Gained from Liberalization and
This article examines what has occurred in Latin America's labor markets as a result of the twin processes of economic liberalization and regional integration. The author argues that the two are closely related, because they both tend to reduce the scope of national policy making. The article begins with a review of labor market conditions in Latin America. Neoliberal ideology predicts that labor market [flexibility] should increase employment, general deregulation should foster growth, and faster growth should lead to higher wages. Weeks' analysis reveals that to the contrary of neoliberal predictions, the results of neoliberal reforms for labor over the last twenty years have been extremely mixed. He also finds that the integration schemes in the Americas, inspired by neoliberal ideology, have a strong bias against organized labor and favor capital.
The political economy of Latin America in the 1990s was dramatically different from two decades before. Prior to the debt crisis,1 most governments in the region pursued economic policies that were essentially national, rather than derivative from international markets. This was possible because of a range of controls over capital flows and regulations that affected imports and exports.2 Through the 1980s and 1990s, virtually every government (with the exception of Cuba) reduced both trade regulations and capital controls.3 Closely associated with this process of deregulation has been regional integration, most notably the North American Free Trade Agreement, which in 1994 added Mexico as its third member. In a parallel development, the governments of Argentina, Brazil, Paraguay and Uruguay formed the Common Market of the South (Mercado Comun del Sur or MERCOSUR), with Chile and Bolivia as associate members.
* Centre for Development Policy and Research, SOAS, University of London, London, WC1H
OXG, United Kingdom.