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Article Excerpt
The impact of economic globalization for the countries of Latin America was profoundly shaped by the impact of the debt crisis of the early 1980s. For these countries, the emergence of transnational policy networks involving multilateral and domestic technocrats was instrumental in ushering in market reforms. By 2007, a variety of factors would seem to place middle-income countries such as Mexico and Chile beyond the policy reach of multilateral lending institutions. I argue, however, that the Inter-American Development Bank and the World Bank have, in fact, become closely entangled in the development of conditional cash transfer programs through closed transnational policy networks. The nature and extent of that involvement has been shaped by the different institutional legacies and cultures of the two institutions. While both multilaterals tended to bolster the objectives of domestic policymakers and the exclusion of civil society organizations from the policy process, the greater rhetorical commitment of the World Bank to civil society participation did allow civil society organizations to pry open a small space for policy inclusion in the Chilean case. KEYWORDS: Mexico, Chile, World Bank, Inter-American Development Bank, poverty.
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Economic changes since the mid-1970s, involving the elimination of economic borders and an increase in international exchange particularly in trade and investment flows, are at the heart of what has become known as economic globalization. These changes were accompanied by a new policy direction that took as its primary article of faith the reduction in the role of the state. For Latin America (and for most countries of the Global South), this new policy direction became closely associated with the debt crisis and with World Bank structural adjustment programs. For at least a decade, the main ideas of neoliberalism (particularly, trade liberalization and privatization) were transmitted through "policy dialogue" in which protracted discussions between lending institutions and borrower governments established close working relationships between domestic and multilateral technocrats. Multilateral officials now had an opportunity to influence policy in important ways and did so through these transnational policy networks. (1)
This article is an analysis of the role of transnational policy networks in the development of conditional cash transfer programs in two Latin American countries: Mexico and Chile. (2) Such programs have become increasingly popular in the region. (3) The policy network that originated and drove the conditional cash transfer payment programs in each case can best be described as a "policy community," a particular kind of policy network characterized by a tightly integrated set of actors, restricted membership, insulation from the public, and a clear consensus on basic policy assumptions. (4) Like the earlier market reform versions, policy networks may not be strictly defined by institutional affiliations--personal links and nonstate/multilateral actors may also be important. Unlike the market reform policy process, however, the global arena is now the setting of contradictory pressures: while it bolsters exclusionary domestic elites, it can also provide an opportunity for civil society organizations to push open domestic policy space. In the cases dealt with here, it did both--restructuring and opening the policy process in complex ways. This study suggests that a more institutionalized policy culture may, because it downplays the importance of personal ties, afford more policy opportunity for civil society groups.
One would expect international organizations to have little impact on the social policies of middle-income countries such as Chile and Mexico. The leverage afforded by the debt crisis has long since passed; the neoliberal economic model, propounded so strongly by international lending institutions, has faced rising criticism undermining the credibility of multilateral advice; and private capital flows have increased, removing the need to borrow from multilateral institutions inclined to ask for policy conditionalities. (5) Neither Chile nor Mexico, with well-trained technocrats in the upper echelons of their bureaucracies and political leaderships, (6) needs the analytical work provided by multilateral organizations. Chile's "tiger" status would seem to place it beyond the reach of multilateral influence. Even in the face of economic crisis, Mexico was not only able to resist multilateral pressure, but exerted important pressure of its own on institutions such as the World Bank. (7) Yet, as this analysis shows, in recent years the officials of international organizations (the World Bank and the Inter-American Development Bank) have been closely entangled in conditional cash transfer programs in those two countries. In their efforts to develop and to push these programs forward, their technocratic domestic originators have recruited support from international organizations; together these domestic and international actors not only puzzled over important features of the new programs, but also considered their political dimensions. (8)
In their policy deliberations, these national and transnational actors have had to contend with the pressures exerted by civil society organizations. These organizations, which have often been among the most important critics of neoliberal policy reforms, lobby not only their own governments but also multilateral lending agencies when the objects of their criticisms are programs and projects with multilateral funding. The ability of civil society organizations to influence policy is shaped by the following market reform era legacies:
1. The continuing predominance of technocrats and technocratic culture in policymaking and a policy paradigm that involves strong faith in the market and a desire to streamline the state. Measurement of policy efficacy is highly quantitative.
2. Ongoing and close relations, originating in policy dialogue over structural adjustment, between country finance ministry officials (the interlocutors between their countries and the banks) and those of multilateral lending institutions.
There is no consensus on the impact of multilateral lending institutions on the policies of Global South countries. Much of the work on structural adjustment made the case that policy conditionality, in itself, had been largely unsuccessful in pushing countries to implement policies they opposed. (9) More important was the more subtle process of persuasion through years of policy dialogue during which structural adjustment was discussed with domestic officials. (10) While some argue that the sovereignty of borrower countries has been severely compromised by multilateral lending institutions, other work has suggested that the extent and nature of the impact on policy is shaped by, among other things, the strategic importance of the borrower country to US interests. (11)
For the domestic instigators of conditional cash transfer programs, these programs were designed to serve the larger interests of the neoliberal model, which was coming under varying degrees of stress. While Chile had been highly successful in reducing moderate poverty, extreme poverty stubbornly persisted. In Mexico, after a decade of market liberalizing reforms, both moderate and extreme poverty were still widespread. (12) Policymakers also faced fiscal pressures. Chile faced an economic slowdown with the Asian crisis; Mexico experienced a severe financial crisis in 1995 and stagnant economic growth thereafter. Concerned about maintaining business confidence if they engaged in "populist" social spending, the originators of these programs sought more efficient ways to address pressing social needs. International supervision of these programs was also seen as a way to ensure that they would be regarded by the business community as running in a transparent and efficient fashion. (13) Once under way, program instigators were concerned that the programs not be tampered with by civil society involvement.
The World Bank and the Inter-American Development Bank: Conflicting Pressures on Policy...
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