Globalization and Neoliberalism: Economy and Society in Latin America

Article excerpt


In the 1980s, Latin America experienced the worst economic crisis in history. Economic stagnation and financial crises created havoc among the Latin American economies. The policies that were proposed to end this nightmare, that ultimately were implemented, meant a radical break with the model of development that had been pursued by most Latin American countries for the last fifty years. The restructuring of the economies along proposed neoliberal lines has taken place under conditions of increasing globalization - for example, the objectives of these processes had to be realized increasingly within globally defined parameters and structures. The relations between state and civil society experienced significant changes regarding the legitimacy and effectiveness of the traditional structures of interest representation of groups and classes in many countries. This article will explore the nature of these changes, the impact of the neoliberal offensive for economy and society, and the prospects for alternative development strategies and sociopolitical scenarios.


Since the 1930s, economic, social and political processes in most Latin American countries were coordinated through what Cavarozzi has called a state-centered matrix (SCM) (Cavarozzi, 1993:665-684; 1994:127-156). This concept implies a double dependency in state-civil society relations. Social actors such as industrial workers, state bureaucrats, members of the middle class, all forming part of the urban-industrial complex, became a factor of sociopolitical importance, but they depended on the state for the realization of their demands and aspirations. The state in turn needed the support of these actors to give its functioning a certain basis of legitimacy. The SCM was obviously the stereotypical configuration under populist rule when those sectors associated with the model of import-substituting industrialization were integrated into corporatist structures, and formed the social basis and political force for the state. However, the presence of SCM was not limited to populist rule. Populism was not the only political formula that emerged under the model ofdesarrollo hacia adentro (inward directed development), although -admittedly- it was the most important.1 These political solutions to a highly complex economic and social situation, shared a common emphasis on an all-encompassing trend toward state intervention in all spheres of economic, social, political and cultural life. The trend was supported by politicians of widely differing political persuasions. Although the specific content of policies depended on the composition and orientation of the supporting class alliance (see Collier and Collier, 1991; di Tella, 1964:47-74; Smith, 1998:51-74).

The state thus became a 'developmental state' that not only provided most of the infrastructure that supported the development process, but -in the long-term- extended its power and influence to all those areas that had' developmental impact. In this manner, in addition to the essential concerns with internal order, the continuity, and the external relations of the societal system, state action came to include an ever-increasing number of interventions (see Kruijt and Vellinga 1980).2 At the same time, however, the state had not strengthened its capacity to define policies that went beyond the interests of the many narrow social groups that had established particularistic links to public agencies. These policies produced a social fragmentation that served the objectives of political control, but made it increasingly difficult to create a sufficiently strong social basis for broad development-related policies. The continuous growth of the state apparatus was not accompanied by an equal growth in internal coordination, efficiency and effectiveness of state action, and lacked autonomy with regard to particularistic demands. As a result, private interest infiltrated public institutions and, in fact, 'captured' parts of the state (Weyland, 1996). …