with the import substitution era is more striking, when in the name of populist concerns, state-owned firms kept rates down but persistently ran deficits and underinvested in infrastructure. Indeed, this arrangement (in the absence of later rate increases) may well foreshadow the state financing infrastructure investment on a continuing basis. Although this marks a break from the neoliberal reliance on private investors to build infrastructure, one may well ask if such a policy direction is sustainable. Another particularly important outcome from the process of renegotiations has been the renationalization of privatized firms, usually justified in terms of their failure to comply with the terms of their concession contracts (particularly regarding investment and extension of services). As of January 2007, there have been four cases of such renationalizations at the national level, the most important being Correo Argentino


S.A. (mail) and Aguas Argentinas S.A. (water and sanitation). However, taking into account renationalizations at the provincial and municipal levels, the impact has been much greater. Daniel Azpiazu and Nicolas Bonofiglio (2006: 38) point out that in water and sanitation, most of the major concessions were rescinded, resulting in a reduction of the population of the country within concession areas serviced by privately owned firms from 57 percent in the pre-crisis period to 16 percent in May 2006, while state-owned firms grew from covering 12 percent to 53 percent over the same period. A number of important multinationals were affected, including Suez (France), former owner of the largest Buenos Aires concession; Enron (United States); Dragados (Spain); Saur (France); and Vivendi (France), most of which currently have cases before international arbitration (Azpiazu and Bonofiglio 2006: 36). The case of Suez and Aguas Argentinas S.A. has drawn the most attention. Suez’s contract was rescinded for unfulfilled obligations, and the privately owned firm renationalized as AYASA (Aguas y Saneamientos Argentinos S.A.) as 90 percent property of the state and 10 percent property of its workers. Nonetheless there are good reasons to doubt that this is the beginning of a trend in Argentina. Reports suggest that the renationalization was principally the result of Suez’s abandonment of its concession (due to the calculation it could do better through an arbitral ruling) than the reflection of new policy directions (Cufré 2006). As Azpiazu and Bonofiglio put it, the nationalizations seem to be more of “a response to the ‘lack of interest’ of foreign capital to remain in this sector than a strategic reestablishment of the state as provider of basic public services” (Azpiazu and Bonofiglio 2006: 49). Chile: Changes to mining royalty legislation Chile also demonstrated an increased willingness to put fiscal pressure on TNCs in the mining sector, which marked a departure from past neoliberal practices under both the dictatorship and in the democratic era. One of the first attempts to increase taxation on mining companies during the government of Eduardo Frei, known as the Villarzú proposal (1997–8), failed due to vigorous opposition from the mining sector and its domestic allies (Haslam 2007). However, the subject of taxing foreign mining companies was revisited in early August 2002 under the Socialist Party-led Concertación government of Ricardo Lagos, when, on the fifth of August, the Ministry of Mining released its figures on the contribution of the privately owned mining sector to public finances. The figures revealed that only two mining companies had paid taxes in the last 10 years. Although the government continued to deny that it

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was, in fact, interested in changing the rate of taxation on the mining sector, the debate was officially launched. The proposal to create a mining royalty on sales quickly gathered steam and appeared to garner wide support in Congress and among the population as a whole. Public-opinion surveys suggested the royalty was supported by 67 percent of Chileans (La Tercera 2004a). By mid-June 2003, in the context of copper prices returning to and exceeding historical averages, the government announced that it would be pursuing the legislation of a mining royalty. The 3 percent royalty was not only to compensate Chile for the exploitation of its national patrimony but also to finance an Innovation and Technological Development Fund that would permit the diversification of the Chilean economy in the expectation of the future exhaustion of the copper mining boom ( Jimeno 2003). The Lagos administration also decided to advance the royalty as a change to the Dictatorship’s Organic Constitutional Law on Mining Concessions (1982), requiring a 4/7th majority in Congress and thus forcing the opposition to bear the brunt of either approving or rejecting it during an electoral calendar. The royalty law was defeated in the lower house on July 21, 2004, when the moderate right-wing opposition largely abstained from voting, and again in the Senate on August 10, 2004. Intensive lobbying by foreign firms was cited as the reason by one of the Concertación’s prominent supporters of the royalty (La Tercera 2004b). However, the royalty was relaunched in November 2004 and submitted to Congress in December, this time as a change to taxation laws (not a constitutional reform), requiring only a simple majority held by the government Concertación. The legislation proposed a 4–5 percent tax on operational profits of companies producing over 50,000 metric tons of mineral. Furthermore, the government viewed the royalty “tax” as less disruptive of “private property rights” and the contract law of DL 600 (La Tercera 2004d). The legislation nonetheless constituted a step back from the royalty, as it abandoned the principle of compensating the state for the exploitation of nonrenewable resources (La Tercera 2004c). Royalty II, as it was known, passed the lower chamber in March 2005 with significant support from across the political spectrum, including the far-right Unión Demócrata Independiente (UDI—Independent Democratic Union) party. The Innovation Fund created with Royalty II offers another perspective on the extent of post-neoliberal policies. The Fund is supposed to invest in innovation projects (not social welfare spending), to improve the articulation of innovation with business, increase research and development spending in private enterprise, and diversify the


economies of Chile’s mining regions. Although explicitly rejecting the claim that it is developing an industrial policy, the US$80 million fund strengthens the activities of both the Corporación de Fomento de la Producción (CORFO) (the state development agency) and the Comisión Nacional de Investigación Científica y Tecnológico (Conycet) (the state science and technology agency). CORFO is expected to almost double, to 800, the number of projects financed (where the private sector cofinances 55 percent), 80 percent of which are small- and medium-sized enterprises (La Tercera 26 May 2006). In this respect, the increased fiscal pressure on foreign investors benefits both public finances and the government’s development strategy.

Continuity and change in post-neoliberal investment policy This chapter has examined the extent to which the policy of postneoliberal governments toward foreign investors in Argentina and Chile represents a qualitative break from FDI policy during the neoliberal period of the 1990s. Overall, it is the continuity with the policies of the neoliberal era that is most striking (in terms of international agreements and relatively minor contract and taxation changes), which seems to indicate minor tinkering on the margins of the neoliberal model. But, to focus on the minor changes in this way is misleading. This is because the most important transformation brought about by post-neoliberal governments lies in the realm of perceptions and discourse regarding foreign investment. The New Left, even in Argentina and Chile, has rejected the more extreme neoliberal arguments about the natural harmony of interests between firms and governments and the “opportunity costs” of regulating FDI. This has opened new space to put more pressure on foreign investors, which is more in line with the historic predictions of the obsolescing bargaining model. In this interpretation, it is not the policy changes of post-neoliberalism which are mysterious and require explanation; it is rather the self-restraint and unwillingness of neoliberal governments to pressure TNCs that is the historical aberration. Moreover, a significant shift in the perception of FDI is also revealed in public discourse on the role and contribution of foreign investment to national development. In Argentina, high-ranking political figures, including the former president Néstor Kirchner, have repeatedly accused Spanish multinationals of sacking the country. Even in Chile, there has been an aggressive public discourse involving high-ranking figures, such as Minster Nicolás Eyzaguirre, which sought to paint mining TNCs as

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evading taxes and not contributing sufficiently to the country’s economic development. In this respect, the New Left has broken with the neoliberal discourse that asserted that (any) investment was good and that spillovers were naturally occurring. In its place, a more critical perspective has taken hold, generally favorable to FDI, but recognizing that the state must be more active in regulation, setting investment minimums and higher taxation. Interestingly, the Innovation Fund in Chile is an explicit recognition of the limits of the contributions of FDI to development and the need to find other mechanisms to encourage diversification and linkages in the economy. Perhaps most important has been a change in perceptions regarding the “opportunity cost” of regulating FDI and making minor changes to the “rules of the game,” such as introducing elevated levels of taxation. The neoliberal argument that changing the “rules of the game” (in any minor fashion) would result in lower FDI inflows has been definitively dismissed by New Left politicians. Argentina is a good example as it brings together both subjective and objective factors in the interpretation of the opportunity cost of regulation. The Argentina of the 1990s, with fresh memories of hyperinflation and economic stagnation, handicapped by the Convertibility Regime and a general inability to cut government spending or earn sufficient export revenue, was dependent on large capital inflows, particularly in the form of FDI, to balance its capital account. In this context, Argentine policymakers and the general population were convinced that the stability of the rules, particularly Convertibility, was the cause of its economic renaissance. Any changes to these rules, it was argued, would have undermined Argentina’s reputation as a good business climate, and thus would have threatened the massive capital inflows and the Argentine recovery as a whole. In post-crisis (and post-neoliberal) Argentina, the illusion that the stability of the “rules of the game” was the sole cause of prosperity was definitively dismissed. Following the 2002 devaluation, almost all rules were changed, and the economy contracted so dramatically that it was literally impossible to contract any further. This opened up an immense freedom of action regarding changes to public service contracts; nationalizations; and hard bargaining in relation to firms, international debt creditors, and the IMF. The devalued exchange rate meant that dependence on FDI inflows en masse was reduced, and the fear of breaking the rules of the game was banished. Argentina’s post-2002 recovery could not be attributed to stability in rules, but instead to Argentina’s comparative advantages in internal market size and natural resources. Beyond policymaker perceptions of the role and contribution of FDI to development, it must be emphasized that conditions have


changed since the early 1990s to permit more pressure on foreign firms. Interestingly, these factors, unlike perceptions, are unrelated to the emergence of the New Left per se—which raises the difficult question of how much policy change can be attributed to post-neoliberal regimes, and how much is linked to changing objective conditions. This is clear in the Argentine example mentioned earlier, where, objectively speaking, overall dependence on FDI inflows was reduced following the devaluation. It is also evident in the reasons for the success of Royalty II in Chile and the failure of Villarzú proposal of 1997–8. The low price of copper in large part frustrated the 1998 proposal and increased the political opposition to it. In contrast, the Royalty II legislation was written to work at US$0.93/tonne of copper, and by late 2005, the price was at historic highs of US$1.50. Furthermore, in the intervening years, with few new discoveries of major deposits, fears developed that the mining boom might soon reach its end, leaving the country economically devastated, as the end of the nitrates economy had done in the early twentieth century. Getting the most out of the current mining boom became much more important. In this sense, the opportunity costs of regulating or taxing foreign investors (the loss of potential future inflows) were drastically reduced. The change in objective conditions had nothing, intrinsically, to do with the rise of the New Left. What the New Left contributed was the ideological justification for seeing opportunity costs in a different way than the neoliberals’ slavish devotion to the stability of the rules of the game. Although the change in perceptions and objective conditions would seem to herald a perfect storm for renewed state-firm bargaining, in fact, the actual policy changes in Argentina and Chile are for the most part limited to tinkering on the margins of the neoliberal model. The best explanation for this continuity is the path dependence of the legislation dating back to the neoliberal period. The debate in Chile regarding the modification of taxation on mining companies is particularly illustrative. The debate about options was framed by the difficulty of changing the law created by the dictatorship and Chile’s international treaty commitments. The preferred option, changing the Dictatorship’s Mining Concession Law (1982) to permit a royalty on sales, was rendered impossible through the qualified majority required for the change (rules that had also been established by the Pinochet regime). Another concern, in the end moot, was that the royalty would face international arbitration challenges under the BITs and FTAs signed by Chile if it were applied to existing investments. The Royalty II, simply a change to tax laws (the prerogative of the state, and recognized by such in

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international agreements), was runner-up by default, though it too faced challenges related to whether it would violate the guarantee of tax stability available to investors through the dictatorship’s domestic investment statute, DL600. The choices for the Chilean government were thus highly circumscribed by the existing neoliberal legal structure. This was not the case in Argentina, where the rule of law is less independent and more politicized, and where the executive faced fewer Congressional political obstacles. Nonetheless the Argentine response was also highly circumscribed by its international (if not domestic) legal obligations resulting from its BIT program of the 1990s. Argentina did not renounce its international obligations, but pursued a two-pronged strategy, contesting investor claims in international arbitration, while simultaneously bringing pressure to bear domestically on many of the same firms to renegotiate their public service contracts. Domestic negotiations were concluded only if firms renounced their rights and withdrew existing claims to international arbitration. In this respect, even in Argentina, the post-neoliberal investment policy remains highly constrained by the legal path dependence of the neoliberal period.

Conclusion This chapter has discussed the extent to which New Left governments in Argentina and Chile have elaborated policies on FDI that may be considered distinct from the neoliberal period. Overall, it has demonstrated significant continuity in domestic and international legal frameworks governing investment, explained in large part by the legal path dependence of the neoliberal model. Although change is limited to tinkering on the margins of the model, in particular regarding contract renegotiation and increased taxation, these small changes are due to more significant changes in perceptions regarding the contribution of foreign investors and the opportunity cost of regulating and bargaining with them. In a post-neoliberal era when unmitigated neoliberalism is discredited among important segments of the Latin American population, and governments struggle to contain populist pressures, it is likely that post-neoliberal governments will continue to explore creative options in their relationship with TNCs. There is, however, no guarantee that the objective factors that have facilitated this round of state-firm bargaining will endure: Latin America’s privately built public infrastructure will rapidly deteriorate without major investment; and declines in commodity prices could change the willingness of foreign firms to accommodate rising post-neoliberal demands.

8 The World Bank and the Poverty Reduction Strategy of Nicaragua: Toward a Post-Neoliberal World Development Order? Arne Ruckert Introduction After two decades of experimentation with neoliberal policy throughout Latin America, a strong wind of change is currently blowing through the Americas. While donor governments and multilateral development institutions have started to more openly acknowledge some of the (increasingly obvious) shortcomings and negative side effects of neoliberal reforms (for example DAC 1996 and World Bank 2001), many New Left governments in the region have initiated experiments with postneoliberal policies that combine the traditional (neoliberal) emphasis on sound macroeconomic policies with elements of heterodox economic policy and more expansive social policies, in particular targeted human capital investment into the poor. Concerns regarding the inclusiveness of neoliberal development policies have also been raised at numerous international conferences and informal gatherings, for example the Word Social Summit in Copenhagen in 1995 and the Millennium Summit in New York in 2000, and at the annual gatherings that form part of the World Social Forum. At the same time, major social protests in both developed and developing countries against the harmful effects of neoliberal adjustments, such as the “Battle in Seattle” in 1999, have translated into a sustained legitimacy crisis for many of the most important development agents in Latin America, in particular the World Bank and the International Monetary Fund (IMF) (Stone and Wright 2007: 4). In response, the leading international development institutions, the World Bank and the IMF, have in the late 1990s started to engage in an attempt to redefine their approach to development, shifting at least rhetorically away from structural adjustment toward poverty reduction 135

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The World Bank and Poverty Reduction Strategies

and country ownership as the guiding principles of all International Financial Institution (IFI) operations (see World Bank 2001; and Klugman 2002a and 2002b). This orientation toward poverty reduction was also reflected in the articulation of the post–Washington Consensus (PWC) by Joseph Stiglitz in 1998 (Stiglitz 1998a), and the launching of the Comprehensive Development Framework (CDF) in 1999 (Wolfensohn 1999). The Poverty Reduction Strategy Paper (PRSP) was identified by the World Bank as the main policy tool through which to achieve the goals of the CDF (Pender 2001: 407). The recent changes in the IFIs’ approach to development raise a number of interrelated questions that directly speak to the themes of this edited volume. Most importantly, to what extent does the current world development order contain elements of and tendencies in development policy that go beyond the well-known standard prescriptions of neoliberalism? With the emphasis on poverty reduction and country ownership, and the introduction of novel policy tools, should we conceptualize the world development order that is emerging under the post–Washington Consensus as post-neoliberal? And, finally, why have the World Bank and, more importantly, the IMF moved toward embracing poverty reduction as the main goal of all their operations? This chapter suggests that while some significant changes have indeed materialized in the IFIs’ stance with the introduction of the PRSP approach, it would nevertheless be premature to announce the arrival of a post-neoliberal world development order; rather the World Bank is reacting to challenges to neoliberalism and post-neoliberal developments in the hemisphere by slightly adapting its own approach to create a more “inclusive” version of neoliberal development policy (Craig and Porter 2005; Ruckert 2006; see also the chapter by Macdonald and Mahon in this volume). In fact, numerous similarities between the Washington Consensus and the PWC, and at the programmatic level between structural adjustment policies (SAPs) and PRSPs, remain in place, such as the commitment to “sound macroeconomic policies” and the liberalization and privatization of the economy. Nevertheless the PRSP approach deviates in a progressive direction from earlier SAPs in the realm of social policy, particularly in its emphasis on poverty reduction, empowerment and participation, and its acknowledgment of the role of the state in achieving these goals. The PRSP approach links traditional neoliberal policies of global economic integration, trade liberalization, and good governance to a range of provisions designed to promote human capital development and build social safety nets. These provisions are to be executed by states and are

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designed to ensure the active participation of previously excluded populations in “the project of building a more inclusive world economy” (World Bank cited in Craig and Porter 2005: 227). Poverty reduction and its social agenda, rather than being opposed to neoliberal policies, have become important addenda to the market-enabling reform agenda promoted by the IFIs so as to institutionally and socially embed commodification attempts (Jayasuriya 2006: 81). Thus, this chapter suggests that the IFIs have not (yet) reached the shores of post-neoliberalism, but that we are nevertheless confronted with a sustained metamorphosis of neoliberal development policy at the multilateral donor level. In order to capture this ambiguity, the chapter introduces the notion of “inclusive neoliberalism,” and argues that the introduction of the PRSP approach represents the first step toward the emergence of an inclusive-neoliberal world development order (see also Craig and Porter 2005 and 2006; and Ruckert 2006 and 2007). Moreover, I suggest that the introduction of more inclusively oriented neoliberal policies could be understood as an attempt to resolve some of the legitimacy problems and contradictions that neoliberal policies faced in the periphery (similar to the argument put forth by Taylor in this volume). In substantiating these claims, this chapter first discusses some of the criticisms of neoliberal policy that have materialized over the last two decades, before describing the most pertinent elements of the PWC. It then outlines in an “ideal-typical manner” the main policy components of the inclusive-neoliberal world development order that is emerging under the PWC, through a selective reading of the World Bank’s Sourcebook for Poverty Reduction Strategies. Finally, the chapter draws on Nicaragua’s experiences with the PRSP approach in order to further substantiate the claim that the IFIs have reacted to the upheavals in the hemisphere and the emergence of post-neoliberalism by promoting more inclusively oriented neoliberal development policies.

The post–Washington Consensus and inclusive neoliberalism During the period from the early 1980s until the mid-1990s, the World Bank proceeded with a strong sense of certainty in promoting a set of development policies that came to be known as the Washington Consensus, but which arguably neither represented a real consensus nor achieved a truly hegemonic status. According to John Williamson, the policy advice associated with the Washington Consensus encompasses

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first and foremost “macroeconomic prudence, outward orientation, and domestic liberalization” (Williamson 1990: 1). However, a more comprehensive definition of the Washington Consensus includes a number of other neoliberal commitments, such as privatization, deregulation, tax reform, and secure property rights. In the realm of social policy, this meant state retrenchment and market expansion in the financing, delivery, and administration of social services and transfer payments (Huber 2005: 75). The Washington Consensus was implemented in most developing countries through SAPs which became the standard policy instrument of World Bank lending in the mid-1980s (Mosley et al. 1995: 27). However, SAPs have from the very beginning been harshly criticized, particularly by civil society actors, for their immense social costs and their failure to create “socially stable” societies (see SAPRIN 2004) and, more recently, have also come under attack within the academic mainstream for their failure to contribute to economic growth (Rodrik 2002; Wesibrot et al. 2001). At the same time, as discussed by Friesen in this volume, the Washington Consensus has come under assault from within the IFIs. Joseph Stiglitz, Chief Economist of the World Bank from 1996 to 2000, has been the most influential voice involved in articulating an alternative PWC (Stiglitz 1998a, 1998b, and 2002). Finally, counterhegemonic social forces in developing countries, engaged in anti-IMF protests and anti-neoliberal struggles must be acknowledged as having played a key role in the unraveling of the Washington Consensus, as described in more detail by Brand and Sekler in their chapter in this volume. The PWC has added a host of new policy elements that were clearly missing in the narrowly focused Washington Consensus, such as institutional reform; competition policy; the role of imperfect markets and the concomitant need for prudential state regulation; social equity concerns; and the importance of participation in, and country ownership of, development policies (Stiglitz 1998a and 1998b). With the articulation of the Millennium Development Goals (MDGs) at the United Nations Millennium Summit in New York in 2000, the strong emphasis on poverty reduction, and the return of social policy in development cooperation more generally, the PWC has been further broadened, enjoying support not only among donors but also among segments of the international NGO community and within civil society.1 Finally, the PWC and inclusive neoliberalism also depart from orthodox neoliberalism in their main analytical focus which has been expanded from being limited to the policy content to problematizing the delivery

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mechanisms of development policy. In fact, what is most noteworthy about the PWC is not the novelty of the policy content, which has largely remained neoliberal in nature, but rather its approach to reform delivery. The PWC proposes novel “delivery devices,” such as civil society participation and community involvement in locally owned projects, that aim to socially (re-)embed and maintain market-led reform processes (Carroll 2005). The CDF represents the overarching policy framework under which PRSPs, the most visible policy tool of the PWC, operate. PRSPs are also linked to the Heavily Indebted Poor Country (HIPC) debt relief initiative as access to debt relief is conditional on the approval of a PRSP by the IFIs. According to the World Bank, the CDF emphasizes the interdependence of all elements of development—social, structural, human, economic, environmental, and financial—and advocates a holistic longterm strategy, focusing on three pillars in particular: poverty reduction and pro-poor growth, country ownership, and civil society participation in the elaboration of PRSPs (Wolfensohn 1999; and Klugman 2002a: 2). Yet these principles are expected to be embedded within “sound macroeconomic policies” as laid out in the Sourcebook for Poverty Reduction Strategies, where the IFIs maintain that “[w]hile the shift to country ownership will allow more leeway in terms of policy design and choice, acceptance by the Bank and the IMF boards will depend on the current international understanding of what is effective in lowering poverty” (Klugman 2002a: 4). Traditional macroeconomic policy As further highlighted in the Sourcebook, “effective development policy” builds on “sound macroeconomic and structural reform policies,” such as trade liberalization and banking sector reform, appropriate sectoral policies and programs, good governance (oriented toward facilitating noncorrupt privatization regimes), and realistic costing and appropriate funding for poverty alleviation programs (Klugman 2002a: 16). However, there are minor modifications in IFI policy advice in line with the PWC which relate predominantly to the ways in which the neoliberal reform process is expected to be implemented and the compensation of those negatively affected by neoliberal reforms. This can best be exemplified through a discussion of the advice given to developing countries in the Sourcebook for Poverty Reduction Strategies in areas such as budgetary and fiscal policy, trade liberalization, and utility privatization. When it comes to the budgetary process, the Sourcebook highlights the need for government spending to be prudent and anti-inflationary

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while also poverty sensitive. Sensitivity to poverty can be discerned in the emphasis that is given to health and education sectors in most poverty reduction strategies, and the subsequent growth in social expenditure and the expansion of social safety nets in most PRSP countries (Driscoll and Evans 2005). At the same time, though, governments are expected to invest in a prudent manner without risking the resurgence of macroeconomic instability, by keeping inflation in the low single digits, avoiding budget deficits, and establishing independent central banks (Klugman 2002a and 2002b). As the United Nations Conference on Trade and Development (UNCTAD) has recently argued, the IFIs’ unwavering commitment to “tight monetary policy” is problematic as it might translate into lower output growth and higher levels of unemployment, and therefore undermine the laudable attempt to reduce poverty through economic growth and poverty-sensitive budgets (UNCTAD 2002: 24). Moreover, targeting inflation substantially reduces the policy options that developing countries can resort to in times of economic recession, such as deficit spending and credit expansion, and the goals of poverty reduction and inflation-targeting might actually be in conflict, as the later circumscribes the extent to which governments can spend freely on poverty-related causes. Not surprisingly, almost all developing country PRSPs contain the same elements of “sound macroeconomic policy” that were promoted by the IFIs during the era of the SAPs (Gottschalk 2005). The liberalization of trade has been a particularly thorny and contested issue within the development community but nevertheless remains high on the IFIs’ list of priorities. However, the IFIs have recently acknowledged that previous liberalization efforts have, in many cases, created unnecessary hardship among the poorest and weakest segments of society during the adjustment process. Consequently, the IFIs now propose that liberalization be accompanied by significant compensation measures that temporarily insulate the poor from the vagaries of liberalized markets. Moreover, there is much more concern regarding the proper sequencing of trade reforms (Klugman 2002b: 33). At the same time, the donor community seems to hold on to the highly contested notion that trade liberalization inherently contributes to economic growth and overall development, despite the lack of a substantial consensus on the issue within academic circles. In fact, various United Nations organizations and numerous academics have come to dramatically different assessments regarding the desirability of the liberalization of trade for developing countries (UNCTAD 2002).

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As critics of the neoliberal wisdom do not tire of pointing out, trade liberalization might have contributed to the impoverishment of uneducated workers and concomitantly to growing inequality and poverty within developing countries (UNCTAD 1997 and 1998). Moreover, countries that have economically caught up to the West have not followed the standard advice of trade liberalization given to developing countries by the IFIs, but selectively applied protectionist policies (Wade 1990; Chang 2002; Charlton and Stiglitz 2005). Thus, the inclusiveneoliberal model adopted by the IFIs acknowledges the possible negative side effects of trade liberalization and proposes mechanisms, such as social safety nets, to ameliorate those effects more seriously than through previous attempts, without however granting developing countries the space to truly choose their own trade policy. Utility privatization became a key conditionality of development assistance during the era of structural adjustment, and it continues to be fiercely promoted under the inclusive-neoliberal development policy regime. Indeed, recent studies confirm that conditionalities linked to privatization have actually proliferated since the articulation of the inclusive-neoliberal development project, despite notions of ownership and partnership ( Jubilee Debt Campaign 2006). Nevertheless there is again significant discontinuity in the way in which the topic is being approached by the donor community. For instance, much more emphasis is being placed on the need for an appropriate regulatory framework as a precondition for successful privatization (Klugman 2002b). Moreover, the likely negative social implications of utility privatizations are acknowledged more openly, and the Sourcebook consequently calls for compensation measures if the poor are negatively affected by privatization, such as the cross-subsidization of water and electricity consumption (Klugman 2002b: 286). Nevertheless developing countries are still pressured to further divest and privatize public utility providers. It is unfortunate that such a delicate political decision should be the outcome of a fundamentally undemocratic process of external imposition of conditionalities, particularly given the current environment in which partnerships and country ownership are touted as a cornerstone of the development regime. Social policy and social inclusion In the economic sphere, inclusive neoliberalism thus continues to prescribe most of the elements of the traditional neoliberal macroeconomic core. At the same time, the World Bank has, through its recent emphasis on inclusion, started to acknowledge the need for a more

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prominent role for social institutions and the state, in particular, in empowering its people, reducing poverty, enabling citizen participation, providing social services to the poor, and upholding an adequate regulatory environment (Craig and Porter 2006: 12). As a result, IFI conditionalities have increasingly expanded into the sphere of social policy and socio-institutional restructuring, with conditions linked to poverty-spending targets and the expansion of targeted social services to the poor (Dijkstra 2005). However, as social exclusion and poverty are assumed to be linked to the inability to effectively participate in market exchange, the inclusive-neoliberal model is one in which access to welfare is not considered to be a right—as in the case of social citizenship—but rather a prerequisite for securing the successful economic participation of the poor in free capitalist markets and remains linked to a number of conditions ( Jayasuriya 2006). Thus, social policy is not universalistic but rather selectively targeted to improve the human capital endowment of the poor, particularly through conditional cash transfers (CCTs), the preferred modality of IFI social investment under inclusive neoliberalism. As discussed in more depth in the chapters in this volume by Mahon and Macdonald, and Luccisano and Wall, under CCTs access to welfare depends on fulfilling specific obligations, imposed on mothers, in particular, to ensure school attendance by children, health clinic visits, and participation in educational workshops, all aimed at augmenting the human capital of the poor and their subsequent integration into the market order. The inclusiveneoliberal approach to social policy has been accurately described by Jayasuriya as a form of market citizenship as it establishes a distinctive terrain of relationships between the state and its citizens that make access to social goods and services conditional on participation within the market order (2006: 86). While CCTs exist in numerous countries that have not entered into PRSP agreements with the IFIs, CCTs have become an important component of almost all PRSPs developed by Latin American governments. Inclusion through stakeholder participation As mentioned earlier, a key difference between the Washington Consensus and the PWC is the novel delivery mechanisms that have been devised to institutionally embed neoliberal reform processes. Accordingly, the second key element of inclusion promoted through the inclusive-neoliberal approach is the enrollment of stakeholders in the process of social policy formulation. The need for civil society inclusion into the decision-making process has been tirelessly emphasized in recent IFI publications as a precondition for successful structural

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adjustments (for example, World Bank 2001 and Klugman 2002b), and the Bank has made civil society participation in the formulation of social policy a precondition for the acceptance of national PRSPs. This is linked to the realization that “ownership matters because it directly affects program implementation” (Khan and Sharma 2001: 14). Similarly, civil society participation is understood to be essential for creating a broad-based national consensus around neoliberal development policy. As the World Bank argues in the Sourcebook: “Negotiation between stakeholders over priorities can lead to broader ownership and a more widely accepted consensus around development policies” (Klugman 2002b: 241). The integration of counterhegemonic agents into the political process could be understood as an attempt to engender a broad-based national consensus on a slightly modified inclusive-neoliberal development model and to contribute to the IFIs’ hegemony-building efforts surrounding increasingly contested peripheral neoliberalism. To further substantiate these claims, the following section will provide a brief discussion of Nicaragua’s experience with the PRSP process.

Nicaragua’s experience with the PRSP process There are currently seven countries that have developed national PRSPs in the hemisphere, with Bolivia, Honduras, Nicaragua, and Guyana, all part of the first wave of PRSP formulation in 2000, and Grenada, Haiti, and Dominica joining the club of PRSP countries in the mid-2000s. The following discussion will focus on Nicaragua’s experience in delineating inclusive-neoliberal policy through the PRSP process. Nicaragua’s PRSP was initially developed by the Liberal administration of Arnoldo Alemán, and slightly revised by Enrique Bolaños; however, even though the Sandinista electoral victory in 2006 brought to power another New Left government in the hemisphere, the PRSP continues to play a prominent role in Nicaragua’s development and poverty reduction efforts, and the Sandinistas continue to build on some of the social policy elements outlined in the PRSP. In the following discussion, particular emphasis will be placed on macroeconomic policies, trade liberalization, and privatization, and the emergence of a more expansive social policy agenda through the promotion of the PRSP. Macroeconomic continuity In the realm of macroeconomic policy, there is little discontinuity with previous adjustment policies as Nicaragua’s PRSP contains all the elements of “sound fiscal and macroeconomic management” that had

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been promoted by the IFIs in the Washington Consensus era, including low inflation rates, restrictive budgets, and exorbitant interest rates (Government of Nicaragua 2001: 17).2 In fact, a “sound” (that is, neoliberal) macroeconomic framework and satisfactory performance under the Poverty Reduction Growth Facility (PRGF), the IMF’s equivalent to the World Bank’s PRSP, represent preconditions for being granted debt relief under the HIPC initiative. What is more, the conditions attached to IFI finance have actually increased since the PRSP process started, despite the IFIs’ grandiose claims of country ownership of the PRSP process. The Poverty Reduction Support Credit (PRSC) granted to Nicaragua after the approval of its PRSP has more than 140 conditions attached to it (Dijkstra 2005: 457), while the PRGF agreement with the IMF also contains an endless lists of preconditions for reaching debt relief under the HIPC initiative. Some of these conditions include the privatization of the public pension system; governance reforms oriented toward enhancing efficiencies in the public sector and providing a noncorrupt institutional environment; the further liberalization of trade; and the privatization of certain sectors of the economy, in particular telecommunications, electricity, and health care, with the most important divestments expected to be that of Empresa Nicaragüense de Telecomunicaciones (ENITEL), the telecommunications giant, and, Empresa Nacional de Electricidad (ENEL), the main energy producer and distributor (Government of Nicaragua 2001; World Bank 2003). Most of these classic neoliberal policy elements build on earlier reform processes that had stalled under intense opposition to market expansion by counterhegemonic social forces, in particular in the area of the privatization of public utilities. Thus, there is much continuity between earlier SAPs and Nicaragua’s PRSP as the World Bank seems to hold on to most aspects of the neoliberal recipe, and using the “carrot” of debt relief pushes through market-enabling reforms that had not been fully implemented in the past due to civil society resistance. Social policy discontinuity Yet, as suggested earlier, there is important discontinuity with the classic neoliberal paradigm in the realm of social policy, sometimes overlooked by critical analysts of World Bank policy. Interestingly, the World Bank has, throughout the PRSP process, put pressure on developing countries to augment poverty-related spending using resources freed up by debt relief initiatives, and to integrate what are perceived to be innovative social programs, such as CCTs, into all national PRSPs.

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In fact, protection (and increase over time) of poverty-related spending and the expansion of social service coverage to the poor are themselves conditions attached to Nicaragua’s PRSC, and as such a precondition of further collaboration with the IFIs and access to concessional finance (Dijkstra 2005: 456). While these social programs might help to ameliorate the situation of the poor (albeit in a severely limited way), they must also be considered to be part of a hegemony-building exercise in which classic neoliberal ideas of commodification are married with socially progressive transfer payments and consumption subsidies, in order to prop up support for highly contested policies. In the case of Nicaragua, approximately US$980 million was saved through debt relief in the period from 2001 to 2005, and the IFIs expected those savings to be channeled predominantly into poverty reduction programs. In actuality, a large chunk of this money was directed away from poverty reduction, and instead allocated to internal debt reduction, a move welcomed by the IMF but critiqued by the World Bank. The Nicaraguan NGO La Coordinadora Civil estimates that, in fact, only 60–70 percent of all debt relief funds were used for their intended purpose, to finance a poverty reduction strategy that tackles poverty head-on (Bradshaw et al. 2004). Nevertheless in line with IFI expectations, poverty-related spending rose in Nicaragua from 11.3 percent of GDP in 2001 to 13.6 percent in 2005, while expenditures in the education and health sector increased noticeably during the same time span, rising from 3.6 to 4.7 percent of GDP in education (representing an additional US$80 million) and from 2.8 to 3.4 percent in health (adding another US$50 million to the meager health budget) (Government of Nicaragua 2005: 125). Importantly, this happened during a period in which Nicaragua had to make significant cutbacks on government expenditures as it was running large balance of payment and budget deficits. Also in line with the World Bank’s predilection for a highly targeted provision of social services, Nicaragua’s PRSP promotes a CCT program called the Social Protection Network, or Red de la Protección Social (RPS), which was launched in 2000. The RPS is a pilot social safety net that offers assistance to approximately 20,000 households in an attempt to improve the well-being of the extremely poor, while from the World Bank’s view also stimulating the accumulation of “human capital.” However, the money transfers to the poor are not unconditional, as numerous strings are attached to the participation in the program: to partake in the RPS, mothers have to commit to sending their children to school on a daily basis and to visiting health centers regularly so that

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children receive vaccinations. Moreover, mothers must agree to participate in educational sessions on a wide range of issues, including nutrition, sexual behavior, reproductive health, family hygiene, and child care, in exchange for monetary rewards. While this emerging social safety net is to be welcomed, it has to be highlighted that it currently reaches only 2.5 percent of the extremely poor, and therefore is just a “drop in the ocean” of poverty, and may better be understood as an instrument of political crisis management than a serious social policy ( Jayasuriya 2006: 82). What is more, the program is unfortunately much more limited than the CCT programs in Brazil and Mexico on which it is modeled. At the same time, the IFI-sponsored targeted inclusion of the poor directly undermines rights-based approaches to welfare, rooted in a social citizenship model, as “welfarism is transformed from claims that arise out of the political standing of actors (individuals or states) to claims that are contingent on the prior and continuing performance of certain obligations” (ibid.: 84). Finally, there are serious gender implications of inclusive-neoliberal social policy as the Bank reinforces the notion of women being primarily mothers, responsible for all family issues, while imposing extra workloads on already overburdened poor women through CCTs (see the chapters by Luccisano and Wall, and Macdonald and Mahon in this volume). Civil society participation as a novel reform delivery mechanism As discussed above, the PRSP approach also contains an important departure from previous SAPs in its emphasis on stakeholder participation in the elaboration of PRSPs. The “inclusion” of the disempowered into the political process is hoped to contribute to building a nationwide consensus on poverty reduction strategies, which will make the implementation of neoliberal reform policies more likely. However, in the case of Nicaragua this attempt failed miserably as most NGOs felt that the views raised in consultation processes were not reflected in the official PRSP document (Bradshaw and Linneker 2002, Ruckert 2007). As a result, the umbrella NGO La Coordinadora Civil launched a parallel PRSP consultation process, which eventually led to the publication of an alternative civil society PRSP document, La Nicaragua Que Queremos (The Nicaragua We Want) (CCER 2001). What stands out most in comparing both the official and the alternative PRSP are the dissimilarities in the area of macroeconomic policy. The further privatization and liberalization of the economy, proposed in the PRSP as development tools, is severely criticized in the alternative

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PRSP, and more heterodox macroeconomic policies, such as the ones currently implemented by many New Left administrations in the Americas, are supported. Moreover, land reform and the redistribution of wealth, in general, are considered to be a precondition for sustainable poverty reduction. This stands in sharp contrast to the official PRSP, which in line with the PWC promotes pro-poor growth as the solution to widespread poverty. Thus, while the World Bank and the IMF insisted that the Nicaraguan government engage civil society actors and attempt to integrate NGOs into the PRSP implementation process, the macroeconomic content of the PRSP was never open for discussion, and the integration of the ideas of civil society into the PRSP was largely restricted to reform proposals that were already in line with the PWC, such as good governance reforms and the anticorruption strategy (Ruckert 2007). The Sandinista turn and inclusive neoliberalism The return to power of left-of-center political forces, with the electoral victory of the Frente Sandinista de la Liberación Nacional (FSLN—the Sandinista National Liberation Front) in 2006, has surprisingly had little impact on the cooperation between Nicaragua and the World Bank. In fact, the Sandinista government, in contrast with many other New Left administrations in the region, has sought new agreements with the IFIs, and finalized a Poverty Reduction and Growth Facility agreement with the IMF in October of 2007. This agreement contains all the elements of the above outlined inclusive-neoliberal development model, and signals the IFIs’ willingness to engage New Left governments in the region in order to steer them toward implementing inclusive-neoliberal development policies. What is more, the first Sandinista budget delivered in 2007 did not signal a significant departure from inclusive neoliberalism. The Sandinistas admittedly made some social spending adjustments to the budget, especially the expansion of certain social programs based on promises made by Daniel Ortega during his election campaign. These include the Hambre Zero (No Hunger) program, which attempts “to promote capacity building and facilitate production for self-consumption and commercial sale by impoverished families,” including support to 75,000 rural families through providing access to productive assets and subsidized credit (Government of Nicaragua 2007: 4). Other important changes are the reestablishment of the principle of free public primary and secondary education, guaranteed food for public primary school pupils, and the resources allotted for the purchase of medicines.

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However, taken together, the amount assigned by the government for the expansion of social programs remains below the savings from recent debt relief initiatives, which are expected to be channeled into social spending. Moreover, as Nestor Avedano notes, “these adjustments [are] cosmetic, because the amounts involved aren’t really enough to shift the essence of the former government’s budgetary policy” (Avedano 2007). Moreover, budget adjustments are made within the parameters of the neoliberal model, whose basic assumptions of free trade and export promotion remain largely privileged by the Sandinistas. The extent to which the Sandinistas will, in future budgets, deviate more significantly from the IFIs’ policy advice, and experiment with postneoliberal policy alternatives currently pursued by many other New Left administrations in the region, remains to be seen. Of course, Nicaragua’s strong external financial dependence will make it more difficult for the FSLN than for other Latin American governments to pursue alternative macroeconomic and development policies, despite recent financial help from Venezuela.

Conclusion This chapter has argued that the World Bank, in the late 1990s, responded to the contradictions and social struggles that emerged in the aftermath of neoliberal adjustment processes by reformulating its development approach and experimenting with what I have called inclusiveneoliberal development policy through the promotion of the CDF and the PRSP. It suggests that the introduction of the PRSP approach represents an attempt to restore the hegemony of slightly modified, more inclusively oriented neoliberal policies, which have lost their hegemonic status in most developing countries. Moreover, through the PRSP process, policy interventions have been significantly broadened beyond the IFIs’ initial focus on “sound macroeconomic policies,” reaching deep into the social and institutional fabric of society, as evident in the regulation and policing of the behavior of the poor through CCTs in Nicaragua. As Macdonald and Mahon note in this volume, inclusive neoliberalism has substantially broadened the scope of its social engineering and may better be described as “intrusive neoliberalism.” While there is significant overlap between what the editors of this collection consider to be post-neoliberal policy alternatives and what I have called inclusive-neoliberal development policy in this chapter, especially in the realm of social policy, it would nevertheless be premature to label the World Bank’s approach to development truly

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post-neoliberal. Rather, the current transformation of neoliberal development policy, from being narrowly focused on macroeconomic reforms to acknowledging the institutional and social prerequisites necessary for market expansion, are part of the political project to more seriously addresses the contradictions and social struggles engendered by neoliberalism so as to further expand the reach of the market and socially embed neoliberal commodification processes (see also the chapter by Taylor in this volume). The means toward achieving this transformation are, at times, similar to the social policy tools used by some of the more moderate post-neoliberal governments, such as Brazil and Chile. However, the ultimate goal of IFI interventions remains the same as in the Washington Consensus era, as the progressive notions of empowerment, inclusion, and participation are framed strategically within the market-led neoliberal paradigm. Moreover, the IFIs have swerved little in their macroeconomic prescriptions from orthodox neoliberalism. To what extent this will change in future negotiations between the IFIs and the New Left Sandinista government remains to be seen. At the same time, the emergence of post-neoliberal regimes has undermined the IFIs’ position and significantly curtailed their influence in the region, as a growing number of New Left governments avoid cooperating with the IFIs at all costs. The IMF has been reduced to a shadow of its former self, with numerous middle- and low-income countries, most notably Venezuela, Argentina, Bolivia, and Ecuador, repaying all their outstanding debts, in most cases with the financial backing of the Hugo Chávez administration (Weisbrot 2007b). What is more, the World Bank suddenly faces competition in the region from the recently inaugurated Latin American Development Bank, El Banco del Sur, which enjoys the financial backing of Venezuela, Brazil, and Argentina, the financial heavyweights of the region, and will extend credit to countries without attaching neoliberal conditions to its lending. This suggests that the World Bank would be well advised to bring its own priorities more closely in line with the views and policies of post-neoliberal leaders and embrace some of the more heterodox macroeconomic policies currently so successfully applied all over the region; otherwise it risks further marginalization, and could ultimately face complete irrelevancy in the hemisphere.

Notes 1. Many NGOs have nevertheless retained a critical stance toward the PWC and the MDGs, arguing that this newest effort to address poverty is inadequate as

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it does not tackle the asymmetrical power relationships that lie at the heart of the current development crisis (Bond 2006: 341). 2. What is more, all Latin American PRSPs contain similar elements of neoliberal macroeconomic policy, in particular tight monetary policy, and the promotion of trade liberalizations and utility privatizations, with little substantial differences to the previous era of structural adjustment (see Dijkstra 2005 and Gottschalk 2005).

9 The “Re-Branding” of Neoliberalism: Competing Hegemonies and Systemic Dilemmas Impacting Educational Development in Heavily Indebted Latin American States Adam Davidson-Harden Introduction Using an overview of Latin American experience and drawing on evidence from some of its most heavily indebted states as cases, this chapter considers the example of education policy as a means of exploring the question of whether the poverty reduction strategies of the Bretton Woods Institutions (the World Bank and the International Monetary Fund (IMF), hereafter referred to as BWIs) merely “re-brand” damaging structural conditionality principles inherent in neoliberal development paradigms. My argument draws both on a conception of hegemony adapted from Gramsci (1991) and an understanding of the dynamic of neoliberalism as an imperialistic and “colonizing” set of policy discourses and practices, or a “material-discursive dialectic” between the hegemony of neoliberal policy discourses and their attendant impacts that play out in various educational policy practices (Davidson-Harden 2005). Neoliberalism consists of a series of trends and preferences toward privatization, deregulation, and commodification as modes of social policy wielded by a “restructured” state whose principal aim is to continuously “re-order” all aspects of the social according to the image of the market, both to facilitate capital accumulation, on the one hand, and to promote a neoliberal vision for the state, society, and citizen, on the other. In educational terms, this shift has meant the reframing of the citizen as the “consumer of educational services” defined as commodities through a lens of economistic human capital and public

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The “Re-Branding” of Neoliberalism

choice theories, rather than as the bearer of social and economic rights which states are obligated to facilitate through social investments. In this way neoliberal ideology attempts to entrench a vision of market society as a normatively preferred and “superior” mode of social organization. Neoliberal conditionality regimes are understood here as attributable to poor Latin American states’ “illegitimate debts,” used as instruments of powerful leverage on the part of richer countries over poorer countries. The case of school fee and the costs of education in these contexts stands out as a stark example of the material consequences (in terms of policy practices and preferences) of the hegemony still enjoyed by neoliberal-inspired “solutions” (in terms of policy discourses) for educational development proffered both by the BWIs and various proneoliberal policy advocates and researchers. Restricted social spending, on the one hand, as well as a stubborn preference for variously “privatized” and “marketized” modes of educational “delivery,” on the other, form the basis of the current political economics of the neoliberal development paradigm as it continues to play itself out in Latin American education, and particularly in the most heavily indebted states. The stubborn preference for neoliberal policy discourses and practices in the context of regimes of debt continues to frustrate the substantial achievement of even the most modest targets for educational development in the region, comprising what I refer to as “systemic dilemmas” constraining educational development. In addition to the argument that Poverty Reduction Strategy Papers (PRSPs)—the most recent gateway for BWI and Inter-American Development Bank (IDB) lending—represent a “re-branding of neoliberalism” (Davidson-Harden 2006; Wood 2004), this chapter will offer the contention that the mechanism of the PRSP has been a significant instrument for the attempted co-optation and accommodation of erstwhile critics within the process of “owning” national country-based consultations on poverty reduction, embodying an example of a type of “inclusive neoliberalism” along the lines suggested by Craig and Porter (2006). The PRSP is a required adjunct of the newly rebranded mode of lending created with the accompanying shift in discourse in 1999, namely, the Poverty Reduction Growth Facility (PRGF), formerly the Enhanced Structural Adjustment Facility (ESAF). Heavily indebted countries, hoping to be eligible for further development loans and funding, were invited to submit strategy papers that attempt to map out cross-sectoral strategies for development. All countries eligible and participating in the Heavily Indebted Poor Countries (HIPC) initiative, for

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example, were required to develop PRSPs in order to access any further program funding, a matter this chapter will return to later. The central “spin” of the PRSP as a novel way of mediating structural adjustment processes is based principally in its nominal focus on “participatory” processes emphasizing their “ownership” by local civil society and national governments. Such a trend further entrenches a core set of neoliberal macroeconomic conditions that northern and southern elites require to facilitate capitalist accumulation for the few, under the guise of seeking that panacea, economic growth along with its elusive promise of “poverty reduction” (see also Ruckert’s chapter in this volume). In the continuing preference for the neoliberal ideological focus on market mechanisms as preferred and more “efficient” means of allocating public spending resources, the International Financial Institutions (IFIs) and donor governments continue to impose neoliberal policies in development strategies that reverberate in social sectors such as education, while a dominant orientation toward loans as well as bilateral aid belies deeper issues of neoliberalism’s failure to lift countries in the global south out of poverty through its dictates, as well as its success in entrenching this poverty as a factor in ongoing relations of dependency. On the basis of an interrogation of these dynamics, which act as systemic dilemmas affecting educational development in Latin America’s poorest and most heavily indebted states, I will argue that until neoliberalism’s core conditions and normative preference for “marketized” modes of development are effectively challenged and alternatives are acknowledged, progress toward the achievement of basic goals of equity of access to education and other forms of social rights will continue to be frustrated in Latin America’s most vulnerable states, and beyond. In the face of still-hegemonic neoliberalism, the struggle for alternatives is a type of “counter-hegemonic” struggle based in a discourse of human rights as well as a strong role for states in social investment and development. Finally, following the hopeful definition of “post,” meant in this volume as indicating the notion of leaving the failures of neoliberalism behind, I shall suggest a number of initiatives that represent a “competing hegemony” set against the policy failures of neoliberalism.

Unequal education in heavily indebted Latin American countries While statistics show school enrollment and access has kept up a growing pace since the 1980s across the region in general (UNDP 2001 and 2006; Carnoy 2002; Winkler & Gershberg 2000), at the same time

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aggregate funding cutbacks, as well as wider issues of social inequity and poverty across the region, have arguably compromised the “quality” or the type of educational experiences teachers are able to provide for students (Carnoy 2002, Borón and Torres 1996). This problem reflects the types of “measures” for education that are frequently omitted or ignored in conventional instruments emphasizing enrollment and retention (Stromquist 2004). Further, indicators such as gross or net enrollment must be complemented with those addressing dropouts or “school survival” in order to get a fuller picture of the state of education in the region and in some of its poorest and most heavily indebted states. The region’s ignominious distinction as the most unequal on the planet is borne out forcefully in statistics attesting to the inequality of educational attainment (or “school survival”) levels in Latin American countries, as shown in three separate figures from a recent report by the Economic Commission for Latin America and the Caribbean (ECLAC) on progress toward the Millennium Development Goals (MDGs) (ECLAC, 2005: 90–2). The first of these figures relates to the incidence of failure to complete a basic/primary education program correlated with highest and lowest income quintiles. In Nicaragua, for example, one of the region’s official HIPC countries, nearly 60 percent of those in the lowest income quintile had failed to complete a primary education in 2002, whereas only 12.5 percent of those in the highest income quintile failed to complete this level of education in the same time frame. In Honduras, the same comparison obtains 54.1 percent versus 6.9 percent, and in Bolivia, 38.9 percent versus 5 percent. Related figures track the inequalities between places of residence along urban/rural lines, finding pronounced differences showing the disadvantage of the rural poor. A background paper for the Education for All (EFA) Global Monitoring Report for Latin America reported that the average years of schooling for adults aged 25–39 was 9.2 for urban Bolivia as opposed to 4.0 for rural Bolivia, with similar discrepancies for Honduras at 7.5 versus 3.5, and Nicaragua at 6.9 versus 3.1 years (Umayahara 2005). Finally, indigenous peoples are shown to suffer pronounced inequality in primary completion rates, and indeed across most educational indicator categories, with differences most pronounced between them and nonindigenous young people in Bolivia when it comes to educational attainment/school survival (ECLAC 2005: 90–1)). These figures illustrate Stromquist’s (2004) characterization of inequality as a “way of life” with severe impacts across the region. Systemic discrimination along gender and identity/ethnic is clearly evident, especially in the state of indigenous and Afro-descendent peoples’ educational opportunities


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across this diverse region (Hopenhayn 2005). These figures should not eclipse the positive stories of increasing gender parity in enrollments and retention at primary and secondary levels in the region and in these three countries; however, a consistent thread complicating these more positive trends is the difficulty in spreading access to rural regions, a phenomenon Bolivia struggles with despite allocating more than 6 percent of its GNP to educational expenditures. In addition, inadequate funding, as UNESCO observes, seriously limits the quality of education across the region (2005). Funding cutbacks have been achieved under what Carnoy describes as the “finance-driven” imperative for education reform in Latin America (2002: 296) which accords with the region’s long history with neoliberal economic and social policy prescriptions and directives, oriented toward more fundamental goals of servicing debts, as alluded to earlier. Efforts at education reform in this context have been driven primarily by an economic imperative to reduce aggregate social expenditures, whether as a measure of “sound fiscal policy” or as conditions attached to programs and loans administered by the World Bank, IMF or IDB. Neoliberal education policies in Latin America have commonly taken the shape of “decentralization” efforts, aimed at scaling down the role of central governments in direct responsibility for different aspects of education, toward increased provincial/regional, municipal, and notably private involvement in education (Carnoy 2002; Munín 1998; Borón and Torres 1996). Such moves are complemented by shifts to emphasize “demand-side financing,” further opening the territory for student, parent, and teacher financing of education. All of these thrusts for neoliberal policy discourses have found expression in the mechanisms of adjustment from the BWIs, consistent from the era of structural adjustment through to today’s context of “poverty reduction.” In this context, the social consequences of heavy indebtedness and burdensome debt service priorities/obligations have been linked to systemic neglect of proper funding and involvement on the part of the state in education. Lora and Olivera (2006), for example, confirm in their working paper for the IDB that higher levels of indebtedness as well as the burden of debt-servicing obligations have contributed to a trend of declining social expenditures in Latin America as a region, leading to an incidence of marked lower contributions as measured in percentage of GDP in Latin America as a region as compared with other parts of the world. They note that a particular shortfall occurs in education expenditures comparatively, with the gap between education expenditures as a percentage of GDP in the region as compared with

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“developing countries of East Asia, Europe and Central Asia, and Africa” totaling 1.2 percent (Lora & Olivera 2006: 14–15). The authors note that resources directed toward payment of debt interest payments (debt service) average 2.8 percent of GDP across Latin America annually, and that this amount would be enough to increase total social expenditures by 25 percent (Lora & Olivera 2006: 4). Across Latin America as a whole, debt-servicing obligations as a percentage of GDP rose from 4.0 to 7.8 percent just over 1990–2004 (UNDP 2006), while education expenditures as a percentage of GDP in Bolivia, Honduras, and Nicaragua outstrip debt service payments in 2004 by only a slim margin (UNDP 2006). As the reason for the existence of neoliberal loan and aid conditionality, such a perspective on the “constraining envelope” of debt for educational development helps contribute to an appreciation of how newer modalities of the BWIs help to reproduce a status quo of unequal development.

PRSPs and the “Re-Branding” of neoliberal solutions Designed to encourage consultation between IFI country leaders, government workers/leaders, and various stakeholders in various sectors, PRSPs are meant to focus development strategies into a coherent intersectoral agenda that bilateral donors should adhere to (although unsurprisingly, no formal mechanism exists to ensure such acquiescence). With respect to education, there have been many and varied types of experiences with these participatory ventures. While intended to foster a sense of national “ownership” of development agendas and programs mediated through the BWIs, final veto of any plan for a PRSP-mediated development approach lies with the Bank and the Fund, and in many cases both the “process and product” of PRSP processes—including the parameters of any consultative processes—have been heavily steered and constrained by the BWIs. This proverbial axe held over the head of the poorest and most needy countries is, of course, the most salient factor explaining the power in global governance that the BWIs have accumulated for themselves through their trusted lever of conditionality. The element of structural conditionality in providing development loans and assistance has remained consistent across the discursive shift to “poverty reduction.” Focused on trade liberalization across a variety of key sectors, fiscal austerity and responsible social spending, privatization, deregulation, and a refocusing of economies toward monetary stability and export earnings earmarked for debt service obligations, conditionality remains the principal tool whereby IFIs and donor


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countries extract from the poorest nations of the world an acquiescence of their dependent role within a globally polarized and asymmetrical world. The notion of “participation” and ownership suffusing the discourse of the PRSP is one of the first issues that must be treated in any review of the effectiveness of these programs. In their own review conducted in 2002, the IMF and the International Development Association concluded that stakeholder participation in development planning through the PRSP faced serious challenges. Groups as various as directlyrelated nongovernmental organizations (NGOs), civil society organizations (CSOs) such as women’s and poverty groups, and even local government officials, as well as representatives of involved countries’ private sectors, all reported serious obstacles and lack of access to participatory PRSP processes. In the case of critical CSOs/citizens’ groups, documented concerns centered on the lack of a forum for questioning the social impact of macroeconomic measures of privatization and trade liberalization, as well as the pervasiveness of critical limits to “consultation” processes concerning substantial matters impacting poverty. In a detailed review of the topic, Dijkstra (2005) explores such controversial aspects of the exclusivity of PRSP processes in Bolivia, Honduras, and Nicaragua. Such a critical and skeptical perspective concerning the PRSP’s participatory nature is borne out at the global level in other PRSP countries, in particular by critics in civil society/NGO circles (for example, Wood 2004). Again, the lynchpin of these criticisms remains the element of conditionality, which is constant across the discursive shape-shifting of the IFIs. The continuance of the basic mode of neoliberal conditionality as a mechanism for development loans and aid is borne out through several points of contradiction and tension within the IFI agendas through the PRSP process. Focusing on the impact of PRSPs upon critical public services, Alexander (2004) points out a number of such points of contradiction and tension, including the centrality of other forms of country assessment of development eligibility and direction (such as the World Bank’s Country Policy and Institutional Assessment (CPIA)). In addition, Alexander and others have argued that this tension is also obvious in the centrality of the Private Sector Development (PSD) strategy in the World Bank’s operations, when compared with rhetoric surrounding development, and social development and services in particular. While the BWIs have always endorsed neoliberal restructuring of education—including financial decentralization, and devolution of powers

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in setting standards of education management and funding, as a costsaving measure, as well as increased privatization in education—such measures have been roundly called into question for their effect on equity of access to education and, in turn, on social polarization and poverty in vulnerable countries. In a “toolkit for poverty reduction” derived from the WB/IMF “sourcebook” for PRSPs dating from 2000, the authors rehearse a familiar litany of measures designed to improve efficiency of educational expenditure, which include cost recovery (increased tuition) in higher education, as well as competition and privatization measures in education such as vouchers, contracts, and increased participation of private schools (Marope et al. 2000). These types of privatization measures in education—from increased reliance on user fee to increased private provision—have been criticized for their negative impact on equity in education. Meanwhile, proponents of this neoliberal toolkit for education continue to argue (disingenuously) for its effectiveness based on equity goals, again using the discursive “wrapping” of equity to dress up neoliberal policies for education, a tactic analyzed previously by other critical scholars (Schugurensky 2000). It is with reference to this set of “foreground” debates in neoliberal discourses and policy practices in education that we now turn to help unpack various examples of the impact of these trends.

Unequal education and the privatization of education by default The BWI preference for a focus on neoliberal-inspired education policies of decentralization, and forms of privatization and competition, in social sectors represents a panacea offered by the World Bank, IMF, and related institutional actors toward purported efficiency in public expenditure, which almost always works down to a bottom line of spending reductions or reduced financial transfers from a central government, and increased reliance on private expenditures and family contributions to the costs of education. The World Bank is one interesting actor to interrogate in this regard. Both in general documentation as well as specifically through the International Finance Corporation (IFC) and its Edinvest service,1 the Bank has sought and continues to seek to encourage the growth of private, including for-profit, educational initiatives in developing countries globally through strategic loans,2 while the impact on accessibility—or the lack thereof—due to fee or required “family contributions” continues to be a bone of contention with the institution in the eyes of a host of civil society movements and critics.


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The central contradiction lies in the fact that while the BWIs enthusiastically support neoliberal education policy discourses as purportedly working toward equity in education, the policy practices engendered by these discourses encourage the growth of an educational private sector, the mandate of part of which may indeed be to provide paid access to “basic” as well as other (including tertiary and adult) educational “services.” The weakness of this position is highlighted further in another IFC document entitled “Investing in Private Education: IFC’s Strategic Directions” (IFC 2001). In a subsection titled “improving equity,” the authors outline how fee-paying educational institutions, that is, movement away from free education, might “improve” equity: Private education can indirectly benefit the lowest socioeconomic groups by attracting families who can afford some level of fee away from the public system, thereby increasing capacity and per student spending for the students who remain in the public system. Similarly, the emergence of private tertiary institutions allows governments to reduce funding in such institutions and instead to invest in lower levels of education, thus improving distributive efficiency. (IFC 2001: 5) Of course, much World Bank literature rejects out of hand that encouragement of multitiered systems of education based on the ability to pay would have negative impacts on social or educational equity, a dynamic well documented in comparative educational research (e.g. Carnoy 2004; Borón & Torres 1996; Schugurensky & Davidson-Harden 2003; Reimers 2000). The UK Department for International Development (DfID) commissioned a research paper on education that found that “lack of money to pay school expenses” was a principal factor affecting children leaving school in their comparative study of developing countries (Boyle et al. 2002). Indeed, the World Bank’s own official position, having traversed from outright support of user fees in services, including education, to its recent vacillation and settlement on a stance against school fee, remains mired in the contradictions of different types of fees still levied “on the ground,” due for the most part to a lack of adequate public finance and a concomitant reliance on private (family or student) finance for education. Nowhere is this hypocrisy of neoliberal hegemony better attested to than in the work of the recently deceased Katarina Tomasevski, former Special Rapporteur of the Secretary-General on the right to education from 1998 to 2004. Working from a framework that views school fee as an educational “human rights violation,”

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Tomasevski and several of her colleagues worked to track the status of various sorts of fees charged for basic and secondary education globally. Her most recent report, published in August 2006, documented incidences of different types of fees as still prevalent across Latin America as a region, and particularly in its heavily indebted states (Tomasevski 2006: 182). Describing the resulting phenomenon as a “privatization of the financial responsibility for education,” Tomasevski documented in her August 2006 report the reality of PRSPs in all three Latin American HIPC countries discussed here ignoring the matter of the breakdown of the “costs of education,” or specifically, the reality of increased sorts of private and family (and student) financing of education, including at the basic/primary and secondary levels. Various types of school fees,3 for example, are common in Honduras, whose constitution contains a guarantee of free education that, according to Tomasevski, is basically unenforceable. Such a shift is the natural consequence of the withdrawal of the state from a commitment to an adequate level of financing for education—from safe infrastructure, to materials, to the education of teachers and their remuneration, that of support staff, etc.—that might preclude families and students (“communities”) from picking up the slack in the financing of education. In this context BWI rhetoric around community participation in decentralization initiatives in education must be translated into a tolerance, or outright encouragement, of “community” roles in “demand-side” financing of education, to use one neoliberal catchphrase (Patrinos 2006; Patrinos & Ariasingam 1997). In a recent volume complimentary of trends toward increasingly privatized education in Latin America, Wolff, Navarro and Gonzalez note the ubiquity of user fee of various kinds in the region’s education systems (Wolff et al. 2005: 10–11). In contrast, the discourse emanating from the World Bank and IFC on private education is an attempt to frame the introduction of the market mechanism into education as the “best solution” to equity in developing countries. Within this contradiction lies the stark example of the charging of user fee of various sorts in educational settings, including in basic or primary education. While abolition of fee for schooling has led to dramatic improvements in school attendance across a variety of contexts (School Fees Abolition Initiative 2007; Tomasevski 2006), the logic of “investing in private education” advocated by the IFC and World Bank, on the other hand, arguably agitates in the contrary direction, and toward educational governance mechanisms that have been shown to exacerbate inequity by stratifying and limiting access to education.


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All of this is in the context of an official Bank shift to a policy explicitly against user fee in education, bringing the subtle lines of hypocrisy in neoliberal policy discourses to the fore (see Hutton 2004). These types of policy directives again derive from the specious reasoning that overall equity is to be increased if more user fee and “demandside management” (Patrinos & Ariasingam 1997; Patrinos 2006) are introduced into higher/postsecondary education, although occasionally basic and secondary education are not exempt from arguments encouraging increased privatization for nominally equitable goals (see Tooley 1999a and 1999b). This nominal logic of redistribution is refuted both by the effect of user fee on lessening equity of access to education at any level (see Boyle et al. 2002) as well as by the lack of acknowledgement/redress of the systemic constraints presented by loan conditionality. Bonal (2002) points out that the focus on “poverty reduction” employs an exclusively compensationist strategy, emphasizing targeted, limited help for those most in need in various settings, rather than a mode of engagement that considers any of the “progressive or regressive” redistributive impacts of neoliberal measures enshrined through mechanisms of structural conditionality. In the meantime, the arm of the World Bank dedicated to partnering with the global private sector for development financing—the IFC—retains a stalwart focus on implementing the thrust of the PSD strategy in encouraging further privatization of education (IFC 2001; IFC Edinvest 2001; IFC Health and Education Group 2001) regardless of any critical concerns with equity impacts. In sum, BWIs and donor nations’ approach to aid and lending for crucial social development, including education, is fundamentally Janus faced. The two-sidedness is engendered by these actors’ public commitment to development through focused targets such as the MDGs, as well as the honoring of human rights instruments as keys to development, and their concurrent focus on mechanisms of governance and investment (whether through conditionalities on lending or otherwise) that can be seen to directly exacerbate the problems of equity and access that act as barriers to achieving these development goals.

Hegemonic attempts at “Inclusive Neoliberalism” and resistance A recent and innovative report tracks progress of HIPC goals for debt relief in the 42 countries that are officially classified under the HIPC criteria. Instead of utilizing the criteria for debt sustainability

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incorporated into the initiative itself—based on debt-servicing availability as compared with export earnings—the report’s authors use an alternative human development-based criterion for comparison. This mode considers debt-servicing commitments with funding left over that is available to address MDG targets in line with countries’ international human rights commitments in various areas. According to this criterion, the report finds that 27 of the total 42 HIPC-classified countries (including 15 that had reached “completion point” at the time of writing the report) were not “debt sustainable” with respect to their ability to achieve the MDG commitments (Greenhill & Sisti 2003). These problems are compounded by other pressing economic factors, such as falling primary commodity exports in such countries, related not only to social inequality at the domestic level but also to trade asymmetries at the global level. An even more embarrassing report tabled in April 2006 by the Bank’s Independent Evaluations Group (IEG) reported that half of all HIPC countries had regressed into levels of debt equivalent to what they were before they joined the initiative. The same report highlighted the fact that debt levels in 11 of the 13 countries studied had, in fact, risen (World Bank IEG 2006). Debt relief schemes such as the HIPC initiative and loans from IFIs and bilateral donor governments operate on the basis of a form of conditionality that is also heavily implicated in poorer countries’ lack of progress in investing capacity toward realizing MDGs. “Structural conditionalities,” or imposed policy regimes tied to bilateral and, particularly, multilateral lending, have been thoroughly indicted for their effect in hampering development in the world’s poorest countries. In addition, it must be understood that debt cancellation alone, for instance—however limited or expansive—is tied to a host of other systemic problems in current approaches to development. The dominant thinking in terms of structural conditionalities, with their adverse effects for social sectors,4 must be understood in the context of a web of complex factors affecting citizens of poorer countries. These run the gamut from an unfair trade architecture protecting richer countries’ markets to rampant and deregulated foreign direct investment in vulnerable countries, delinked both from investment in local capacity-building and employment, and from human rights or other social and environmental criteria. It is in this complex web of asymmetrical and dependent development that the political economy of education tenuously sits. PRSPs, which are a required adjunct of the HIPC plan, can be seen in this context as a project attempting to extend a badly needed legitimacy to the regimes of debt that have been so forcefully impugned for their destructive


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impact by global social movements and citizen movements in affected countries; what Craig and Porter describe as an “inclusive neoliberalism” (2006). However, this attempted project has been arguably seen for what it is by many in affected Latin American states and beyond, as a neoliberal “emperor without clothes.” From the strong and vibrant social movements in Bolivia (including teacher union members), active in the context of contesting the privatization of water and the intensification of neoliberalism from 1999–2003, to the alliance between teachers and the Landless Workers’ Movement in Brazil (Diniz-Pereira 2005), to the solidarity with the nonviolent campaign of the Zapatistas in Mexico as well as recent protests in Oaxaca, resistance movements have flourished across Latin America in response to the continuing demands of neoliberal hegemony. Gentili, Suarez, Stubrin and Gindin (2005) note the growing militancy of teachers’ unions in Latin America in the context of the late period of structural adjustment in the 1990s and the new “era” of poverty reduction, which has seen a precipitous rise in collective action in solidarity with other social movements and concerning other issues that go beyond education policy. With the electoral reaction to ostensibly anti-neoliberal leaders in Bolivia and Nicaragua, publics in affected countries continue to tilt toward political options—both electoral and nonelectoral—that can help realize the goal of alternative paths to development. As discussed in the chapter by Meltzer in this volume, arguably the strongest example of chipping at the edges of global capital and its dictates in the region is encompassed in the Bolivarian Revolution advanced by Chávez in Venezuela, whose momentum toward constructing policy alternatives to neoliberalism continues to propel new, potential “post-neoliberal” realities forward. In addition to bold advances in promoting equity in education (access to higher education is now enshrined as a constitutional right) (Muhr and Verger 2006), Venezuela’s advancement of alternative trade regimes for the region in the Alternativa Bolivariana para las Américas (ALBA— Bolivarian Alternative for the Americas) promises to be a grand “postneoliberal” experiment outside the hegemony of the United States in the hemisphere. With respect to the context of education in regimes of debt, transnational social movements and conferences such as the World Social Forum and its constituent World Education Forum have also been an important venue for enunciating a defense of the idea of education as a public service and a common good, rather than a tradable commodity or “personal investment” as promoted by hegemonic neoliberalism. In these settings, with their extensive and grounded links with critical

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citizen-driven movements across Latin America and the global south in general, we will see what the twenty-first century will bring in terms of movements for alternate “hegemonies.”

Notes 1. “Edinvest, the education investment information facility, is a forum for individuals, corporations and other institutions interested in education in developing countries. A service of the World Bank Group, Edinvest provides information for making private investment possible on a global scale” (International Finance Corporation 2002). 2. The IFC and the World Bank have relied on the research of a minority in the educational community who actively endorse privatized education as a development solution (see Tooley 1999a and 1999b; Patrinos 2000, 2001, and 2006; Patrinos & Ariasingam 1997). 3. Tomasevski usefully highlights three categories for school fees: “Direct costs of education include various fees and other charges levied by schools or education authorities as well as textbooks and other learning materials. Indirect costs are food and clothing, which children would need whether at school or not. Opportunity costs are created when children are sent to school while they could be working. Eliminating charges is the first necessary step but this does not make education free. For those who cannot shoulder indirect costs of sending children to school education is still too expensive. The elimination of all direct and indirect costs does not suffice where families need children’s work to survive” (Tomasevksi 2006: 188, italics added). 4. The scope of this chapter cannot do justice to the realities faced on the ground by countries subject to the myriad forms of conditionality and their impact on domestic economies and social conditions. The reader is referred to others who have done good work documenting these trends for more information (see SAPRIN 2004; Bond 2004; Bond & Dor 2003; Dembele 2005; Chossudovsky 2003).

Section III Transformations of Neoliberalism in the Americas


10 Neoliberalism and the Micropolitics of Domination in the United States Mary Hawkesworth

Introduction Neoliberalism, as proselytized in the second half of the twentieth century, might well bear the stamp, “made in the USA.” Associated with the “Washington Consensus,” a form of market fundamentalism championed by the Chicago School of Economics, neoliberalism advocated a return to capitalist economic principles and the classical liberal conception of laissez-faire government. Advanced by eminent economists such as Friedrich von Hayek, Milton Friedman, and George Stiglitz, neoliberalism was prescribed as a remedy to Keynesian economics and state interventions into the marketplace associated with President Franklin D. Roosevelt’s “New Deal” and President Lyndon B. Johnson’s “Great Society” programs. Incorporated into Ronald Reagan’s political agenda, neoliberalism gained ascendancy in the United States with Reagan’s election to the White House in 1980. Beyond the domestic scene, neoliberalism was also a potent policy export. Incorporated by the World Bank and the International Monetary Fund into the conditions for the extension of credit and loan refinancing to nations in the throes of the international debt crisis triggered by the oil shocks of the 1970s, neoliberal principles became a hallmark of structural adjustment policies that dramatically “rolled back the state” across the global South by cutting health, education, and welfare expenditures, and privatizing public utilities and key nationalized industries. Although the United States has been a chief architect of neoliberalism on the global scene, its domestic policies deviate in important respects from the “ten neoliberal commandments” (Williamson 1990). This chapter examines continuities in classical liberal and neoliberal policies in order to illuminate various ways that the U.S. falls far short 167

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Neoliberalism in the United States

of the principles it espouses. In contrast to promises to protect and promote individual liberty and property, adhere to fiscal discipline, and roll back the state, American liberal and neoliberal policies have generated a system of governance that is far more interventionist than the notions of laissez-faire or the “night watchman state” suggest. The political interventions and policy machinery devised to promote the free market have extended the reach of the institutions and agencies of governance to produce a micropolitics of domination. To demonstrate these continuing dynamics, the chapter compares policy interventions in the eighteenth and nineteenth centuries with recent initiatives in the areas of welfare, securitization, and biopower.

Producing homo economicus Although liberal political and economic theorists routinely insist that human nature is given and that government must be designed to accept human beings as the self-interested maximizers that they are,1 the evidence from the United States suggests that the liberal state has been deeply involved not only in regulating the criteria of citizenship but also in using the law to produce particular mentalities and dispositions among its citizens, crafting homo economicus, man qua rational economic maximizer. Far from protecting the freedoms and respecting the inalienable rights of all, the allegedly laissez-faire state has selectively privileged certain citizens while harshly regulating others. When designing their constitutions in the aftermath of the American Revolution, most of the constitutive states of the United States excluded women, African Americans, indigenous Americans, and unpropertied settlers from the rights of citizenship.2 Although the republican revolutionaries claimed to break with feudal hierarchies, the constitutions created within the first liberal republics replicated and strengthened hierarchies tied to gender, race, and class by denying equal citizenship and rights of political participation to women, blacks, indigenous peoples, and those without property. At just the moment that universal claims about liberty and equality raised hopes for the elimination of all social distinctions before the law, gender, class, and racial discrimination were encoded into the founding constitutions of “free nations.” The white men who theorized and enacted the liberal polity followed Aristotle in locating women, servants, and slaves within the domestic sphere under the command of a free male citizen. From the outset, then, liberal domesticity was inherently political even as the private sphere was proclaimed prepolitical and “protected” from the intrusions of state

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power. Indigenous peoples were said to be sovereign nations, not bound by the laws of settler society. Situating large segments of the population in a domain beyond the reach of the state and barring them from public speech and political participation, the liberal polity deployed the rhetoric of public and private spheres to naturalize subordination. Even as resistance to such exclusionary practices mounted over the course of the nineteenth century, liberal claims about separate spheres masked the explicit acts of white men that produced subordination. The exclusions enacted by the liberal polity encompassed economic as well as political life. Women, blacks, and indigenous peoples were barred not only from voting rights and legislative assemblies but also from educational institutions, the professions, the practice of science, the worlds of art and cultural production, and membership in many unions. As indigenous peoples were relocated and confined to reservations over the course of the nineteenth century, repeated efforts were launched to bar women and blacks from factories, mines, and other skilled crafts. Defining women by their familial relationships, placing them under the legal guardianship of men, and denying them the right to enter into contracts effectively precluded women from selling their labor freely in the marketplace. Slave codes, “Black codes,” and complex laws governing share-cropping and property ownership effectively excluded African Americans from selling their labor or contracting as private entrepreneurs. Through laws regulating the economic and political status of people on the basis of race, gender, ethnicity, and religion, state and federal governments in the U.S. produced homo economicus as an exclusively white male identity. In contrast to claims about natural liberty that the liberal state exists to preserve and protect, Carole Pateman has demonstrated that raced and gendered state action created “three elements of ‘independence’ … related to the masculine capacity for self-protection: the capacity to bear arms, the capacity to own property and the capacity for self-government” (Pateman 1998: 248). Liberal states used mandatory male military service, conscription, and militia duty to construct white men as “bearers of arms.” Women and enslaved blacks, on the other hand, were “unilaterally disarmed,” barred from military service and from combat duty, as white men were assigned responsibility to protect women, children, and property. Through laws governing freedom of contract, liberal states created the most fundamental property owned by “free men,” the property in their own person and in their labor power. By constructing women as the property of their fathers or husbands and enslaved blacks as property tout court, states denied both groups

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the right to freely contract their labor. By structuring slave codes and marriage laws to guarantee white men the right to control and dispose of the productive and reproductive labor of others, liberal states denied slaves and married women autonomous ownership of their bodies. Moreover, by creating the category “head-of-household” and restricting it to white men, liberal states created men’s capacity for governance, not only of themselves but of their “dependents.” Census classifications, tax laws, and pension schemes omitted domestic labor, thereby transforming a mode of productive activity into a mode of dependency. Thus the liberal state created and reinforced the “dependency” of some citizens directly and indirectly, even as it used dependency to legitimate exclusion from political life (Fraser and Gordon 1994). State and federal legislatures also passed laws to support a market economy and to promote free enterprise (Polanyi 1957). From laws determining the freedom to contract and antitrust laws designed to foster competition to statutes pertaining to the creation, internal governance, liability, and consolidation of corporations, states actively intervened to strengthen corporate capitalism (Chauvosky 2007). The Supreme Court issued a series of decisions defining corporations as rights-bearing “persons” under the U.S. Constitution and struck down state and federal laws regulating working conditions, minimum wages, maximum hours, and child labor as infringements of corporate citizens’ freedom to contract. In the nineteenth-century United States, then, the classical liberal laissez-faire state actively promoted the market economy, the rights of corporations, the mind-set associated with self-interested maximizing behavior, and a cohort of raced and gendered economic maximizers by proclaiming laws and deploying various policy instruments. Far from a policy of nonintervention, the liberal state crafted and policed the boundaries of public and private spheres and dictated the life prospects of those who fell within these realms. Although freedom to participate in economic maximization was a privilege accorded to some, political and economic exclusion and marginalization were the fate of many more, a fate determined not by the market’s invisible hand but by statutory provision and constitutional law.

Keynesianism and the emergence of a truncated welfare state The promarket policies of the liberal state had numerous critics in the United States. From socialist activists, women’s rights advocates, black radicals, and progressive reformers on the left to pro-tariff conservatives

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on the right, laissez-faire liberalism amassed multiple opponents in the late nineteenth and early twentieth centuries. After a series of increasingly harsh recessions, the stock market crash of 1929 ushered in the “great depression,” which devastated the U.S. (and world) economy for more than a decade. Franklin D. Roosevelt’s “New Deal” introduced Keynesian economic principles, according the state a legitimate role to regulate the market to offset the worst consequences of capitalism’s “boom and bust” cycle. Where laissez-faire regimes had used the law to assist the market, the New Deal Administration intervened to curb harms caused by an unregulated market. Launching public jobs programs and providing welfare assistance to those thrown out of work during the depression, the Roosevelt Administration also passed legislation to expand the scope of governance to include monetary and fiscal policies to stimulate or dampen the economy. In 1935, the U.S. Congress passed the Social Security Act, establishing contributory schemes to cover unemployment insurance, worker’s compensation, and old-age pensions for those employed full time in most sectors of the waged labor force. Like the nineteenth-century laws that privileged white male citizens, social security provision was also raced and gendered. Two occupations— agricultural labor and domestic service—in which three-fifths of African American workers were concentrated were excluded from social security coverage at the insistence of members of Congress from southern states, a move that prolonged the state-sanctioned impoverishment of African Americans. Women’s unwaged labor in the home was also excluded from the provisions of the act, making married women’s access to benefits dependent upon the contributions of their husbands. While white men had access to benefits on the basis of their status as workers, white married women were constructed in state policies as “dependents” whose primary access to benefits was mediated by their husbands. Even women who worked in the waged labor force throughout their lives had to choose at the time of retirement either to accept a pension tied to their wages or to receive a higher spousal pension calculated on the basis of their husband’s lifetime earnings. By awarding “wives” the same benefit level, whether they had worked for wages outside the home or whether they had devoted their lives to unwaged labor in the home, the state effectively penalized married working women. Their lifelong contributions to social security were canceled out (Gordon 1994; Fraser and Gordon 1994). Although African American women, working-class women, and some women professionals spent most of their adult years in the waged labor force, Keynesian welfare state policies continued to

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treat men as if they were the exclusive wage earners for a family. Aid to Families with Dependent Children (AFDC), the primary “welfare” policy in the U.S. from the 1930s until 1996, was originally designed to provide benefits to widows who had no way to support their dependent children. Medicare, which provides health care coverage for people during their retirement years, was conceived in 1935, although not passed by Congress until 1965 (Abramovitz 1996; Quadagno 1994). In the 1950s and 1960s, the civil rights movement and the women’s rights movement mobilized to press for an inclusive liberalism that would fulfill the promise of equal protection of the law. Hard-won battles for desegregation of the military and school desegregation were followed by the 1964 Civil Rights Act, which prohibited housing, employment, and educational discrimination on the basis of race, sex, and religion. The 1965 Voting Rights Act finally put an end to the systemic disenfranchisement of African American citizens. Lyndon Johnson’s “Great Society” programs created mechanisms such as the Office of Economic Opportunity designed to provide federal funds for community-based activism, including economic revitalization, job training, health, housing, and education initiatives, in impoverished inner cities and rural areas. Legal Aid Societies and the National Welfare Rights Organization were launched to inform impoverished women of their welfare entitlements and to assist them in filing for benefits. “Headstart” programs provided early-childhood education to inner-city children with impressive results. Reproductive rights activists mobilized to secure access to birth control and abortion and to end sterilization abuse and pregnancy discrimination. Executive Orders 11246 and 11375 were issued to implement Title VII of the Civil Rights Act of 1964, creating the government’s “affirmative action” program, which required that job opportunities be publicly advertised; that criteria for hiring employees be related to job performance, sex, race, and ethnicity not be used as criteria for employment unless they constituted bona fide job qualifications; and that employers make good-faith efforts to recruit qualified minority and women candidates for open positions. Although these policies did not immediately secure racial or gender equality, much less eliminate massive income disparities in the United States, they certainly challenged the exclusionary status quo sanctioned by the state for nearly two centuries. Although the majority of welfare recipients remained white, as the number of welfare recipients increased from 3.5 million in 1961 to 5 million by 1967 and to 11 million in 1972, cultural stereotypes of the typical welfare recipient became increasingly racialized.3 Racist attitudes fueled the misperception of

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welfare recipients as overwhelmingly black and contributed to white opposition to welfare (Gilens 1995, 1996). There is also considerable evidence that entrenched racism, which had inhibited the development of an American welfare state, stimulated policymakers’ renewed efforts beginning in the 1960s to “reform” welfare (Alesina, Glaeser, and Sacerdote 2001; Lieberman 1995; Quadagno 1994) and to “roll back” the state. A welfare state was never fully realized in the United States. Neither the federal nor the state governments established universal health care, eliminated poverty, created early childhood education, or achieved a racially integrated public education system.4 Although authorization to expand the size of the federal government was passed during the New Deal era, World War II far more than social policy accounted for the significant increase in government employees during the 1940s. Expenditure on social provision through AFDC, Supplementary Security Income—a means-tested program for the elderly poor—and Food Stamps increased, yet remained a tiny fraction of GDP. Between 1960 and 1997, for example, the percentage of GDP going to federal programs targeting low-income children rose from 0.21 percent to 1.47 percent (Clark et al. 2001). Nevertheless conservatives denounced these programs as emblematic of “big government” and castigated them as the road to socialism, a potent allegation during the McCarthy era in the 1950s, which retained its threat as the U.S. waged the cold war during the 1960s and 1970s. Given the underdevelopment of the American welfare state, it would be a mistake to take complaints about “big government” at face value. The emergence of neoliberalism as a policy prescription had a good deal more to do with electoral strategy. Republican Party strategists, including prominent leaders such as Richard Nixon, Barry Goldwater, and Ronald Reagan, deployed antigovernment rhetoric to attack progressive policies as a means to dissolve the New Deal coalition that linked affluent progressives, blue-collar workers, and African Americans in a Democratic voting bloc. Attacks on federal laws such as the Civil Rights Act of 1964 and the Voting Rights Act of 1965 were recast as legitimate concerns about the federal government’s interference in state jurisdictions pertaining to race relations, educational policy, and police matters. Manipulating welfare as a “wedge issue” to recruit white voters to the Republican Party, Republican candidates began to decry “welfare cheats” and welfare “dependency” as incompatible with the demands of a market economy (Neubeck and Cazenave 2001; Melich 1996). As early as 1957, Republicans in Congress included language

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concerning work incentives in AFDC legislation, stipulating that the goal of assistance was to prepare the recipient for work (Abramowitz 1996: 322). When 12 states amended their welfare policies in 1962 to allow benefits to “intact” families (i.e., married couples with children) where the breadwinner was unemployed (AFDC-UP—Unemployed Parent), recipients were required to work in unwaged public service assignments in exchange for benefits. Designed to ensure that welfare provision would not undermine the “work ethic,” this early workfare program compensated recipients in welfare benefits at the equivalent of 75 cents per hour (Abramowitz 1996: 336). Rhetoric concerning the production of market mentalities and disciplined workers, then, has a long history in the United States, although proponents of these policies refused to characterize them either as social engineering or as punishing the poor. Within these electoral and policy circuits, discussions of welfare and discussions of decentralization were intimately tied to white racism. African Americans, newly registered for welfare benefits, were constructed as undeserving poor. Federal laws governing entitlements were constructed initially as undue interference with states rights, and later, as unfunded mandates, which states should actively resist. Getting big (that is, federal) government off the backs of the people was a policy agenda designed to enable states to preserve their prerogatives to perpetuate racial segregation and discrimination, while also ignoring structural causes of poverty.

Consolidating the neoliberal agenda Neoliberalism in the United States was never exclusively an economic doctrine. Fiscal conservatism, a staunch defense of capitalism against encroachments of the welfare state, monetarism, states rights, strict constructionism (a commitment to preserve the original tenets of the 1789 Constitution in Supreme Court decisions), anticommunism, racism, and a strong streak of libertarianism were hallmarks of Barry Goldwater’s 1964 campaign for the presidency of the United States. Ronald Reagan cultivated these arguments in his successful bid for the governorship of California in 1966 and in his unsuccessful attempts to win the Republican nomination for the presidency in 1968 and 1976. After winning the presidential election in 1980, Reagan preserved neoliberal rhetoric, but selectively applied neoliberal policies. Various policies—industrial, tax, and foreign—had encouraged U.S. corporations to engage in international trade and foreign direct investment since the end of World War II. But the combination of

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deindustrialization, “stagflation,” and the oil crises in the 1970s contributed to a significant decline in nonfinancial corporations’ return on investment, falling from 15.5 percent in the mid-1960s to 9.7 percent in 1978 (Bayes 2006: 149). To stimulate a sluggish economy, the Reagan Administration introduced steep tax cuts for corporations and the wealthiest citizens. To help restore the global competitiveness of U.S. corporations, offshore enterprises were taxed at substantially lower rates than industrial facilities on American soil. To maximize the competitive position of U.S. corporations, President Reagan also articulated a strong antiunion stance, opposing the air traffic control operators strike and breaking the power of their union by hiring replacement workers in the early 1980s. President Reagan identified deregulation as a priority, yet scholars note that most of the deregulation for which he took credit (airlines, trucking, railroads, telephones, natural gas, and banking) had been introduced by the Carter Administration during the late 1970s (Rajan and Zingales 2004). The Reagan Administration also sought to weaken or eliminate environmental controls, claiming that they drove up production costs and compromised U.S. competitiveness in the world market. While one could argue that the Reagan Administration’s covert funding of the Contras in Nicaragua by means of third parties was a precursor of privatization of the military,5 the enormous increase in outsourcing of military support services by the U.S. Department of Defense occurred after Reagan left office. Although President Reagan continued to denounce big government and leveled off nondefense spending, his defense initiatives vastly increased federal expenditures, creating the largest federal deficit since World War II. Despite ongoing controversy over Reagan’s fidelity in implementing the neoliberal agenda, there is no question that his Administration helped move the American electorate and U.S. public policy to the right. Policies pertaining to privatization, deregulation, free trade, tax cuts for the wealthy, supply-side economics, freer capital mobility, and restrictions on union activity have characterized the administrations of George H. W. Bush, Bill Clinton, and George W. Bush. Appealing to neoliberal principles, these Republican and Democratic administrations have explicitly advocated policies to reduce the state to the role of “handmaiden” to the market, ensuring a stable money supply and fostering economic growth by devising tax policies attractive to corporations, reducing or eliminating barriers to trade, and eliminating regulatory barriers to production. They have also sought to “privatize” various government functions, such as prison guards, military operations, and administration of welfare, by contracting out these government services

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to private corporations, such as Wackenhut (prisons), Halliburton (military support services and infrastructure), or Lockheed Martin (welfare administration) (Bayes 2006). Yet at the same time, they have increased the federal government’s role in structuring elementary and secondary education with the “No Child Left Behind” initiatives; funneled federal funds to religious organizations for education and drug rehabilitation programs, overriding long-standing policies pertaining to the separation of church and state; and altered eminent domain policies, allowing local governments to seize the property of private individuals for corporate development deemed to promote the public good.6 One incontestable consequence of these neoliberal initiatives is growing inequality. Since 1975, practically all the gains in household income have gone to the top 20 percent of households. As Jane Bayes (2006: 165) has pointed out, although the Gini Index documented diminishing income inequality from 1947 to 1967, falling from 0.376 to 0.348, after 1968 income inequality began to grow rather dramatically, with the Gini coefficient rising from 0.340 to 0.409 for both men and women by 2001 (US Census 2004). Although the median household wealth of white Americans increased 17 percent to $88,651 from 1996 to 2006, the gains for Latinos were smaller, increasing 14 percent to $7932, while the median household wealth of African Americans decreased 16.1 percent to $5988 during the same period. As with earlier liberal regimes, neoliberal principles exist in tension with regulatory impulses. Freeing the market is quite compatible with increasing regulation of some parts of the citizenry. These contradictions play out most visibly in recent U.S. policy initiatives such as workfare and welfare reform, securitization, and the exercise of biopower.

From workfare to welfare reform In keeping with their goal to link welfare provision to workforce preparedness, neoliberals promoted “workfare,” a program which requires recipients of public assistance to “work off” the value of their benefits through unpaid labor in community service projects, as the “welfare reform of the 1980s” (Findley 1980). In a series of amendments to the Food Stamp Act of 1977, Congress established workfare demonstration projects that required food stamp recipients to work at public service jobs in return for their household food stamp benefits. The Omnibus Budget Reconciliation Act of 1981 extended the concept of workfare to additional welfare programs, including AFDC, AFDC-UP, and general assistance by permitting states to opt to involve welfare recipients in the

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Community Work Experience Program (CWEP), which required recipients to “earn” their welfare benefits by working a specified number of hours in projects that serve a useful public purpose. The CWEP legislation stipulated that earning benefits must take the form of a quid pro quo exchange based on unpaid labor and that participants are not entitled to any salary or reimbursement for training expenses. It also specified that failure to complete the requisite hours of unpaid labor would result in the termination of benefits to the household. In 1983, the Reagan Administration expanded the scope of CWEP, transforming it from an option to a requirement for all states as a condition of federal block grants to fund welfare programs. Neoliberals claimed that workfare would encourage recipient identification with the labor market, provide recipients with a work history, and help them to develop the discipline necessary for regular employment (Hawkesworth 1985). Welfare reform in the 1990s shared workfare’s castigation of welfare policies for promoting “dependency,” insisting that “government handouts” undermined the work ethic and interfered with the operations of the market, which relied upon economic incentives to motivate and reward hardwork, while penalizing the “lazy” who refused to work. Ignoring structural problems such as high levels of unemployment caused by deindustrialization, neoliberals claimed that there was ample work for all who wanted it and attributed lack of work to the willful refusal of the poor to work. In keeping with long-standing policies that refused to recognize child rearing and domestic labor in the home as work, Republican and Democratic lawmakers joined together to end welfare as an entitlement for the 4 million impoverished women headsof-household and their 10 million children under the age of 18. In 1996 Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which was signed into law by President Bill Clinton, a Democrat who had promised to end welfare during his 1992 campaign for the presidency. PRWORA abolished AFDC and replaced it with “Temporary Assistance for Needy Families” (TANF), which sets a lifetime limit of 5 years for federal welfare assistance, regardless of the circumstances of the recipient. TANF also imposes a mandatory work requirement as a condition for the receipt of benefits. The initial 30-hour/week requirement was increased to 40 hours/week in 2006. While some states allow educational programs, such as vocational classes or college courses, to fulfill mandatory work requirements, it is far more typical for “workfare” jobs to involve menial tasks such as street cleaning, floor mopping, or leaf raking, tasks which do not enhance the “marketable skills” of TANF recipients. Failure to

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perform this work results in termination of benefits. Although the primary recipients of TANF are single mothers of young children, workfare requirements are mandatory and no provision is made for publicly provided child care during work assignments. At a time when some social democracies were beginning to retreat from the harshest aspects of neoliberal social policies, the U.S. federal government created TANF as a mechanism to push mothers of young children into the labor force without devising a universal early childhood education program that could meet pressing needs for child care. Like structural adjustment policies promoted by the World Bank that construe employment in the formal sector as the primary means of “empowering women,” TANF casts employment as mothers’ best route to self-sufficiency, without addressing pressing questions of child care or household labor. Where AFDC had established the principle of state responsibility for impoverished families, PRWORA declares parenting a private matter even as it coerces single parents into the labor force. For poor women in the U.S., the state has not been rolled back. On the contrary, in addition to mandatory unwaged work, welfare reform has empowered states to severely restrict poor women’s privacy rights, reproductive choices, and bodily integrity. Under TANF, poor single mothers are subjected to sexual regulation by the state: “They are required to submit to interrogations about their sexual histories, to undergo genetic tests to establish paternity, and to assist the state to collect support payments from the absent fathers of their children even if they do not want to be dependent upon them—and in many cases, even if they are fleeing from the absent father’s violent conduct” (Smith 2002: 66). Twenty-two states have implemented “family cap” legislation designed to curtail the family size of TANF recipients by imposing financial penalties for childbearing. Sixteen states require TANF recipients to participate in family planning counseling, which explicitly excludes information about and referrals for abortion. Three states encourage pregnant TANF recipients to relinquish parental rights to any children conceived while on welfare and to place these children with adoption agencies. All 50 states require mandatory paternity identification and child support enforcement cooperation as conditions for welfare eligibility. Forty-nine states have accepted federal funds to promote sexual abstinence outside of marriage (Smith 2002).

Securitization If welfare reform heightens surveillance and regulation of poor women in ways thoroughly at odds with notions about rolling back the state, so

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too do the massive efforts undertaken to promote “homeland security.” In response to the September 11, 2001, bombing of the World Trade Towers and the Pentagon, the George W. Bush Administration launched the “war against terrorism” on October 7, 2001. By executive order, the President mobilized a “coalition of the willing” to invade Afghanistan to remove the Taliban regime and defeat the Al Qaeda network. One month later, the Bush Administration issued a “Military Order on the Detention, Treatment and Trial of Certain Non-Citizens in the War Against Terrorism” (66 Fed. Reg. 57,833, November 13, 2001), which suspended basic constitutional protections, authorizing the establishment of military tribunals, indefinite detention of “enemy combatants,” as well as noncitizens associated with newly designated terrorist networks, denial of detainees’ habeas corpus and basic constitutional rights, including a presumption of innocence, the right to be informed of charges against them, and the right to legal representation. The Bush Administration also declared that the Geneva Conventions protecting prisoners of war did not apply to terrorists. Moving to enhance “homeland security,” the U.S. Justice Department arrested and detained some 1200 people—citizens and noncitizens alike. Over 760 noncitizens were detained on immigration charges, while others were held as material witnesses or on criminal charges unrelated to the September 11 attacks. As surveillance was heightened, racial and ethnic profiling by state and federal agencies was legitimated as essential to the identification of suspected terrorists. According to a report by Human Rights Watch (2002), the “special interest” detentions of noncitizens involved five major abuses: detention without charge for up to 4 months, denial of an opportunity for release on bond, interference with the right to counsel, secret deportation hearings, and excessively harsh conditions of confinement that included cases of physical and verbal abuse. Although President George W. Bush labeled the expansion of the war on terror into Iraq, “Operation Enduring Freedom,” his authorization of practices of torture in Abu Ghraib, Guantánamo, and at sites of “extraordinary rendition” are more akin to state terror, which David Rapoport (2004: 1050–1) defined as “‘extra-normal violence’ or violence deliberately constructed to go beyond the two sets of conventions used to govern coercion, namely the rules of war, which distinguish combatants from noncombatants, and those governing punishment, which separate the guilty from innocent parties.” In addition to the assault on civil liberties and on the personal security of those who fall under the parameters of state-sanctioned racial profiling, U.S. efforts to secure borders has seriously impaired the free movement of labor which Mexico initially expected under the North

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American Free Trade Agreement (Hawkesworth et al. 2006). Moreover, the price tag of the “war on terror”—conservatively estimated at $142 billion by mid 2007—has again pushed the United States into record levels of deficit spending.7

Biopower and the micropolitics of domination Quite independent of the demands of “defense” and “homeland security,” a good deal of legislation has been passed by state and federal governments over the past decade that contradicts neoliberalism’s explicit commitment to cut back the state: abortion restrictions and bans, controlled access to contraception, sex education campaigns grounded in abstinence only, active promotion of heterosexual marriage (funded by Congress to the tune of $150 million/year), policies to promote traditional fatherhood (with an appropriation of $50 million/year), the pathologization of single mothers, mandatory paternity identification as condition of welfare benefit, marriage incentives coupled with birthing disincentives for TANF recipients, the defense of marriage act, constitutional amendments to ban gay marriage, state ordinances defining marriage as a contract between a man and a woman, and covenant marriage (a version of marriage contract that precludes divorce). Contrary to neoliberalism’s rhetoric concerning individual liberty, these measures regulating the terms under which citizens may mate and marry delimit not only the contours of privacy but determine which citizens have access to a private sphere. It is important then to interrogate the regulation of sexuality, marriage, and family form to grasp the micropolitics of domination under contemporary neoliberalism in the United States. Emphasizing the “protection of life” rather than the threat of death, classical boundaries between public and private are obliterated when the state exercises biopower to regulate health, sexuality, bodies, dispositions, and desires as part of its official mandate. While legitimating a vast expansion of the reach of the state, biopower deploys the language of rights to mask this extension of power as it produces disciplined subjects who believe themselves to be self-regulating or “free” (Foucault 1977; Agamben 1995; Brown 1995). In the context of rights regimes linked to biopower, recent legislation regulating sexuality and marriage takes on new meaning. The state claims a legitimate interest in promoting reproduction among some (white, affluent, heterosexual) citizens and curbing it among other (poor, black, gay, and lesbian) citizens. The criminalization of abortion and restriction of birth control are justified as means both to protect life and to preserve the (white) nation.

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Denial of access to contraception and condemnations of sexual activity outside of wedlock are ways to affirm that unproductive eroticism is not only immoral but also unpatriotic. The denial of marriage licenses and benefits to same-sex couples, like the ban on sexually active and honest gays and lesbians in the military, narrowly circumscribe who can perform certain patriotic duties. Pro-heterosexual, pronatalist, and antiabortion legislation politicizes reproductive behavior, while also asserting “biological rights of the collective” reminiscent of Mussolini’s Codice Rocco. Containing a provision on “Crimes Against the Integrity and Health of the Race,” this law located the integrity of the race in the wombs of Italian women, lodging responsibility for protecting those wombs from contraception and abortion with the fascist state. Although Mussolini located “crimes against the biological collective” within the wombs of citizens (Miller 2007, 22), the federal government has recently expanded the category of potential threats to the biological collective beyond pregnant women themselves. In March 2004, the U.S. Congress passed and President Bush signed the “Unborn Victims of Violence Act,” which makes it a separate federal crime to kill or injure a fetus while committing a federal crime against a pregnant woman. Declaring that a “person” possessing full constitutional rights “exists from the moment of conception,” this law expands the state’s compelling interest in the unborn well beyond the parameters established in Roe versus Wade. As the state fosters a notion that it has a “compelling interest” in prohibiting harm from the moment of “viability,” privacy concerns and women’s reproductive freedom are swamped by discursive constructions of “natural” “moral” imperatives. Nature is invoked not only to legitimate women citizens’ reproductive responsibility, but heterosexuality more generally. Thus the Defense of Marriage Act, efforts to use the law to define a family exclusively in terms of heterosexual couple, and promotion of heterosexual marriage as part of welfare “reform” can be understood as evidence of the state’s linkage of sexuality, reproduction, and citizenship, constructing the womb as a setting for political debate and a site for political intervention, while also fostering hierarchies among citizens. Operating through antiabortion and anticontraception legislation, constitutional amendments to ban gay marriage, statutes prohibiting gay adoption, and welfare policies that penalize out-of-wedlock births and promote marriage, biopower expels the liberal chimera of the private domain beyond the reach of the state, replacing it with explicit recognition that the family is a political entity and reproduction is a social and political relation reserved for those the state deems worthy.

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Conclusion If the post-neoliberal era is characterized by a search for progressive policy alternatives to remedy the contradictions within neoliberalism, then signs of post-neoliberalism are sorely lacking in the United States. Despite formal political and legal “equality” in a neoliberal era, distinct modes of citizenship are enacted through regulatory practices that treat men differently from women, the affluent differently from the poor, the white differently from people of color, and the heterosexual differently from gays and lesbians. In contrast to neoliberalism’s explicit commitment to individual rights and privatization, surveillance has been heightened and civil rights suspended, while women’s reproductive organs and nontraditional families (that is, nonwhite, nonheterosexual families) have been “publicized,” claimed as legitimate targets of public concern, regulation, and policing. Contrary to promises of fiscal responsibility and economic growth, deficits are soaring as incomes of 80 percent of the population stagnate. At a time when mobilizations against neoliberalism are mounting in Latin America and social democracies like Canada are moving to reverse some of the polarizing effects of neoliberalism, why has there been so little constructive engagement with the contradictions of neoliberalism in the United States? Discussions of American “exceptionalism” have been a staple of social science inquiry since Tocqueville’s speculations in the mid-nineteenth century. Liberal individualism and a dogged belief in the promise of equal opportunity and the prospects for individual upward social mobility figure prominently in these discussions, as do racism and political repression linked to successive waves of antisocialist and anti-communist policies (Lipset and Marks 2000; Alesina et al. 2001). As this chapter has noted, liberal precepts have provided a powerful form of ideological immunity. The rhetoric of individual rights and liberties tends to insulate “Middle America” from direct confrontation with unsavory dimensions of the micropolitics of domination. Deployed as a political ideology and as a macroeconomic policy by astute politicians, neoliberalism’s mystifying effects have been difficult to dispel. Recent public opinion polls, however, indicate growing public dissatisfaction with proposals to privatize social security, the war in Iraq, and lack of affordable medical care. Whether Democratic candidates will transform this dissatisfaction into electoral success in 2008 and policy change thereafter remains to be seen.

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Notes 1. With the exception of Rousseau, claims concerning a fixed human nature grounded in selfishness and activated by pursuit of private interest have been a staple of social contract theorists (Hobbes, Locke) and their critics (Smith and Hume). These views were shared by founders of the U.S. polity such as Jefferson, Hamilton, and Madison, and they reverberate in the works of the Chicago School. 2. The U.S. Constitution designed a federal political system which divided sovereignty between the federal government and state governments. The federal government was accorded power to provide for the common defense, conduct international relations, and regulate interstate commerce. All residual powers, including the power to regulate economic matters and to determine criteria for citizenship, were reserved to the individual states. Reflecting Quaker influence, New Jersey’s first constitution awarded voting rights to single white women and free black men and women who owned property. This right was rescinded in 1807. For a discussion of the politics behind shifting criteria for enfranchisement, see Keyssar 2001. 3. AFDC recipients continued to increase in number until 1976, when the total number of recipients peaked at 11.3 million. As the number of recipients increased, the purchasing power of the welfare grant declined sharply. The value of the median benefit level fell by 30 percent between 1970 and 1980 (Abramovitz 1996: 341). 4. Consider, for example, that the poverty rate for children increased from 17.6 percent to 19.9 percent over the period between 1966 (the first year official poverty rates were calculated) and 1997 when welfare entitlement was officially abolished (Clark et al. 2001). 5. In December 1982 and again in October 1984, the U.S. Congress cut off direct military aid to the Contras whether provided by the Defense Department, the Central Intelligence Agency, or any other government agency. Rather than comply with this Congressional mandate, the Reagan Administration began providing military supplies and funding through third parties, a policy which culminated in the “Iran-Contra Affair,” in which the Reagan Administration illegally sold arms to Iran and used the proceeds to fund the Contras in their effort to defeat the Sandinistas in Nicaragua. 6. In 2005 the Supreme Court ruled that local governments may force property owners to sell out and make way for private economic development when officials decide it would benefit the public, even if the property is not blighted and the new project’s success is not guaranteed. Kelo et al. versus City of New London, 545 U.S. 469 (2005). 7. The nonpartisan Congressional Research Service has prepared a less conservative estimate of the price tag for the “war on terror.” The appraisal includes military operations, base security, reconstruction, foreign aid, embassy costs, and healthcare for returning veterans. The cost since September 11, 2001, is $610 billion. That number will rise to $758 billion if Congress approves the White House request for fiscal year 2008 (Salon.com 2007, http://www.salon. com/news/primary_sources/2007/07/19/crs/index_np.html).

11 Poverty Policy and Politics in Canada and Mexico: “Inclusive” Liberalism? Rianne Mahon and Laura Macdonald

Introduction The North American Free Trade Agreement (NAFTA) was supposed to bring prosperity and well-being to the peoples of Canada and Mexico. It has perhaps contributed to growth in both countries over the last decade, but the fruits of that growth have been very unevenly distributed. In contrast with the vision of “Social Europe” incorporated in the European Union, NAFTA was and remains a neoliberal form of continental economic governance. As such, it contributes to pressures on Canada and Mexico to restructure their social policies to become competitive in a continental market dominated by the United States. As discussed in the chapter by Mary Hawkesworth in this volume, the latter has never had a strong welfare state and, since the Reagan era, even limited existing welfare policies have been subject to substantial retrenchment. The question this chapter addresses is to what extent North American integration has pushed Canada and Mexico to follow suit, embracing a punitive workfare approach to poverty alleviation typical of neoliberal America? There has been some degree of convergence toward the U.S. model in both countries. In Canada, income inequality grew during the 1990s, mainly because of cuts to unemployment insurance and social assistance, two key areas where convergence toward the U.S. norm is apparent (Hoberg et al. 2002; Banting and Boychuk 2003). In Mexico, social provision in the postwar era was much less adequate than in Western welfare states, but the forms of social welfare associated with the corporatist system have also been cut and restructured in response to the structural adjustment programs imposed by the International Monetary Fund (IMF), with quite devastating results for the majority 184

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of Mexicans. It would be a mistake, however, to see these reforms as simply paving the way for American-style neoliberalism. Rather, we argue in this chapter that poverty policies in both countries are best understood as representing different forms of “inclusive” liberalism (Craig and Porter 2006). In social policy terms, inclusive liberalism retains the classical liberal preference for narrowly targeted programs, while eschewing the “passive,” consumption-oriented approach of the postwar period in favor of “activation.” This emphasis on measures to promote labor market participation also appears in American-style workfare, yet in contrast to the U.S. programs, Canadian and Mexican poverty programs contain a mix of carrots and sticks. There is a gender dimension to inclusive liberalism too: the male breadwinner/female caregiver family form is no longer the norm—lone mothers are to be activated, although in different ways in the two countries. Perhaps the key distinguishing feature of inclusive liberalism’s poverty policies, however, is generational. In both Canada and Mexico, the emphasis is on investment in the “human capital” of the next generation. Thus, these cases show that the United States remains an outlier in the region, since Canada and Mexico have taken a step in the post-neoliberal direction, even if both retain significant neoliberal elements, particularly in their macroeconomic and trade policies.

Varieties of liberalism As discussed elsewhere in the volume, by the 1990s, resistance to neoliberal globalization had opened the way to “third way” governments in the North and to the international financial institutions”(IFIs) embrace of “poverty reduction” in the South. Porter and Craig’s concept of “inclusive liberalism” (2004, 2006) seeks to grasp changes introduced in response to contradictions exposed by the first phase of neoliberalism. While pointing out the continuities, they also draw attention to important themes— “opportunity” and “empowerment,” or the activation of capacities— that began to appear in social policies of a number of Organization for Economic Cooperation and Development (OECD) countries and in international org anizations’ prescriptions for the global south. Inclusive liberalism differs in crucial ways from earlier forms of liberalism, although all of these forms share an emphasis on the individual and a capitalist market economy. Under classical liberalism, individual freedom was defined as the ability to pursue one’s selfinterest “free from” the interference of others. In this imaginary, the role of the state was limited to the protection of individual property and

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the maintenance of orderly relations of exchange. The role of social policy was confined to assisting the “deserving” poor and reinforcing the work ethic among the rest. “New” or social liberalism began to emerge in the late nineteenth century, articulated by theorists such as John Stuart Mill, but would receive its first full-policy expression in the Keynesian welfare state. One critical difference between classic and new liberalism was that “[n]ew liberalism understood freedom as more than the negative freedom of classical liberalism: it also included the positive freedoms of opportunity and personal development” (O’Connor et al. 1999: 50). The emphasis of the human capacity for development played an especially important role in this version of the liberal imaginary. The role of the state was understood to create the conditions for all to develop to their full potential, even if this involved measures to mitigate the impact of market forces. In the Keynesian–welfare state, social citizenship assumed its place alongside liberal civil and political rights among most of the Western democracies (Marshall 1950). Neoliberalism, which became dominant in the 1980s, shares with classic liberalism a celebration of market individualism and minimal government. It aims to eliminate the Keynesian and corporatist welfare states, roll back the rights of unions and limit the impact of “special interests,” including the women’s movement. Privatization, contracting out, public-private partnerships, and the use of private finance for public purposes are all part of the neoliberal toolkit. As discussed in the chapter by Harder in this volume, neoliberalism’s position on gender relations is ambivalent. As noted by O’Connor et al., neoliberals may be allied with conservative political forces that call for safeguarding traditional family life, but “neo-liberalism itself claims to be blind to ascribed characteristics of individuals such as age, sex, and race”(1999: 53–4). In a pure neoliberal discourse, women are to be treated like men, including as full-time participants in the labor market. Lone mothers thus become “employable,” to be pushed off social assistance and into the labor market. Children do not figure large in the neoliberal discourse, as the family is to assume full responsibility for their care, but there may be some limited room for remedial action to save children from the “cycle of poverty.” Inclusive liberalism thus draws on aspects of the same new liberalism that underpinned the Keynesian welfare state, even while it redesigns the policy toolkit. Inclusive liberalism shares neoliberalism’s commitment to noninflationary growth and balanced budgets. It is equally dedicated to the liberalization of the flow of goods, capital and, with


some provisos, labor. Both stress the centrality of employment while rejecting a public responsibility to create the conditions for full employment, which characterized Keynesian economic policy. The work ethic is to be encouraged: employment is celebrated “as a source of financial support and as an indicator of social esteem, respect, and self-worth” (McDowell 2004: 151). For both neoliberalism and inclusive liberalism, systems of income support need to be reconfigured to favor labor market participation. In contrast to the coercive workfare policies of neoliberalism, however, inclusive liberals see a role for the state in providing training and other forms of assistance to develop individual “capacities.” Finally, both advocate the flexibilization of labor and labor markets and accept that this means greater inequality in the here and now. Again, however, inclusive liberals favor opportunities for lifelong learning, which would allow the poor to get off the “poverty bus” (Esping-Andersen 1999). Inclusive liberalism’s emphasis on capabilities is associated with “a clear shift away from welfare as income management to a notion of welfare as capability to function within the market sphere” (Jayasuriya 2006: 54). Accordingly, the role of government shifts from (limited) redistribution and “passive” consumption to measures to “enable” the development of individual capabilities. With this also comes an emphasis on obligation—or “co-responsibility” (Molyneux 2006): beneficiaries are expected to do their part to escape poverty by developing their capacities/human capital and to participate in the community, thus increasing social capital. There is a clear gender dimension to inclusive liberalism’s agenda. The IFIs’ embrace of poverty reduction strategies occurred at a high point of global feminism, as reflected in the Beijing Platform of Action and the Millennium Development Goals (Molyneux 2006). Women thus have assumed a new visibility in poverty reduction strategies even while these do little to tackle the underlying causes of women’s inequality. Inclusive liberalism in the North also embraces a new gender model, centered on the adult-earner family. The normalization of this family form is lauded because it makes possible the redesign of social security systems centered on the needs of the male breadwinner. This does not mean that the family is reduced to a site for the daily reproduction of labor power. In fact, inclusive liberalism is also very much concerned with the intergenerational reproduction of human capital. As we shall see, parenting—especially the role of mothers—is stressed in both Canada’s and Mexico’s poverty policies, in a way that is not particularly conducive for the empowerment of women.

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Inclusive liberalism, then, is characterized by an emphasis on the “empowerment” and “activation” of the poor, both men and women, integrating them into the labor market through training and other supports. It does not, however, involve measures designed to come to grips with the forces underlying existing levels of polarization and poverty. To the contrary: inclusive liberalism in effect supports the functioning of a polarized labor market. It also aims to contribute to social capital formation in local communities, by encouraging participation, in partnership with civil society organizations. Finally, its preoccupation with social investment is reflected in the primacy it attaches to the next generation. It is important to note, however, that inclusive liberal strategies can coexist with predominantly neoliberal politics, as the cases of both Canada and Mexico reveal.

Poverty policy and politics in Canada Among Western social welfare states, Canada stands out for its relatively high poverty rate and a labor market with a substantial share of lowwage jobs (Jackson, 2006). At the same time, Canada is much closer to the OECD average than both the United States and Mexico, which top the OECD’s poverty table. The variant of the Keynesian welfare state implemented in Canada was clearly “liberal” (Esping-Anderson 1999). As a polarized labor market began to emerge in the 1980s, social policies initially cushioned the effects—but only at the price of increased targeting (Myles and Pierson 1997). By the mid-1990s, Canada had clearly entered the “roll-back” phase of neoliberalization, as both federal and provincial governments cut benefits and tightened eligibility. Toward the end of the decade, however, the federal government took the first step toward inclusive liberalism, with the 1998 launch of the National Child Benefit. The “social investment” aspects of this program focused on children, while prodding their working-age parents to manage, with diminished support, in an economy that was generating increasing numbers of part-time, temporary, self-employment jobs, which typically offer low wages, lack employment benefits and tend to be unstable (Saunders 2005). Those involved in Canada’s postwar reconstruction foresaw the establishment of a full range of social citizenship rights. As Battle et al. note, however, “with the notable exception of the retirement income system, which ensures a (debatably) minimally adequate income, the core objective of what the social policy pioneers termed a ‘social minimum’ (that is, an adequate income for all Canadians) was never achieved or even attempted” (2006: 6). Indeed, many of the ambitious plans were shelved in the early postwar years.


During the 1960s and 1970s, however, new social programs were introduced. In addition to universal health insurance, the mid-sixties saw the passage of the Canada Assistance Plan (CAP), which committed the federal government to share the costs of social assistance and related services, on a 50-50 basis, with the provinces. CAP was thus typical of the arrangements through which Canada’s welfare state was institutionalized: the federal government used its spending power to enable all provinces to establish equivalent levels of social support, while leaving them to determine the precise features of the programs. During this period, the federal government also sought to promote equality by providing core funding for civil society organizations that voiced the concerns of women, Aboriginal peoples and the poor ( Jenson and Phillips 1996). Although the Chrétien Liberals were elected to office on a platform of inclusive liberalism, it was they who unleashed the openly neoliberal rollback phase. Unemployment insurance (UI) was gutted in a series of moves, culminating in its 1996 renaming as “employment insurance” (EI): Specific changes included disentitling workers who quit their jobs “without just cause;” cuts to the earnings replacement rate; increasing the minimum replacement rate; increasing the minimum number of weeks required to qualify for benefits (variable according to replacement rate); tougher work requirements for new entrants to the workforce, re-entrants and repeat claimants; reducing the maximum duration of benefits; and partial claw back of benefits from higher-income recipients … The federal government ended its sharing of UI costs, leaving the program financing wholly by employee and employer premiums. (Battle et al. 2006: 15) Many of the unemployed who have contributed to EI are denied access and thus forced onto social assistance (Battle et al. 2006:19). The gender gap too has widened as UI has essentially cut off access by the growing number of workers holding nonstandard jobs, a majority of whom are women. The heightened emphasis on family-income testing in EI went against the women’s movement’s push for benefits “in their own name” (McKeen 2004). There was a serious attempt to overhaul the whole social security system with an eye to promoting “employability,” but this initiative was derailed by the finance department’s imposition of fiscal austerity. CAP was eliminated as federal support for social assistance and related

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services was rolled into a new, and much-reduced, block fund, the Canada Health and Social Transfers (CHST) fund. As a consequence, social assistance had to compete with such popular programs as health and post-secondary education for fewer dollars. The end of CAP also eliminated what limited federal rules there had been, including a prohibition of compulsory workfare schemes and the requirement to see that all who needed assistance got it. More specifically, the National Child Benefit (NCB) aims to prevent and reduce the depth of child poverty; ensure families would always be better off as a result of parents working; and reduce overlap and duplication, by linking federal and provincial support for families with children (NCB 2008). It brought together an enhanced Canada Child Tax Benefit, available to low- and modest-income families with children under 18, with a National Child Benefit Supplement (NCBS) for lowincome families, with a maximum benefit kicking in at, or below, a family income of $22,615 and tapering off to zero for families with incomes of $35,000 or more. Unlike the American Earned Income Tax Credit, the supplement is available to families on social assistance as well as the working poor. The social investment component of the NCB, however, came in the form of permission to the provinces and territories to “claw back” an equivalent amount from social assistance recipients, provided it was “reinvested.” The provinces, moreover, were now free to make deeper cuts in social assistance rates and eligibility criteria and several did. Thus lone-parent families were worse off in 2004 than they were when the NCB started in 1999 in all but two provinces and two-parent families were worse off in two major provinces, Ontario and Alberta. Thus the NCB may have increased federal spending on child benefits, but these increases “have been offset by freezes and cuts in provincial and territorial benefits, including the claw back of the NCBS” (National Council of Welfare 2005: 12). “Employable” social assistance recipients are thus subjected to increased pressure to take any job, even if it offers low pay. There is, moreover, a marked workfare orientation in the list of appropriate areas for reinvestment—for the most part, the “carrots” inducing social assistance recipients to work, or low-wage workers to keep their jobs. Thus child benefits and employment income supplements are intended “to provide low income families with more money so parents can stay in jobs working towards higher wages”; child care initiatives are “to help low income families cover extra child care costs incurred when working”; and supplementary health benefits enable families to “keep important health benefits when they move from welfare to work” (NCB 2008).


The NCB money can also be “reinvested” in another area favored by inclusive liberalism—early child services and programs for children “at risk.” Unlike the other parts of the NCBS claw back, these programs can include the children of parents who remain on social assistance as well as others judged to be “at risk.” It is mothers, however, that are typically “on the receiving end of the information, education and referral services provided and [who] are expected to follow through on the activities …” (McKeen 2006: 19). This dimension of the National Children’s Agenda became even more pronounced with the announcement of a new intergovernmental agreement. Through the Early Childhood Development initiative, the federal government offered the provinces and territories $500 million over 5 years, to be spent on the promotion of healthy pregnancy, birth and infancy; improvement of parent and family supports, early childhood education and care; and strengthening community capacities. As with the NCB, for the most part the provinces chose not to use the money to lay the foundations for a universal system of early childhood education and care. Instead they favored programs targeting those “at risk.” Although these services are potentially available to all children who need them, low-income and lone-parent families are singled out as “high risk.” The federal Liberal government concluded two other intergovernmental agreements, however, which indicated that it was prepared to draw more deeply on social liberalism’s developmental focus, albeit with a continued emphasis on children. The Multilateral Framework agreement on Early Childhood Learning and Care (2003) and the bilateral agreements negotiated with all ten provinces in 2005 clearly aimed to establish the foundations for a pan-Canadian early learning and child care system, based on the principles of quality, universality and accessibility. Following the defeat of the Liberals in the 2006 federal election, however, the new Conservative government announced it would withdraw from the bilateral agreements, offering instead a taxable “universal child care benefit” worth a maximum of $1200 per annum. These agreements, and the National Children’s Agenda of which they were a part, involved a form of decentralization of control to provincial governments in a manner consistent with the principles of inclusive liberalism, through the Social Union Framework Agreement (SUFA). SUFA allowed for even greater interprovincial diversity than existed in Canada’s Keynesian–welfare state, even though this substantially blunted the “developmental” thrust. Thus SUFA tolerated neoliberal

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experiments at the provincial scale, even while it ostensibly favored social policy of an inclusive liberal design. Like the bilateral child care agreements, SUFA is now a dead letter. Following the Conservatives’ victory in 2006, the federal, provincial and territorial governments began a new round of consultations designed to end the “fiscal imbalance” exacerbated, if not caused, by the downloading that occurred in the 1990s as part of the neoliberal rollback and the regime of competitive interprovincial tax-cutting that arrangements like SUFA did little to halt. Thus, Canada’s experiment with inclusive liberalism has been put on hold, while the minority Conservative government has downplayed concerns about poverty and children’s development.

Poverty policy and politics in Mexico Mexico’s encounters with, first, liberalism and, then, neoliberalism have been much more tumultuous than Canada’s, and are entwined with the politics of democratization and the legacy of corporatist rule. After the debt crisis of 1981, Mexico adopted an extremely orthodox neoliberal program of economic and social reform. In contrast with other Latin American states discussed in this volume, Mexico has not seen a general turn to post-neoliberalism in recent years. Nevertheless the failure of neoliberalism to substantially reduce income inequalities and poverty levels (see World Bank 2005) has led recent administrations to experiment with new policies aimed at poverty reduction that adopt many of the principles of “inclusive” liberalism, particularly in the area of poverty reduction. A significant decline in extreme poverty has occurred in Mexico over the last few years, due in part to new targeted assistance policies, in addition to other factors such as income growth in rural areas and remittances from migrants. The financial resources provided by Oportunidades are minimal in relation to popular needs, and the program imposes significant new demands on the time and resources of the participants, particularly the mothers who have been selected as the recipients of conditional cash transfers (see the chapter by Luccisano and Wall in this volume). In contrast with the liberal model pursued in Canada and the United States, Mexico’s social welfare system resembled a limited version of the Bismarckian or conservative corporatist model, in which social provision was tied to occupation rather than provided on a universal basis. This form of state underplayed the importance of market efficiency and


commodification, and acted to preserve status differentials: “rights, therefore, were attached to class and status” (Esping-Andersen 1989: 25). According to Guillermo Trejo and Claudio Jones, “welfare policy served as the material basis of consent for the sustainability of authoritarian rule for more than half a century” (1998: 73). There is a strong gender dimension to this type of social policy regime: since social rights are delivered to the (usually male) wage earner, women’s dependence on the principal breadwinner is intensified (O’Connor, Orloff and Shaver 1999: 19). The effects of the debt crisis and the subsequent neoliberal adjustment policies adopted under IMF tutelage were devastating for the poor, as Mexico underwent a serious roll back of its social programs. Social development spending as a percentage of expenditure actually declined under President De la Madrid (1982–8); by 1986–8, real per capita expenditure on social programs had fallen 30 percent compared to 1971–81 base levels (Bruhn 1996: 154). The failure of orthodox neoliberal policy prescriptions to reduce levels of poverty and inequality or to create the basis for sustainable growth has led recent governments to experiment with new, more heterodox forms of social provision. The first such attempt was President Carlos Salinas de Gortari’s Programa Nacional de Solidaridad—PRONASOL (also known as Solidarity). Eager to shore up his legitimacy, Salinas launched the PRONASOL program based on a “social liberal” ideology purported to represent a more just and equitable approach than neoliberalism, while avoiding the statist excesses of corporatism (Soederberg 2001: 114). This program contained elements of “inclusive” liberalism. In keeping with neoliberalism, and in contrast with earlier forms of social provision, Solidarity was seen as a way of promoting competitiveness and productivity by enabling the poorest members of the population to participate in the market. Thus, the program was designed to target the poorest groups, hardest hit by structural adjustment, and it provided support for public investment in schools, roads, electricity, water, sewage and health. It contained an element of “roll-back,” in that it bypassed the formal structure of the Partido Revolucionario Institucional (PRI—the Institutional Revolutionary Party) and its corporatist allies, particularly labor. PRONASOL also involved some degree of rescaling the state outward, by aiming at a more decentralized and flexible form of program administration, as well as grassroots participation through the formation of “solidarity groups” to which funds were disbursed. Thus, as in inclusive liberal approaches, PRONASOL attempted to foster social capital at the local level, and to displace earlier corporatist forms of representation (Kurtz 2002: 305).

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Nevertheless PRONASOL was ultimately discredited as a viable and credible program of poverty alleviation because of the link between program expenditures and the political objectives of the dominant party (Bruhn 1996; Ward 1994; Molinar and Weldon 1994). The most recent phase of poverty policy in Mexico has been marked by a clear turn away from the rollback phase of neoliberalism toward the “inclusive” liberalism project. By the end of Salinas’s time in office, Mexico was experiencing dangerous levels of instability, with rising levels of crime, violence and corruption. Immediately after assuming office, Zedillo’s position was dramatically undermined by the crash of the Mexican peso in December 1994, which triggered a significant national economic crisis. Between 1984 and 1994, the wealthiest 10 percent of Mexicans’ share of real national income rose from around 34 percent to more than 41 percent, while all other groups suffered a decline (Pastor and Wise 1997: 426). By 1997, the PRI lost its majority in the lower house for the first time in its history (Rocha Menocal: 517–18). This context of political and economic instability led Zedillo to undertake a series of decisive reforms that would ultimately undermine the dominance of the PRI and lead to a new approach to poverty reduction. Again, as under Salinas, poverty policy was a central element in Zedillo’s bid to regain legitimacy. To distance himself from Salinas’s legacy, Zedillo pledged to make his new antipoverty program, Progresa, launched in 1997, free from political manipulation. Zedillo’s strategy, continued by President Fox in his poverty program, Oportunidades, represented a real shift away from neoliberalism toward principles of “inclusive” liberalism. In contrast to Solidarity, Progresa was a highly targeted program of social benefits, focused exclusively on families living in extreme poverty. The main element of the program is a system of conditional cash transfers, in which money is delivered directly to households (specifically mothers) living in extreme poverty. As in Canada, children have been the main focus of inclusive liberal strategies of poverty alleviation. Progresa/Oportunidades seeks to increase the efficiency, productivity and, ultimately, the income of individuals through nutrition, health and education programs (Dussel Peters 2000: 150). The philosophy behind the program is typical of that of inclusive liberalism: the Fox government stated that under Oportunidades, “co-responsibility is an important factor in the program, because the families are an active part of their own development, moving beyond philanthropy and paternalism” (SEDESOL n.d., our translation). Miguel Székely, Mexico’s former Undersecretary for Social


Development and one of the architects of the program, describes the Mexican’s social strategy: The Mexican government is aiming all its mechanisms at generating capacities, options, patrimony and protection. In that sense, the tortilla subsidy was pointless, the same as the milk program, because they were not generating capacities […] Oportunidades fits in this new framework because it’s our principal tool for building human capital. (Szekely 2007: 6) This objective of human capital formation helps explain the program’s heavy emphasis on school attendance. Critics of the program, however, note that increased school attendance is meaningless without providing the school system with adequate budgets to meet the new demand on their resources, and without an effective program to improve the quality of Mexican education (Luccisano 2006: 72). Székely also echoes the language of the OECD in his framing of the program’s long-term objectives. He refers to Mexico’s traditional social programs as “static,” since they are designed to deal with structural poverty: “What we have to do is to start thinking of these programs as dynamic programs with appropriate incentives so that people themselves will leave the programs when they no longer require assistance” (Székely 2007: 10). In this regard, the role of banks and private financial institutions in the delivery of the Oportunidades benefits is seen as crucial, since, he claims, “a lack of access to the financial market is one of the great obstacles to overcoming poverty.” The eventual outcome of all of these incentives and options is to spring people out of poverty and into the middle class. The government also claims that one of the priorities of Oportunidades is to “strengthen the position of women in the family and within the community. For this reason, it is the mothers of the family who are named as the beneficiaries of the program and who receive the corresponding monetary transfers” (Oportunidades n.d.). Mothers receive payments for food, based on the number of children in the family, and larger transfers to support their dependent children in school, but, in turn, are subjected to an intrusive set of requirements, including ensuring their children attend school; making regular visits to the health clinic; and attending regular talks on topics such as health, nutrition, hygiene, domestic violence and family planning. From this standpoint, inclusive liberalism begins to look more like “intrusive” liberalism.

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Molyneux (2006) notes that, in this sense, this program represents a return to the maternalism that characterized much of social policy in Latin America in the past, since it reinforces traditional conceptions of the role of women in the family, without any clear strategy for women’s empowerment. While the program has thus been evaluated as achieving some degree of success in its own terms of poverty reduction, increased child enrollment in school and reduced child labor, it entrenches familiar patterns of hierarchy within Mexican society, and its contribution to social development in the long term is questionable. In contrast with Canada, however, where the future of “inclusive” neoliberal programs may be in question, the future of this form of social provision in Mexico seems assured. Even though the centre-right Partido Acción Nacional (PAN—the National Action Party) candidate, in the 2006 election, Felipe Calderón was elected under a neoliberal platform, he quickly changed tack after his narrow victory and embraced the “inclusive” discourse of his predecessors. After spending the campaign criticizing his Partido Revolución Democrática (PRD) opponent for his promises to expand social spending on public works projects and subsidies, Calderón declared in his acceptance speech: “I want the nation to assume its social responsibility, especially for the most vulnerable, to promote and guarantee equal opportunities. First will be fighting poverty and overcoming inequality” (Enriquez 2006). Calderón has subsequently announced increased funding for Oportunidades, expansion of medical insurance, a day care center program and new support for energy spending by Oportunidades beneficiaries.

Conclusions Canada and Mexico have thus diverged in significant ways from the neoliberal policies of their North American partner. While both turned toward neoliberalism in the 1980s and 1990s, beginning in the late 1990s, both countries began to take on an inclusive liberal hue. As the introduction to this volume noted, state policies can adopt aspects of inclusive liberalism without fully embracing the post-neoliberal model that has taken root elsewhere in the hemisphere. Thus in both countries, while macroeconomic and trade policies have remained largely neoliberal, inclusive liberal strategies have been adopted in attempts to reduce poverty levels aggravated by neoliberalism. This has involved an emphasis on children—often at the expense of their mothers. This may be clearest in the Oportunidades program, where women can lose their benefits as a result of failure to comply with their “co-responsibilities”


under the program. Yet it is also visible in Canada, as the NCB provided the carrots that supplemented (certain) provincial policies designed to push lone mothers into the (low-wage) labor force. While the concept of “inclusive liberalism” draws attention to common themes running through third-way and poverty reduction strategies, this should not lead us to ignore important differences between the two—or differences that remain between countries as a legacy of the past. Thus, Canada’s turn to inclusive liberalism fits the thesis of pathdependent responses to crises, especially the version which admits that such incremental responses can ultimately result in “path modification” (Thelen and Streeck 2005). In other words, Canada had a welfare state form composed of a thin layer of flat-rate, Beveridge-style social programs, social insurance programs covering most in the labor force, plus programs targeted at the poor or those “at risk.” As labor market polarization deepened in the 1980s, the Conservative government responded incrementally, initially undermining universal programs like the family allowance then finally replacing them with an income-tested child tax benefit. It increased the targeted profile of Canada’s social policy, even while it provided incentives for the provinces and territories to experiment with workfare. The NCB can be seen as an incremental adjustment that opened the way to path modification, as it increased the share of targeted programs. Now, however, support for low-income families was even more strongly linked to “activation.” The Early Childhood Development initiative, the multilateral framework agreement and the bilateral agreements on child care followed this modified path, although the latter two potentially paved the way for the creation of a universal system of early child education and care. In contrast, the legacy of state corporatism in Mexico meant that inclusive liberalism would be plagued by problems of clientelism and co-optation. This was clearest in the first version, adopted under Salinas. The reforms adopted under Zedillo and Fox and continuing under Calderon represent a clearer turn toward inclusive liberalism, but clientelism continues to plague the system. Indeed, some observers like the nongovernmental Alianza Cívica have charged that the last elections again saw the politicization of social programs as programs like Oportunidades continued to be linked with the vote. There are also differences in the gender model. In Canada, the ideal family began to change from the male breadwinner/female caregiver to the adult-earner family in the 1970s. In this context, the challenge to the right to social assistance for lone parents is understandable: all mothers become potentially employable, though only those who have

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“standard” employment enjoy the right to one year parental leave. In Mexico, one might talk instead of neo-familialism. The family remains the core care-providing unit—with the exception of a small percentage who have child care rights through the modernization of corporatist social programs (OECD 2004). Here the accent is on women’s maternal role, whereas in Canada the emphasis became securing quality child care for the adult-earner family. Party politics mattered in both. Thus the election of a Progressive Conservative government opened the way for the “path modifications” to Canada’s poverty policy, and the election of a “reformed” Conservative party in 2006 certainly appears to spell a return to neoliberalism. Yet the opening to inclusive liberalism occurred under the same Liberal government that had implemented the most draconian cuts. This shift in the Liberals’ position reflects not only the continued presence of “social liberals” in the government but also the impact of civil society organizations, especially those that had the research capacity the shrunken federal bureaucracy needed. Even if the Mulroney Conservative and Chrétien Liberals had muffled contentious politics, at least some civil society organizations proved resilient enough to adapt to the new terrain. In Mexico, high levels of poverty, despite years of adjustment and free trade policies, have strongly discredited neoliberal solutions in the eyes of a large segment of the public. As a result, even the center-right party, PAN, has been pushed to adopt an inclusive liberal policy agenda to maintain legitimacy. The last elections displayed a strong polarization of the vote between the center-right PAN, advocating an inclusive liberal agenda, and the center-left PRD, which espoused policies closer to a social democratic alternative. Whether the PRD would be able to implement such policies, if elected, is questionable, however, given the structural constraints from the international market, international donors and the North American context.

Notes Research for this chapter was funded by the Social Science and Humanities Research Council of Canada. The authors would like to thank Debora Lopreite, David Craig and Arne Ruckert for their helpful comments.

12 The Shaping of Motherhood through Social Investment in Children: Examples from Canada and Mexico Lucy Luccisano and Glenda Wall Introduction The recent global shift in state policy and politics toward social inclusion and investment in human capital has raised questions among academics about whether and to what extent these developments serve to deepen and strengthen neoliberal hegemony, or represent a move beyond neoliberalism toward a potentially more progressive postneoliberal political space with regard to social justice concerns. As many authors, including several in this volume, note, the last decade has seen a notable shift in the direction of social spending, both in southern developing and northern industrialized states. This shift is characterized by a refocusing on social investment and regulation after years of cutbacks, in part as a reaction to the real and potential social problems associated with the deregulatory approach of the 1980s and 1990s ( Jenson 2001; Dobrowolsky & Jenson 2004; Porter and Craig 2004; Peck and Tickell 2002). While a focus on promoting self-responsibility, in line with neoliberalism, characterizes this reinvestment strategy, what is seemingly new, as pointed out by Mahon and Macdonald in this volume, is the provision of state resources to empower citizens and provide them with more tools and opportunities to be successfully integrated into the market economy and become self-sufficient and self-responsible citizens (see also Porter and Craig 2004: 388). Our concern in this chapter is to elucidate the ways in which processes of post-neoliberalization that surround the education of, and investment in, children interact with the regulation and experience of motherhood in two quite different local contexts in Canada and in Mexico. Education forms a corner stone of much of the renewed and refocused spending, as it serves the underlying goal of the creation of a smart, 199

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healthy, self-responsible, self-improving, and self-scrutinizing citizenry that can integrate into an increasingly knowledge-based global market economy. Bound up with this, of course, are moral regulatory processes that shape subjectivity in many of the same ways that neoliberal practices of the past did. Risk management also plays an important role in recent policy initiatives. While risk groups have been targets of state regulatory measures for some time, they are now being increasingly targeted as potential investment opportunities, at the same time that social equality is being recast in political rhetoric as “equality of opportunity” ( Jenson 2001; Dobrowolsky and Jenson 2004). With the proper investments in the proper areas, according to this logic, citizens can be provided with equal opportunity to succeed in the market. Children, given their potential to become either good citizens or future risks to society, are seen as good investment opportunities, which Jenson (2001) suggests is the logic behind much of the recent social spending initiatives targeting children. This chapter focuses on recent initiatives in Canada and Mexico that target the education of children in order to enhance their future integration into, and success in, the global market economy. These initiatives, we will argue, are bound up with local cultural understandings of gender and motherhood, and work to increase the parenting responsibilities and surveillance of mothers. In both cases states are investing not only in the education of children but also in the education and scrutiny of mothers in a somewhat indirect attempt to shape future citizens. The processes through which this happens as well as its implications will be outlined later. In specifying and comparing the regimes of “rules, routines, pressures and penalties” that make up these local processes, we hope to contribute to a better understanding of current global processes of post-neoliberalism (Peck and Tickell 2002: 392). We will also explore some ways in which these processes open up spaces of resistance and possibilities for social support of families and mothers, as well as the extent to which they act to reinforce neoliberal hegemony. Comparing what seem like two very dissimilar contexts in Canada and Mexico allows for exploration of connections and similarities between different forms of post-neoliberalization on a more global scale (Peck and Tickell 2002: 393). In Canada, recent campaigns have urged mothers to invest heavily in their children during their early years in order to enhance brain development and future market success. In Mexico, the state-sponsored antipoverty program aims to increase children’s human capital development through the educational system as a way to ensure the future insertion of rural Mexicans into the market

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economy. When results of in-depth interviews with mothers in southern Ontario and rural Mexico are compared, there are many class-based and cultural differences in the experiences of these mothers. There are, however, some important similarities concerning the effects of a social investment framework on the regulation of motherhood and gender equality in both contexts.

The Canadian context: New brain research and child-rearing advice The current climate of investing in children in Canada through the education of mothers must be understood within a broader context of the intensification of mothering in industrialized countries, which itself is influenced by expert discourses of medicine and developmental psychology. Following World War II, a growth in developmental psychology in the postwar period, combined with a cultural focus on maternal domesticity, resulted in a shift in child-rearing advice given to mothers, from a focus on children’s health and habits to their emotional and psychological well-being. Mothers’ needs were backgrounded in the new advice literature and good mothering became associated with anticipating and adapting to children’s needs, which had expanded to include emotional and psychological health (Hays 1996; Weiss 1978; Richardson 1993; Wall 2001, 2004). Hays (1996) argues that this intensification of maternal duties continued to grow as the twentieth century progressed, so that by the 1990s good mothering required more time, emotional energy, and financial resources devoted to individual children than ever before. While more widespread conditions of poverty in industrializing countries necessitated a continued focus on children’s physical, as opposed to psychological and cognitive, health, there is evidence of a current intensification and broadening of maternal responsibilities there as well, as will be outlined later on in this chapter. In the 1990s, the intensification of motherhood in Western countries was supplemented by a new strand of developmental psychology that built on the psychological notion of attachment and made use of what is called “new brain research.” Over the 1990s, parents, and mothers in particular, were increasingly inundated with information on exciting new findings in the area of brain science; these findings suggest that parents’ behavior during children’s early years is crucial in determining the future intellectual potential of their children (Wall 2004). In Canada, government health agencies and ministries, nonprofit foundations, and authors of child-rearing advice literature undertook to

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promote increased parental involvement in this regard through educational campaigns and literature. Parents were urged to spend ample one-on-one quality time with young children, talking to, singing to, and teaching their children in order to maximize brain development. In this process, parents (and especially mothers) became increasingly responsible not only for their children’s emotional health but also for their optimal brain development and future intellectual potential and success (Nadesan 2002; Pitt 2002; Castaneda 2002; Wall 2004). The understandings of childhood evident in the early-years advice literature mesh with those aspects of neoliberalism that emphasized individual responsibility, risk management, and the need for constant self-scrutiny and self-improvement—what Beck-Gernsheim (1996) referred to as “life as a planning project” (Wall, 2004). Children become part of parents’ planning projects and parents’ success is increasingly measured in terms of the extent to which their children “exceed the norm” in terms of intelligence (Nadesan 2002). The recent focus on investment in children as outlined by Jenson (2001) is also amply evident in government policy documents and in the educational campaigns funded by government and nonprofit foundations. As is noted, for example, in The Early Years Study commissioned by the Ontario government in 1990, “the entrants to the workforce of 2025 will be born next year. From this generation will come a key factor in determining the wealth base of Ontario in 25 years. … Ensuring that our future citizens are able to develop their full potential … is crucial if we are to reverse the real brain drain” (McCain and Mustard 1990: 2). Maximizing children in this way is presented as necessary not only to building a selfsufficient, self-educating, and intelligent workforce that will contribute to the wealth of the nation but also to minimize future social problems of welfare dependency and criminal justice involvement (Wall 2004). The policy response to this research and the claims that emerged out of it during the 1990s, in a political climate of cutbacks to welfare and social programs, focused for the most part on educational campaigns aimed at changing parents’ behaviors, and on the development of resource centers and programs to educate and support parents in their role as teachers, rather than on publicly funded preschool initiatives. As Mahon and Macdonald point out in their chapter in this volume, some recent post-neoliberal policy initiatives that promised to deviate from this path and provide substantial funding to support a national system of early learning and child care were abandoned when the Liberal government was defeated in the 2006 federal election. This continuing policy focus on educating parents implies that resources for


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investing in children are provided indirectly through the education of parents rather than through universal early-childhood learning opportunities. Because mothers still bear the majority of the responsibility for raising children, this policy direction contributes to increasing the duties, responsibilities, and intensity of motherhood, and in many ways continues the neoliberal pattern of emphasizing individual rather than social responsibility for child outcomes. Implications for, and experiences of, mothers in Canada While the degree to which the Canadian mothers interviewed for this chapter engaged in intensive parenting aimed at enhancing brain development varied (often with number of children and number of hours mothers spent working), all mothers expressed familiarity with the messages that accompanied the recent educational campaigns. Although most mothers were concerned first and foremost with children’s happiness and self-esteem, there was also much evidence in the interviews of the importance of intelligence as a childhood characteristic and the importance of enhancing intelligence in children. There was also ample evidence that mothers were taking responsibility for tasks aimed at trying to make their children smarter than they would otherwise be. This was accomplished by spending one-on-one time with their children, choosing “educational” toys, researching and carefully choosing child care providers, and enrolling their children in cultural and physical activities that would broaden their experiences and enhance their abilities. Also notable in the interviews was the extent to which the increasing parental expectations associated with the advice literature continued to fall on the shoulders of mothers as opposed to fathers. Despite the fact that the gender-neutral term “parent” is currently used throughout child-rearing advice literature, the advice still is, as researchers have noted, largely addressed to, and representative, of mothers (Sunderland 2006; Wall and Arnold 2007). In this study, almost all mothers talked about how they were the ones to read and pay attention to the advice. Most also talked about their attempts to filter and interpret the information for their husbands. As one woman noted, “he lets me be the filter. He is not the first person to go seeking advice, in fact, he is the last.” For some women, more effort is spent using the information in the advice literature to try to change their spouses parenting behavior. As one woman stated, “I will read to him, and I will say “maybe we can try that differently.” While the mothers in this sample did not feel coerced or directly compelled to take on the additional responsibilities described above, and

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many were happy to be able to do so, they did describe some of the pressures, worries, and fears that constrained their choices and behaviors. The taken-for-granted understandings and practices that surrounded intensive parenting set up boundaries within which the morally correct and seemingly most intelligent choice became obvious. In the first place, mothers’ own social capital as good middle-class mothers was at risk if they were not seen to be doing everything they could to increase future opportunities for their children. And having a smart and accomplished child was a sign of their success. Many of the mothers talked about feeling like they were in a competitive position vis-à-vis one another. They talked about the ways in which their image as a good mother would be jeopardized by refusal to participate in an ever-widening array of children’s activities. They also talked about the pressure they felt to ensure that their children rose above the pack and the failure they felt when this didn’t happen. Mothers also expressed worry and anxiety about the potential lost opportunities that their children may face if they were not able to spend enough time stimulating them, or if they did not enroll them in the right lessons and activities. One mother, for instance, had made a conscious choice to keep her daughter out of structured activities but noted that her daughter’s friend was enrolled in several different activities and lessons and that as a result she “keep[s] thinking, what am I doing? Am I doing the right thing?” The implications of intensive parenting and the culture that surrounds it for mothers include additional worry and anxiety around doing the right things, and guilt over not doing enough for their children and for wanting some time and space for themselves. One of the most prominent themes in interviews was the tension mothers felt between the need to parent intensively and their own (nonlegitimate?) needs and desires, and the guilt and sometimes resentment that arose out of this. Most of the mothers in this sample were working mothers and most were routinely exhausted, sleep deprived, and stressed. Some talked about the toll on their health that the constant demands from work and intensive parenting were taking. As one mother noted, “I find myself really going down. I have gained so much weight in the last couple of years from stress. Trying to make it all work.” It is important to note that although the mainly middle-class women interviewed in this study did not feel overtly coerced to participate in increasingly intensive parenting techniques, this experience cannot be assumed to be shared by low-income or otherwise disadvantaged mothers. There is evidence that for many mothers in Canada and elsewhere


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the targeting of risk groups and changing expectations of parental behavior have resulted in increasing surveillance and intervention during the 1990s. This was a time in Canada when dramatic welfare cutbacks, declining minimum wages, and the dismantling of community support increased stress on low-income families. Coinciding with this were dramatic increases in child welfare reports, investigations, and apprehensions around the country (Trocmé and Chamberland 2003; Child Welfare League of Canada 2003). The number of children taken into care by child welfare authorities in Ontario, for instance, has almost doubled since 1995 (Trocmé and Chamberland 2003; Ontario Association of Children’s Aid Societies 2007). Pitt’s (2002) analysis of family literacy programs that aim to teach less educated mothers how to enhance the cognitive development of their children provides another example of intervention which targets mothers outside of the middle class. Likewise, British Prime Minister Tony Blair recently announced a new child care proposal which would have agencies intervene as early as possible to identify babies at risk of future behavioral problems based, in part, on their family characteristics, and take steps to prevent this. Blair even suggested that such intervention could happen “prebirth,” and announced the creation of a database, The Children’s Index, to keep track of risk indicators for children born in Britain (Ghafour 2006). Post-neoliberal implications in Canada Greater investment in children, even though it occurred indirectly through the education of mothers and the public in general, did provide some real gains for Canadian mothers and families in addition to the increased obligations it placed on them. Social policies that support parental care such as maternity and parental leave programs and legislation have, in their rationale, recently tapped into the early years brain development discourse. There also exists space for regulated nonparental childcare to benefit from taken-for-granted social understandings about the importance of brain development in the early years. There are two major ideological frameworks within which child care policy has developed in Canada and other industrialized countries: one which frames child care as a women’s issue linked to employment equity for women and, more recently, one which is much more child centered and frames child care as early childhood development and education ( Jenson and Sineau 2001). As Mahon and Macdonald point out in this volume, there were indications under the previous Liberal federal government in Canada that a greater focus on childcare as early childhood education could result in greater investment in childcare than in the

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past. To the extent that child care advocates are able to frame child care as early childhood education, there exists the potential for increased public and state support, and it is not surprising, then, that advocates are increasingly reframing child care in this way (Doherty et al. 2000).

The Mexican context: Social investment, education and empowerment The promotion of intensive parenting techniques is also occurring in Mexico; the Mexican case differs in that monetary incentives are tied to participation and penalties are imposed in case of noncompliance. The Mexican poverty reduction agenda of the last decade has seen a trend toward a post-neoliberal social investment model in which targeted conditional cash transfer programs (CCTs)1 have become the dominant strategy for investing in children and alleviating child poverty. Cash transfers are provided for nutrition and educational scholarships to enhance human capital development, in terms of both physical growth and cognitive development. The investment approach differs from the neoliberal “rollback” policies that resulted in severe spending cutbacks in education in Mexico and Latin America, as discussed in the chapter by Davidson-Harden in this volume. CCTs are designed to invest in children so that, empowered through education, they become adults who will be “active” and “productive” market citizens. These policies reflect what Peck and Tickell describe as “‘roll-out’ neoliberalism, underlying the sense in which new forms of institution-building and governmental intervention have been licensed within the (broadly defined)—project” (2002: 389). In the following discussion, we build on previous arguments of mothers’ increased social responsibilities and draw attention to how particular ideas of motherhood and good parenting are being reinforced through the CCT programs. Mexico’s CCT program is one of the first and most highly praised programs that reflects the policy direction of investment in children. By 2007, there were 5 million families receiving economic support through CCTs. Mexican President Felipe Calderón, elected in 2006, has committed to continue funding the CCT program, and increased the program budget to US $3.6 billion dollars. However, these post-neoliberal investments continue to coexist with “roll-back” neoliberal educational budgets. For example, the lack of appropriate investment in education, including infrastructure, resources, and teachers’ salaries, has negatively impacted student achievements (Luccisano 2006). In Mexico, in contrast to Canada, where official discourse tends to be gender-neutral, it is mothers, not fathers, who are explicitly targeted


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to take on the extra parenting responsibilities. Since 1997, the Mexican government has provided cash transfers on condition that mothers become co-responsible partners with the government in their children’s human capital development. The extra roles are supposed to be empowering to mothers. However, they are ultimately geared to changing the behavior of mothers and children. The cash transfers have inserted mothers into the market as creditworthy consumers, yet have inserted them into the economy and into political discourse not as citizens with rights, but as mothers with increased social responsibilities (Luccisano 2006). Mothers are held accountable both for the fulfillment of their obligations and their noncompliance with program rules. Failure to abide by program conditions results in temporary loss of cash benefits and scholarships and/or removal from the program. Like the Canadian examples, what we see through this program is an intensification of motherhood, accompanied by increased intervention, regulation, and surveillance. But there are also significant differences: Mexican women who fall into the category of extreme poverty presumably are more vulnerable to state control and manipulation than middle-class and even poor Canadian women. Mexican women face the more immediate and dire consequence of loss of benefits for failing to meet their conditional obligations. As pointed out in the chapter by Mahon and Macdonald in this volume, this version of post-neoliberal policy represents a more explicit system of carrots and sticks. Adult educational programs for mothers It is not only the education of children that is the focus of post-neoliberal policy but also, as in the Canadian case, the education of mothers. Mothers are being educated in the areas of health promotion and ways to improve children’s cognitive development. One of the key concerns of the CCT program is to get mothers and their families to think proactively about their health, and make them understand the difference between illness-care and prevention/self-care. Medical visits and mandatory health workshops for mothers are preconditions for receiving their cash transfers. Nutritional knowledge geared toward changing unhealthy habits and diets is provided in the health workshops. For example, preventive self-care is explained through 35 teaching modules that range from hygiene and family planning to cervical cancer and HIV/AIDS. The health workshops and the medical visits are geared to inculcating responsible health habits of preventive care for both children and their mothers. Dr. Veronica Romero, a medical doctor explains: “They’re not in the habit of taking responsibility for their health” (Braine 2006: 592). While mothers reported that some knowledge about

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health care was gained, the result was also an increased gendering of health care responsibilities. These investments for preventive care are taking place within the context of a weakened public health care system that has reinforced a two-tier system of private and public care. New brain research influencing the Canadian case has also found its way into the CCT program. Impact Evaluation Reports on Mexican CCT programs have identified mother’s low educational levels as hindering the realization of the full impact of the CCT program on child development (Duarte et al. 2004; Gertler and Fernald 2004). In their report Lia Fernald and Paul Gertler, chief economist of the World Bank’s Human Development Network, applauds the improvements of motor and behavioral development in children between the ages of three and six. However, Gertler and Fernald argue, “while the brain may be more prepared for cognitive development biologically due to the better nutrition, there may be the lack of necessary stimulation to develop cognitive skills in the home and environment” (2004: 7). The low educational levels of parents were identified as a problem for the mental stimulation of their children (Gertler and Fernald 2004: 36). To increase stimulation, Gertler and Fernald recommended the following: At a minimum, the pláticas (talks) could be expanded to include teaching skills to parents about how to stimulate their children, including how to make simple toys, how to interact with children at various development levels, and what milestones to look for in the development of language and cognition. (2004: 7) The Mexican National Institute of Public Health arrived at similar conclusions about improving the educational health workshops for mothers. In its evaluation, it acknowledged that because of low levels of education in the population, mandatory talks “do not guarantee learning and changes in behavior” (Duarte et al. 2004: 12). The proposed solution was to add literacy and educational training for the mothers so that they could better understand the health talks and provide better stimulation and care for their families. In response to concerns raised in these and other evaluation studies, in 2003 the Mexican CCT program changed the program rules to include an adult literacy component. This option was available to mothers who had already completed 3 years of health workshops. The Instituto Nacional para la Educación de los Adultos (INEA—National Institute for Adult Learning) was solicited to provide adult education


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modules including themes of health and preventive care. Between 2003 and the end of 2006, a total of 54,462 mothers completed various levels of adult education. Mothers participated in this program so that they could better stimulate and teach young children, and help their older children with their homework. The Mexican case study is an example of the ways in which practices and discourses of motherhood are reinforced through the CCT programs and evaluation reports, based on scientific truths regarding good parenting techniques and child stimulation. Official constructions of motherhood and self-esteem Empowerment is part of the post-neoliberal agenda, and images of happy, empowered, and grateful mothers fill the pages of Oportunidades policy documents. Education for girls and adult education for their mothers, which provides them with increased knowledge and confidence, is viewed as central for challenging gender inequality. Statements made by Mr. Rogelio Gómez-Hermosillo, then National Coordinator of the CCT program (2000–6) reveal the importance of education to selfesteem and empowerment. He states that mothers Finished secondary school as adults and now they have more confidence and they are proud of themselves. That is the meaning that access to the education has in the self-esteem of women who did not imagine doing their homework next to their children or their grandchildren. (authors’ translation, Coordinación Nacional Programa de Desarrollo Humano Oportunidades 2005: 9) The solution to overcoming poverty then lies in the mother’s increased self-esteem that will enable her to transform herself into a proactive subject, providing happy and stimulating household environments. This notion of the self resonates with the neoliberal and post-neoliberal focus on self-help remedies aimed to ameliorate inequality through increased governance of the self. Foucauldian theorist Barbara Cruikshank views self-esteem as a “technology of citizenship and self-government” (1996: 234). She explains that “self-esteem is a technology in the sense that it is a specialized knowledge of how to esteem our selves, to estimate, calculate, measure, evaluate, discipline, and to judge ourselves” (1996: 233). Cruikshank argues that projects concerned with self-esteem “promise to deliver a technology of subjectivity that will solve social problems from crime and poverty to gender inequality by waging a social revolution, not against capitalism, racism and inequality, but against the order of

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the self and the way we govern our selves” (1996: 97). Similarly, the initiative to create happy Mexican mothers with increased self-esteem masks the harsh reality of the instability of the Mexican economy, the precariousness of work, the continued practices of women’s subordination to patriarchal power relations, and the high levels of poverty and inequality. Implications for, and experiences of, mothers in Mexico Drawing on our interviews, we examined how mothers interpreted and responded to the CCT program requirements and how insecurity and vulnerability was experienced and framed by the mothers who were program beneficiaries. In the interviews, mothers were asked to identify what they liked about the Oportunidades program and what changes they would make to it. All mothers expressed gratitude and happiness about their inclusion in the program. They talked about how the health talks provided them with knowledge about their bodies, how to prevent illness, and information on how to help their children. The mothers indicated that the economic supports and information allowed them “to help and provide for their children.” While clearly appreciative of financial assistance, all mothers indicated that the monies were certainly not enough to absorb ongoing household expenses and children’s basic needs, and work possibilities were preferred to income supports. Themes of regulation and surveillance were identified in the interview data. While discussing their program co-responsibilities, the conversation sometimes turned to a discussion of the role of the vocales, or the members that constituted the “committee of community promotion.” In each local municipality a committee is set up to act as the liaison between the beneficiary and the government. The work of the vocales is to ensure that mothers abide by the program rules, including participation in “voluntary” community cleanup activities. Through this program, mother’s social reproductive activities are extended to the public sphere. Mothers must care for the cleanliness of the school, the clinic, the church, and any other place health professionals and the vocals required. While officially the cleaning activities are considered voluntary work and ostensibly do not result in the loss of benefits if foregone, this is not the perception of many mothers. Many resign themselves to participating in volunteer activities because they see it as a trade off for monetary gain. One mother stated: “The vocal treats us badly, but I am afraid of complaining because I fear being removed from the program.” Another mother expressed, “in this program, one has to work, if I don’t do what they want then I receive less money.” While some mothers


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voiced no complaints about the vocales, others talked about these women as a new layer of authority within their community. Attendance records by the teachers and the doctors can also be seen as measures that enforced the good behavior of mothers, even if the teacher or health professional was seen to be abusing his or her power. Many indicated that they put up with badly behaved nurses, doctors, and teachers because they were afraid their complaints would result in reduced support payments. One mother said, “The nurse is always in a bad mood, we put up with it because we are afraid of her and we are afraid of complaining because she’ll find out and then mark us as absent.” Another mother explained, “Getting into the program is based on luck, so I am afraid of denouncing these people [health care workers] because they will blame me and then I’ll be out of luck.” The mothers’ responses suggest that the fear of having their bimonthly payments reduced through recording sheets that mark them absent operates to regulate their behavior, even if they believe they are being treated unfairly. While the mothers feel outraged, their economic situation renders them vulnerable and thus many do not complain. In 2004, President Vicente Fox implemented a transparency mechanism called Citizen Attention as a measure to increase public accountability and counter political corruption. It offers a number for citizens to call to get information on the program and to launch complaints against program beneficiaries. The center received many calls denouncing families, reporting on their misuse of funds and their ineligibility for the program. This effect of this mechanism, which operates as a snitch line, was to foster a “culture of denunciation.” Mexican anthropologists Ivonne Vizcarra and Xóchitl Guadarrama (2007) have found that the denunciations are most often aimed at the mothers within the program. The government has essentially created a surveillance mechanism where individual families can inform the government of their neighbors’ activities. The majority of mothers interviewed indicated that, while they were aware of the office of Citizen Attention, they never used it. Nevertheless the threat of being reported is always present and this mechanism has contributed to mothers’ vulnerability and insecurity. Moreover, the adult education component of the program had mixed results for mothers. Mothers talked about their experiences as students of Adult Education. Their comments reflect Kathy Pitt’s argument that adult literacy can be both rewarding and persecuting (2002: 252). For example, the experience of learning was welcomed and embraced by some of the mothers. One mother talked about how she loved to study. She was making great progress in her studies and she was going to use

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her new knowledge to launch a small business. This mother stated, “I love learning and I do not want to miss another opportunity to obtain an education.” Other mothers were not as enthusiastic. Many stated that they neither had enough time nor energy to attend. Some said that their children had to help them with their homework. Another mother told us that studying gave her a headache and was making her ill. While taking exams is mandatory, it is not contingent on continued program support. Nevertheless studying seemed to add additional stress to the lives of these mothers. Pitt points out that adult literacy is tied into forms of self-government and assumes that mother’s time is constantly available for their children’s needs and cognitive development (2002). From their interview data, Vizcarra and Guadarrama argue that Mazahuas, mothers who are beneficiaries of the Mexican CCT, are demanding their right to time (Vizcarra and Guadarrama 2007). These extra roles are supposed to be empowering to mothers. However, they are ultimately geared toward obligating, changing the behavior of, and regulating mothers. In Mexico, the concept of being a good mother is reinforced by adherence to program regulations, which dictate that they send their children to school, do their homework, and become re-educated on advancement of their children’s brain stimulation and preventive health self-care.

Conclusion Despite the two very different contexts examined in this chapter, a number of points of commonality can be identified that contribute to an understanding of processes of post-neoliberalization and the ways in which these processes represent neoliberal continuity and/or offer possibilities for better state support of families and mothers. First of all, in both cases, the processes of governance through which postneoliberal subjectivity is being shaped include surveillance and intervention, as well as attempts to involve subjects as active participants in their own self-regulation, resembling the ways in which neoliberal collective subjectivity was organized in the past. Practices of intensive mothering which form part of the ideal of middle-class parenting, and from which middle-class children are more likely to benefit, are embraced (to a certain extent) by middle-class mothers, and encouraged in more directly coercive ways through education and surveillance in non-middle-class mothers in both Canada and Mexico. The educational campaigns described here, and the practices that emerge around them, not only provide information, they also aim to change taken-for-granted


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understandings about proper mothering behavior, and thus contribute to the creation of self-disciplining, self-sufficient, and self-improving citizens in both the present (mothers) and the future (children). In both cases studied, mothers were a primary target of state efforts to enhance the potential of children, and the extra responsibilities that accompanied this fell on the shoulders of mothers, rather than on fathers or the state. These processes are thus drawing on and contributing to cultural ideals of motherhood and gendered inequality in the family. They contribute to the intensification of parenting and the shifting of responsibility for social ills and success from the collective to the individual, and to women in particular. Failure becomes both individualized and gendered, and mothers who do not take advantage of the opportunities provided through the educational campaigns have no one but themselves to blame for their own difficulties and the future difficulties of their children. The increased workload resulted in increased stress for mothers in both settings. Not taken up in the discourse that surrounds the educational campaigns is the fact that intensive parenting works best for mothers with ample resources and few demands on their time. Mothers are assumed to be constantly available for their children, and the fact that most mothers have many responsibilities that may include elder care, paid work, and several children to care of simultaneously is ignored. Women in both settings talked about the colonization of their time that resulted from the extra responsibilities, and the negative consequences this had for their emotional and physical health. Finally, though, it is important to point out that there are real gains to be derived for children and families from the investments being made by states in both cases. There is no doubt that some material gains, illness prevention, and parenting information resulted from these postneoliberal policies that was valuable to women and beneficial to children. Furthermore, potential exists, in particular in the Canadian situation, for groups to make use of and appropriate the discourse that surrounds the investment in children to increase social support, state-funded care, and parental benefits. The processes examined in these case studies, not surprisingly then, act to both strengthen and challenge neoliberal hegemony. Regardless, though, of the extent to which the policies, programs, discourses, and practices examined here can be said to represent developments beyond neoliberalism, the examination of the processes themselves can contribute to better understandings of the diverse ways in which neoliberal governance is changing, the implications of those changes, and the potential space for resistance that exists within them.

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Notes Data for the Canadian section of this chapter came, in part, from interviews with 14 mothers of preschoolers in southern Ontario in 2004 to explore their experiences with recent child-rearing advice. Interviews were semi-structured with mainly open-ended questions and were one to two hours in length. Most of the mothers came from two-parent, above average income families and all had postsecondary education. Data for Mexican section of the chapter is based on interviews with 65 poor mothers, who were beneficiaries of the Mexican Conditional Cash Transfer (CCT) program in 2005. Interviews varied in length from 25 to 40 minutes. The authors would like to acknowledge the funding support provided for this research by grants from Wilfrid Laurier University. 1. Between 1997 and 2000, the Mexican CCT program was referred to as Progresa and from 2000 to the present it is called Oportunidades. The Mexican CCT program and Oportunidades will be used interchangeably throughout the chapter.

13 Neoliberalism’s Agnosticism: Domestic and Immigration Policies and the Model Family in Canada and the United States Lois Harder Introduction The struggle for the recognition of increasingly diverse forms of intimate life has coincided with the adoption and consolidation of neoliberal forms of governance in Canada and the United States, and indeed, in virtually all Western societies. But does this correlation reveal causation? It is entirely possible to read Canada’s extension of most marriage rights to common-law relationships in 2000 and the recognition of the marriage rights of same-sex partners in 2005 as, simultaneously, a post-neoliberal shift toward greater social inclusion, the consolidation of neoliberal governance through the extension of private obligations of support to a wider array of citizens, and the successful struggle for the extension of human rights to excluded groups of citizens. It is also possible to read the passage of the U.S. federal Defense of Marriage Act (DOMA), at the other pole of legislative innovation around relationship recognition, as a conservative (as in nonliberal) defense of the institution of marriage; a neoliberal impulse to limit public outlays by restricting the range of legitimated relationships through which Americans might claim public entitlements; and the successful struggle to resist the extension of human rights to excluded groups of citizens.1 If we are to make a positive claim about the relationship between these diverse developments and neoliberalism, it would be to observe neoliberalism’s incomplete explanatory force and its malleability to the political contexts of distinct nation-states (Clarke 2000: 205). Even if increased family diversity can only partially be explained by the onset and consolidation of, or the shift beyond, neoliberalism, we can still ask whether neoliberalism has a “preferred family model,” and examine if and how that model is expressed in public policy. 215

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Neoliberalism’s Agnosticism

As the contrast between the Canadian and U.S. approaches to legitimated relationships between adults already suggests, neoliberal governments have taken contradictory approaches to the recognition of family diversity. In this chapter, through an analysis of recent developments in Canadian and U.S. law concerning relationship recognition in domestic and immigration contexts, I argue that while neoliberal theory and practice can be inattentive to family form (marriage, domestic partnership, sexual identities, conjugality), neoliberal governance nonetheless expresses a deep reliance on a specific set of ideas about family function. These ideas include a fetishized distinction between the private and the public, self-support, self-sufficiency, and socialization to these and related norms. Particular political contexts and social values may thus enable some variation in form, but there is a remarkable similarity in Canadian and U.S. policy about the kinds of tasks that families are expected to perform. My analysis will proceed by exploring neoliberalism’s unspoken assumptions regarding the family and its role in facilitating private accumulation. Particularly notable here is the extent to which (classical, neo- and post-neo-) liberal readings of the family presume that membership in a state-endorsed family form (e.g. marriage) is synonymous with performing its associated functions. Intervention to ensure that these functions are actually performed is eschewed in the name of family privacy. The liberal state transgresses the sanctity of the private family only when familial relationships break down, in the presence of reported violence.2 Recent domestic policy developments concerning family diversity in Canada and the United States, especially their expression in the context of immigration policy, will provide the empirical support for the contrast between Canada and the United States, as well as their common expectations regarding the role that legitimated family forms are expected to play in contemporary governance. I conclude by reiterating the contention that neoliberalism’s consistency regarding privatized family support also allows for a range of family forms. It remains to be seen whether more kinds of families equate to more sites for neoliberal normativity, or whether new structures for intimacy might provide alternative forms of solidarity through which to resist the alienating consequences of neoliberal accumulation strategies.

Liberalisms and the family Not surprisingly, critical theorists, and particularly feminists, have taken the lead in revealing that classical liberal theory, in its celebration of

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freedom and rationality, relied on a man’s dominion over his private household as the basis for political participation in the public realm (Pateman 1988; Brown 1995). To establish this dominion (and political society more broadly), domestic life needed to be organized accordingly, a feat accomplished through marriage laws, patrimonial inheritance laws, and slavery (Stevens 1999; Cott 2000).3 Although the majority of the population in the Enlightenment era did not embody the bourgeois liberal family model, over time, its normative force shaped law and policy, casting a specific form of the family—the nuclear family, with its attendant gendered and racialized forms of power—as the “natural” order (Coontz 2005). Indeed, “naturalizing” this family form was an impressive political accomplishment, requiring vigilant legal, social, and political attention to sustain its alleged given-ness. In addition to its political uses, this family model also served the interests of capitalism’s logic of accumulation. The separation of productive from reproductive functions that distinguished capitalism from its feudal predecessor meant that most surplus-generating work occurred in industrial facilities, while the care and support that ensured the preparedness of workers to participate in the labor market, happened in private households (Seccombe 1993). At the same time, Barrett and McIntosh caution us not to draw this boundary between public/production and private/ reproduction too sharply, noting that women also engaged in productive work by taking on additional household tasks for pay (1982: 90). The explicit relations of subordination supporting this liberal capitalist order posed considerable logical difficulties for its sustaining ideology. Marginalized subjects, whose identities were forged by, and in relation to, their exclusion from freedom, equality, and rationality, mobilized against oppression by insisting that liberalism should live up to its claims to universality. This task is, of course, still underway, registering some rhetorical and material successes but also confronting intensifying inequalities. Arguably, the period of the Keynesian welfare state (KWS) represented one of the most significant periods during which liberal modes of governance confronted their internal contradictions. At its inception, of course, the KWS continued to embody gendered, racialized, and other forms of social exclusion. For example, policies of full employment were, in fact, directed at white men while married white women were often explicitly banned from participation in the labor market. Racist hiring practices that excluded Black men and racialized immigrants from well-paying industrial jobs, compelled women in these communities to find work to support their families, including serving in the

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homes of white bourgeois families (Mink 1995; Stacey 1996: 40). In terms of a preferred family model, the KWS expressed its preference for the nuclear family through policies such as the family wage, stringent divorce laws, and unwillingness to maintain child care services. But the welfare state’s claims to ensure equality were soon confronted by civil rights struggles; new left, feminist, peace movement; and student activism, and the strictures that ordered a highly patriarchal and racist social order were slowly and incompletely liberalized. The fact that the pressure for this reordering occurred in concert with the collapse of the Keynesian boom fueled claims that Western societies had reached a “crisis of ungovernability” (Offe 1984), to which neoliberalism, with its emphasis on individualism, freedom, and a weakened state sector, was alleged to provide the solution. Neoliberalism, in governing through freedom (Rose 1999) and avoiding political contestation over moral issues and the constitution of the good life (Yeatman 1994), repeats liberalism’s originary tendency to simultaneously rely on and disregard the reproductive role of families. Distinct from its classical liberal predecessor, however, neoliberalism must contend with successful struggles for the recognition of human rights, and thus the explicit subordination of racial and ethnic groups, sexual minorities, and women is restricted. Moreover, in its libertarian form, neoliberalism resists prescriptive claims about the organization of social life, with the caveat that whatever people choose to do, it must support capital accumulation. In this approach, contract increasingly prevails over status, enabling individuals to organize their intimate lives as they see fit (Cossman 2005: 420; Cohen 2002: 74).

Form and function Neoliberalism has thus been described as being “agnostic” on the issue of family form (Cossman 2002: 182). And it is this agnosticism that helps to explain why two neoliberal states—Canada and the U.S.—can diverge quite markedly on the range of legitimated relationships supported by their respective legal regimes. Canada, for example, recognizes marriage between different and same-sex couples, common law relationships between same and different sex couples, and even nonconjugal relationships in the province of Alberta. In the United States, heterosexual marriage maintains its pride of place, with some notable gains, and recent losses for the recognition of same-sex partners (Duggan and Hunter 2006: xiii). With regard to the former, it is possible for same-sex partners to marry in Massachusetts, and form domestic partnerships

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or reciprocal beneficiary agreements in a number of states and municipalities. In other U.S. locations, however, common law (or cohabiting) relationships, regardless of whether their participants are of the same or different sex, are illegal. It is evident from this brief cataloguing that neoliberalism’s agnosticism leaves open an important site of contestation, and allows for national as well as intra-national distinctiveness in which historical processes, political norms, and moral values can assert themselves. This finding concurs with a substantial portion of the literature on neoliberalism, cautioning political analysts to attend to the details of encounters between neoliberal ideas and specific political configurations (Esping Andersen 1996; Clarke 2004: 88–105; Jessop 2000: 177–80; Hoberg 2002). As Peck and Tickell assert, “where there is politics there is always the scope for geographical unevenness and path-transforming change. Somewhat paradoxically … the outcome [of neoliberal hegemony] is not homogeneity, but a constantly shifting landscape of experimentation, restructuring, (anti)social learning, technocratic policy transfer and partial emulation” (2002: 396). Agnosticism and the encounter with specific historical and political practices and institutions can explain variability in the relationshiplegitimation policies of neoliberal states. However, I also want to emphasize that agnosticism is not atheism, and that neoliberal governance has explicit expectations with regard to family function, even though it is pointedly ambivalent with regard to family form. In order for the productive functions of capitalism to be realized, a considerable degree of reproductive work must be undertaken. And because neoliberal governance works to limit or abolish state-provided support services, this work is shifted to the private sphere. Particularly when labor markets are competitive and wages are low, the expectation that people will secure their welfare through private means creates a situation in which family members, rather than paid service providers, take up these reproductive tasks, generally at the cost of their own leisure and reproductive requirements. Thus, while neoliberalism does not necessarily require a nuclear family, some kind of family is necessary to fulfill these supportive functions.4 Neoliberalism’s aim to familialize the provision of care and thereby reduce demands on the public purse thus enables the relationship regimes of both Canada and the United States to be understood according to its terms, despite the very different approaches that these countries take. In Canada, the rationale that more legitimated family forms offer more efforts to privatize support obligations is expressed in policies that appear to extend equality rights while decreasing demands on public

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resources. Both of these rationales can be seen in the Supreme Court of Canada’s ruling in M v. H. In this decision, the Court held that same-sex common law partners should be included with different-sex partners in Ontario’s Family Law Act for the purposes of spousal support. The Act explicitly states its purpose as providing some relief from the financial hardship which resulted from the breakdown of that relationship and to reduce the demands on the public welfare system (M v. H 1995). Indeed, by excluding same-sex couples from accessing private means of support, the court ruled that the law “would impose additional costs on the taxpaying public” and thus that different and same-sex couples should be treated equally in law (M v. H. 1995). In the context of policies to support people with low income, the rationale of supporting private provision by recognizing more family forms is even more intense. While the federal government requires that two people must have lived in a conjugal relationship for at least 1 year before the state imposes obligations of mutual support, and provinces impose time limits varying from 2 to 5 years (except Quebec, which requires couples to register before obligations are imposed), at least two provinces (Ontario and Alberta) have chosen to disregard these time limits in the context of social assistance. These provincial governments presume that when a woman and her child share a residence with another adult, but particularly when that adult is a man, they constitute a family, and the income of both adults can be shared and is available for the support of all household members (Ontario 1997; Alberta 2003).5 People who are categorized as “the working poor” have experienced a similar phenomenon. On the basis of the income declared on people’s tax returns, people with low earnings are assessed for receipt of a series of tax credits. And while part of the purpose of these credits is redistributive, the fact that eligibility is assessed on the basis of family income (whereas the individual is the standard unit of taxation in Canada), and the cutoff level is quite low, results in fewer people gaining access to these benefits (Harder 2007 and 2003). This effect of reducing eligibility is further intensified by the expansion of the definition of spouse. In contrast to Canada, neoliberalism’s family preferences in the U.S. case keep strictly to the path of marriage. In policy terms this preference for the marriage form is expressed in eligibility criteria for public and private benefits, in the passage of Defense of Marriage legislation—including efforts to constitutionalize heterosexual marriage at both the state and federal levels—and a strong rhetorical commitment to marriage over legitimating other forms of domestic relationships.

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Effectively the message is that marriage is good for society and more people should engage in it and take its foundation in a lifelong commitment seriously. As with the Canadian case, the expression of the American neoliberal family model is especially evident in the context of income supports to the poor. Three of the four objectives of Temporary Aid to Needy Families (TANF), the federal funding mechanism for U.S. “welfare” programs, identified marriage and family as central to the objective of poverty reduction.6 When this legislation was reauthorized in the Deficit Reduction Act (2005), marriage was again identified as a central means for combating poverty, with $150 million earmarked for programs designed to promote marriage and responsible fatherhood. Supported by reams of social science research, evidence for the link between marriage and reduced poverty rates is claimed to lie in the fact that single parents have far higher rates of poverty than married couples (US Government 1996; Wisensale 2005). Moreover, in addition to asserting that marriage results in material well-being, signing on to the marital form is also claimed to result in greater emotional health which might possibly increase productivity, and may also encourage long-term investments in skills and assets (Acs and Nelson 2004: 4–5). In sum (and in its neoliberal inflection), the argument runs that if more people living in low income, especially single mothers, could be encouraged to wed, the state would be less burdened by demands for income support, crimefighting, funds for special-needs children and health care. Marriage is claimed to produce a robust middle class, and a robust middle class does not rely on the state to satisfy its needs. If marriage is a key institution for the delivery of social order and the reduction of demands on public benefits, it would suggest that more marriage should be encouraged since the marital form is presumed to produce economically and socially desirable functions. Yet when we turn to marriage between same-sex partners, U.S. governments have responded by attempting to restrict marriage to heterosexual couples, most notably through the Federal Defense of Marriage Act and a similar series of state laws and constitutional amendments.7 Neoliberal arguments have been mobilized to reinforce this opposition to marriage between same sex couples, on the basis that the extension of marriage rights would cause a drain on public coffers and increase business costs for private employers (Hatzele and Purcell, 2004: 3–4). Some evidence of the concern to limit public outlays for pension funds can be seen in the DOMA’s explicit refusal to recognize marriages that do not conform to its own definition, and thus to limit the number of “spouses” eligible for

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Social Security benefits or private pension plans. Because Social Security is a federal program, the federal definition of marriage (as between one man and one woman) applies to its administration.

The immigration context Until now I have been arguing that liberal models of the family, and neoliberalism in particular, have presumed that the presence of a legitimated relationship form ensures a set of desired functions. The strength of this presumption, coupled with the valorization of privacy and the principle of nonintervention in the private sphere, means that the (neo)liberal state does not actually step foot, in any obvious way, into functioning families to oversee the redistribution of income and the provision of adequate care in those families that it legitimates. The immigration context, and particularly the area of family-class immigrants and spousal sponsorship, complicates this set of claims. While domestic policy and political campaigns are quick to celebrate the family, immigration law, in both Canada and the United States, is suspicious of family ties, insisting on extensive proof to determine the existence of the relationship form. Whereas domestic policy presumes that when people marry they mean it, and, in the Canadian case, that when they live together in a conjugal relationship8 for a period of a year that they can be presumed to mean it, the realm of immigration law is far less willing to accept the legitimacy of even declared relationships. In these cases, evidence of function is required to establish the existence of form. Again, however, a central underlying motivation for the skepticism regarding whether or not a relationship actually exists is driven by a desire to ensure self-support and guard against unwanted demands on state resources. The Canadian case provides a particularly fascinating juxtaposition of a domestic willingness to see relationships where they are not declared, at least in part because more families offer more opportunities to privatize support, and an immigration context in which those same relationships are regarded as a burden on public resources and require an extensive body of evidence to assure their validity. Over the last two decades, Canada has dramatically reduced the number of family-class immigrants it has admitted while sharply increasing targets for independent or economic class immigrants (Abu-Laban and Gabriel 2002; Macklin 2002).9 Whereas the targets had been approximately 43 percent economic, 51 percent family, and 6 percent refugees in the early 1990s (Abu-Laban and Gabriel 2002: 66), by 2007, Canada’s immigration projections were 60 percent economic, 26 percent family, and 14 percent

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refugees, humanitarian, and compassionate, and other (Citizenship and Immigration Canada 2006). The reduction in family class immigrants stems from a perception among policymakers that people in this category are “non-contributing.” The admission of members of the family class is often interpreted as, at best, an act of humanitarian compassion, rather than as serving the reproductive needs of “independent” partners or sponsors, or as workers themselves (Abu-Laban and Gabriel 2002: 66). At worst, family class immigrants are represented as possible fraudsters who may be seeking entry to Canada on false pretenses, and/or as a drain on state coffers whose potential to impose on public services must be curbed by requiring sponsors to personally assume support obligations and the costs of settlement. Mediating the harshness of this assessment are two important recent reforms: the reduction in years of sponsorship obligation from ten to three for spouses and the expansion of relationship categories to include common-law and conjugal partners (for both same- and different-sex couples) (Abu-Laban and Gabriel 2002: 83). In the United States, by contrast, family class immigrants receive greater preference than economic class immigrants. For the fiscal year 2007, the U.S. Department of State reported that the number of family-sponsored immigrants was targeted at 226,000 (or 58 percent of the total) while the number of employment-based immigrants was 147,148 (or 22 percent) (2007). Family reunification has been a priority for U.S. immigration policy throughout the twentieth century, for reasons ranging from the centrality of family to American political values (Wasem 2007: 3) and resistance to economic immigrants for fear of job loss (Jacoby 2006) to a lack of political traction for alternative priorities.10 Nonetheless the American preference for family reunification in its immigration policy evinces an, arguably, even more intense concern for false representation and fraudulent claims to family status than in Canada. Bonnie Honig (2001) argues that the vehemence with which U.S. legislators and immigration officials pursue verification of a legitimate relationship stems from the role that foreigners play in reenchanting the American nation-state. If family immigrants are to perform this function properly, they must be engaged in “proper” marital relationships based on love. An economic rationale or the desire to pursue a different life in a different country are not seen as acceptable, since these ulterior motivations are seen to offend against an idealized form of marriage. Honig observes, Such loveless marriages are seen as doubly dangerous (certainly more dangerous than all the other loveless marriages in the nation)

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because they disenchant two of the nation’s most beloved institutions: the institution of marriage, which foreign brides [for example] are supposed to help prop up, as well as the institution of citizenship, which is supposedly damaged when immigrants acquire it improperly. The affective health of both institutions depends upon immigrants’ being attracted to them not for the sake of money or other worldly goods but rather for the sake of a love, devotion, or virtue that is seen as prior to the institutions in question and not as one of their ideological effects. (2001: 91) Honig’s elegant and persuasive argument extends the rationale for immigration well past economic instrumentalism. Nonetheless there are also (neo)liberal arguments at play in the United States’ emphasis on family reunification that might be noted. One might observe, for example, the important social reproductive functions that family class immigration can fulfill, which as noted above, have become increasingly important as state services have diminished. As well, and in distinction from the Canadian case, American policy makers do not necessarily understand immigrant family members as nonworkers. Tamara Woroby asserts that a consequence of America’s family reunification emphasis has been an increased flow of low-skilled workers to the U.S. (2005: 254–5). While Woroby laments this outcome, Tamar Jacoby sees this as a positive development, arguing that the U.S. labor market is about to confront a dramatic decline in the number of unskilled workers, and hence immigration can make up for the shortfall (2006). As with the domestic contrasts between Canada and the U.S., the realm of immigration law also demonstrates the flexibility of neoliberal arguments in making sense of contemporary conditions. The immigration manuals of Canada and the U.S. provide the “how to” descriptions for assessing whether a relationship meets the criteria of both form and function necessary for sponsorship. Canada’s Operations Manual for processing members of the family class was updated in November 2006, and is primarily devoted to defining relationship forms in order to accommodate developments in domestic law and outlining standards of proof for the existence of a relationship.11 Sponsorable relationships between adults who are not blood relationships are now defined as marriage, common-law, and conjugal. For the purposes of immigration law, a marriage must be valid in both the country in which it occurred as well as in Canada (Canada 2006: 23), although, interestingly, even after Canada legalized marriage between

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same-sex partners, foreign marriages between same-sex partners were not considered valid (ibid.: 30).12 A common-law relationship requires that the couple live together continuously in a shared residence and in a conjugal relationship for at least 1 year prior to the immigration application (ibid.: 28). Finally, a conjugal relationship, a category that does not correspond to any relationship in domestic law, applies to two people who are mutually committed to each other but do not share a residence.13 This category was created primarily to cover same-sex couples in countries where fear of persecution would not permit them to establish a co-habiting household or to marry, but might also apply to a different sex couple who, due to religious, legal, or familial sanctions, found themselves similarly constrained (ibid.: 31). Clearly, assessing the validity of the category “conjugal relationship” poses the greatest difficulties for immigration officials, since the types of evidence that could be used to establish a shared life are unavailable. To determine the validity of both marriages and common-law relationships, the processing manual lists a number of criteria that can be used to determine a shared life, including joint tenancy or property ownership, joint utility bills, joint bank accounts and credit cards, evidence of joint purchases, mutual attendance at family functions, shared values, and knowledge of each others lives (ibid.: 21–2). Through documents and interviews, intimate partners must attest to their mutual commitment by exposing the details of their lives and by providing evidence of an intimate life organized according to the state’s fantasy of how adults should live together. And while the Operations Manual states that not all of the evidence it seeks must be present in order to confirm the validity of a relationship, how much is enough is left to the discretion of immigration officials. Effectively, Canadian immigration regulations (and Canadian law generally) have extracted the condition of conjugality from marriage and used it to identify relationships of sufficient interdependency and intensity to create a reliable bond of support. Nonetheless there is a distinction between the domestic and immigration contexts. In immigration law, conjugality is defined as involving all of the following characteristics: • exclusive—cannot be in more than one conjugal relationship at a time; • intimate—commitment to sexual exclusivity; • interdependent—physically, emotionally, financially, socially; • permanent—long-term, genuine and continuing relationship; • present themselves as a couple;

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• regarded by others as a couple; • caring for children (if there are children). (Canada 2006: 19) At the level of domestic politics, however, courts have ruled that a conjugal relationship may not necessarily include all of these features (Molodowich v. Pentinnen), noting that many marriages fall well short of this standard but are considered legitimate nonetheless. In particular, the necessity of a sexual relationship has been singled out as unnecessary to defining a relationship as conjugal, since many sexual relationships are not committed, and many committed relationships are not sexual (Cossman and Ryder 2001; Gavigan 1999; Holland 2000; LCC 2001). The flexibility of the definition of “conjugal” at the domestic level can thus assist in expanding the array of relationships that might be called upon to provide support, even as this recognition also signals a sensitivity to the contemporary (and historical) organization of many people’s lives. This flexibility, as the strictness of the definition of conjugality attests, has not been extended to the immigration context. Among the peculiar consequences of Canada’s expansion of legitimated relationships for the purposes of family sponsorship is that the category of “fiancé(e)” is no longer deemed to represent sufficient commitment to merit consideration. According to the Operations Manual, Canadian immigration is no longer interested in determining people’s future intentions to marry (2006: 32). Further, Canadian immigration law understands fiancé(e)s to be distinct from co-habiting and conjugal partners on the grounds that because they have an intention of marrying, but have not yet done so, they are not yet sufficiently interdependent to merit their inclusion in one of the nonmarital categories (ibid.). Moreover, the regulations observe that “traditional” fiancé(e)s would be unlikely to have established a sexual relationship, and hence would not meet that criterion of the conjugality test (ibid.). Canada’s definition of an appropriately functioning relationship would thus seem to suggest that premarital sex is an immigration requirement. Because the United States federal government recognizes marriage between only different-sex couples, the regulations governing spousal sponsorship in U.S. immigration law are far less elaborate than the Canadian example. Nonetheless the field manual for U.S. immigration officials does offer some important insights into the expectations of a functional relationship and, like the Canadian case, the regulations’ focus is centered on evidence of sufficient commitment between the

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partners—in addition to the financial commitment articulated through the sponsorship agreement. United States regulations stipulate that a marriage that was valid in the country where it was performed will be considered valid in the U.S., as long as it is not considered offensive to U.S. public policy (USCIS 2007: chap. 21, sec 101(B)). Intriguingly, the regulations note that plural marriage represents such an offense, but at this juncture in the manual, they do not state that same-sex marriage is similarly offensive. The flipside of the valid-marriage provision requires that if the partners were previously married, that they be legally divorced. As with marriage, the divorce must also be valid under the laws of the country in which it was pronounced. The regulations are very clear that a legal separation is not adequate and that people who were married in countries where divorce is illegal, such as the Philippines, will have to gain a divorce before they are “free to marry” and hence eligible for sponsorship (ibid.). The United States does make provision for fiancées, issuing a 90-day temporary visa to the foreign prospective spouse. If the marriage does not occur within this period, the fiancé(e) is obliged to leave. Whereas Canadian immigration law imputes a degree of suspicion on the fiancée category and describes such people as not yet sufficiently committed, this suspicion is mediated in the U.S. case, by conferring a conditional residence status on “aliens” (USCIS 2007a: chap. 21 sec 101(7)). The United States Citizenship and Immigration Service has recently come under criticism for its overreliance on documentation provided by applicants to prove the existence of relationships (and the validity of divorces), and for the insufficiency of resources designated for interviews and more extensive forms of investigation (Wasem 2007). That is, immigration officials are being chastened for an overreliance on form to presume function. In addition to the issue of national security, the concern here is that marriages may be entered into under false pretenses and that documents might be forged in the interests of providing evidence of a shared life. This anxiety persists despite 1986 immigration amendments that impose conditions of residency on recently married sponsored spouses (USCIS 2007a: Chap. 21, sec. 25.1). Whether or not the practice of investigation into relationship function lives up to the expectations of the regulations, the field manual articulates a very clear sense of what a proper marriage is to look like. For example, partners are not to demonstrate too great a disparity in age, their friends and family should be aware of the relationship, and they should not vary too greatly in cultural and ethnic background (USCIS 2007a, Chap. 21 (G)).

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As well, and as with Canada, interrogations into the details of the relationship are expected as the price of future citizenship.

Conclusion This exploration of relationship legitimation laws in Canada and the United States has attempted to show the extent to which neoliberalism might be used to explain the contemporary politics of relationship diversity in these two countries. In the context of domestic policymaking, I have argued that neoliberal states are primarily concerned with regulating the form of relationships and that form is used to presume function. Whereas Canada has increasingly equated marriage and common-law relationships, and has understood these relationships to be alike regardless of whether the partners were of different or same sex, the United States federally, and in many states as well, has reinforced the marital form, complete with a protective bulwark around its heterosexuality. The emphasis on legitimated form has made it possible for states to presume function, a presumption that enables the reduction of public programs and privatization of social welfare, in the belief that families will readily shoulder these shed responsibilities. The objective of the discussion of the domestic legal context was to demonstrate the agnosticism of neoliberalism’s approach to the family. In its rigorous defense of the market and its antipathy to the state, neoliberalism has neglected any serious thinking about the familial scene, in essence repeating the presumptions of its liberal predecessor, but in a less overtly gendered way, and with a firmer rhetorical commitment to allowing people to structure their personal lives as they see fit. The degree to which this approach to the family is manifest in public policy is a product of the play of domestic politics—and here the contrast between the Canadian and U.S. political environment is readily apparent. The politics of relationship recognition in immigration policy complicates this story in important respects. In the context of borders, national security and chosen membership (as distinct from birthright membership), states find that their liberal costumes fit rather snugly and the exceptions of sovereign power begin to reveal themselves at the seams. No longer can the declared form of a relationship suffice to ensure that appropriate family functions, but especially the financial duties of sponsorship, will be performed. Detailed rules and extensive inquiries into how relationships operate are then used to assure the receiving state that the petitioning family member will not be an undue

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burden on the public resources of the new home country. These rules tell us much about how liberal states imagine that families function, even if states are not prepared to assure this function once they are persuaded that it exists, except in a financial way, in either the immigration or domestic context. Is it also possible to understand the political struggles and policy changes around family diversity as a post-neoliberal development? It is clear that the diminished relevance of marriage qua marriage in Canada and in some U.S. states has resulted from intense political struggles to expand the realm of legitimated relationships, struggles that have won their legitimacy in courts and ultimately in legislatures. These relationships do, I think, have some capacity to undermine the patriarchal traditions upon which marriage was founded. They certainly denaturalize the nuclear family and, as such, they make it possible to consider a wider array of possibilities for living in association with others and may be understood to stand at some distance from acquisitive logic of neoliberalism. At the same time, as critics of the same-sex marriage have observed, family diversity may also be incorporated into the circuits of contemporary capitalism—whether understood as post-neoliberalism or neoliberalism. Nonetheless while so much of neoliberal governance has sought to and succeeded in closing off alternatives, intimate life remains a dynamic site of contestation, invention, and, perhaps, alternatives.

Notes 1. It should be noted that many activists in the U.S. gay, lesbian, bisexual, and transsexual (GLBT) communities also oppose the extension of marriage rights to same sex couples. Their opposition is founded on a critique of marriage, including the limits that monogamous marriage places on the expression of sexuality and the range of options for organizing one’s intimate life. 2. The recognition of domestic violence as a legitimate concern of the state is one of the major accomplishments of feminist advocacy. For the purposes of this chapter, however, the family’s role in social reproduction will be my primary focus. 3. Jacqueline Stevens argues that membership in all political societies is a function of kinship rules. One of the key distinctions between states thus becomes the rules of membership. 4. Michelle Barrett and Mary McIntosh argue convincingly, that the nuclear family model is an ideological effect of capitalism and point out that while the nuclear family has certainly been a preferred family form, individuals have always lived in a diverse array of familial arrangements (1982: 81). 5. While a similar assumption should also prevail in situations where women share a residence, provincial welfare officials appear to be more inclined to

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Neoliberalism’s Agnosticism presume a common-law relationship in the context of different sex adults and to advise against such a presumption in the case of same-sex adults. See Alberta, Manual for Supports for Independence. These provisions are as follows: (1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; (2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and (4) encourage the formation and maintenance of two-parent families. Sec 104 Public Law 104–93 August 22, 1996, 110 STAT.2113 (http://wdr.doleta.gov/readroom/legislation/ pdf/104-193.pdf). The National Gay and Lesbian Task Force provides a map outlining where DOMA laws are in effect throughout the U.S. See www.thetaskforce.org/ downloads/reports/issue_maps/Marriage_Map_06_Nov.pdf. Ascribed status may also be imposed on a nonconjugal relationship, in the case of Alberta, although the partners must hold themselves out “as a couple.” See Harder, forthcoming. Family class immigrants consist of close relatives—spouses, partners, minor children and grandparents—who live abroad and wish to join a permanent resident or Canadian citizen in Canada. Independent-class immigrants are required to qualify under the points system (which selects immigrants on the basis of skill, labor market need, age etc.). The family members of independent immigrants are categorized as “accompanying family members.” The rules of kinship are the same for both accompanying dependents and family class immigrants. (Macklin 2002: 240). In a recent report to Congress, Ruth Ellen Wasem summarizes the variety of immigration legislation proposed over the last 3 years. The motivations for this legislation extend from a desire to limit family reunification to the “nuclear” family; an attempt to drastically reduce immigration across the board; to include nonmarried partners as part of the definition of family; and to reverse the ratio of family 2002: 240) migrants. See Wasem 2007. “Blood” relations are also an important component of the family class, but for the purposes of this discussion, I will focus my attention on the regulation of relationships between intimate partners. The Ottawa Citizen reported that Canada’s Conservative government had moved to recognize foreign marriages between same-sex partners in January 2007 (Godbout: A4). However, at the time that this chapter was going to publication (May 2008), the Operations Manual had not been edited to include this change, and states that a Canadian may sponsor her same-sex partner under the categories of common-law or conjugal relationship. While the condition of conjugality applies to marriage and common-law relationships as well, Canadian immigration law also distinguishes between “out” relationships and a distinct conjugal relationship category that includes “closeted,” if no less committed relationships.

14 Colombia’s Neoliberal Regime of Governance: Securitization by Dispossession Cristina Rojas

Introduction In contrast to many of the countries discussed in this volume, contemporary Colombia can hardly be viewed as a “post” neoliberal regime. The case of Colombia thus provides a useful corrective to the idea that all of Latin America is turning to the left, and indicates the complexity of current trends in the hemisphere. The current president of Colombia, Alvaro Uribe, has not continued with neoliberalism in the same manner as his predecessors; as both his critics and followers admit, he has transformed the way Colombians are governed with important consequences for the future, not all of which are positive. In the first place, President Alvaro Uribe has transformed the perceived relationship between the economy and politics. Contrary to the widely held belief that changes in the prevailing economic model are necessary to solve the structural conditions of poverty and inequality, Uribe has advanced the idea that conflict was the direct cause, not the consequence, of lack of economic progress. His “democratic security policy” is based on the notion that the elimination of conflict is a precondition for economic prosperity: Without security in the countryside and in the main roads, without certainty in the rules of the game and without conviction about the financial viability of the Nation, it would be very difficult to resume the road to economic recovery. For this reason, economic growth asks, above all, [for] the recovery of physical security, the restoration of judicial security and the fixing of state finances. (Presidencia 2002, Chapter II)

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Secondly, Uribe has transformed the dynamic of conflict between the state, guerrilla forces and the paramilitary. After several failed negotiations with guerrilla organizations, he promised a military victory over the guerrillas and negotiations with the paramilitary. He issued the Justice and Peace Law ( JPL) (law 975 of 2005) aimed at the demobilization of armed actors; close to 45,000 combatants, most of them paramilitary, have laid down their arms and are waiting for reincorporation into society. Having completed his first term in office (2002–6) and been reelected for a second, Uribe delivered a positive report to the Colombian congress (Presidencia 2007): in 2006 the GDP grew at 6.8 percent, the highest rate since 1978; foreign investment grew 194 percent since he took power in 2002. The report shows a decrease of 43.2 percent in the homicide rate; the yearly number of victims of massacres declined from 608 to 193 and the number of people kidnapped decreased from 3572 to 687. The report also shows slight progress in the proportion of people living below the poverty line (a reduction from 57.5 percent in 1999 to 45.1 percent in 2006) and in income distribution (the Gini coefficient decreased from 0.58 in 2002 to 0.54 in 2006). Despite this progress, his accomplishments have been viewed with some skepticism, including by prominent members of the U.S. congress (Pearce 2007; Arnson 2007a), and Uribe has been criticized by human rights defenders, organized labor and popular social movements. In this chapter, I argue that these two views are not contradictory. I contend that during Uribe’s presidency there has been a transformation of neoliberalism, with the state placing an emphasis on security as the objective of government and the road to economic prosperity. Under this rationality, the government selectively combines freedom with coercion and inclusion with exclusion. While a selected group of citizens see their rights and freedoms guaranteed, others are deprived of their property, means of subsistence and even the right to life. The paramilitary, multinationals and big landowners belong to the first group, while Indigenous groups, Afro-Colombians, peasants, trade unionists and women are overrepresented in the second. I characterize this strategy as “securitization by dispossession” where security for some means dispossession for many. This chapter concurs with those that see in “liberalism” a practice of government (Hindess 2001, see also the chapter by Mary Hawkesworth in this volume). In this understanding, the use of force and authoritarian methods of government are not exceptions to liberalism but a consequence of the liberal belief that not all are equally prepared to make

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choices or take advantage from the market; in those cases the use of force, including the declaration of war, is justified in order to transform them into liberal agents. The argument also concurs with David Harvey’s (2003 and 2007) view that dispossession is the neoliberal response to a crisis of both accumulation and class hegemony which allows the transfer of assets from the masses to the upper classes at very low cost. In Colombia dispossession has a long history, and has deepened under neoliberalism. In the past 20 years, 3.7 million people were internally displaced; these internally displaced people (IDPs) abandoned between 2 million and 7 million hectares of land that was illegally appropriated by powerful economic groups. This dispossession has contributed to one of the highest Gini coefficients of land concentration in the world.1 At the same time, many workers have lost their labor rights and 2515 trade unionists were assassinated since 1986 (ENS-UE 2005). The persecution and assassination of Indigenous and Afro-Colombians and the appropriation of their resources is a form of dispossession. Unlike other cases discussed in this volume (see the chapter by Mahon and Macdonald) and elsewhere (Craig and Porter 2005), which have centered on inclusion through enhanced social rights, in Colombia inclusion is carried out by extending the liberal component: the rights to protection. This rationale allows for the creation of feelings of inclusiveness and solidarity not based on redistributive benefits but on citizens’ participation in security operations.

Neoliberalism and conflict in Colombia during the period from 1988 to 2002 Since its adoption in the late 1980s, neoliberalism has coexisted in Colombia with a protracted conflict whose present cycle began in 1983.2 Before its adoption a main postulate was the need to modify the structural conditions of conflict (social, political and economic) simultaneously with negotiating with insurgents (Bejarano 2003: 240). Public investment was perceived as an instrument to reduce conflict; this policy was accompanied by recognition of the political status of guerrilla organizations and the opening of political spaces (Rangel 2001: 361). Guerrilla movements responded positively to this opening by creating new political parties like the Unión Patriótica (UP) and the Frente Popular. However, powerful economic groups and the armed forces perceived these negotiations and the prospects of political reform as a threat to their interests. Sectors within these groups, such as cattle

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ranchers, drug traffickers and banana exporters, opted to support counterinsurgent forces. The efforts toward a solution to the conflict continued during the neoliberal period carried out under two modalities: one is a strategy of “fragmented peace” where negotiation took place in small doses, dealing with guerrilla groups one by one and combined with the use of force (Gonzalo Sánchez 2001; see also Hylton 2006). The other is a strategy of “fragmented sovereignty” where the state allows the paramilitary to operate as a counterinsurgency force (Richani 2007). The governments of César Gaviria (1990–4) and Andrés Pastrana (1998–2002) illustrate this double strategy which accompanied neoliberal policies. César Gaviria adopted a neoliberal agenda promoting agribusiness; capital-intensive manufacturing; rentier speculation in land and urban real state; and multinational exploitation of petroleum, charcoal and gold (Hylton 2006: 82). He reduced public investment in the rural areas and lowered tariffs for agricultural products (CCJ 2006: 15). At the same time he opened up political space by establishing a Constituent Assembly that included members of demobilized groups as well as representatives of Indigenous organizations. Its product, the Constitution of 1991, is considered one of the most plural and inclusive of the region. The same day that voters were electing the members of the Constituent Assembly he ordered the bombing of the secretariat of the Fuerzas Armadas Revolucionarias de Colombia (FARC—Revolutionary Armed Forces of Colombia) guerrillas (Uribe 2001: 232). Drug-traffickers, guerrilla forces and the paramilitary flourished during this period. The country experienced a boom in illicit drug production: the share of coca leaf production rose from 20 percent at the beginning of the 1990s to 53 percent in 1998; the gross revenue for sale of cocaine in 1995 is estimated to be between US$5.5 billion and 7.3 billion (Berry & Barragán 2005), leading to the establishment of a narcobourgeoisie (Richani 2007). The FARC also profited from the growth of illicit drugs as the territories under their control were used for coca cultivation; it is estimated that by 1998, 80 percent of the surface area of the FARC-controlled territories of Caqueta, Putumayo, Vaupes, was covered with coca (Hylton 2006: 85). The organization expanded from 17 fronts in 1978, mainly in peripheral areas, to 105 fronts by 1994 and operated in 60 percent of Colombia’s municipalities (Hylton 2006: 89). Membership in the paramilitary also grew exponentially from 93 in 1986 to 27,000 in 2002 (Romero 2003: 26; CIP 2005: 4). The paramilitary collaborated with the narco-bourgeoisie and broad sectors of the population, including the army, politicians, local government officials

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and the private sector. It is estimated that in the past 10 years at least 480 mayors and 1200 city councilors have entered into agreements with the paramilitary and 2000 businesses have contributed to their finances (Rangel 2006). The paramilitary brutally opposed any attempt at political and economic reform. They declared war against the newly created political parties, especially the UP, trade unionists, teachers and human rights defenders; three presidential candidates in the 1990s were assassinated (Uribe 2001: 231).3 The number of massacres perpetrated by the paramilitary mushroomed from 286 in 1997 to 403 in 1999 (Hylton 2006: 93). At the same time, displacement of the population increased massively in the 1990s, totaling 3.7 million over a period of 20 years (CCJ 2006: 17). As part of the process of dispossession, members of the paramilitary gained ownership over between 2 million and 5 million hectares of agricultural land, including 48 percent of the most fertile land in the country (Richani 2007: 408–11). When President Pastrana was elected, he granted FARC a demilitarized area of 42,000 kilometers in the Department of Caqueta, and both sides agreed to a program that included agrarian reform, human rights promotion and socioeconomic restructuring (Hylton 2006: 99). Like his predecessors, Pastrana intensified the preparation for war, signing the Plan Colombia with President Clinton, a security strategy supporting drug eradication that was later adapted to the fight against terrorism.4 He also turned a blind eye to the paramilitary, whose organization Auto Defensas Unidas de Colombia (AUC—United Self-Defense Forces of Colombia) grew from 4500 to 11,000 combatants during his administration (ICG 2003: 13). Pastrana also maintained the neoliberal agenda, reaching an agreement with the IMF. While the negotiation with the FARC stalled, the demilitarized area became a sanctuary to the FARC whose troops turned themselves into a de facto government, holding thousands of victims of kidnappings (Hylton 2006: 99; Bagley 2005: 31). Toward the end of 1999 the FARC completely withdrew from negotiations. In 1989–99 the economy entered into its worst crisis since the 1930s; the percentage of GDP supplied by agricultural production declined from 43 percent in 1980 to 13 percent in 1998; coffee exports represented only 3 percent of GNP in 1998; the economy contracted 9 percent; and the country’s debt spiked from 34 percent of GDP in 1998 to 41.3 percent in 1999. Social indicators declined as well: poverty levels rose seven points to 57.5 percent between 1995 and 1999, unemployment levels rose to 18 percent and the rate of criminality peaked at 62.2 homicides per 100,000 (Hylton 2006: 85; Bagley 2005: 38; DeShazo et al. 2007: 7–8).

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Alvaro Uribe, at that time a presidential candidate, responded to popular discontent with this situation of extreme insecurity with a promise of peace. Peace, however, did not signify the resolution of conflict. For him, peace meant a country “without guerrilla and paramilitaries” (Uribe n.d.: par. 26). Using a law and order platform favored in the post 9/11 environment of the “war on terrorism,” he was elected in 2002 with over 50 percent of the vote, and reelected in 2006 with 62 percent of the ballots. He is still a free-market advocate and Washington’s closest ally in Latin America, and enjoying an unprecedented 70 percent approval rate during his 6 years in office.

The Uribe government Uribe ended the tradition of “fragmented peace” and “fragmented sovereignty” and replaced them with a two-track strategy: a military victory against the FARC and negotiation with the paramilitary to allow their incorporation into the political, social and economic structures of the country. In December of 2002, as part of this strategy, the government issued Law 782 which allowed it to negotiate with groups lacking political status, as is the case with the paramilitary. The leader of the paramilitary, Carlos Castaño, publicly stated his willingness to submit to this policy, which he summarized in the statement “we are going to stop being the lover and become the wife” (CCJ 2005b). As discussed later, the double-track strategy of total war against FARC and negotiation with the paramilitary indirectly favored the expansion of the neoliberal program. First, the incorporation of the paramilitary into society coincides with neoliberal policies of expansion of the export economy given the paramilitary’s stake in high-risk agribusinesses such as African palm oil and processing plants. Second, the paramilitary’s use of repressive methods against labor and peasants also favors the national bourgeoisie and multinational corporations (MNCs) engaged in the same business activities (Richani 2007: 413; Duncan 2007: 95). Third, the emphasis on “democratic security” encompasses and invites the active participation of citizens, encouraging their support of the government. The focus on a war against terrorism preempts the need for social reforms and depoliticizes conflict.

Securitization of economic development and the war against terrorism The objectives of Uribe’s development plan “Towards a Communitarian State” (2002–6) are the provision of security for all, the effective

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presence of the state in the national territory and the recovery of state control over the areas under the influence of illegal armed actors (Presidencia 2002). Security is a requirement, followed in importance by economic growth. The government also issued a policy of “Defense and Democratic Security” (DDS) (Presidencia 2003) which presents an inclusive conception of security. This inclusiveness is made possible by the identification of an external element which is presented as the main obstacle to the realization of peace and communitarian society: terrorism. In the president’s own words “the antipode of democratic politics is terrorism, which aims to impose by violence its will over others at the cost of the life to thousands of civilians … Against terrorism there is only one option: to defeat it” (Presidencia: 5–6). The military plays an essential role in the war on terrorism. Under Uribe’s mandate the size of the military increased 33 percent: from 192,000 in 2002 to 254,000 members in 2006 (Presidencia 2007: 34). The security budget is the largest in the history of the country, reaching 6.5 percent of GDP (Isaza and Campos 2007: 2).5 Military equipment improved substantially as well, thanks to resources from the U.S.financed Plan Colombia. The focus on a military strategy overwhelms financial support for social reform, as a significant part of the international aid and the national budget are dedicated to defense. In the case of Plan Colombia, 80.5 percent of the budget for 2000–3 was assigned to the military and police (CIP 2005: 245). National expenditures on defense projected for 2008 are equal to the sum of the support for health, education and the environment (Isaza and Campos 2007). The war on terrorism is being fought on one additional front: the mass media. The media plays an important role in the government’s strategy of disseminating the results of the war on terror to increase citizens’ confidence, solidarity and cooperation (Presidencia 2003: 64). The government demanded results from the institutions involved in the war against terrorism, including the army, and provided economic incentives to the population to buy their collaboration. This policy has severe consequences for human rights violations and for fostering authoritarian practices of citizenship (Rojas 2007). The promotion of “positives” illustrates this point: the government provides economic, professional and special prizes to those participating in operations of national importance, that is, the capture of insurgents (Decree 1400 May 5, 2006). As well, in response to government demands for concrete results in the war on terrorism, army commanders engage in practices like fabrication of “positives” to increase their effectiveness. They planted bombs and carried out terrorist attacks, provided extra benefits to soldiers granting them 5 days off duty for each terrorist killed, and assassinated innocent

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peasants to be reported as guerrillas killed in combat. The tactics also included an increase in mass detentions, disappearances and extrajudicial executions (Duzán 2006; Semana 2008; Coronell 2006; Rueda 2006). The human rights organization CINEP (2007) reported that 90 false positives were identified between August 2006 and June 2007; in one locality, Vistahermosa, there were 14 cases with 27 victims, 17 of whom were killed by extra-judicial execution. The urge to communicate success includes the distortion of national statistics, especially in the areas of poverty reduction and unemployment. Accusations of “false positives” led to the resignation of the directors of the National Planning Office and the National Statistics Department: according to reports, 3 million of the poor disappeared from the national accounts resulting in a reduction in poverty levels from 60 to 52 percent; a reduction in the census population of 3 million inhabitants increased the GDP per capita (Coronell 2006; Rueda 2006). It is estimated that 22.5 million Colombians, more than half of the population, live in poverty, and an additional 6.5 million could be classified as poor depending on the system adopted (Bonilla 2005: 97).

(In)Security of capital and citizens The priority given to security and the war on terrorism has allowed the selective application of freedom/coercion by attributing different degrees of risk to regions and populations according to their economic importance, such as those key to oil exploitation. The government has created Zones of Rehabilitation and Consolidation (ZRCs), along the trajectory of the five-hundred-mile Caño Limon-Coveñas pipeline, which is owned in part by U.S.-based Occidental Petroleum. In these areas of special governance regimes, authority is held by a military commander and police have been granted with special powers, including the right to search and arrest without warrant (Rojas and Meltzer 2005: 4). The program has succeeded economically: Colombia became the leading foreign direct investment (FDI) recipient in the Andean Community, receiving more than $10 billion in 2005, mainly in the hydrocarbon sector (ECLAC 2005a: 29). The security granted to capital contrasts with the situation of the citizens living in these areas; they are treated like guerrilleros, and are subjected to curfews, mandatory identification and preventive detention. Communities are closely monitored and intimidated by security forces; in some municipalities there has been an increase in the number of assassinations of activists, human rights defenders and trade unionists;

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attacks by armed groups, guerrilla included, increased killings of civilians and children; extra-judicial executions by security forces increased (AI 2004a; AI 2004b; CCJ 2004; United Nations 2005; United States Government Accountability Office 2005). The Colombian Constitutional Court denounced the dangerous possibility generalized juridical insecurity founded on the government’s assumption that “all Colombian citizens, without distinction, belong to these armed organizations.” The court also criticized the denial of the principle of distinguishing combatants from noncombatants (Sentencia C-1024 2002). As a result, the Court declared some of the exceptional powers conceded to the military in the ZRCs unconstitutional; nevertheless the program continues.

(In)securing labor Unlike capital, labor in Colombia has become increasingly insecure. Law 789, 2002, like Law 50, 1990, facilitates the massive firing of workers and the reduction of labor costs. Measures like the privatization of public enterprises, the liquidation of companies with trade unions and the classification of economic activities as “essential public services” have undermined labor rights. What is more, Colombia’s rate of unionized workers is among the lowest in the region at 4.6 percent (Silverman 2007: 102; Vásquez n.d.: 4–5). An extreme form of dispossession is the assassination of unionized workers, making Colombia the world’s most dangerous country for trade unionists. Sixty-one percent of these assassinations were the responsibility of the paramilitary, 31 percent of the guerrilla and 4.5 percent of state agents. The paramilitary have acted in complicity with state officials (El Tiempo 2006; Forero 2007). MNCs have also been charged due to their complicity in human rights violations: trade unions filed a lawsuit in the United States against Coca-Cola for the alleged hiring of paramilitaries to assassinate union members. The large U.S. banana producer Chiquita Brands International Inc pleaded guilty to paying more than $1.7 million of protection money to the paramilitary between 2001 and 2004 (CNN 2007). Banadex, the Chiquita Brands affiliate in Colombia, is accused of trafficking arms and munitions for the paramilitary. Drummond, one of the biggest coal exploitation companies, faced a trial in the United States for links with the paramilitary and the promotion of the assassination of three labor leaders (Méndez 2007a; Springer 2007; Mazure 2007; Forero 2007). Other threats have increased substantially, such as death threats against labor leaders, as well as an increase of death threats and

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harassment toward women. This violence is exacerbated by the persistent invisibility of gender-based violence and the symbolic character of aggressions against women (ENS-UE 2005: 10). Although impunity is generalized in Colombia, for trade unionists the situation is even worse—in 2003, only 26 (2.14 percent) of 1210 cases came to trial, and of these there were convictions in only 14 cases (1.15 percent) (Uprimny, Garavito, and García 2006: 30). The government has contributed to the dispossession of labor rights by inviting workers to participate actively in the creation of Cooperativas de Trabajo Asociado (CTA—Associated Work Cooperatives) in which workers become “associated” and receive “compensation” instead of wages. In contrast to the situation of cooperatives in other Latin American countries (see Meltzer, and Brand and Sekler, this volume), these cooperatives increase labor insecurity as the compensation paid is often below the minimum wage, and workers do not have union rights and do not contribute to social security. Their growth is impressive: in a period of 5 years the number of CTAs increased from 732 to 2980, representing 46 percent of the cooperatives in the country (Urrea 2007: 120). CTAs are used by economic conglomerates like sugar plantations, flower agroindustry, African palm oil and privatized health provisions (ibid.: 168). Some businesses make the affiliation of their workers to these cooperatives compulsory as a way to lower the cost of labor (Silverman 2007; Springer 2007; Urrea 2007).

Dispossessing land In rural areas, the situation of extreme economic insecurity has intensified the model of accumulation based on exports, with some 3.7 million people, mainly Indigenous, Afro-Colombian and small proprietors, abandoning their land, which had been dedicated largely to subsistence production.6 Two-third of the inhabitants of the rural areas (68.2 percent) live in poverty, one-third of them are extremely poor (CID 2003: 56). As scholars have documented, most of the internally displaced population originates in areas with predominantly big property, especially cattle raising latifundia (Fajardo 2006: 25). Afro-Colombians represent one-quarter of the displaced population though they are less than 11 percent of the total population. The legislation produced by the government, such as the laws of Rural Development, Forestry Law, the Law of Water, and the Law of Justice and Peace, reveals the linkages between the democratic security policy and the deepening of neoliberal policies. While this legislation is

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issued in the name of the poorest sector of the population, in practice it has contributed to the transformation of peasant economies into agro industries (Fajardo 2006 and 2007; Moncayo 2006). The Law of Rural Development (Law 030 2006), the stated objective of which is to increase the income and life conditions of rural producers, in practice jeopardizes the rights of peasants, Indigenous peoples and Afro-Colombians. The law does not acknowledge the rights already granted to Indigenous groups by international legislation like ILO Law 169, or by the Colombian Constitution of 1991, and places Indigenous groups at a disadvantage compared to big business or the paramilitary by obstructing the enlargement of Indian resguardos and subjecting them to municipal plans of territorial regulation. As a consequence, local mayors can legislate in favor of big landowners or MNCs, as has already happened in the banana and mining regions (Mondragón 2007). Moreover, the law criminalizes Indigenous protest by denying land title to any plot claimed by the use of “violence” or the “intention” to use violence. The law also facilitates the expropriation of small proprietors while mandating payments at market price to big landowners in the case of expropriation (Mondragón 2007; García Segura 2006; Parra Hende 2007). The law thus further promotes the neoliberal economic model by recognizing only the “productive function of property,” ignoring its cultural and social functions, and introduces neoliberal principles of productivity as criteria for granting state subsidies; these conditions make the reception of credits and subsidies very difficult. The Instituto Colombiano de Desarrollo Rural (Incoder—Colombian Institute of Rural Development) has approved only 6500 projects. An example of consequences of this policy is the attempt by the Minister of Agriculture to grant private investors 17,000 hectares of land in Carimagua, a stateowned hacienda, at very low cost, after the land had been granted to 500 internally displaced families. According to the minister, the reason for transferring the land to the private sector is economic, as private investors have more ability to exploit the land productively and create more employment (El Tiempo 2008a; Mondragón 2008). Similarly, the Forestry Law (Law 1021 of 2006) does not recognize rights previously granted to Indigenous and Afro-Colombians; the law does not acknowledge that forests are linked to environmental and cultural ways of life, and, as a result, privileges the interest of MNCs over biodiversity (Fajardo 2007). The Constitutional Court declared the Law to be in conflict with the Constitution because the government did not consult Indigenous groups as stated in the ILO agreement 169 of

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which Colombia is a signatory. At the same time, the JPL, whose objective is the reincorporation of armed groups, in practice became a mechanism for reducing subsistence production and deepening the agro-export model (Fajardo 2006 and 2007; Moncayo 2006). The land owned by small proprietors has diminished in favor of big ownership, to the extent that 0.04 percent of proprietors now own 61 percent of the land (Fajardo 2006: 27). Changes in land concentration have favored export crops such as African-palm oil, sugar cane and banana; as a consequence, food insecurity for the population has increased. As a collective of lawyers has concluded, the JPL legitimizes dispossession (CCJ 2006: 40). The report mentions several mechanisms that allow the paramilitary to hold property acquired illegally. These include the lack of priority to land restitution and reparation to victims, the amnesty given to “front men” who hide properties, the reliance on the “good will” of the victimizers and the lack of data on the amount of land owned by the paramilitary (CCJ 2006: 41–6). Furthermore, the so-called productive projects for peace discriminate against IDPs as the projects compel victims to work for victimizers as cheap labor; in addition the victimizer receives additional benefits such as sentence reduction and subsidized credit (CCJ 2006: 47–8). Additional problems are the failure to dismantle the organizational structure of the paramilitary and the formation of new criminal organizations where the paramilitary have demobilized (CIP 2005; CCJ 2005; OAS 2006; González Posso 2006).

Securitization of citizenship The Colombian experience does share with post-neoliberalism the call for the active participation of citizens. According to Craig and Porter (2005), under the emerging form of inclusive neoliberalism words like inclusion, empowerment and opportunity are commonly employed along with market integration. In the Colombian case, however, it is the right to protection rather than social provision which provides the inclusive element. Security is defined as a collective effort of all members of society in the “struggle of all against terrorism”; security and citizenship are one and the same: “security favors the “empowerment” of citizens … and the “empowerment” of citizens contribute to security” (Presidencia 2003: 23). Citizens are empowered by aiding the state in the elimination of individuals considered dangerous by providing information about their “terrorist” activities; this technique of denunciation is used to link the

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citizen to the nation (Baker 1994: 190–1). By creating networks of informants the government aims at making citizens responsible for policing society, a process which produces “vigilante citizens.” This strategy was first proposed in Uribe’s platform: I will start with a million citizens; without paramilitarism; with security fronts in every neighborhood and commerce; networks of vigilantes in roads and rural areas. Everybody would be coordinated by the armed forces that, with this help, would be more efficient and totally transparent. (par. 38) At the same time, the program also introduces neoliberal rationality by recognizing financially the work of informants and publicly displaying this recognition in ceremonies transmitted by the mass media (“Reward Mondays”), with high-ranking military personnel handing out payments to informants wearing ski masks in order to hide their identity. In the rural areas, the program went further by actively including peasants as citizen soldiers. The strategy entails the training of 100,000 “soldiers of my town” (soldados de mi pueblo) whereby peasants received 4 months of military training to enable them to participate in combat operations. Presently, the program has 598 platoons totaling 21,528 soldiers (ICG 2006b: 2). Not even children are excluded from acting as informants, at times policing their own parents. For example, military personnel implemented the “soldier for a day” program in the conflictridden region of Arauca. Children invited to visit the battalion received fake bills especially designed with the intention of urging their parents to surrender. The bills were printed with the following statement: “the government would reward you. You and your family deserve another opportunity. Escape now” (CCJ 2004: 58–9). However, the program was eventually questioned by the attorney general’s office because of its potential harm to the psychological development of the children and potential physical risks to them. These practices of vigilance increase distrust and weaken solidarity in a society already fragmented and also increase the insecurity of citizens by blurring the distinction between civilians and the military. The participation of peasants in security operations make them more vulnerable to attacks by armed actors and is a contributing factor to massive displacement (CCJ 2004). As the influential journal El Tiempo (2002) contends, Colombia is at risk of becoming a “society of informers.”

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Conclusion I have argued in this chapter that what we can currently observe in Colombia is the deepening of the neoliberal model in two directions: first, the extent to which methods of dispossession are used in the reproduction of neoliberal social relations and, second, the generalization of a mode of governance based on security. The number of IDPs is an example of the former, as is the number of Colombians living in poverty. An emphasis on security has helped solve the problem of accumulation in the natural resource and agribusiness sectors, as reflected in the growth in foreign investment and exports. Security and the war on terrorism have allowed the selective combination of freedom and coercion and the targeting of areas to be protected and those unsecured in order to facilitate dispossession, as in the case of territories inhabited by Indigenous and Afro-Colombian peoples. Security furthers feelings of belonging and nationalism, and provides the president with high rates of popularity, reaching a peak of 83 percent after the assassination of FARC leader Raul Reyes in March 2008. Without minimizing the complexity of the Colombian situation, it is possible to say that the benefits of this economic growth are skewed toward the rich: land, capital and income are increasingly concentrated (CID 2006: 132). Victims are still waiting for the promised justice and reparation. Moreover, fear has not disappeared. In 2006, 72 trade unionists were assassinated (CUT 2007); in the first 6 months of 2007 there were 238 selective assassinations, 77 more than the previous year; extrajudicial executions by state agents increased to 128, from 92 in 2006 (El Tiempo 2008b); furthermore since the start of the process of negotiations in 2002, 3040 people were assassinated by or disappeared due to the paramilitary (CCJ 2008). Equally worrisome is the attitude of common citizens toward the paramilitary. Although the mass media are reporting on their barbaric acts, one out of three Colombians consider the paramilitary necessary in the struggle against the guerrillas and believe that the government should allow them to accomplish this task; in some cities (Medellín, Barranquilla, Santa Marta) this support is as high as 45 percent. Moreover, 58 percent favor taking justice into private hands if the state does not fulfill its obligation of protection (Semana 2007). The explanation of this phenomenon is beyond the scope and space of this chapter. Nor is there sufficient space to illustrate the resistance to neoliberal policies carried out by Indigenous and Afro-Colombian organizations, peasants, women and victims of conflict. However, the movements resisting neoliberalism and securitization can be considered

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as promoting a “politics of life,” against the increased dehumanization of life promoted by contemporary state policies in Colombia.

Notes 1. A small number of proprietors, 2448 or 0.06 percent, own 53.5 percent of the land (CID 2006: 38). According to the World Bank, land concentration in Colombia stands at 0.85, which is very high when compared with international standards: for example, in Korea the Gini coefficient for land ownership is 0.35 and in Japan 0.38 (Deininger and Lavadenz, 1). 2. A first cycle occurred during the period known as La Violencia from 1948 to 1962. 3. The three candidates assassinated were Luis Carlos Galán from the New Liberalism, Eduardo Pizarro from the M-19 and Bernardo Jaramillo from the UP. It is estimated that the 500 members of the UP were assassinated. 4. Colombia became the most important recipient of military aid after the Middle East and Afghanistan; the Plan has provided more than US$2 billion in aid since 1999, of which more than 80 percent has been allocated to military and police forces. 5. During the period 1926–98 the proportion of the GDP spent on the military averaged 1.8 percent; the highest proportion was 3 percent during the conflict with Peru in 1934 (Isaza and Campos 2007: 5). In the United States this proportion is 4.04 percent, including the expenditures of the Iraq war. 6. It is estimated that in 1997, 70 percent of displaced persons had rural links, 42 percent were proprietors, tenants or settlers. By 1995, drug-traffickers had bought estates in 400 municipalities, close to 39 percent of the country’s territory (ICG 2003: 11).

15 Afterword: Post-Neoliberal Politics and Pathways Laura Macdonald and Arne Ruckert

When we first proposed this book project to our contributors in 2006, a number of developments in the Americas converged to suggest that a profound and sustainable transformation of neoliberalism was under way. While individual authors within the collection hold different views about the utility of the concept of post-neoliberalism, as a whole, the contributions to this volume provide ample support for the thesis that the hemisphere is currently at a crossroads, and that neoliberal policies are increasingly transcended by more socially interventionist and ameliorative post-neoliberal alternatives. Certainly some countries within the hemisphere continue to cling to neoliberal policies, and elements of the neoliberal policy agenda persist in most countries of the region, as explored in depth in this collection. Recent developments, however, highlight a deepening of post-neoliberal trends in the region and suggest that the rise of post-neoliberal policy alternatives must be conceptualized as a deep structural rather than a shallow conjunctural transformation. This brief afterword will identify some of the most pertinent characteristics of post-neoliberal politics, highlight some of the recent trends in both the Northern and the Southern parts of the hemisphere, and speculate about the potential impacts such trends might have on future post-neoliberal pathways. During the fourteenth Sao Paulo Forum, which recently brought together the leaders of the 13 Latin American countries in which leftwing political forces are in power, Frederico Gomensoro from Uruquay’s Frente Amplio (Broad Front) noted that “We are not just living through change, but through a change of era, reflected in 13 Latin American countries” (Artigas 2008). This change of era is mirrored in a number of developments and initiatives that are part of the emerging postneoliberal policy tool-kit and is reflected in the changing perception 246


about the role of markets and the state in economic activity. Most importantly, there is a growing realization among post-neoliberal leaders that state capacity has to be built back up after decades of bloodletting, and that alternatives to neoliberalism require a vigorous reconstruction of the state, which was progressively hollowed out during the era of structural adjustment. As various country cases in this volume confirm, the state has stepped back in to (re)regulate certain areas and aspects of the economy and has taken on new tasks, especially relating to issues of equality and social justice that under neoliberal dominance were left to the market. An important element of this process will be to reverse corrupt privatization processes in which public resources were appropriated below “fair market value” and to reestablish state control over strategic sectors of the economy. Social movements throughout the hemisphere continue to press for more radical measures to address longstanding problems of poverty, inequality, social exclusion, racism, and sexism, and tensions remain between these social movements and the New Left governments that claim to represent them. The recent repudiation of the Ecuadorian government of President Rafael Correa by the indigenous movement CONAIE is a clear illustration of these tensions. It is also clear that an important aspect of post-neoliberal political practices will be a dramatic reorientation of the economy toward the domestic market, as already evident in the cases of Venezuela and Bolivia. This will not necessarily involve a return to import substitution industrialization (ISI) policies but rather signifies greater commitment to community control of the production process and more emphasis on the linkages between the export sector and the domestic market. Finally, a key issue which all post-neoliberal regimes will have to address and that will undoubtedly be important so as to enable a meaningful reconstruction of the state and society is to reform the severely unjust tax regimes that characterize most Latin American countries. In the current environment, Latin America’s poor are paying on average a higher share of their income in taxes than the top 10 percent of income earners that benefit the most from current patterns of redistribution (Borón 2008). To establish a more progressive tax regime will be crucial for addressing inequality and poverty, and without a far-reaching tax reform it will be extremely difficult, if not outright impossible, to reconstruct the state and engage in active social policy to redress poverty and solve the most pressing social issues of our time. Recent events in the hemisphere also indicate that New Left leaders are determined to cooperate more closely in initiating policies to overcome past neoliberal failures and reverse the situation of exclusion and

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injustice engendered by previous generations of neoliberal reforms. New Left leaders have recently reaffirmed their intention to build stronger ties between progressive governments and, in doing so, to broaden the overall policy space of Latin American economies. Prime among those initiatives is the attempt to better integrate Latin American economies through new forms of regional trade agreements, for example the Alternativa Bolivariana para los Pueblos de Nuestra América (Bolivarian Alternative for the People of Our America—ALBA). ALBA directly challenges the neo-imperial U.S. project of constructing a hemisphere-wide free trade zone and embodies a deeply anti-neoliberal logic. Thus, it represents an alternative model of trade integration which promotes principles largely favorable to its member states, such as the extension and deepening of domestic markets under relative equality of competitive positions, economic complementarity—a division of production based on reciprocal benefits— and the increase in consumption and production of products of mass consumption leading to rising living standards (Petras 2008). However, ALBA also stands for a collective defense mechanism against U.S. imperialism and the imposition of adverse conditions on Latin American trading partners as it has the potential to create a regional bloc capable of negotiating on a more equal basis with other regional blocs such as the European Union and North American Free Trade Agreement (NAFTA). What is more, the recent revival of MERCOSUR suggests that subregional trade integration is increasingly seen as an alternative to a continent-wide free trade zone (McKinney and Gardner 2008). As noted in the introduction, the establishment of El Banco del Sur (The Bank of the South) represents another key post-neoliberal initiative in the hemisphere, which is expected to provide alternative sources of unconditional lending to the conditionality-prone lending form the IFIs. However, although the international agreement launching the Bank of the South was signed on December 9, 2007, and the plan at that time was to finish the charter within 60 days, the last meeting on April 25, 2008, was far from conclusive. Various issues remain to be resolved, in particular the distribution of voting power between different countries. The ongoing discussions over the establishment of the Bank suggest that there are also significant tensions between different post-neoliberal governments, especially between the center-left countries, such as Brazil, and the more radical ones in Venezuela and Bolivia. This potential for conflict was recently brought into the open when Brazil rejected Venezuela’s participation in MERCOSUR. In May 2007, the Brazilian Congress asked Venezuela to reconsider the nonrenewal of the license of an oppositional television network, RCTV, or to remain excluded


from MERCOSUR. President Hugo Chávez responded by accusing the Brazilian Congress of being subservient to the interests of the United States. This highlights that the path of cooperation between New Left regimes will not be devoid of conflict. Moreover, the continued reliance of New Left regimes on booming revenues for primary products and the failure to achieve higher levels of industrialization and production of higher value-added products that might form the basis of greater interregional trade are a long-term source for concern and raise significant questions about the sustainability of the post-neoliberal project. Finally, as discussed in the last section of the book, the countries of North America, at the time of writing, are all led by center-right governments, and the shift to post-neoliberalism is largely confined to the Southern part of the hemisphere. The form of path dependency established by NAFTA acts to further promote market-friendly forms of economic development in North America (Finbow 2006), and the minimalist institutional structure of the agreement provides few spaces for democratic consultation or contestation that might promote postneoliberal policy measures (Morales 2008). More recently, the Security and Prosperity Partnership of North America seems to go further in this direction, by restricting decision making to summit meetings and depoliticized bureaucratic structures, and providing privileged access to decision makers for the representatives of big businesses in the North American Competitiveness Council (Macdonald and Ayres 2008; Ayres and Macdonald 2006). Nevertheless a Democratic victory in the fall 2008 elections would likely lead to a partial shift in discourse in the United States, and might lead to a foreign policy more open to ideological diversity in Latin America. More fundamentally, the continued global decline of U.S. hegemony, and the rise of new actors, in particular China, India, and Brazil, may create a global environment more friendly to post-neoliberal regimes, and more accepting of greater levels of political and economic pluralism both in this region and in other parts of the world.

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Index Abdala, M., 128 Abramowitz, M., 172, 174 Acción Democrática (AD), 91–2 accumulation, 217–18, 233, 240, 244 activation, 185, 187–8, 197 active citizenship, 98–9 AD (Democratic Action), 91–2 Adolphs, S., 55, 58 adult education, 201–3, 205, 207–13 see also literacy programs Africa Faith and Justice Network, 76 African Coalition for Debt Cancellation, 74 African Development Bank, 82 Agamben, G., 180 Agenda Venezuela, 91 agribusiness, 46–7, 50–1, 234–6, 240, 242, 244 agriculture, 42, 95, 100–1, 105, 171 Aguas y Saneamientos Argentinas S.A. (AYASA), 129 AIDS, 75, 79, 207 Aid to Families with Dependent Children (AFDC), 172–4, 176–7 ALBA (Alternativa Bolivariana para los Pueblos de Nuestra América), 7, 101, 126, 163, 248 Alemán, Arnoldo, 143 Alesina, A., 173, 182 Alexander, N., 157 Alianza Cívica, 197 All African Council of Churches, 75 Allende, Salvador, 123 Alternative Bolivarian Agenda (AAB), 94 Alvarado, Jorge, 112 Alvarez, A. E., 68 Andean Pact, 42, 50, 123 Andina, 111–12 Andrés Pérez, Carlos, 91 Anglade, C., 23 anticapitalism, 63, 65, 98 anti-neoliberalism, 1–2, 7, 54, 92 Arato, A., 56

Argentina, 1, 21, 37, 41–5, 52, 55, 59, 149 foreign investment, 120–1, 123–7, 129, 131–4 hydrocarbons industry, 102, 106, 113, 115 Piqueteros, 60–1, 64 self-organization, 61–4 state-firm bargaining, 127–9 Argentinean Federation of SelfManaged Workers’ Cooperatives (FACTA), 62 Ariasingam, D., 160–1 arms trafficking, 239 Arnold, S., 203 Arnson, C. J., 1, 232 Arnsperger, C., 25 Arps, A-B., 63 Artigas, A., 246 Asian financial crisis, 77, 81, 83 Associated Work Cooperatives (CTA), 240 authoritarianism, 232, 237–8 Auto Defensas Unidas de Colombia (AUC), 235 autonomy, 55, 61, 64–8, 91, 93, 102 Avedano, Nestor, 148 AYASA (Aguas y Saneamientos Argentinos S.A.), 129 Ayres, J. M., 5–6, 249 Azpiazu, David, 127–9 Bachelet, Michelle, 38, 43, 47–8 Bagley, B. M., 235 Baker, K. M., 243 Baker Plan, 73 Banadex, 239 Banco del Sur, 7, 82, 149, 248 Banco do Brazil, 46 Band Aid, 75 Bánzer, Hugo, 111 Barlow, M., 78–9, 81 Barragán, A. M., 234

280

Index Bayes, Jane, 175–6, 180 Beattie, A., 82 Beck-Gernsheim, E., 202 Bedford, K., 5, 10 Behrens, R., 124 Bejarano, A. M., 233 Bello, W., 82 Bennett, W., 122 Bergeron, S., 5 Berger, T., 61 Berry, A., 234 bilateral agreements, 26, 41, 52, 191, 197 bilateral debts, 81 bilateral investment treaties (BITs), 122, 124–6, 133–4 biopower, 168, 180–1 Blair, Tony, 1, 205 Blyth, M., 81 Bolaños, Enrique, 143 Bolivarian Circles, 93, 96 Bolivarian Constitution, 92–5 Bolivia, 21, 36, 69, 101, 111, 120, 126, 143, 149, 247–8 economic/trade policies, 38, 44, 51 educational development, 154–7, 163 see also hydrocarbons industry: Bolivia Bolivian Observatory of Extractive Industries (OBIE), 114–16 Bolsa Familia program, 45 Bonal, X., 161 Bonilla Gonzàles, R., 238 Bonofiglio, Nicolas, 127–9 boomerang politics, 82 border security, 179–80 Borón, A., 59, 65, 105, 154–5, 159, 247 Boyle, S., 159, 161 Bradshaw, S., 145–6 Braine, T., 207 brain research, 198–203, 208 Brand, Ulrich, 12, 66–7, 72, 100, 138, 240 Brazil, 1, 21, 31, 35, 74, 102, 125, 146, 149, 163, 248–9 economic/trade policies, 38–9, 41–3, 45–7, 52 hydrocarbons industry, 106, 113, 115 Bread for the World, 76

281

Brenner, N., 31 Bretton Woods institutions (BWIs), 73, 75, 151–2, 155–61 Bretton Woods order, 72, 76, 84, 151 Brown, W., 180, 217 Bruckmann, M., 68–9 budgetary processes, 139–40 Bush, George H. W., 175 Bush, George W., 2, 4, 9–10, 175, 179, 181 Caldera, Rafael, 91 Calderón, Felipe, 67, 196, 206 Camacho Guizado, A., 241 Cameron, M. A., 6, 89 Campione, D., 60–1, 63 Canada, 1–3, 5, 9–10, 81, 184–5, 187–8, 196–8 family issues, 215–16, 218–20, 222–6, 228 gender issues, 185, 187, 189, 196–8, 201, 203, 205–6, 218 post-neoliberalism, 205–6 poverty policy/politics, 188–92 social investment in children, 198–206 Canada Assistance Plan (CAP), 189–90 Canada Health and Social Transfers (CHST), 190 Caño Limon-Coveñas pipeline, 238 Cao, H., 60 capacities generation, 195 capitalism, 71, 169, 217–18 adaptive capacity, 71–2, 84 anticapitalism, 63, 65, 98 irrationalities of, 32, 34, 77 capitalization, 106–8 Capitalization Law, 110 Caracas Energy Agreement, 101 The Caracazo, 91 Caranda gas field, 115 Caribbean, 4, 117, 126 Carnoy, M., 153–5, 159 Carrière, J., 24 Carroll, T., 139 Cartagena charter, 74 Castañeda, Jorge, 6, 202 Castaño, Carlos, 236 Castro, Fidel, 97–8

282

Index

CCTs see conditional cash transfers CDF see Comprehensive Development Framework Ceceña, A. E., 65, 67 Centre for Economic and Policy Research (CEPR), 97 Chaco, 111–12 Chamberland, C., 205 Chang, H-J., 141 Charlton, A., 141 Chauvosky, 2007, 169 Chávez, Hugo, 1, 6, 31, 63, 82, 106, 117, 120, 126, 149, 163, 249 Communal Councils, 98–9 economic/trade policies, 38, 43–4, 49–52 new productive model, 100–1 policy alternatives, 89–90, 101–3 reforms, 92–6 rise of, 90–2 Social Missions, 97–8 Chicago School of Economics, 28, 167 child benefits, 188, 190–1, 195–7 child care programs, 205 child-rearing advice, 198–206 children, social investment in, 200–1 Canada, 198–206 Mexico, 199–201, 206–7 Child Welfare League of Canada, 205 Chile, 1, 28–9, 31, 35, 106, 149 economic/trade policies, 38, 42–3, 47–8, 52 foreign investment, 120–1, 123–5, 127, 131–4 state-firm bargaining, 129–31 Chiquita Brands International Inc, 239 Chrétien, Jean, 1, 189, 198 Christian Aid (CA), 77 Chudnovsky, D., 124 Citizen Assemblies, 98 Citizen Attention, 211 citizenship, 98–9, 146, 186, 188, 224 market, 142, 151–3, 168, 170, 186, 206 civil rights, 93–4, 179, 182, 218 civil rights movement, 172 civil society, 138–9, 142–3, 146–7 activism, 73–5, 81, 83–4, 138, 170 participation, 143, 146–7, 153

civil society organizations (CSOs), 54, 56–7, 65, 67–8, 71–3, 76–84, 157, 188–9, 198 see also Piquetero movement Clarke, Simon, 26, 28, 215, 219 Clarke, T., 78–9, 81 classical liberalism, 185 class issues, 59, 65, 168, 182, 201, 204–5, 233 clientelism, 99, 197 Clinton, Bill, 1, 175, 177, 235 CND (Convención Nacional Democrática), 65 CNI (Congreso Nacional Indígena), 65 Coca-Cola, 239 Cohen, J. L., 56, 218 Cold War, 173 Colectivo Situaciones, 60 Collective Capitalization Fund (FCC), 111 Collins, C. J. L., 76 Colombia, 231–3, 244 conflict (1988–2002), 233–6 dispossession, 240–2 securitization, 236–40, 242–3 trade unions/unionists, 232–3, 235, 238–40, 244 Colombian Institute of Rural Development (Incoder), 241 Comité de Organización Política Electoral Independiente (COPEI), 91–2 commodification, 35–6, 145, 149, 151, 193 Communal Councils, 96, 98–9, 102 Community Work Experience Program (CWEP), 177 Compañía Logística de Hidrocarburos de Bolivia, 111 competitiveness, 39, 41, 47, 122, 175, 184, 193 Comprehensive Development Framework (CDF), 136, 139, 148 Concertación coalition, 48, 129–30 concession contracts, 128 conditional cash transfers (CCTs), 142, 144–6, 148, 206–12

Index conditionality, 10, 14, 17, 74, 81–2, 176–7, 248 in educational development, 151–2, 155–7, 161–2, 206–7, 210–11 in poverty reduction, 139, 141–5, 147, 149, 192, 194–5 Constitutional reform, 99 continuity, 6–10, 42, 105–6, 118, 121, 128, 131, 133–4, 143–4, 212 Contras, 175 Convenio Marco, 113 Convertibility scheme, 44–5, 127, 132 cooperatives, 61–4, 90, 100 COPEI (Committee for Independent Electoral Political Organization), 91–2 Copenhagen Declaration, 80 Coronell, D., 237–8 Corporación de Fomento de la Producción (CORFO), 131 corporatist systems, 186, 192–3, 197–8 Correa, Rafael, 38, 247 Corredor Mesoamericano, 67 Correo Argentino S.A., 128–9 Cortes, K, 46 Council on Hemispheric Affairs (COHA), 48–9 counterhegemonic strategies, 57–9, 63, 65, 138, 143–4, 153 see also hegemonic power counterinsurgency forces, 234, 237 country ownership, 136, 139, 156–7 Country Policy and Institutional Assessment (CPIA), 157 Craig, David, 9, 15, 21, 71, 84, 102, 136–7, 142, 152, 163, 185, 199, 233, 242 credit crisis, 4 crisis management, 146 Cruikshank, Barbara, 209 CSOs see civil society organizations CTA (Cooperativas de Trabajo Asociado), 240 Cuba, 97–8, 101, 103, 117, 126 Cufré, D., 128–9 cultural politics, 68 currency stability, 26 CWEP (Community Work Experience Program), 177

283

Daudelin, J., 4 Davidson-Harden, Adam, 15, 151–2, 159, 206 death threats, 239 debt, 4, 25, 44, 46–7, 76 cancellation, 71, 74–84, 118, 141 crisis, 3, 72, 74–6, 82–3, 167, 192–3 relief, 75, 139, 144–5, 148, 161 restructuring, 73–4, 81, 124, 128 service, 155–6, 162 Debt Crisis Network UK, 75 decentralization, 91, 96, 102, 155, 157–8, 160, 174, 191, 193 decommodification, 35 see also commodification deconstructive perspectives, 55, 58–9, 62, 65, 68 Defense and Democratic Security (DDS), 237 Defense of Marriage Act (DOMA), 181, 215, 220–1 Deficit Reduction Act, 221 deindustrialization, 175, 177 De Janvry, A., 24 De la Rúa, Fernando, 44 DeMartino, G., 27 democracy, 7, 41, 61–2, 66, 69, 80, 90–3, 95–6, 98–9, 102, 123–4, 129 Democratic Action (AD), 91–2 democratic security policy, 231, 240 democratization, 192 dependency, 73, 169, 171, 173, 177 depoliticization, 29, 31–2, 105, 236, 249 see also politicization deregulation, 3, 22, 30, 89, 101, 120, 122, 138, 151, 175 detention of suspected terrorists, 179 developing countries, 72, 80, 123, 125, 140–1 see also Highly Indebted Poor Countries; Third World development agencies, 135, 157 developmental psychology, 201, 208 development policy, 136, 139, 148, 156 DfID (Department for International Development, UK), 159 Dieterich, H., 105

284

Index

Dijkstra, G., 142, 144–5, 157 Diniz-Pereira, J., 163 disappearances, 237, 244 discontinuity, 6–10 Do Alto, H., 105 Dobrowolsky, A., 199–200 Doha Round, 42, 125 Doherty, G., 205 DOMA (Defense of Marriage Act), 181, 215, 220–1 domestic markets, 247–8 Dominica, 143 donor communities, 135, 137, 140–1, 153, 156, 161–2 Do Prado, M. C. R. M., 47 Dos Santos, T., 68–9 Driscoll, R., 140 drug-traffickers, 234 Drummond, 239 Duarte Goméz, M. B., 208 Duhalde, Eduardo, 44 Duhau, E., 25 Duncan, G., 236 Dunning, J., 122 Duzán, M. J., 237 Early Childhood Development initiative, 191, 197 The Early Years Study, 202 Economic Commission for Latin America and the Caribbean (ECLAC), 4, 48–51, 154, 238 economic crises, 23–5, 41, 47, 61, 91, 96, 127, 132, 171, 194, 235 economic policies, 37–40, 45–51, 139, 234 leftist, 38–40, 46–51 see also macroeconomic policies economic prosperity and conflict, 231–2 economic reforms, 94–6 economic restructuring, 3–4, 23, 29–32, 35 Economist Intelligence Unit (EIU), 44, 46–7, 109, 117–18 Ecuador, 38, 51, 101, 149, 247 education, 151, 172, 176, 178, 195, 199–200, 206 inclusiveness, 152, 161–4

inequalities, 153–6, 158–61 Mexico, 163, 206–9 of parents, 201–3, 205, 207–13 privatization, 151–2, 157–61 and PRSPs, 156–8 see also education policies Education for All (EFA), 154 education policies, 48, 97, 117, 140, 145, 147, 155, 159 Ejército Zapatista de Liberación Nacional (EZLN) see Zapatistas electoral politics, 39, 92, 173 Ellner, S., 50, 93–4 Elson, Diane, 5, 10 emancipatory forces, 55, 59, 65–9 employment, 108, 187, 190, 224 Employment Insurance (EI), 189 empowerment, 22–3, 34–5, 97–8, 102–3, 136, 142, 178, 188, 196, 199, 206–9, 242 Empresa Nacional de Electricidad (ENEL), 144 Empresa Nicaragüense de Telecomunicaciones (ENITEL), 144 endogenous development, 100 Engler, M., 78, 82 Enhanced Structural Adjustment Facility (ESAF), 152 environmental concerns, 22, 73, 83–4, 125, 175, 241 equality, 37 see also inequalities Erlassjahr, 77–8 Escobar, A., 72–3 Esping-Andersen, Gøsta, 35, 187–8, 193, 219 Ethiopian famine, 75 ethnic issues, 154, 169 European Forum on Debt and Development (EURODAD), 76 Evans, A., 140 Evans, P., 122 exclusion, 69, 91, 142, 169, 232, 247 see also inclusion executive power, 93, 99 exports, 40–2, 45, 48, 100, 115, 162, 240, 244 extra-judicial executions, 237, 239, 244

Index extraordinary rendition, 179 Eyzaguirre, Nicolás, 131–2 EZLN see Zapatistas FACTA (Federación Argentina de Cooperativas de Trabajadores Autogestionados), 62 Fajardo, D., 240–2 false positives, 236, 238 family benefits, 220 see also child benefits family cap legislation, 178 family issues, 186–7, 190–1, 195–8 Canada, 215–16, 218–20, 222–6, 228 diversity, 215–16, 218–20, 228–9 form and function, 218–22 and immigration, 216, 222–8 and liberalisms, 216–18 Mexico, 199–201, 206–12 preferred models, 215–21, 227 United States, 215–16, 218–28 FARC (Fuerzas Armadas Revolucionarias de Colombia), 234 Farthing, L., 108 Fatherland for All (PPT), 92 Favaro, O., 60 FCC (Fondo de Capitalización Colectiva), 111 FDI see foreign direct investment feminism, 5, 10, 187, 216 see also gender issues; women’s rights movement Fernald, L., 208 Ffrench-Davis, R., 21 Fifth Republic Movement (MVR), 92 financial crises, 39–41, 72, 77 Finbow, R. G., 249 Fine, Ben, 33 Fletcher, S., 50 flexibilization, 34–5, 125, 187 Focus on the Global South, 76 food insecurity, 242 foreign direct investment (FDI), 108, 120–2, 131–3, 162, 174, 238 domestic legislation, 123–4 international investment treaties, 124–6 and New Left governments, 122–3

285

foreign investment, 46–7, 49, 51, 94, 100, 108, 114, 120, 131, 232, 244 see also foreign direct investment Forero, J., 239 Forestry Law, 241 Fortin, C., 23 FOSIS (Fondo de Solidaridad e Inversión Social), 35 Foucault, Michel, 180 Fox, Vicente, 194, 197, 211 fragmented peace/sovereignty, 234, 236 Fraser, N., 169, 171 freedoms, 185–6, 238, 244 free trade, 5–6, 42, 248 free trade agreements, 5–7, 41, 101, 125–6, 133, 179–80, 184, 248–9 Free Trade Area of the Americas (FTAA), 6–7, 41, 101, 125 Frei, Eduardo, 129 Frente Amplio, 246 Frente Popular, 233 Frente Sandinista de la Liberación Nacional (FSLN), 147 Friedman, Milton, 26, 28, 167 Friesen, Elizabeth, 12–13, 138 FSLN (Sandinista National Liberation Front), 143, 147–9 Fujimori, Alberto, 29 Fukuyama, F., 18 G7/G8 summits, 75, 77, 79, 81–2 Gabriel, Leo, 68, 222–3 Gamble, Andrew, 30 Garavito, C., 240 García, Alan, 43 García Linera, Álvaro, 110–11 García, M., 240–1 García Segura, Hugo, 241 Gardner, H. S., 248 gas industry see hydrocarbons industry Gas War, October 2003, 109 Gaviria, César, 234 gender-based violence, 240 gender issues, 5, 10, 65, 146, 154–5, 186, 213, 217, 221 Canada, 185, 187, 189, 196–8, 201, 203, 205–6, 218

286

Index

Mexico, 185, 187, 193, 195–8, 201, 206, 208–10 United States, 168–9, 171–2, 178, 180–2, 218 generational differences, 185 Geneva Conventions, 179 Gentili, P., 163 George, Susan, 72–5, 78 Gershberg, A. I., 153 Gertler, Paul, 208 Ghafour, H., 205 Gilens, Martin, 173 Gilligan, M., 41 Gindin, S., 4, 163 Glaeser, E., 173, 182 Global Call to Action against Poverty (GCAP), 80 global finance see international finance globalization, 5, 67, 80, 185 Goal 8, 80 Goldwater, Barry, 173–4 Gomensoro, Frederico, 246 Gómez-Hermosillo, Rogelio, 209 González Posso, C., 160, 242 Gordon, G., 112–13, 171 Gordon, L., 169, 171 Gottschalk, R., 140 Gourevich, P., 43 Graciela, I., 60 Graefe, P., 9 Gramscian perspectives, 12, 54–7, 64, 68, 71, 151 Greenhill, R., 162 Grenada, 143 Grosse, R., 122 Gualberto Villarroel, 112 guerrilla organizations, 232–4, 239, 244 Guillermo Elder Bell, 112 Guyana, 143 Haiti, 46, 101, 143 Hall, A., 45 Halliburton, 176 Hallinan, C., 82 Hall, P. A., 81 Hambre Zero program, 147 Harder, Lois, 10, 17, 180, 220 Harvey, David, 3–4, 233

Haslam, Paul, 14, 94, 125, 129 Havana Conference on debt, 74 Hawkesworth, Mary, 8–9, 15–16, 177, 180, 184, 232 Hayek, F. A., 3, 26, 28, 30, 167 Hays, S., 201 health care, 97, 117, 140, 145, 172, 207–11 hegemonic power, 8, 10, 55–7, 145, 148, 152, 161–4, 199–200, 233, 249 see also counterhegemonic strategies Heidrich, Pablo, 11–12 Hellinger, D., 50, 91–2 Highly Indebted Poor Countries (HIPCs), 81–2, 139, 144, 151–2, 154–5, 160–1 see also developing countries; Third World Hindery, D., 106 Hindess, B., 232 HIPCs see Highly Indebted Poor Countries Hirsch, J., 66–7 Holloway, J., 65–6 homeland security, 179 Honduras, 21, 143, 154, 156–7, 160 Honig, Bonnie, 223–4 Hopenhayn, M., 155 Huber, E., 138 Huffschmid, A., 65, 67 human capital, 7–9, 136, 142, 145, 185, 195, 199, 207 human rights, 73, 94, 162, 215, 218, 232, 235, 237, 239 and international finance, 71–84 Human Rights Watch, 179 Hunter, W., 47 Hutton, G., 161 hydrocarbons industry Argentina, 102, 106, 113, 115 Bolivia: nationalization, 105, 109–16; privatization, 105–9; and social spending, 116–18 Brazil, 106, 113, 115 Colombia, 238 Venezuela, 106, 117

Index Hydrocarbons Law, 95, 106–7, 109, 112, 114–15 Hylton, F., 105, 234–5 IDB see Inter-American Development Bank identities, 9, 65, 154, 217 IDPs see internally displaced people immigration, 179, 216, 222–8 import substitution, 24, 29, 40, 121, 124, 128, 247 inclusion/inclusiveness, 10, 21, 66, 71, 84, 90, 102, 199, 215, 233, 237, 242 and education, 152, 161–4 and poverty policy, 135–9, 141–3, 146–8, 185–9, 192–7 see also exclusion Incoder (Colombian Institute of Rural Development), 241 Independent Democratic Union (UDI), 130 Independent Evaluations Group (IEG), 162 indigenous communities, 65–8, 154, 169, 233, 240–1, 244 individualism, 23, 26–8, 33, 182, 186, 202 individual responsibility, 202–4, 207, 210, 213 industrialization, 24, 29, 40, 50, 114, 121, 124, 201, 247, 249 deindustrialization, 175, 177 industrial relations, 23–4, 34, 40, 49, 59, 108 see also labor relations; trade unions/unionists INEA (Instituto Nacional para la Educación de los Adultos), 208 inequalities, 48, 76, 103, 107, 168, 176, 187 education, 153–6, 158–61 inflation, 46–7, 50, 139–40 infrastructure, 34–5, 39, 42, 44–5, 47, 49–50, 94, 101, 118, 124, 128, 134 innovation funds/projects, 130–2 institutional development, 21–5, 29–35, 189, 206

287

Institutional Revolutionary Party (PRI), 67, 193–4 Instituto Colombiano de Desarrollo Rural (Incoder), 241 intelligence enhancement, 202–4 intensive parenting, 203–4, 212–13 Inter-American Development Bank (IDB), 118, 152, 155 internally displaced people (IDPs), 233, 235, 240–2, 244 international arbitration, 123, 128–9 International Conference on Financing for Development (ICFfD), 80 International Crisis Group (ICG), 96, 235 International Development Association, 157 international finance, 72 and human rights, 71–84 and poverty reduction, 72, 75–6, 80, 82 structural adjustment programs, 72–3, 77, 81 International Finance Corporation (IFC), 158–61 international financial institutions (IFIs), 7–8, 23, 90, 98–9, 102, 153, 156–7, 162, 185, 187, 248 and human rights, 71–84 and poverty reduction strategy, 136–42, 144–9 international investment treaties, 124–6 International Monetary Fund (IMF), 3, 5, 25, 29, 45, 91, 102, 106, 109, 167, 235 and highly-indebted states, 151, 155, 157 and human rights politics, 73, 75, 77, 79, 81–2 and poverty policy, 135–6, 139, 144–5, 147, 149, 184, 193 interventionism, 121–2, 168, 170, 206, 212, 246

288

Index

investment policy, 121 Iraq war, 2, 9, 179 ISI (import-substitution industrialization), 24, 29, 40, 121, 124, 247 Izaguirre, M., 94 Jacoby, Tamar, 224 Jaguaribe, H., 38 James, H., 72–4 James, I., 117 Jayasuriya, K., 3, 8, 90, 102, 137, 142, 146, 187 Jenson, J., 8, 189, 199–200, 202, 205 Jimeno, P., 130 Johnson, Lyndon B., 167, 172 Jones, Claudio, 193 Jubilee movement, 74–9, 141 see also debt juntas del buen gobierno, 65 Justice and Peace Law ( JPL), 232, 242 Kaltmeier, O., 68–9 Karakayali, S., 55, 58 Kasnabish, A., 65 Kastner, J., 68–9 Kaunda, Kenneth, 75–6 Keck, M., 72, 81–2 Keynesianism, 3, 8, 28, 45, 47, 84, 167, 170–4, 186, 188, 217–18 Khan, M. S., 143 Kirchner, Nestor, 1, 37, 43–5, 60, 102, 127, 131 Klugman, J., 136, 139–41, 143 Kobrin, S., 122 Kohl, Benjamin, 107–8 Körner, P., 25 KWS (Keynesian welfare state), 217–18 labor relations, 59, 61–4, 108, 169, 171, 175, 232–3, 239–40, 242 see also industrial relations; trade unions/unionists La Coordinadora Civil, 145–6 Lagos, Ricardo, 1, 47–8, 125, 129–30 Lal, D., 27 Lambert, T., 63 Land Law, Venezuela, 95

Landless Workers’ Movement, Brazil, 163 land ownership, 235, 240–2 Latin American Development Bank, 149 ‘leading by obeying,’ 65 leftist economic policies, 38–40, 46–51 Lemco, J., 31 Lemoine, M., 105 LeoGrande, W. M., 5 Lewis, S., 75 liberalization, 3, 6, 31, 39–42, 83–4, 136, 139–41, 143, 146, 156–7, 176, 186 and foreign investment, 120, 123–5 Lieberman, R. C., 173 Linneker, B., 145–6 Lipset, S. M., 182 literacy programs, 117, 205, 208, 211 Live Aid, 75 lobbying, 42, 130 local government, 39, 98 Lockheed Martin, 176 López, A., 124 López Obrador, Manuel, 66 López Ramirez, A., 67 Lora, E., 155–6 Lora, M., 105–6 Luccisano, Lucy, 9–10, 16–17, 142, 146, 192, 195, 206–7 Lula Da Silva, Luiz Inácio, 1, 6, 38, 43, 45–7, 74, 102, 125 Luoma, A., 112–13 Luo, Y., 122 McCain, M., 202 McCarthy, J., 78 Macdonald, Laura, 6, 9–10, 16, 66, 106, 118, 136, 142, 146, 148, 199, 202, 205, 207, 233, 249 MacDonald, S. B., 31 McGuigan, C., 107–9 McKinney, J. A., 248 McNamara, K. R., 81 macroeconomic policies, 7–8, 21–2, 44–7, 52, 102, 136, 139–41, 143–4, 146–9, 153, 182

Index Madrid, Miguel de la, 193 Magalhaes, L., 46 Mahon, Rianne, 9–10, 16, 66, 136, 142, 146, 148, 199, 202, 205, 207, 233 Makhulu, Archbishop, 76 mandar obedeciendo (leading by obeying), 65 Manzetti, L., 128 marginalization, 35, 59, 65–6, 91, 149, 217 Marin, P., 124 market citizenship, 142, 151–3, 168, 170, 186, 206 market forces, 26–8, 30, 33, 47, 102 market fundamentalism, 77, 167 marketization, 25, 31–2, 34, 80, 152–3 market participation, 142, 185, 187, 193, 200–1 market reforms, 21–2, 144 market relations, 22, 35–6 Marks, G., 182 Marope, M., 158 marriage rights, 215, 217–27 Marshall, A., 79 Marshall, T. H., 8 MAS (Movimiento al Socialismo), 1, 92, 105, 110, 112–14, 118 mass detentions, 237 mass mobilization, 37, 60, 76, 79, 82–3, 91, 95, 109, 172 material reproduction, 59–64 Mazure, L., 239 MDGs see Millennium Development Goals means-testing, 173, 189 media, 237, 239, 243–4, 248 Medicare, 172 Melich, T., 173 Meltzer, Judy, 13, 49, 163, 238, 240 Méndez, A. G., 239 Menem, Carlos, 37, 44, 124 MERCOSUR, 41–3, 45, 50, 126, 248–9 Mesa Gisbert, Carlos, 109, 118 Mesa-Lago, C., 24 Mexico, 2, 5, 9–10, 21, 31, 35, 55, 59, 72, 77, 179–80 education, 163, 206–9 motherhood, 199–201, 207–12

289

poverty policy/politics, 146, 184–5, 187–8, 192–8 social investment in children, 199–201, 206–7 Zapatistas, 64–9 Micah Challenge, 80 micropolitics, 168, 180–2 militarization, 243 military interventions, 25, 92, 94–5, 175, 233–4, 236–7, 239 military tribunals, 179 Millán, M., 65 Millennium Development Goals (MDGs), 80, 82, 84, 138, 154, 161–2, 187 Millennium Summit, New York, 135, 138 Miller, R., 181 Mill, John Stuart, 186 mining sector, 129–33 Misión Barrio Adentro, 97 Misión Mercal, 97 MNER (Movimiento Nacional de Empresas Recuperadas), 62 MNFRT (Movimiento Nacional de Fábricas Recuperadas por sus Trabajadores), 62 modernization, 38, 48, 124, 198 Molina, F., 112 Monbiot, G., 82 Moncayo, H. L., 241–2 Mondragón, H., 241 monetary policies, 30, 46–7, 50, 140 Monterrey Consensus (MC), 80, 84 Morales, Evo, 1, 31, 38, 44, 49, 51–2, 105–6, 109–18, 120, 249 Morales Olivera, Manuel, 111 moral issues, 76, 81, 218–19 Moran, T., 122 Moreno-Brid, J. C., 4, 7 motherhood Canada, 199–201, 203–5 Mexico, 199–201, 207–12 Movimiento al Socialismo (MAS), 1, 92, 105, 110, 112–14, 118 MTD Solano, 60–1 Muhr, T., 163 Müller, N., 63

290

Index

Multilateral Agreement on Investment (MAI), 78 multilateral agreements, 78, 122–3, 191, 197 Multilateral Debt Relief Initiative (MDRI), 82 multilateral development institutions, 135 multinational corporations (MNCs), 129, 131, 236, 239 Munín, H., 155 Mustard, J. F., 202 MVR (Movimiento Quinta República), 92 9/11 attack, 10, 179, 236 Nadesan, M. H., 202 NAFTA see North American Free Trade Agreement National Action Party (PAN), 67 National Child Benefit (NCB), 190–1, 196–7 National Democratic Convention (CND), 65 National Indigenous Congress (CNI), 65 National Institute for Adult Learning (INEA), 208 nationalization, 30, 51, 62, 91, 94, 100, 120, 123, 128 National Movement of Recovered Companies (MNER), 62 National Movement of Worker’s Recovered Factories (MNFRT), 62 Navarro, J., 160 neoclassical traditions, 25, 27–8, 33 neoliberal policies, 1–2, 21–3, 35–6, 59, 244, 246 and anti-neoliberalism, 1–2, 7, 54, 92 contradictory evolution of, 31–5 critics of, 3–6 in practice, 29–31 as response to crisis, 23–5 as social engineering, 25–9 and World Bank, 21–2, 25, 29, 31–5 see also roll-back neoliberalism; rollout neoliberalism New Deal, 167, 171, 173

New Left governments, 1, 6–7, 37–8, 51–3, 69, 121, 135, 143, 147, 149, 247–9 economic learning and adaptation, 38–40 national experiences, 43–51 trade policy, 40–3 New Left investment rules, 122–3, 125, 131–3 new productive model, 100–1 NGOs see non-governmental organizations Nicaragua, 101, 117, 148, 154, 156–7, 163, 175 PRSP approach, 137, 143–7 Sandinistas, 143, 147–8 La Nicaragua Que Queremos (CCER), 146 Nixon, Richard, 173 ‘No Child Left Behind’ initiatives, 176 No Hunger program, 147 non-governmental organizations (NGOs), 57, 68–9, 73–6, 138, 145–7, 157, 197 normativity, 216–17 norms and values, 71–2, 83 North American Competitiveness Council, 249 North American Free Trade Agreement (NAFTA), 5, 179–80, 184, 248–9 North, Douglas, 33 Oaxaca, 163 OBIE (Observatorio Boliviano de Industrias Extractivas), 114–16 objective conditions, changes in, 132–3 obsolescing bargaining model, 121–2, 131 Occidental Petroleum, 238 occupied enterprises, 61–2 OECD see Organization for Economic cooperation and Development oil crises, 24, 72, 167, 175 oil industry, 10, 49–51, 91, 95, 100–1, 103, 106, 120, 238 Olivera, M., 155–6 Ontario Association of Children’s Aid Societies, 205

Index OPEC (Organization of the Petroleum Exporting Countries), 95 operations contracts, 115 Oportunidades, 35, 192, 194–7, 209–10 opportunity costs, 121, 131–2 Orellana, A. L., 105 Organization for Economic cooperation and Development (OECD), 185, 188, 195, 198 Ortega, Daniel, 147 The Other Economic Summit (TOESUSA), 73 La Otra Campaña (“The Other Campaign”), 66 Oviedo, L., 60 Oxfam, 76 Øyen, E., 35 Padilla, A., 110–11 PAN (National Action Party), 67, 196, 198 Panitch, L., 4 Panizza, F., 38–9 paramilitaries, 232, 234–6, 239, 242–4 Parra, H. P., 241 participation, 93, 96–9, 102, 136, 139, 160, 188, 236 civil society, 143, 146–7, 153 market, 142, 185, 187, 193, 200–1 stakeholder, 142–3, 146, 157 Partido de Acción Nacional (PAN), 67 Party of the Democratic Revolution (PRD), 66–7, 196, 198 party politics, 198 passive revolution, 57–8 Pastor, M., 21, 32, 194 Pastrana, Andrés, 234–5 Pateman, Carole, 169, 217 path dependency, 31, 35, 121, 123, 126, 133–4, 197, 249 path modification, 197–8, 219 Patrinos, H., 160–1 Patriotic Pole (PP), 92, 95 patronage systems, 69 Paunovic, I., 4, 7 PDVSA (Petróleos de Venezuela, SA), 50, 95, 105 Pearce, J., 232 Pearson, N. O., 117

291

Peck, Jamie, 9, 71, 89, 105, 199–200, 206, 219 Pelaéz, E., 66 Pender, J., 136 perceptions, changes in, 132–3 Pereyra, S., 60 Peronism, 37 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), 177–8 Peru, 29, 42–3 Petras, J., 23, 32, 248 Petrobras, 46, 110–13, 115–16 Pettifor, Ann, 77–9 Piñeira, Sebastian, 48 Pinochet, General, 29, 31, 124 Piquetero movement, 60–1, 64 Pitt, Kathy, 202, 205, 211–12 Plan Bolivar 2000, 94 Plan Colombia, 235, 237 Plan Puebla Panamá, 67 pluralism, 96 Polanyi, Karl, 29, 43, 71, 83–4, 169 polarization, 188, 197, 232, 244 political reform, 93–4 political spaces, 58, 67–8, 233 politicization, 24–5, 65, 72, 75, 103, 197 see also depoliticization popular dissatisfaction, 37, 49, 75, 109, 182 populism, 6–7, 31, 37, 45, 48, 51, 99, 128 Porta, F., 124 Porter, D., 9, 15, 21, 71, 84, 102, 136–7, 142, 152, 163, 185, 199, 233, 242 positivism, 68 post-Washington Consensus (PWC), 22, 33, 99, 121, 136–9, 142, 147 see also Washington Consensus poverty, 4, 9, 22, 33–5, 44–6, 48, 50–1, 60, 91, 103, 142, 240, 244 see also poverty policy/politics; poverty reduction poverty policy/politics, 187, 194, 198 Canada, 188–92 and IMF, 135–6, 139, 144–5, 147, 149, 184, 193

292

Index

inclusion/inclusiveness, 135–9, 141–3, 146–8, 185–9, 192–7 Mexico, 146, 184–5, 187–8, 192–8 poverty reduction, 90, 185, 187, 192–4, 196–7, 206, 221, 232, 237, 247 conditionality, 139, 141–5, 147, 149, 192, 194–5 education and, 152, 155–6, 158, 161, 163 international finance and, 72, 75–6, 80, 82, 136–42, 144–9 World Bank and, 135–7, 139–40, 143, 145–7 see also Poverty Reduction Strategy Paper Poverty Reduction Growth Facility (PRGF), 144, 152 Poverty Reduction Strategy Paper (PRSP), 136–7, 139–40, 142–8, 152–3, 160, 162 and education, 156–8 Nicaragua, 137, 143–7 Poverty Reduction Support Credit (PRSC), 144–5 power relations, 30, 34–5, 56 Power, T., 47 PP (Polo Patriótico), 92, 95 PPT (Patria Para Todos), 92 pragmatism, 52, 62, 69, 92–6, 126 Pravda, T., 79 PRD see Party of the Democratic Revolution PRI (Partido Revolucionario Institucional), 67, 193–4 privacy issues, 179–82, 216–17 private investment, 44–5, 100, 103, 107, 241 Private Sector Development (PSD), 157, 161 privatization, 6, 31, 47, 51, 95, 107–8, 175–6, 182, 239, 247 and education, 151–2, 157–61 and foreign investment, 120, 122, 124 Nicaragua, 136, 138–9, 141, 143–4, 146 Progresa, 194 progressive policy alternatives, 6

PRONASOL program, 193–4 property rights, 26–7, 61, 138, 169, 176, 241 protagonism, 92–4, 96, 98 protectionism, 40, 42 protests, 48, 50, 73, 75, 79, 91–2, 95–6, 105, 109, 135, 138, 163, 218, 241 see also mass mobilization; social movements PRSP see Poverty Reduction Strategy Paper PRWORA (Personal Responsibility and Work Opportunity Reconciliation Act), 177–8 public investment, 44, 47, 49–50, 193, 233 public sector privatizations, 144 public utility sectors, 127–9, 139, 141, 144, 175–6 Punto Fijo Pact, 90–2 PWC see post-Washington Consensus Quadagno, J., 172–3 Quiróz Viquez, A., 145 race issues, 65, 168–9, 171–4, 176, 179–80, 182, 217–18, 233, 240–1, 244 Rajan, R., 175 Rajland, B., 60–1, 63 Ramirez Gallegos, F., 45 Rangel, A., 233, 235 Rapoport, David, 179 rational actors, 25–6, 40 Reagan, Ronald, 3, 167, 173–5, 177 Rebón, J., 61–2, 64 redistribution, 30, 51, 102–3, 161, 187 regional integration, 7, 10, 101, 248 regionalism, 41, 43 regulation, 9–11, 14–16, 23–4, 32–3, 39, 84, 95, 100–2, 141–2, 171, 176 and foreign investment, 120–2, 126–8, 131–4 reregulation, 102, 247 and social investment, 199–201, 210, 212 see also deregulation

Index Reimers, F., 159 Reitan, R., 74 relationship recognition, 215–16, 218–29 religion, 28, 74, 76, 78, 176 renationalizations, 7, 120, 128–9 repression, 67, 69 reproductive rights, 172, 178–81, 218–19, 223 Repsol, 110, 113 Republican Party, 173 research and development, 130–1 resistance, 60, 91, 144, 163, 244 Revolutionary Armed Forces of Colombia (FARC), 234 ‘revolutionary motors,’ 96 Reyes, Raul, 244 Richani, Nazih, 234–6 Richardson, D., 201 risk management, 200, 202, 205, 238 Roberts, K., 7 Rodrik, D., 138 Rojas, Cristina, 9, 17–18, 237–8 roll-back neoliberalism, 167–8, 173, 188–9, 192–4, 206 roll-out neoliberalism, 9, 71, 84, 206 Romero, Veronica, 207, 234 Roosevelt, Franklin D., 167, 171 Rosales, Manuel, 51 Rose, N., 218 Royalty II, 130, 133–4 Rozas, P., 124 RPS (Red de la Protección Social), 145 Ruckert, Arne, 14–15, 32, 35, 66, 106, 118, 136–7, 147, 153 Rueda, M. I., 237–8 Ruggeri, Andrés, 61–2 Ruiz Torres, G., 29 rule of law, 27 Rural Development Law, 241 Saad-Filho, A., 23–4 Sacerdote, B., 173, 182 Sachs, J., 77, 79, 83 Sader, E., 105 Salinas, Carlos, 21, 193–4, 197 San Alberto gas field, 110, 115–16 San Andrés Agreement, 66

293

San Antonio gas field, 110, 115–16 Sánchez de Lozada, Gonzalo, 106, 109, 111, 114, 234 Sandinista National Liberation Front (FSLN), 143, 147–9 Sandoval, L., 97, 103, 117–18 San Jose Agreement, 101 Santiso, J., 43 SAPRIN see Structural Adjustment Participatory Review International Network SAPs see structural adjustment programs Sarney, José, 74 Scharma, S., 143 Scherrer, C., 56 School Fees Abolition Initiative, 160 Schugurensky, D., 158–9 Seattle Conference, 79, 135 securitization, 178–80, 231–2, 237, 243–4 Colombia, 236–40, 242–3 Security and Prosperity Partnership of North America, 249 Sekler, Nicola, 12, 72, 100, 138, 240 self-determination, 44, 61, 65 self-improvement, 202, 209 self-interest, 168, 170, 185 self-organization, 59–64, 66–7 service contracts, 114–15, 134 sexuality issues, 179–82, 221, 225, 227 Sharpe, K., 122 shock therapy, 30, 91 Sikkink, K., 72, 81–2 Silverman, J., 240 Sineau, M., 205 Sisti, E., 162 Smith, A. M., 178 social citizenship, 146, 186, 188 social engineering, 10, 23, 25–9, 148, 174 social funds/institutions, 34–5, 142 social investment, 7–9, 188 in children, 198–207 and regulation, 199–201, 210, 212 socialism, 1, 36, 38, 49, 63 see also MAS (Movimiento Al Socialismo); twenty-first century socialism

294

Index

social justice, 39, 44, 66–7, 74 social liberalism, 21, 186, 191, 193, 198 Social Missions, 96–8, 101 social movements, 5–6, 24, 54–5, 57–9, 72, 109, 158, 163–4, 170, 232, 247 see also civil rights movement; Jubilee movement; mass mobilization; protests; women’s rights movement social policy, 3, 39, 43–5, 47–51, 102–3, 138, 141–6, 184–6 see also social investments; social spending Social Production Enterprises (EPS), 100 Social Protection Network (RPS), 145 social relations, 60 social reproduction, 5, 10, 24, 28, 210, 224 social spending, 106, 116–18, 147–8, 199–200 social transformation, 55–63, 65, 67, 69 Zapatistas and, 64–8 Social Union Framework Agreement (SUFA), 191–2 Soederberg, S., 21, 80, 193 Soliz Rada, Andrés, 112 Sourcebook for Poverty Reduction Strategies (World Bank), 137, 139, 141, 143, 158 South American Community of Nations, 42 Southern Cone market, 106 sponsorship of immigrants, 222–4, 226–8 Springer, N., 239–40 Spronk, S., 105, 107 stakeholder participation, 142–3, 146, 157 state control, 7–9, 247 see also state interventions; state ownership state-firm bargaining, 122, 126–7, 129–31, 133 Argentina, 127–9

state interventions, 9–10, 22, 24–5, 27–30, 33, 52, 55 state ownership, 39, 46, 50, 62, 90, 95, 100, 102, 106–7, 122, 126, 128–9, 241 Stefanoni, P., 105 Stiglitz, George, 167 Stiglitz, Joseph, 22, 33, 77, 79, 83, 136, 138, 141 Stone, D., 135 Stopford, J., 122 Storper, M., 27 Strange, S., 122 Stromquist, N. P., 154 Structural Adjustment Participatory Review International Network (SAPRIN), 32, 138 structural adjustment programs (SAPs), 3, 32–3, 39, 89, 153, 167, 184, 193 and international finance, 72–3, 77, 81 and World Bank, 135–6, 144, 146 Stubrin, F., 163 Suarez, D., 163 subaltern interests, 55, 64 Subcomandante Marcos, 65 subjectivities, 9, 60, 65, 200, 212 subordination, 217–18 subsidies, 97, 241–2 Suez, 129 SUFA see Social Union Framework Agreement Sunderland, J., 203 surveillance, 16–17, 178–9, 182, 200, 205, 207, 210–12, 238 Svampa, M., 60 Székely, Miguel, 194–5 taxes and royalties, 107–9, 113–16, 120, 126–7, 129–30, 132–4, 175, 247 Taylor, Marcus, 10–11, 29–32, 35, 99, 137, 149 technocratization, 31, 39, 209 Temporary Assistance for Needy Families (TANF), 177–80, 221 terminology, 3–4, 6–8, 82 territoriality, 68

Index terrorism, 179–80, 236–7, 242, 244 Third Way concept, 1, 21, 94–6, 185, 197 Third World, 72, 74, 76, 78 see also developing countries; Highly Indebted Poor Countries Thomson, S., 105 Tickell, Adam, 9, 71, 89, 105, 199–200, 206, 219 TNCs see transnational corporations Tomasevski, Katarina, 159–60 Tooley, J., 161 Torfing, J., 56 Torres, C., 154–5, 159 Total, 110 Touraine, A., 38 ‘Towards a Communitarian State’ (Uribe), 236–7 trade agreements, 41–3, 51–2, 113, 122, 248 trade openness, 39–43 trade unions/unionists, 24, 34, 49, 91, 108, 163, 169, 175, 186 in Colombia, 232–3, 235, 238–40, 244 and human rights, 74, 76, 79 and institutional change, 59, 64, 68–9 trans-Amazonian pipeline, 101 transnational corporations (TNCs), 105, 107–11, 114–16, 120–4, 126–7, 129, 131–2, 134 Transnational Institute, 75 transnationalization, 64–8 Transredes, 111–12 Trejo, Guillermo, 193 Trocmé, N., 205 Tuider, E., 68–9 Tussie, Diana, 11–12 twenty-first century socialism, 89, 93, 96, 100 UDAPE (Unidad de Análisis de Políticas Sociales y Económicas), 118 UDI (Unión Demócrata Independiente), 130 Uganda Debt Network (UDN), 76 Umayahara, M., 154 Unborn Victims of Violence Act, 181

295

unemployment, 44, 46, 50, 59–60, 140, 171, 174, 177, 189, 237 Unión Patriótica (UP), 233, 235 United Nations, 80, 124 United Nations Conference on Trade and Development (UNCTAD), 125–6, 140–1 United Nations Development Program (UNDP), 153, 156 United Nations Educational, Scientific and Cultural Organization (UNESCO), 155 United Nations Non-Governmental Liaison Service (UNNGLS), 79–81 United Self-Defense Forces of Colombia (AUC), 235 United States, 1–5, 8–10, 81, 125, 163, 167–70, 174–6, 184–5, 239, 249 economic/trade policies, 41–3, 49 family issues, 215–16, 218–28 gender issues, 168–9, 171–2, 178, 180–2, 218 micropolitics, 180–1 securitization, 178–80 welfare, 170–4, 176–8 Unit for Political, Social, and Economic Analysis (UDAPE), 118 Unit for the Renegotiation and Analysis of Public Service Contracts (UNIREN), 127 Universal Declaration of Human Rights (UDHR), 73–4, 80, 84 universality, 217 unwaged labor, 171, 174, 178 UP (Unión Patriótica), 233, 235 Uprimny, R., 240 Uribe, Alvaro, 231–2, 235–6, 243 Urrea Giraldo, F., 240 Uruguay, 38, 42–3, 48–9, 52, 106, 125, 246 utilitarianism, 27 Valdés, J. G., 28 Vandevelde, K., 123 varieties of liberalism, 185–8, 216–18 Varoufakis, Y., 25 Vázquez, Tabaré, 38, 43, 48–9, 125 Veltmeyer, H., 21, 32

296

Index

Venezuela, 1, 7, 10, 21, 36, 55, 59, 69, 82, 148–9, 163, 247–8 economic/trade policy, 38, 42, 44, 49–52 foreign investment, 120, 125–6 hydrocarbons industry, 106, 117 self-organization, 63–4 see also Chávez, Hugo Venezuela Agenda, 94 Venezuelan Petroleum (PDVSA), 50, 95, 103 Verger, A., 163 Vernon, R., 122 Villarzú proposal, 129, 133 Villegas Quiroga, C., 106–7 Vizcarra, Ivonne, 211–12 vocales, 210–11 Vuelvan Caras project, 63 Wackenhut, 176 Wade, R. H., 141 wages, 24–5, 40, 45–6, 60, 63, 91, 170, 188, 190, 205, 218–19, 240 wage support, 40 Wall, Glenda, 9–10, 16–17, 142, 146, 192, 201–3 war on terror, 179–80, 236–7, 242, 244 Washington Consensus (WC), 3, 8, 39, 71–2, 77, 79–81, 84, 89, 120–1, 144, 149, 167 see also post-Washington Consensus Webber, Jeffrey, 13–14, 51, 105, 107, 109 Weisbrot, M., 4, 18, 97, 103, 117–18, 138, 149 Weiss, N., 201 welfare, 8, 24–5, 40, 43–4, 125, 142, 184, 186–7, 193, 202, 221 Canada, 189, 205 conditional, 145–6 Keynesian, 217–18 United States, 170–4, 176–8 Williamson, J., 3, 120, 137–8, 167 Winkler, D. R., 153 Wise, C., 21, 32, 194 Wolfensohn, James, 79, 136, 139

Wolff, L., 160 women’s rights movement, 172, 186, 189 Wood, A., 152, 157 Worker’s Party, Brazil, 1 workfare, 174, 176–8, 184–5, 187, 190 World Bank (WB), 3–5, 48, 82, 102, 106, 109, 118, 167, 178, 192 and educational development, 151, 155, 157–62 and human rights politics, 75, 77, 79, 81 and neoliberal contradictions, 21–2, 25, 29, 31–5 and poverty reduction, 135–7, 139, 141, 143–5, 147–9 Sourcebook, 137, 139, 141, 143, 158 and structural adjustment programs (SAPs), 135–6, 144, 146 World Council of Churches, 78 World Development Movement (WDM), 79 world development order, 136–7 World Development Report (UN), 124 world economy, 4 World Education Forum, 163 World Social Forums, 80, 96, 135, 163 World Social Summit, Copenhagen, 135 World Trade Organization (WTO), 5, 67, 79, 123, 125 Woroby, Tamara, 224 Wright, C., 135 Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), 107–14, 116 Zald, M., 78 Zapatistas, 64–9, 163 Zedillo, Ernesto, 194, 197 Zelik, R., 63 Zibechi, R., 54–5, 57–8, 61–3, 69, 105, 113 Zingales, L., 175 Zones of Rehabilitation and Consolidation (ZRCs), 238–9

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