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Business Politics and Policy Making in Latin America Ben Ross Schneider Department of Political Science Northwestern University.

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Presentation on theme: "Business Politics and Policy Making in Latin America Ben Ross Schneider Department of Political Science Northwestern University."— Presentation transcript:

1 Business Politics and Policy Making in Latin America Ben Ross Schneider Department of Political Science Northwestern University

2 A Tale of Two Coffee Sectors Brazil: state control, low quality, and declining consumption, little dialogue with growers Brazil: state control, low quality, and declining consumption, little dialogue with growers Colombia: high quality, private regulation, close collaboration between growers and the state Colombia: high quality, private regulation, close collaboration between growers and the state Why? Federacafe Why? Federacafe

3 Overview Portfolio framework for analyzing business politics Portfolio framework for analyzing business politics Comparative examination of patterns of business politics in Argentina, Brazil, Chile, Colombia, and Mexico Comparative examination of patterns of business politics in Argentina, Brazil, Chile, Colombia, and Mexico Assessment of how various types of policy encourage different political responses from business Assessment of how various types of policy encourage different political responses from business

4 Portfolio analysis of business investment in politics Business associations Business associations Campaign contributions and lobbying Campaign contributions and lobbying Personal networks Personal networks Corruption Corruption

5 Strong Voluntary Encompassing Associations AssociationDateScopeStaff MexicoCoparmex1929-Economy-wide30 CMHN1962-Economy-wide0 CCE1975-Economy-wide80 ChileCPC1935-Economy-wide8 Sofofa1883-Industry50 ColombiaFederacafe1927-Coffee3,500 ANDI1944-Industry150

6 Weak Voluntary Encompassing Associations AssociationDateScopeStaff ArgentinaACIEL Economy-wide0 APEGE1975-6Economy-wide0 CGE1952-Economy-wide10 UIA1886-Industry50 BrazilUBE Economy-wide5 IEDI1989-Industry8

7 Political Activities of Associations Visibility in media Visibility in media Direct contacts with policy makers Direct contacts with policy makers Distant relations with politicians and parties Distant relations with politicians and parties Representation on consultative or policy councils Representation on consultative or policy councils

8 Elections, Campaign Finance, and Lobbying Legal framework greatly restricts private sector funding Legal framework greatly restricts private sector funding Yet millions of dollars flow from business to politicians Yet millions of dollars flow from business to politicians Contributions may not buy much influence Contributions may not buy much influence -- low reelection rate -- narrow impact, collective weakness -- insurance contributions

9 Business Appointees in Recent Government Cabinets President Number of business ministers Percent of business ministers ArgentinaKirchner00 Duhalde18 De la Rua19 ChileLagos00 ColombiaUribe754 MexicoFox525 PeruToledo727

10 Perceived Corruption in Latin America, 2004 ScoreRankPercentile Chile Uruguay Costa Rica Brazil Colombia Mexico Peru Argentina Venezuela Bolivia

11 Estimates of Patterns of Business Politics Lobbying & Elections AssociationsNetworksCorruption ChileLowHighLow BrazilMediumLowMedium ColombiaLowHigh Medium ArgentinaMediumLowMediumHigh Mexico, 1990s LowHighLowMedium Mexico, Medium

12 Negotiating Trade Agreements Chile, Mexico, and Colombia relied on cuarto al lado model of consultation between business and government Chile, Mexico, and Colombia relied on cuarto al lado model of consultation between business and government Business participation mediated by associations Business participation mediated by associations In Brazil and Argentina negotiations for Mercosur excluded business In Brazil and Argentina negotiations for Mercosur excluded business

13 Scope and Implementation in Policy Making Broad ScopeNarrow Scope Rapid Implementation Uniform changes in tariffs, pensions, or taxes; fiscal decentralization Privatization, deregulation Lengthy Implementation Administrative reform, education policy, trade agreements Sectoral re- regulation

14 Conclusions Root causes of variation in patterns of business politics usually found in prior government actions Root causes of variation in patterns of business politics usually found in prior government actions Patterns of business politics are fairly stable over time, yet still subject to change through policy Patterns of business politics are fairly stable over time, yet still subject to change through policy Business influence on policy more likely to be positive when its participation is formal, encompassing, organized, and transparent Business influence on policy more likely to be positive when its participation is formal, encompassing, organized, and transparent


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