Theory in pursuit of practice

A few years ago, in the October 1994 issue of this journal, Leslie Armijo, Abraham Lowenthal, and I wrote about the absence of well-specified theoretical arguments to explain the ability of countries to pursue democratization and market-oriented economic reform simultaneously. There were plenty of theories to explain the difficulties that new democracies would face in formulating and implementing programs of orthodox economic reform, but there was almost nothing to explain how these countries might succeed in sustaining such reforms. We wanted to title our essay “It’s Fine in Practice, but How Does It Work in Theory?” but the editors preferred the more descriptive title “The Problems of Simultaneous Transitions.”

During the three years that have elapsed since we wrote about the pursuit of simultaneous reform, the empirical trend has continued. Most countries, particularly middle-income ones, continue to pursue both democratization and market-oriented economic reform, yet our theories continue to lag behind their practices. Stephan Haggard and Robert R. Kaufman’s new book is an important contribution, in part because it takes us closer to a theoretical understanding of the conditions under which new democracies introduce and sustain major economic reforms.

Like all works of social science, this book has been written with a purpose, and in a particular historical and scholarly context. Haggard and Kaufman are writing after both the initial transitions from authoritarian rule and the euphoria of liberal triumphalism in the early 1990s, and well into the early stages of the consolidation of new democracies in Latin America and East Asia in the mid-1990s. The future of some of these new democracies remains uncertain in important respects, but as time goes by, they are beginning to look more consolidated on both the economic and political fronts. Haggard and Kaufman differentiate themselves from what they term the “choice-based” approach pioneered by Guillermo O’Donnell, Philippe Schmitter, and Laurence Whitehead in their Transitions from Authoritarian Rule(Johns Hopkins University Press, 1986) and its more analytical variant, as represented in Adam Przeworski’s Democracy and the Market(Cambridge University Press, 1991). Haggard and Kaufman want to bring the economy back into the center of the analysis, with a consideration of how economic and related social structures influence the politics of regime change, how economic policy and performance affect the opportunity for political elites to mobilize political support or opposition, and how economic interests are mediated by political institutions.

Haggard and Kaufman cover a vast territory, examining 12 countries from the time of their initial transitions from authoritarian rule through the early phases of their new democracies, to the consolidation of their democratic institutions. Along the way, the authors offer us a great many insightful hypotheses about the political economy of democratic transitions. Their theoretical approach, however, is not that of theory with a capital “T”—of a parsimonious, deductive model of political economy, abstracted out of both time and place. Rather, theirs is a form of middle-range theorizing, probably more appropriate to the subject under investigation. That is, they derive their hypotheses almost inductively, from a close study of their cases. They are not pure empiricists, and they subject their hypotheses to falsification and amendment, as the empirical evidence warrants. Yet their work moves back and forth between their rich knowledge of the historical experiences of the different countries and more general theory-building. Formal analysts will find this approach deficient in important respects, but partisans of “thick description” and policy-oriented analysts will find it more amenable.

The book is neatly divided into three major sections: one on the political economy of withdrawals from authoritarianism, one on economic adjustment in new democracies, and one on the consolidation of democracy and economic reform. The authors provide a nicely integrated explanation over the course of the three periods, but given the date of publication, the discussion of consolidation is the least developed portion of their argument. Haggard and Kaufman formulate important, if not always novel, arguments about each of the periods under investigation. They...