Academic journal article Global Governance

Multilateral Lending Institutions and Transnational Policy Networks in Mexico and Chile

Academic journal article Global Governance

Multilateral Lending Institutions and Transnational Policy Networks in Mexico and Chile

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.


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 Culture

The role that the World Bank and the Inter-American Development Bank (IADB) played in the development and expansion of conditional cash transfer programs was shaped by both their institutional contexts and their histories. The IADB has a closer and more cooperative relationship with the governments of Latin America than has been the case for the World Bank. This attitude stems largely from the fact that its borrower members are also majority shareholders; it therefore must listen closely to their viewpoints, including their resistance to civil society consultation and involvement in policy, both at the international lending level and in the domestic policymaking process. Another feature of the relationship between the IADB and its shareholders is the high degree of trust and "cultural understanding." (14) The consequence of this closeness with governments has been that the IADB is considerably less engaged in pushing civil society on reluctant borrowers.

Dialogue with civil society and its incorporation into the policymaking process became important imperatives for both the World Bank and the IADB, especially from the mid-1980s. For the most part, the IADB's commitment to civil society is the responsibility of its Modernization of the State and Civil Society administrative unit, which focuses largely on promoting dialogue between member states and civil society. Although civil society engagement has strong support from the IADB president, its state and civil society projects are small and the IADB is not generally involved in main-streaming civil society involvement in specific IADB funded projects. Moreover, bureaucratically, the IADB is characterized by a split between civil society promoters (largely in the Modernization of the State and Civil Society unit) and others (often longtime IADB officials or those with training in economics) who remain highly skeptical of civil society organizations. Hence, as we will see clearly in the Mexican case, there is a disconnect between the IADB's civil society aspirations and the actual involvement of civil society in concrete programs.

The World Bank, in contrast with the IADB, has recently become more intensively engaged with civil society organizations, while being more autonomous from regional borrower governments. Major donors on its board, especially from the North, have weighed in on policy directions. These donors, particularly the United States, faced increasing pressure from civil society organizations highly critical of the impact of World Bank projects and programs on the environment, on indigenous peoples, and on poverty. This lobbying was highly effective in pushing the Bank toward a reconsideration of its lending policies and the incorporation of civil society into its policy considerations since 1990. Lacking the IADB's close relationship with borrower governments, the World Bank has been able to build a closer working relationship with civil society organizations. But many observers remain fairly skeptical about the Bank's commitment to participation, pointing out the selective nature of Bank civil society participation (largely in projects involving an impact on the environment or indigenous peoples), the small amount of actual civil society participation in the development of Poverty Reduction Strategy Papers, and the negative impact of the Bank's "disbursement culture" on the time-consuming process of expanding civil society participation. (15) But there has been an effort to mainstream civil society participation. The Latin American and Caribbean (operational) Division does have a civil society coordinator, and each of the country offices has a civil society contact person who cultivates and holds meetings with civil society groups. This, as we shall see, has afforded an opportunity for civil society to push open the policy process, however slightly.

International Organizations in the Development of Conditional Cash Transfer Programs

The role of international organizations in conditional cash transfer programs was particularly notable in the case of Mexico, where a tightly knit and highly integrated transnationalized network, involving a high degree of trust and personal friendships, had an important impact on the continuity and nature of the program. This transnationalized network, involving the IADB and a foreign consultant organization--the International Food Policy Research Institute (IFPRI)--and Mexican government officials retained the technocratic features of the program against the onslaught of civil society criticism. (16) In the Chilean case, the involvement of the World Bank in its conditional cash transfer program had a less important, but nevertheless significant, impact. Here, the transnationalized policy network looked much more like the standard type of network: it was largely institutionally based and far less tightly integrated than the Mexican one. Personalized relationships did not play an important role. In the Chilean case, the greater World Bank concern for civil society involvement and a lower level of reticence about pushing borrowing governments on this issue produced a small opening for civil society in the program.

PROGRESA, the Mexican program, was introduced in 1997 and expanded under its new name, Oportundidades, during the administration of President Vicente Fox. Originally targeted to 400,000 families when it was established, by 2002 the program had been extended to over 4 million families. It emerged during the twilight of Institutionalized Revolutionary Party (PRI)--authoritarian--rule and in the wake of the 1995 economic crisis from the musings of a small number of enthusiastic market reform technocrats. (17) These technocrats, preoccupied with the inefficiencies of state subsidies because they did not benefit the poorest, sought ways to reduce state spending. The new program involved the handing over of small sums of money to the female heads of households in exchange for children's regular attendance at schools and health clinics. The key domestic technocratic figures were Santiago Levy, an economist and subsecretary of expenditures in the finance ministry, and Jose Gomez de Leon, a demographer, close personal friend of the president, and head of CONAPO (National Population Council). The highly technocratic nature of the program was of paramount importance to its originators. The development of an index of marginality made possible the selection of the poorest communities. Then, detailed surveys allowed for the selection of beneficiary families within these communities in accordance with whether incomes fell below the value of a basic food basket.

However, between the time of its initiation in 1997 and the election of Fox in 2000, PROGRESA received an onslaught of criticism from the Mexican congress, from the left, from civil society organizations, and from presidential candidate Fox's own social policy transition team, which had engaged in an in-depth consultation of thousands of civil society organizations on social policy, including PROGRESA. Critics railed against the absence of community participation at all stages (program design, the selection of beneficiaries, monitoring), the exclusion of many deserving poor, and the potential divisive impact on poor communities; they also called for parallel support for productive projects. (18) The position of Mexican civil society organizations, irrespective of their political tendency, (19) has been that a viable strategy to overcome poverty and inequality must include the organization and strengthening of civil society groups and their involvement in policy. Given the intensity of opposition, including civil society criticism, it is perhaps surprising that the program was not only maintained largely in its original form, but also expanded. This was particularly unusual since it was customary for incoming presidents to abandon social programs closely associated with previous presidents--and this would be especially likely given the defeat of the PRI in 2000. To ensure the continuity of the program, its technocratic originators sought, as early as 1997, the involvement of international actors: the Washington-based consulting organization IFPRI and the Inter-American Development Bank.

The key instigators of the new program (Levy and Gomez de Leon) had an amicable relationship with the IADB, which included numerous personal contacts and some close friendships. (20) An ongoing outside evaluation of the program, from the beginning of its implementation, was seen as a way of generating "hard data" that could be used to support the argument that the program should continue. An IADB official not only recommended IFPRI as the organization with people who could carry out such an evaluation, but the bank also lent Mexico the money to hire the consulting agency. (21) Discussions with IFPRI began in 1997 and produced a very close working relationship between Mexican technocrats involved in PROGRESA and the IFPRI people. The IFPRI evaluation team lived in Mexico during the period of evaluation (1997-2000), and evaluation reports were a collaborative effort between the Mexicans and the IFPRI teams. (22) Critics charge that, as a consequence, the evaluations of the program were not impartial. Mexican officials discouraged their IFPRI consultants from discussing their work on Mexico with other academics or with other groups in Mexican society. Indeed, the first presentation of the IFPRI evaluation was made in Washington in 2001. The fact that the IFPRI evaluation demonstrated quantitative improvements in the lives of the children of the poor in the program gave it tremendous international support and was instrumental in the program's continuation under President Fox; the president became firmly convinced of the program's efficacy.

A parallel strategy pursued by the program's originators was to lock in the program by obtaining an IADB loan that would stipulate that important aspects of the program could not be changed without the agreement of the lending institution. (23) In 1999, Levy approached the IADB for a loan for PRO-GRESA. The choice of the IADB over the World Bank for this loan was very closely linked to the differences in the cultures of the two institutions, as described earlier. The close personal ties between Mexican and IADB officials rendered the Mexicans confident that IADB people would respect their wishes that details of the program not be made public; they were reticent about the World Bank's seemingly greater commitment to civil society involvement and feared that World Bank procedures would slow the negotiation process and expose it to public view. IADB officials, on the other hand, could be relied upon to produce a quick loan and to be discreet about ongoing discussions. The IADB officials involved in the negotiation of the loan were in the regional department--that is, they were separate from the administrative unit dealing with civil society participation, thereby insulating them from intra-IADB pressures for civil society participation. (24) IADB funding for PROGRESA came in two phases: the first loan, which was signed in 2001, was negotiated prior to President Fox's presidency; the second phase, which also binds the government to the program, was negotiated during the Fox presidency and was signed in 2005. (25)

But while Mexican officials might have thought their IADB counterparts to be compliant supporters, in the end, IADB officials played an active role in shaping the program. (26) For example, the original strategy for the allocation of PROGRESA monies involved their allocation regionally and the use of statistical methods to choose poor communities within regions, a method that would have meant that poor beneficiaries in better-off states would be far less poor than many excluded from the program in very poor states. The IADB members of the policy network insisted that the poorest communities be selected through a national poverty instrument, a method that would effectively reduce the amount of PROGESA support going to more prosperous states. (27) The Mexicans were resistant, fearing the potential political fallout should the governors of more prosperous states get wind of it. But the Mexicans agreed, and the promise to keep the national statistical instrument from public knowledge and debate was probably key. (28) The trust between Mexican and IADB officials was important in enabling this policy.

At the same time, IADB officials played an important role in preventing deviation from the statistical method in choosing rural beneficiaries, an approach that came under increasing pressure with the election of the new Fox administration in 2000. Not only did many of Fox's civil society organization supporters want a more decentralized community participatory program, but Fox, himself. initially envisioned a role for these organizations in the process of selecting beneficiaries. Once the new administration took office, the Mexican officials in discussions with the IADB now consisted of two groups: a few remaining members from the previous administration, such as Santiago Levy, who were strongly committed to the statistical method of selecting beneficiaries; and a number of Fox appointees, such as the newly appointed head of PROGRESA/Oportunidades, who wanted change. The IADB officials weighed in on the side of the old guard. They argued the use of quantitative/statistical methods in the selection of rural beneficiaries as an important bulwark against corruption, strongly rejecting the idea of community participation in the selection of beneficiaries. They also supported a centralized registry of beneficiaries. (29) What was described as "tough negotiations" resulted in the centralized technocratic selection criteria remaining firmly in place.

Negotiations for the second phase of the IADB loan occurred between a very small number of Mexican officials (30) and the same IADB officials who had been involved in the earlier negotiation. The funding was to provide for full extension of the program into urban areas. Although the IADB failed in its quest to obtain a number of important policy changes in the new urban-oriented program, (31) it did succeed in persuading Mexicans to move away from the strictly statistical method of deciding on beneficiaries in the urban setting to a method that combines statistical methods with self-selection, an arrangement that allows people to apply for entry into the program. During the discussions, Mexicans vigorously opposed any arrangement that veered away from the sole use of technocratic criteria; the IADB officials, although in agreement in principle with the Mexicans, were more pragmatic. They were able to convince the Mexicans that although the statistical method was the better one, its sole use in urban settings would likely generate political problems. In short, although the Mexicans may have chosen the IADB because of their perception that its officials would be more compliant than their World Bank counterparts, the presence of a high degree of trust, and in some cases friendship, opened up considerable space for policy influence. The consequence was that the IADB did, in fact, shape the evolution of the program in important ways.

The issue of civil society participation in the program, however, did not go away, and the resistance of the Fox administration (despite its initial commitment) in this regard fueled increasing disillusionment on the part of many of the civil society organizations that had provided the new government with electoral support. The civil society organizations most concerned about their exclusion from PROGRESA/Oportunidades not only lobbied their own government, but also complained bitterly to the World Bank civil society personnel. The Bank eventually offered $20 million to carry out a civil society consultation on the program, but that offer was rejected by the administration. The Fox administration also refused to take up Ford Foundation support for the same purpose. According to some observers, the stiffest resistance to civil society consultation came from the Finance Ministry. (32)

Chile's program to reduce extreme poverty, known as Chile Solidario, had its origins in the concerns of two sets of technocrats: the administrative unit within the Finance Ministry concerned with expenditures (the Office of Budget Management, which serves the same function as Mexico's Subsecretariat of Expenditure); and a group of officials in the Planning Ministry (MIDEPLAN). As a program aiming to confront extreme poverty, Chile Solidario focused on the approximately 6 percent indigent (extremely poor) population it seeks to incorporate into existing social protection regimes. While Chile explored support from the IADB, it ultimately decided to work with the World Bank, from which it received a technical assistance loan of $10.71 million for the program in 2003. (33)

Domestic concerns driving the program were very similar to those in the Mexican case, however. For the Finance Ministry officials--in particular, the director of Budget Management, Mario Marcel, and the head of research within the same administrative unit, Jaime Crispi--there were two important considerations. (34) Given the economic downturn in 1998 (a growth rate of only 0.2 percent), there was the pressing need to keep government expenditures under control. There was also the release of poverty figures in 2000 by the Economic Commission for Latin America, which showed that the reduction in extreme poverty had stagnated. This revelation triggered the search for a cost-effective way to deal with the problem. Budget finance officials lamented what they saw as the wasteful duplication of a chaotic variety of social programs across ministries. In their view, the increased spending in health and education through the 1990s had played little role in poverty reduction. Their favorite target, however, was the Planning Ministry, which they saw as an inadequate administrator of a wide variety of poorly targeted programs. Their strategy was to build their case through a variety of studies on the topic. Budget Management did their own studies but also commissioned a report from the World Bank, not released publicly, on the country's social programs. The report bolstered their claim for change: it criticized the duplication of social programs, including MIDEPLAN's, and recommended a cash transfer program that would reach the poorest.

Although the World Bank has no leverage in Chile, given that country's access to private capital markets, Bank officials nevertheless cultivated their relationship with Chilean officials in that country's Finance Ministry, and there was ongoing policy dialogue on issues of social protection. (35) In 1999, the Bank began a study on the country's system of social protection and so was able to jump in when Budget Management officials requested an assessment of its social programs. During 2000 and 2001, the Bank's report went through various revisions in response to the extensive discussions between the Bank and Chilean finance officials. But Bank officials also had broader concerns about Chile's social protection system that they were not shy about expressing: in addition to better targeting to reach the poorest, they were also concerned about the inadequate social protection accorded the working poor who remained vulnerable to a variety of shocks, often because of inadequate sustained time in the formal workforce. Furthermore, while the Bank bolstered the Finance Ministry's objective of instituting a program to help the poorest, and did agree that a reform of social programs was in order, they also argued for the strengthening of the Planning Ministry--indeed, a $200 million social protection loan was also made in 2003 to improve that ministry's information system. (36) As the new program unfolded, the Planning Ministry came to play a vital role in Chile Solidario; while that ministry's role in shaping the program predated the Bank's active involvement (from 2002), the Bank has helped to reinforce that ministry's vision of the program, as we will see.

While Finance officials carried on discussions with World Bank officials, Planning Ministry officials, also concerned about the failure of extreme poverty to drop, were holding discussions with the general secretary of the presidency. (37) These officials were very concerned with the impact of cash transfers on client dependency and therefore developed a strategy that would include an activist approach involving the use of a large number of social workers who would work with extremely poor families to both incorporate them into existing programs and prepare them for integration over the longer term into the economy and society. The final program was a blend of the approaches of both Finance and Planning officials; it provided a small sum of money to the female heads of households, social-psychological support in the form of a social worker assigned to the family, and the requirement that the family sign a contract promising to fulfill no less than fifty-three conditions. As in the Mexican case, the selection of participant families is done by means of technocratic criteria. First, a survey (the Ficha CAS) is administered that purports to measure with exactitude the extent of poverty in individual families. Once the program, Chile Solidario, had been conceptualized, it came before the Bank for more detailed consideration. While the plan for the extensive use of social workers was initially met with some skepticism, the Bank opened up discussions with the initiators of this part of the program--Planning officials--and became a strong supporter of this activist approach.

As in the Mexican case, public consultation in the development of the program was limited. (38) A month prior to the announcement of the program, a seminar was organized by the secretary general of the presidency, at the behest of the interested officials within the Finance Ministry. Those members of the public invited to attend were well-known academics with expertise in poverty issues; they had been invited because they were personally known to government officials (particularly to Finance Ministry officials), not because they represented particular social organizations or nongovernmental organizations (NGOs).

As in the Mexican case, the Chile Solidario program generated a maelstrom of criticism from civil society and NGOs. Frustrated in their attempts to influence the program, the key civil society organizations involved in poverty issues submitted their views and policy recommendations to the government anyway. (39) Their criticisms were remarkably similar to those voiced by the critics of Mexico's program: concerns over the way in which such a program might cause divisiveness among community members, the absence of the opportunity for participation on the part of those chosen as targets for the program, the failure to invite civil society organizations to monitor and evaluate the program, the failure to distinguish between rural and urban poverty (and the failure to use distinct criteria to assess poverty in each), the use of highly technocratic measurements of poverty likely to omit many of the deserving poor, and the absence of community development projects.

While many, perhaps most, government officials took a dim view of civil society participation in policy, there was, as in the Mexican case, a certain ambivalence about the issue. The government of President Ricardo Lagos had promised greater participation by civil society and to this end had even accepted a loan from the IADB to strengthen civil society. Negotiated with the IADB's State and Civil Society unit, this loan led to the establishment of a citizens' council in the year 2000. Some civil society activists saw this development as offering the possibility of influencing social policy, including Chile Solidario. However, the Lagos administration withdrew active support for the IADB consultative initiative; the recommendations of the council were never acted upon, and most civil society representatives resigned from the council in frustration, convinced that the government had abandoned any interest in civil society participation in public policy. In any case, it is clear that by 2003, most Finance and Planning Ministry officials were set against civil society consultations involving Chile Solidario--taking the position that civil society organizations had no right to involvement in policy design because they had not been elected and could not be held accountable. (40)

The Bank participated in important ways on this issue. Not, like the IADB, encumbered by client reticence about civil society involvement in policy (and indeed, compelled to pursue the issue because of its mandate to mainstream civil society involved in programs), nor held back by any sense of personal loyalty to the sensibilities of Chilean officials, Bank officials held discussions with the country's largest poverty NGOs in addition to smaller organizations, particularly those representing indigenous interests. The issue of civil society involvement would become by far the most contentious issue dividing Bank and government officials. Bank officials took the position that the involvement of civil society organizations could be of help given their expertise. But the government argued that Congress was the rightful place for civil society involved in policy and that most civil society organizations were not capable of program monitoring.

The same group of civil society organizations that had been most vociferously critical of Chile Solidario (the umbrella NGO Accion, Fundacion para la Superacion de la Pobreza, and Hogar de Cristo) made a proposal to the World Bank and to the Planning Ministry that they carry out a citizens' evaluation of Chile Solidario. (41) While the Bank was supportive and willing to provide the necessary funding, the failure of the Planning Ministry to support the initiative meant that the loan fell through. (42) In the face of considerable resistance from Chilean officials, the Bank eventually convinced the Chileans to agree to civil society involvement in the program and insisted that civil society monitoring and evaluation of the program be included in loan conditions. The 2003 Chile Solidario loan required that a pilot project for citizen accountability involve both a civil society organization experienced in poverty alleviation programs and an academic institution experienced in program evaluation. (43) While an improvement, this achievement was not hailed as a success by the most active civil society organizations. For one thing, Planning Ministry officials are part of the evaluation team and some civil society groups believed that most national organizations would likely not qualify given the requirement for "local networks" in the selected area where the pilot was to be carried out. Some of these organizations prepared to carry out their own independent evaluation of the program. Another important issue involved the special provisions for the incorporation of indigenous peoples into the program, a request made by the Bank that was not part of the original conceptualization of the program. (44) The government agency dealing with indigenous issues (National Commission for Indigenous Development) was brought into the discussions, and part of the loan was designated for the special training of social workers to support indigenous beneficiaries of the program. Indeed, the importance of well-trained social workers in general had been one of the main concerns of the various poverty advocacy organizations.

While Bank officials played only a small role in the design of the original Chilean program, they did help bolster Finance officials' desire for a cash transfer program that would address the extremely poor. Their more important impact, however, occurred after the program was officially announced. They did become strong proponents of the program as it was eventually envisioned, helping to bolster the Planning Ministry's vision of a highly activist program. Most important, the Bank's openness to civil society consultation did create an opportunity for civil society monitoring that would not have been put in place otherwise.


Even in countries over which international organizations have little leverage, officials in such organizations may have important influence over the domestic policy of client countries. Decades of interaction stemming from the debt crisis and structural adjustment and common educational training (largely in economics) have produced an ongoing process of "policy dialogue." Officials in international organizations can play an important role in bolstering the preferences of certain policy actors over others. In Mexico, IADB technocrats and private consultants employed with IADB money (IFPRI), not only played a critical role in ensuring the continuation of PROGRESA/Oportunidades, but also influenced the development of policy in important ways. In the Chilean case, the World Bank played a role in bolstering the position of that country's finance and budget officials for a conditional cash transfer program, and it weighed in on specific aspects of the program eventually giving weight to the Planning Ministry's activist vision. Its most important contribution was probably the space (albeit limited) it was able to open up to civil society participation in the program.

There were distinct differences in the nature of the transnationalized policy networks, and these differences affected the extent of the influence of transnational actors in those networks. The different cultures and historical legacies of the two banking institutions were important variables. The IADB's peculiar historical evolution and close relationship to its borrower governments is crucial here. The Mexican network was highly integrated and personalized; although the Mexican initiators of the program probably chose the IADB because they saw it as most compliant, the nature of the transnationalized network (involving close personal relationships and trust) ultimately gave IADB officials avenues of influence over the policy that would not otherwise have been present. The findings presented here also suggest that a more institutionalized policy culture is more likely to offer opportunities for groups outside finance ministry and multilateral networks to influence policy. Although Chilean policymakers were opposed to civil society involvement in their new conditional cash transfer program, institutional arrangements for civil society consultation with the World Bank inhibited the sort of secretive and closed policy process that characterized the Mexican case. Indeed, more distant from regional governments, and under more pressure to open up to critical civil society organizations, the World Bank was active in civil society consultation and more susceptible to civil society lobbying: Chilean civil society organizations were able to use the World Bank's rhetorical commitment to pry open a small space for civil society involvement in the country's new poverty program. Whether this small space has an impact on the program remains to be seen.

The conflicts surrounding these programs illustrate the deep paradigmatic chasm separating their technocratic initiators from their civil society opponents. Program initiators in the Mexican case were enthusiastic neoliberal supporters. In Chile, within the Concertacion government, Finance Ministry officials tended to be the most committed to that government's particular version of neoliberalism. In both cases, the concept of what constitutes good social policy is one driven by technocratic imperatives. Program opponents not only were often critical of the neoliberal model, but they also struck out at the very roots of technocratic decisionmaking: the use of quantitative data, rather than participatory methods, to choose program beneficiaries. Hence, opening up these particular transnationalized policy networks to civil society input is likely to produce highly polarized debates where resolution may be difficult. While, for the most part, the multilaterals supporting conditional cash transfer programs have tended to reinforce the goals of their domestic technocratic allies, rhetorical commitment to civil society participation (at least on the part of the World Bank) can be used by civil society groups to pry open the policy process. What happens on this issue, however, depends on the extent of the resistance offered by domestic governments; for transnational actors to have an impact, domestic governments have to be open to persuasion on the issue--a reality that was the case for Chile but not, apparently, for Mexico.


Judith Teichman is professor of political science at the University of Toronto. She is coauthor, with Richard Sandbrook, Mark Edelman, and Patrick Heller, of Social Democracy in the Global Periphery: Origins, Challenges, Prospects (2006), and author of The Politics of Freeing Markets in Latin America: Chile, Argentina and Mexico (2001); Privatization and Political Change in Mexico (1996); Policymaking in Mexico: From Boom to Crisis (1988); and many articles on politics and policymaking in Latin America.

1. On the close collaboration between borrower country officials and multilateral officials in economic policymaking, see Judith A. Teichman, The Politics of Freeing Markets in Latin America: Chile, Argentina and Mexico (Chapel Hill: University of North Carolina Press, 2001); and Ngaire Woods, The Globalizers: The IMF, the World Bank and Their Borrowers (Ithaca: Cornell University Press, 2006).

2. Much of the information presented in this article was obtained through a series of open-ended interviews. Twenty-eight interviews were carried out in 2005 with officials in the international organizations involved in the Mexican and Chilean poverty programs: fourteen for the World Bank and fourteen for the Inter-American Development Bank and the consultant agency it worked with and paid for, the International Food Policy Research Institute. Of these twenty-eight, four interviewees had worked in at least two of these international organizations. The work also draws from interviews with country officials and civil society activists: twenty-one Chilean and thirty-three Mexican; these were carried out in 2003 and 2004. Because a pledge of confidentiality was given as a condition of these interviews, only descriptive, non-identifying characteristics are given. Financial support for this research from the Social Sciences and Humanities Research Council of Canada is gratefully acknowledged.

3. In addition to programs in Mexico and Chile, these include: Nicaragua (Red de Proteccion Social), Colombia (Familias en Accion), Ecuador (Bono Solidario), Brazil (Bolsa Familia), Argentina (Plan Familias), Costa Rica (Superemos), Honduras (PRAF), El Salvador (Red Solidaria), the Dominican Republic (Solidaridad), Jamaica (PATH), and Peru (Juntos).

4. R. A. W. Rhodes and David Marsh, "Policy Networks in British Politics," in David Marsh and R. A. W. Rhodes, eds., Policy Networks in British Government (Oxford: Clarendon Press, 1992), p. 8.

5. During the past decade, private flows to less developed countries have amounted to five times the total official development aid. Catherine Weaver and Ralf J. Leiteritz, "'Our Poverty Is a World Full of Dreams': Reforming the World Bank," Global Governance 11, no. 3 (2006): 373.

6. Jeffrey Puryear, Thinking Politics: Intellectuals and Democracy in Chile (Baltimore: Johns Hopkins University Press, 1996); Miguel Angel Centeno, Democracy Within Reason: Technocratic Revolution in Mexico (University Park: Pennsylvania State University Press, 1997).

7. Carlos M. Urzua, "Five Decades of Relations Between the World Bank and Mexico," in Devesh Kapur, John P. Lewis, and Richard Webb, eds., The World Bank: Its First Half Century, vol. 2: Perspectives (Washington, DC: Brookings Institution, 1997), pp. 4, 82.

8. The multilaterals are also closely involved in discussions with country officials on a variety of other social issues, including many for which there may not be any lending. These include pension and health care reform, educational reform, and indigenous issues. The extent of multilateral influence in other social policy realms awaits further research.

9. For example, Tony Killick, IMF Programmes in Developing Countries (London: Routledge, 1995), p. 121; and Paul Mosely, Jane Harrigan, and John Toye, Aid and Power: The World Bank and Policy Based Lending, 2nd ed. (London: Routledge, 1995), p. 68.

10. Two authors making this argument are Sebastian Edwards, Crisis and Reform in Latin America (New York: Oxford University Press, 1995), p. 41; and Miles Kahler, "External Influence, Conditionality and the Politics of Adjustment," in Stephan Haggard and Robert R. Kaufman, eds., The Politics of Economic Adjustment (Princeton: Princeton University Press, 1991), p. 123.

11. An example of the former is Michael Goldman, Imperial Nature: The World Bank and the Struggle for Social Justice in the Era of Globalization (New Haven: Yale University Press, 2005); and of the latter is Judith Teichman, "The World Bank and Policy Reform in Mexico and Argentina," Latin American Politics and Society, 46, no. 1 (2004).

12. In Chile, between 1990 and 2000, poverty was reduced from 38.6 percent of the population to 20.67 percent, but extreme poverty persisted at 6 percent. In 2000, poverty in Mexico stood at 41.1 percent of the population with a level of inequality comparable to that of Chile's. Comision Economica para America Latina (CEPAL), Panorama social en America Latina, 2002-2003: Anexo estadistico (Santiago: CEPAL, 2003), p. 282.

13. This was a more important reason in the Chilean case than in the Mexican case, where preserving the program from one administration to the next was identified by all key actors interviewed as the most important reason. This is discussed further below.

14. Paul Nelson, "Whose Civil Society? Whose Governance? Decisionmaking and Practice in the New Agenda at the Inter-American Development Bank and the World Bank," Global Governance 6, no. 4 (2000): 407. The information in this and the following paragraph draws from Nelson and from author interviews of four IADB officials.

15. "Disbursement culture" refers to the Bank's drive to develop and disburse loans, because that is the measurement of the Bank's success and the quantitative measurement by which career advancement occurs. Paul J. Nelson, Access and Influence: Tensions and Ambiguities in the World Bank's Expanding Relationship with Civil Society Organizations (Ottawa: North-South Institute: 2002); and Goldman, Imperial Nature, p. 110.

16. For a discussion of the PRI government's stiff resistance to civil society involvement in projects funded by the World Bank, see Manuel Fernandez de Villegas and Naomi Adelson, "Civil Society Participation in World Bank and Inter-American Development Bank Programs," Global Governance 6, no. 4 (Oct.-Dec. 2000).

17. The information in this paragraph comes from interviews with three senior-level Finance officials and two senior Social Development Ministry officials.

18. This information comes from interviews with five civil society leaders and six members of Congress.

19. The four umbrella civil society organizations most involved in social policy are the following: two on the left (FAM [Forum for Mutual Support] and Convergence of Civil Organizations for Democracy); one on the political right and the private sector (CEMEFI [Mexican Center for Philanthropy]); and one linked to the PRI (Fundacion Miguel Aleman).

20. The information in this and the following paragraph is drawn from interviews with seven IADB and IFPRI officials and three Mexican officials.

21. That IADB official was Nora Lustig, then senior policy adviser and head of the poverty and inequality unit of the IADB. Lustig had many close contacts in Mexico (she had taught for many years at the Colegio de Mexico) and was a close friend of Gomez de Leon.

22. See the International Food Policy Research Institute (IFPRI), "Is PROGRESA Working: Summary of the Results of an Evaluation of IFPRI" (Washington, DC: IFPRI, 2000), p. 43.

23. The information in this paragraph was obtained from interviews with three Mexican officials, three IADB officials, and two World Bank officials.

24. The IADB operational units are divided geographically into Regional Departments I, II, and III. At the time of this research, the Mexican programs were managed by the Mexico specialists in Regional Department II.

25. Each phase involved a loan of $1.0 billion.

26. The information in this and the following paragraph is drawn from interviews with four IADB officials and two Mexican officials.

27. The key IADB official behind this change was driven largely by the view that the program would be more sustainable in the long term with such an approach.

28. For explicit reference to the requirement that Mexico implement the new National Targeting Model, see IADB, "Mexico: Multiphase Program for the Consolidation and Expansion of Oportunidades Human Development Program, Phase II (ME-L1007), Evaluation Report," p. 3.

29. IFPRI researchers also apparently worked with the IADB officials to ensure that the statistical method of beneficiary selection remains in place.

30. While some of the early PROGESA people, such as Levy, were still in the picture, the ongoing discussion had succeeded in bringing over a number of the Fox appointees to support the program as originally conceived. Those who did not get on board, such as Fox's first PROGRESA head, were replaced, producing once again a tightly knit group of cooperative policymakers.

31. IADB wanted a different set of conditions for the cash transfers to the urban poor, and it wanted a change in the nutritional supplement for urban dwellers.

32. According to three civil society leaders interviewed.

33. Chile objected to the IADB's insistence on outside (foreign consultant) evaluation of the program (interview with IADB senior official).

34. The information in this and the following paragraph is drawn from interviews with two senior-level Finance Ministry officials.

35. The information in this section was obtained from interviews with three senior-level government officials and three World Bank officials.

36. These viewpoints, the subject of ongoing discussions from the late 1990s, are reflected in World Bank, "Chile, Household Risk Management and Social and Human Development Protection" (Washington, DC: World Bank, 2003).

37. The information in this paragraph comes from two senior-level officials, one middle-level official of MIDEPLAN, and two World Bank officials.

38. The information in this and the following paragraph comes from interviews with the leaders of four civil society organizations and three senior-level government officials.

39. Those who submitted written commentary critical of Chile Solidario included Accion (Asociacion Chilena de Organismos no Gubernamentales, an umbrella organization for seventy NGOs) and Hogar de Cristo. The Fundacion para la Superacion de la Pobreza was also critical.

40. This information comes from interviews with four senior-level officials, two each from the Finance and Planning ministries.

41. The information in this paragraph is from interviews with four civil society leaders and two World Bank officials.

42. The Bank's position was that approval from the Social Planning Ministry would have to be forthcoming before the loan would be made.

43. See World Bank, Human Development Management Unit, Argentina, Chile, Paraguay and Uruguay Country Management Unit, Latin American and Caribbean Region, "Projected Appraisal Document on a Proposed Social Protection Technical Assistance Loan in the Amount of $10.71 Million to the Republic of Chile" (Washington, DC: World Bank, 2003), p. 9.

44. This information is from interviews with two senior-level Chilean officials and two World Bank officials.

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