Politicians and Economic Reform in New Democracies: Argentina and the Philippines in the 1990s (review)

Basing itself on case studies in Argentina and the Philippines, this book argues strongly in favor of a rationalist and institutionalist perspective for interpreting the behavior of legislators and legislatures in the era of neoliberalism and "new" democracies. Eaton argues that party and electoral rules and laws that exist in a given country form the institutional context that conditions policy preferences and the ways in which those preferences are acted on as legislators seek to advance their individual political careers. Other explanations of legislative behavior, such as external actors and forces, interest groups, and the severity of economic crisis are either found inadequate and/or reduced to, at best, complementary roles.

As is well known, the shift away from a strong economic role for the state in Latin America and elsewhere in the past quarter century has been accompanied by numerous changes in economic laws and policies. Most of these changes have been initiated and carried out by presidents in charge of a strong executive branch, with the legislature perceived of as uniformly opposed to reforms and as having an insignificant role in the reform process. This book attempts to reverse this perception by arguing that legislators' preferences are heterogeneous (depending on the institutional context) and that legislators use a myriad of tools (such as passing or refusing to pass laws, modifying proposals of the executive branch, influencing bureaucrats in the implementation phase) to further their policy choices.

The focus of the book is on structural policy reforms—beyond macroeconomic stabilization policies—in the area of tax law that typically involve "streamlining and simplifying," that is to say a move away from a complex list of tariffs, excises and single stage sale taxes to a broadly based value-added tax (VAT); other laws address the areas of revenue sharing and bureaucratic performance. The author notes that presidents across the developing world have proposed remarkably similar policies in these areas. (Although his discussion of why this might be the case is somewhat rudimentary, especially concerning possible domestic reasons for uniformity.) And yet, the policy outcomes have differed considerably from country to country, due to legislatures' differential ability and willingness to alter the course of the presidential proposals on account of the differing institutional incentives and constraints they face.

The author makes his case by considering two examples of presidential (rather than parliamentary) systems of governance: Argentina and the Philippines. The institutional difference between them is that in Argentina the electoral system is party-centered, whereas in the Philippines it is candidate-centered. In the former, politicians build their careers on political party loyalty and thus, in addition to constitutional powers, the President as party leader has partisan powers in his hands, which he can use to good effect. In the latter, parties and party affiliations are weak and thus politicians survive by building personal reputations based on their ability to claim credit for policy favors granted to constituents. As a result, legislators are not overly willing to give up such particularistic powers, resisting pressures to "simplify and streamline."

The comparison between these two countries is based on extensive archival studies in the two legislatures as well as numerous personal interviews. The middle four chapters of the book are dedicated to this discussion, which actually allows for four interesting case studies, as both systems are bicameral and the lower and upper houses in each case face different electoral rules. In subsequent chapters, there is a brief discussion for Argentina and the Philippines within the institutionalist framework established of other policy areas such as trade and financial liberalization, deregulation and privatization, pork-barrel reform, as well as an attempt based on secondary sources to extend the discussion to countries such as Brazil, Bolivia, Colombia and Venezuela. On the narrowly focused question of whether and how...