Political Environments, Sector-Specific Configurations, and Strategic Devices: Understanding Institutional Reform in Uruguay

Fernando Filgueira and Juan Andrés Moraes

No 3049, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This paper argues for a multi-level explanatory model for understanding institutional reform. The expanding but still modest accumulation in the field tends to clump together different levels of efficient causes. Statements like “reform will be more likely in countries that have swiftly proceeded with macroeconomic reform and stabilization and have the legitimacy and power to push further reform” refer to general political conditions. The notion that reforms will be harder where costs are concentrated and benefits diffuse for beneficiaries, as in the case of Social security reform, relate to sector-specific aspects. Thirdly, the idea that bundling can constitute a viable political strategy for overcoming vetoes refer to concrete strategic devices. Finally, a strong policy entrepreneur behind a reformist impulse is nothing other than a contingency. General enabling conditions, sector-specific configurations, the use of strategic devices and contingent factors all contribute to the success or failure of reformist attempts. This analytic divide is indispensable in imposing some order on the rival explanations attempting to grasp the political logic of institutional reform. Using the case of Uruguay, we seek to show how a changed political environment combined with sector- specific configurations and political strategies of reformist leaders allowed for successful institutional reform. More specifically, we claim that the dynamics of electoral politics and political learning are the clues that explain how the dynamics of cooperation and conflict in the political system in Uruguay moved from free rider behavior, to opposition restraint and finally to cooperative reformism thus enabling institutional reform. Furthermore, for our three cases of reform, technical accumulation and precise diagnosis, the power of administrative and beneficiaries corporations, the perception of the population regarding the quality of services and benefits, and the effects of the institutional diseases on the country as a whole appear as critical factors accounting for the intensity of the reformist impulse. Finally we shall show how changes in the broad political environment were capitalized in social security and education and not in health not only due to the use of strategies that linked sector reform to the broader political process in the first two cases and not in health. Strategies that successfully divided or neutralized losers and identified clear winners were also behind successful reformism. Regarding the launching and sustainability of reforms, both the creation of new stake holders and the adequate use and knowledge of the institutional structures and its potential veto points proved critical.

Date: 1999-03
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