Electoral Coalitions and Market Reforms: Evidence from Argentina

Edward L. Gibson and Ernesto Calvo

IPR working papers from Institute for Policy Resarch at Northwestern University

Abstract: Recent experiences with market reform in democratizing countries have generated interest in how structural and institutional factors contribute to the political viability of the reform process. This article thus examines the electoral dynamics of market reform in Argentina between 1989 and 1995, and provides insights into the way that economic differentiation and the territorial distribution of political resources can shape both the design of market reform and the coalitional bases for its political sustainability. The electoral viability of the governing Peronist party during the conflictual period of market reform was facilitated by regionally segmented patterns of electoral coalition-building, and by the regional phasing of the costs of market reform over time. Fiscal adjustment and market reforms were concentrated primarily on economically strategic regions, while public spending and political patronage in economically marginal but politically overrepresented regions helped sustain support for the governing party. A conceptual distinction between "high-maintenance" and "low-maintenance" constituencies is thus introduced to shed light on interactions between patronage spending and market reform. Statistical analyses contrast the social bases of Peronist electoral support in "metropolitan" and "peripheral" regions of the country during the period of market reform, and highlight public sector employment as a major determinant of the interregional variations in electoral support for the governing party. .

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