Territory and Ideology in Latin America: Policy Conflicts between National and Subnational Governments

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Territory and Ideology in Latin America
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Transformations in Governance
Transformations in Governance is a major new academic book series from Oxford
University Press. It is designed to accommodate the impressive growth of research in
comparative politics, international relations, public policy, federalism, and environ-
mental and urban studies concerned with the dispersion of authority from central
states up to supranational institutions, down to subnational governments, and side-
ways to public–private networks. It brings together work that significantly advances our
understanding of the organization, causes, and consequences of multilevel and com-
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attractive production style.
The series is edited by Liesbet Hooghe and Gary Marks of the University of North
Carolina, Chapel Hill, and Walter Mattli of the University of Oxford.
Organizational Progeny: Why Governments are Losing Control over the Proliferating Structures
of Global Governance
Tana Johnson
Democrats and Autocrats: Pathways of Subnational Undemocratic Regime Continuity within
Democratic Countries
Agustina Giraudy
A Postfunctionalist Theory of Governance (5 Volumes)
Liesbet Hooghe and Gary Marks et al.
Constitutional Policy in Multilevel Government: The Art of Keeping the Balance
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With, Without, or Against the State? How European Regions Play the Brussels Game
Michaël Tatham
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Territory and Ideology
in Latin America
Policy Conflicts between National
and Subnational Governments
Kent Eaton
1
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3
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© Kent Eaton 2017
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First Edition published in 2017
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For Karl
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Acknowledgments
Over the decade I worked on this project, including years when I did not yet
realize that it would take the form of a book, I benefited from all kinds of
support, feedback, and assistance—both in the Andes and in the USA. I am
grateful to all those who contributed to my research and for the variety of the
contributions they made, which ranged from financial support to analytical
insights, and from interview contacts to critical feedback. Sometimes this
feedback took the form of detailed comments on chapter drafts, but it also
came as one-off conversations or question-and-answer sessions that funda-
mentally changed the way I thought about my material.
For helping to support and guide my research in Bolivia, I would like to
thank Helena Argirakis, Mauricio Bacardit, Eliane Capobianco, Norma Yalila
Casanova, Alejandro Colanzi, Gabriel Dabdoub, Marcelo Dabdoub, Pablo
Deheza, Gisela López, Gilber Mamani, Juan Pablo Marca, José Abel Martínez,
Hugo Carlos Molina, Oscar Ortíz, Gustavo Pedraza, Claudia Peña, Paula Peña,
Carlos Rocabado, Dunia Sandoval, Vania Sandoval, Carlos Schlink, Hugo
Siles, Leonardo Tamburini, Juan Carlos Urenda, Carlos Valverde, and Moira
Zuazo. Like so many US-based academics conducting field research in Bolivia,
I am especially thankful for the generosity of Diego Ayo, both for his help in
navigating La Paz, where he is based, and for helping me understand the
complexities of Santa Cruz.
In Ecuador, I am grateful to Maribel Almeida, Pablo Andrade, Xavier Andrade,
Guillermo Arosemena, Orazio Belletini, Joffre Campana, Hector Chiriboga,
Russell Crawford, Lois Crawford de Roberts, Jaime Damerval, Francisco Franco,
Jonas Frank, Simon Jaramillo, Henry Kronfle, Victor Maridueña, Billy Navarrete,
Andrea Ordoñez, Emilio Palacio, Willington Paredes, Benjamin Rosales, Carlo
Ruiz Giraldo, Walter Spurrier, Roberto Vernimmen, and TinaZerega. Most of all,
I want to thank Felipe Burbano de Lara, whose fascination with the Guayaquil-
Santa Cruz comparison rivals my own, whose work has long served as an
inspiration, and whose invitations enabled me to present my work on several
occasions in Quito.
In Peru, I sincerely appreciate the help I received from César Acurio, Carlos
Anderson, Javier Azpur, Carmen Bedoya, Violeta Bermúdez, Analía Calmell,
Luís Chirinos, Jorge Chumpitaz, Elena Conterno, Mercedes Cruz, Vladimir
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Gil, Efraín González, Rolando Luque, Raúl Molina, Carlos Monge, Mirian
Morales, Paula Muñoz, Humberto Olaechea, Giannina Pastor, Patricia Pinto,
Cynthia Sanborn, Javier Torres, Dante Vera, Alberto Vergara, Luís Alberto
Villafranca, and Johnny Zas Friz. I particularly want to thank Eduardo Dargent
and Martiza Paredes for inviting me to spend time as a visiting scholar at the
Catholic University in Lima in 2014, which gave me the opportunity to
engage with their very talented colleagues, including José Carlos Orijuela,
Aldo Panfichi, Stephanie Rousseau, and Martín Tanaka.
Back in the USA, I credit David Collier for pushing me to think about
how I might combine the research I was doing on Bolivia and Ecuador with
what I had, until then, thought of as an entirely separate project on Peru. I am
glad I took his advice. Tyler Dickovick, my former student, co-author, and
cherished friend, is the person who has most influenced my thinking about
this topic, including during the long months we spent drafting together a
handbook on democratic decentralization for USAID. I also benefited from
several hard-working research assistants at UC Santa Cruz, including Matthew
Boitano, Leonardo de Haro, Alicia Dolan, Shawn Nichols, Fernando Nuñez,
and Sarah Romano. Also at UC Santa Cruz, I want to thank the participants in
my department’s comparative politics workshop, especially my colleagues
Lamis Abdelaaty, Mark Massoud, Eleonora Pasotti, Ben Read, and Roger
Schoenman. Likewise, I am grateful to the members of the interdisciplinary
research cluster that I organized at UC Santa Cruz for several years on Trans-
national and Local Dynamics in the Andes (TILDA), including Jeff Bury, Adam
French, Flora Lu, Tim Norris, and Aviva Sinervo. I also want to thank our
terrific departmental staff, including Marianna Santana, Glenda Dixon, Jerry
Díaz, Cindy Bale, Maya Woolfe, Tammy Tooley-Chelossi, and especially Dana
Rohlf, who made it possible for me to continue to make progress on this book
even in the years when I served as chair of the department.
For comments, questions, suggestions, and advice on the book project at
various stages along the way, I would like to thank Carla Alberti, Naazneen
Barma, Will Barndt, Mattias Bianchi, Aimee Bourassa, Pasha Bueno-Hansen,
Christopher Chambers-Ju, Sarah Chartock, Ruth Collier, Catherine Conaghan,
Jennifer Cyr, Carlos de la Torre, Diego Díaz, Rodolfo Disi Pavlic, Jorge
Domínguez, Thad Dunning, Tasha Fairfield, Tulia Falleti, Tracy Beck Fenwick,
Franz Flores, Jonathan Fox, Candelaria Garay, Edward Gibson, Agustina
Giraudy, Maria-Therese Gustafsson, Patrick Heller, Maiah Jaskoski, Margaret
Keck, Atul Kohli, Pablo Lapegna, Adrienne Lebas, Steve Levitsky, James
Loxton, Juan Pablo Luna, Sebastián Mazzuca, Stephanie McNulty, Gabe
Paquette, Tianna Paschel, Deborah Poole, Grigo Pop-Eleches, Mathias Poertner,
Alison Post, Juan Diego Prieto, Andrew Schrank, Adam Sheingate, Jazmin Sierra,
Erica Simmons, Alberto Simpser, Dan Slater, Paul Smoke, Rich Snyder, Mariela
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Acknowledgments
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Szwarcberg, Brandon Van Dyck, Matthias vom Hau, Steven Wuhs, Deborah
Yashar, Yue Zhang, and Nick Ziegler.
I am very grateful for invitations from colleagues to present my research
on the book, as it unfolded and evolved over multiple phases, at Brown
University, the Catholic Universities of Lima and Santiago, FLACSO/Ecuador,
Harvard University, Johns Hopkins University, Princeton University, Reed
College, University of Arizona, University of Chicago, University of Delaware,
University of California Berkeley, University of California Riverside, Univer-
sity of Redlands, and University of Toronto. I would also like to thank Ed
Connerley at the US Agency for International Development and Kai Kaiser,
Ghazala Mansuri, and Vijayendra Rao at the World Bank for consulting and
research opportunities within their organizations over the years that have
significantly enriched my thinking about the territorial dimensions of eco-
nomic development.
For defraying the financial costs of the many research trips to Bolivia,
Ecuador, and Peru upon which this book is based, I am deeply indebted to
my home institution, both for annual grants from the Committee on Research
at the University of California Santa Cruz, and for the grant I received from
the UC-wide Pacific Rim research program. I am especially grateful to the
Woodrow Wilson International Center for Scholars for the 2015–16 residen-
tial fellowship in Washington, DC, which enabled me to complete a full draft
of the book. At the Center I would like to thank Kim Conner, Lindsay Collins,
Verónica Colón-Rosario, Karla Peña, and Janet Spikes, along with my very
helpful research assistant Victor Cruz, and the indefatigable Cynthia Arnson,
whose leadership makes the Center such a vibrant place for the study and
analysis of Latin America.
Finally, I am grateful to Dominic Byatt, my editor at Oxford University
Press, to the two anonymous reviewers who took the time to prepare con-
structive and detailed comments on the book, and to the editors of the series
on Transformations in Governance, Gary Marks and Liesbet Hooghe—from
whose pioneering work on multilevel governance I have learned so much.
I also wish to acknowledge that Chapter 3 of this book is derived, in part,
from an article entitled “Disciplining Regions: Subnational Contention in
Neoliberal Peru”published in Territory, Politics, Governance on February 17,
2015, available online: <http://www.tandfonline.com/10.1080/21622671.
2105.1005126>.
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Contents
List of Maps xiii
List of Tables xv
List of Abbreviations xvii
1. Introduction 1
2. When do Subnational Policy Challenges Succeed?: Structure,
Institutions, and Coalitions 29
3. Subnational Contention in Neoliberal Peru 65
4. Policy Regime Juxtaposition in Ecuador 104
5. Territorial Conflict and Reconciliation in Bolivia 139
6. Conclusion 175
References 189
Index 209
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List of Maps
3.1. Peru: Administrative Divisions 73
4.1. Ecuador: Administrative Divisions 108
5.1. Bolivia: Administrative Divisions 145
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List of Tables
2.1. Scoring subnational challenges on the independent (IV) and
dependent (DV) variables 30
2.2. Bolivia, Ecuador, and Peru in comparative perspective (2013 data) 58
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List of Abbreviations
ACORVOL Asociación Coordinadora del Voluntariado del Guayas (Association of
Voluntary Organizations of Guayas)
ADN Acción Democrática Nacionalista (Nationalist Democratic Action)
AHG Archivo Histórico de Guayaquil (History Archive of Guayaquil)
AMPE Asociación de Municipalidades del Perú (Association of Peruvian
Municipalities)
ANGR Asociación Nacional de Gobiernos Regionales (National Association of
Regional Governments)
AP Alianza Patria Altiva y Soberana (Proud and Sovereign Fatherland
Alliance)
APRA Alianza Popular Revolucionaria Americana (American Popular
Revolutionary Alliance)
CADEX Cámara de Exportadores de Santa Cruz (Santa Cruz Chamber of
Exporters)
CAO Cámara Agropecuaria del Oriente (Eastern Agricultural Chamber)
CAINCO Cámara de Industria y Comercio (Chamber of Industry and Commerce)
CCI Consejo de Coordinación Inter-Gubernamental (Inter-Governmental
Coordination Council)
CCR Consejo de Coordinación Regional (Regional Coordination Council)
CEDISA Centro de Desarrollo e Investigación de la Selva Alta (Center for
Development and Research on the Highland Jungle)
CEJIS Centro de Estudios Jurídicos e Investigación Social (Center for Juridical
Study and Social Investigation)
CEPB Confederación de Empresarios Privados de Bolivia (Confederation of
Private Entrepreneurs of Bolivia)
CEPLAN Centro Nacional de Planeamiento Estratégico (National Center for
Strategic Planning)
CFP Concentración de Fuerzas Populares (Concentration of Popular Forces)
CGTP Confederación General de Trabajdores del Perú (General Confederation of
Workers of Peru)
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CIDOB Confederación de Pueblos Indígenas de Bolivia (Confederation of
Indigenous Peoples of Bolivia)
CIPCA Centro de Investigación y Promoción del Campesinado (Center for Research
and Promotion of the Peasantry)
CND Consejo Nacional de Descentralización (National Council of
Decentralization)
COB Central Obrera Boliviana (Bolivian Labor Confederation)
COD Central Obrera Departamental (Departmental Labor Federation)
COMEXI Consejo de Comercio Exterior e Inversiones (Council of Foreign Trade
and Investment)
COMF Código Orgánico Monetario y Financiero (Organic Monetary and
Financial Code)
CONAIE Confederación de Nacionalidades Indígenas del Ecuador (Confederation
of Indigenous Nationalities of Ecuador)
CONALDE Consejo Nacional Democrático (National Council for Democracy)
CONAM Consejo Nacional de Modernización (National Council on
Modernization)
CONFIEP Confederación Nacional de Instituciones Empresariales Privadas (National
Confederation of Private Business Institutions)
COP Comité de Obras Públicas (Public Works Committee)
CORDECRUZ Corporación Regional de Desarrollo de Santa Cruz (Regional Development
Corporation of Santa Cruz)
COTAS Cooperativa de Telecomunicaciones Santa Cruz (Telecommunications
Cooperative of Santa Cruz)
CPESC Coordinadora de Pueblos Étnicos de Santa Cruz (Coordination of Ethnic
Peoples of Santa Cruz)
CPSC Comité Pro-Santa Cruz (Pro-Santa Cruz Committee)
CRE Cooperativa Rural de Electrificación (Rural Electrification Cooperative)
CSC Corporación de Seguridad Ciudadana (Citizen Security Corporation)
CSR corporate social responsibility
CSUTCB Confederación Sindical Única de Trabajdores del Campesinado de Bolivia
(Unified Syndical Confederation of Rural Workers of Bolivia
CTG Comité de Transito de Guayas (Transit Committee of Guayas)
DASE Dirección de Acción Social y Educación (Department of Social Action and
Education)
EIA Environmental Impact Assessment
EMAPA Empresa de Apoyo a la Producción de Alimentos (Company to Support the
Production of Foodstuffs)
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FEPB-SC Federación de Empresarios Privados de Bolivia–Santa Cruz (Federation of
Private Entrepreneurs of Bolivia–Santa Cruz)
FES función económico y social (economic and social function)
FEXPOCRUZ Feria Exposición de Santa Cruz (Exhibition Fair of Santa Cruz)
FINDESA Financiera de Desarrollo de Santa Cruz (Development Finance Company
of Santa Cruz)
GRUFIDES Grupo de Formación e Intervención para el Desarrollo (Group for
Interventions in Development)
IESS Instituto Ecuatoriano de Seguridad Social (Ecuadorian Social Security
Institute)
IU Izquierda Unida (United Left)
JBG Junta de Beneficiencia de Guayaquil (Guayaquil Charity Board)
JCG Junta Cívica de Guayaquil (Civic Board of Guayaquil)
JCP Junta Cívica Popular (Popular Civic Board)
JNE Jurado Nacional de Elecciones (National Board of Elections)
MAS Movimiento al Socialismo (Movement for Socialism)
MEF Ministerio de Economía y Finanzas (Ministry of Economy and Finances)
MG Madera de Guerrero (Wood of the Warrior)
MIES Ministerio de Inclusión Económica y Social (Ministry of Economic and
Social Inclusion)
MINAM Ministerio del Ambiente (Ministry of the Environment)
MINEM Ministerio de Energía y Minas (Ministry of Energy and Mines)
MIR Movimiento de Izquierda Revolucionaria (Revolutionary Left Movement)
MNR Movimiento Nacionalista Revolucionario (Nationalist Revolutionary
Movement)
NAFTA North American Free Trade Agreement
ONDS Oficina Nacional de Diálogo y Sostenibilidad (National Office for Dialogue
and Sustainability)
ONPE Oficina Nacional de Procesos Electorales (National Office of Electoral
Processes)
OT ordenamiento territorial (territorial regulation)
PASOC Pastoral Social Cáritas (Cáritas Social Pastorate)
PRE Partido Roldosista Ecuatoriano (Ecuadorian Roldosist Party)
PSC Partido Social Cristiano (Social Christian Party)
REMURPE Red de Municipalidades Urbanas y Rurales del Perú (Network of Urban and
Rural Peruvian Municipalities)
SAGUAPAC Servicio de Agua Potable (Potable Water Service)
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SENPLADES Secretaría Nacional de Planificación y Desarrollo (National Secretariat for
Planning and Development)
SNIP Sistema Nacional de Inversión Pública (National System of Public
Investment)
SNMPE Sociedad Nacional de Minería, Petróleo y Energía (National Society for
Mining, Petroleum, and Energy)
SOLCA Sociedad de Lucha Contra el Cáncer del Ecuador (Ecuadorian Society to
Fight Cancer)
SUNAT Superintendencia Nacional de Administración Tributaria (National
Superintendency of Tax Administration)
SUTEP Sindicato Único de Trabajadores de la Educación del Perú (Unified Union
of Education Workers of Peru)
TIPNIS Territorio Indígena y Parque Nacional Isiboro Sécure (Isiboro Sécure
National Park and Indigenous Territory)
UCS Unidad de Conflicto Social (Social Conflict Unit)
UJC Unión Juvenil Crucenista (Crucenista Youth Union)
UNASUR Unión de Naciones Suramericanas (Union of South American Nations)
UNSA Universidad Nacional de San Agustín (National University of San Agustín)
USAID United States Agency for International Development
ZEE Zonificación Ecológica Económica (Ecological and Economic Zoning)
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Introduction
One of the most consequential recent developments in global politics is the
shift toward multilevel governance that has taken place in countries around
the world. Thanks to the twin processes of decentralization and integration,
national governments have lost authority both downward to subnational
governments and upward to supranational bodies (Hooghe and Marks 2001;
Bache and Flinders 2004). Although this ongoing phenomenon has been
extensively studied, questioned, and debated, one of its most important con-
sequences remains unexamined and poorly understood. The shift toward
multilevel governance means that ideological conflicts over the market,
which have long dominated the political life of so many countries, are being
shaped in newly important ways by territorial conflicts between levels of
government—especially national and subnational governments. Empowered
by various types of decentralization, subnational governments now have the
power not only to make use of significant new forms of authority, but to do so
in ways that contest the economic development model in place at the
national level. More and more, subnational governments are challenging
national governments in the field of policy.
We are at the dawn of a period of far greater complexity in the relationship
between territory and ideology. This new era is marked by subnational policy
challenges of growing strength, and policy conflicts between national and
subnational governments of increasing relevance. Even if “reports of the
death of the national economy are greatly exaggerated”(Wade 1996), the
supremacy of the national government as the sole arena for conflict over
economic development strategies has been seriously called into question. In
numerous countries, gone are the days when the center could safely ignore the
economic policy preferences of officials who operate at lower levels of govern-
ment. Making sense of this phenomenon requires that we more fully integrate
the literature on multilevel governance, which has focused on why politicians
decide to reallocate policymaking authority between different levels of gov-
ernment, with the literature on the politics of economic development, which
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has focused on why politicians use this authority to adopt or discard rival
development models.
In most countries, the contemporary debate between advocates of market-
centered and state-centered models is anything but new, and has produced
instead a strong sense of déjà vu as national governments over time tend to
tack back and forth between more liberal and more statist conceptions. In
the current period, however, this by now familiar ideological conflict is
generating qualitatively new and significant forms of territorial friction,
dissonance, and heterogeneity. As the political science literature on eco-
nomic development has demonstrated, the replacement of one policy
regime with another has always produced political resistance, opposition,
and struggle—as one would expect given the high stakes associated with
the reorientation of a country’s overarching economic development model
(Haggard 1990; Murillo 2003; Kohli 2004; Roberts 2015). But more than at
any time in the past, political conflict over the content of these models
now involves much more prominent and dynamic roles for subnational
governments, whose elected authorities are increasingly using their
independent control over subnational territories to contest national devel-
opment models and/or to pursue their own preferred approaches at the
subnational level.
It is not that ideological struggles over the appropriate role of the state in the
economy did not have consequential, often heavily redistributive, impacts on
subnational territories in the past. Quite the contrary. Liberalism has typ-
ically benefited those subnational regions that produce commodities in high
demand globally (Cardoso and Faletto 1979; Saylor 2014). Statism, mean-
while, has often led to the concentration of new industrial opportunities in
and around national capital regions, leading to territorially lopsided patterns
of industrialization and contributing in no small measure to the emergence of
megacities across the global South (Evans 2002; Portes and Roberts 2005).
Economic development models have always had profound territorial con-
sequences, but in the opening years of the twenty-first century governing
officials in subnational territories have much greater scope to challenge
national policy directions, and to express and act on their own policy
preferences in their own subnational jurisdictions. In the past, subnational
officials who dared to criticize, resist, or subvert national policy approaches
often did so at their own peril since they served at the pleasure of national
patrons who appointed them to their posts, whether these patrons were
democratically elected presidents or de facto military leaders. By the end of
the twentieth century, however, a global wave of political decentralization to
both local- and intermediate-level governments had replaced appointments
with elections as the main mechanism through which most subnational
executives hold their offices, a shift that has widened the scope for and
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significance of territorial conflicts over the market.
1
As a result, while the
search for appropriate economic development strategies remains a highly
salient one in the world today, no longer is it affected only by political actors
who operate chiefly at the national level, such as presidents and legislators,
party and interest group leaders, or business chamber executives and labor
bosses. Instead, subnational actors such as mayors and governors are shaping
the contours and outcomes of these ideological conflicts to a far greater degree
than was typically the case in the twentieth century.
Examples abound of the growing incidence of territorial actors and issues
in the ideological debates that continuetorageoverthemarket,starting
with Europe. A “Europe of the regions”may have been slower to emerge
than many anticipated, but subnational regional governments now com-
monly form coalitions with the European Commission in ways that chal-
lenge national governments, and the Europeanization of particular policy
sectors has increased the autonomy of subnational actors (Hooghe 1996;
George 2004; Piattoni and Schönlau 2015).
2
Although the literature on
regionalism in Europe has tended to focus on linguistic, ethnic, and cultural
demands, European regions have also articulated distinctive ideological
demands vis-à-vis the market—on both the left and the right. On the left,
French-speaking Socialists in Belgium’s lesser-developed southern region
of Wallonia worry that Flemish liberals in the north will use their influence
in national institutions to undo the welfare state (Coffe 2008). In the UK,
it is not just national identity that has animated the push for Scottish
independence, but widespread ideological preferences for forms of social
solidarity that seem incompatible with Conservative rule from London
(Salmond 2014). On the right, the hegemony in Bavaria of the conservative
Christian Social Union, which has governed the state without interruption
since the Second World War, reflects both the lowest levels of unionization
in Germany as well as strong local preferences for free market economics
1
According to Rodden (2004), over the three decades that began in 1970, the percentage of local
governments that were directly elected increased from 30% to 86%, whereas the percentage of
elected regional governments increased from 25% to 55%. According to Hooghe and Marks, 79% of
central governments could override the decisions of subnational governments in 1975, but only
40% could by 1995 (Hooghe and Marks 2010: 22).
2
In the debate over the evolution of the EU that has taken place between “inter-governmentalists”
and “supranationalists,”the former have questioned thepossibilityof robust regions thatmight escape
the control of national governments (Moravcsik 1998), whereas the latter have emphasized the
important role of regions in the EU’s new three-tiered system of multilevel governance (Hooghe and
Marks 2001). While some dismiss the Committee of Regions owing to its merely advisory status and
view the regions as “hype”(Greenwood 2011: 176–7; Luedtke 2005), others argue that subnational
governments are actively claiming a role in EU policy, and not merely as passive beneficiaries of a
struggle over competencies between national governments and European institutions ( Jeffery 2000;
Piattoni and Schönlau 2015).
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(Gunlicks 2003: 292).
3
InItaly,theNorthernLeaguehassoughttouseits
control over regional governments such as Lombardy and Veneto to articu-
late an anti-statist ideology that seeks to reduce redistribution to lesser-
developed regions (Spektorowski 2003).
The territorial dimension within the larger ideological debate over develop-
ment models has also become more salient in Asia. One of the key questions
that dominated the transfer of Hong Kong back to Chinese rule in 1997 was
whether the city’s distinctly liberal economic model could survive reincorpor-
ation into China, as reflected in the aspirational phrase “one country, two
systems”(Davis 2015). Elsewhere in China, policy decentralization led to
the development of territorially distinct local models of development. For
example, according to Thun’s study of the auto sector (2004: 1291), while
“Shanghai became the local version of a developmental state ...Guangzhou
took a more laissez faire approach [by forcing] firms owned by different
ministries to compete with each other for business and investment capital.”
4
In India, scholars have documented the performance of the economic devel-
opment model designed and implemented by the Communist Party of India
(Marxist) over the course of many decades in the states of Kerala and West
Bengal—in both cases on the basis of strong mass support among peasant and
working-class populations (Isaac 2000; Parayil 2000). The distinctive features
of the Kerala model, according to Heller (1999, 2001), include extensive
investments in public infrastructure, increases in planning capacity centered
in the state-level Planning Board, and working-class empowerment in the
form of new participatory mechanisms. On the opposite side of the ideological
spectrum, the Gujarat model that crystallized under the auspices of the
right-of-center Bharatiya Janata Party looks quite different. Administered
by Narendra Modi, who leveraged his territorial experience as the Chief
Minister of Gujarat between 2001 and 2014 to launch a successful bid for
Prime Minister in 2014, the Gujarat model is characterized by business-
friendly policies, cuts in state subsidies, hikes in electricity rates, and declin-
ing state budget deficits (Sharma 2013).
5
3
See Jeffery et al. (2014) for the argument that partisan and structural differences among the
länder have led to significant policy variation at the subnational level in Germany—against the
dominant view of high levels of policy coordination between federal and state governments.
4
Whereas Thun sees local divergence as the response to policy decentralization, Montinola,
Qian, and Weingast (1995) predict convergence on the part of subnational governments in China
in response to the incentives generated by “market preserving federalism.”For more on regional
variation within China, see Blecher (1991), Qian and Stiglitz (1996), Yang (1997), and Oi (1999).
5
For the argument that “some regional states have managed to escape the adverse effects of the
dirigiste regime”at the national level in India, see Sinha (2003: 460). According to Sinha, while
“some regional states emphasized the role of the public sector, others encouraged synergistic
public–private coordination”(p. 460). Still, because subnational states “cannot be treated like
nation-states”(p. 461), Sinha insists on the existence in India of a “single policy framework”
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While a noticeable tightening in the connection between territorial politics
and ideological conflict can be seen around the world, this phenomenon is
particularly striking in Latin America, in part because of the region-wide
oscillation in economic policy that took place across the twentieth century.
Virtually all Latin American countries began that century governed by funda-
mentally liberal development models, followed by widespread experimenta-
tion with statism in the middle fifty years of the century, and ending with the
subsequent return to market-centered approaches in the century’s closing
decades. Individual countries differed in the exact timing, scope, and depth
of the policy reforms they adopted as part of each successive shift, but to a
striking degree Latin America as a region moved in concert as national gov-
ernments adopted and then shed common approaches (Sheahan 2002;
Corrales 2003). Indeed, these region-wide shifts help account for much of
the coherence that characterizes Latin American political economy as a field
of study.
6
One important pattern of continuity as the policy pendulum swung
back and forth between liberalism and statism in the twentieth century was
the unimportance of subnational actors such as mayors and governors, who
did not meaningfully influence the ideological debate over the market, even as
this debate triggered frequent regime changes, extensive social mobilization,
and in some cases high levels of political violence (Smith, Acuña, and Gamarra
1994; Oxhorn and Ducatenzeiler 1998; Kurtz 2004). This twentieth-century
backdrop sets into sharp relief the protagonism that subnational elected
officials are now exerting in the twenty-first century, which as a result is
starting to look much more like the nineteenth century—a period in which
subnational caudillos routinely took up arms against the center over a range of
matters, including economic policy (Bethell 1985).
7
Particularly with respect to the European cases that have figured so prom-
inently in the literature on multilevel governance, Latin America is an import-
ant region for theory-building because of two further reasons. First is the
relative absence of successful EU-like integration efforts in Latin America
(outside of NAFTA). If the development of supranational institutions had
the effect of strengthening subnational regions in Europe (Hooghe 1996;
George 2004), subnational governments in Latin America have largely been
that is the “product of central rules, provincial strategic choices and subnational institutional
variation”(pp. 460–1).
6
Further, as scores of political scientists have argued, this oscillation in economic policy
interacted in significant ways with some of the region’s most important political developments,
including the emergence, collapse, and reshaping of democratic rule (O’Donnell 1973; Collier and
Collier 1991; Haggard and Kaufman 1995; Roberts 2015).
7
While the territorial dimensions of ideological conflict were salient in nineteenth-century
Latin America as well, especially in the post-independence period, this was often the result of
attempts by national governments to challenge the authority of local governments, as opposed to
the opposite configuration now dominant. I thank Gabriel Paquette for this point.
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denied this possible source of support in their struggles with national govern-
ments. Also, not having lost much authority upwards to supranational
regional bodies means that national governments in Latin America have
been freer to concentrate their efforts on how they want to respond to policy
threats from below.
The second factor runs in the opposite direction by encouraging rather than
discouraging subnational policy challenges. Lower levels of state capacity in
Latin America relative to Europe should be understood as a permissive factor
for the development of these challenges. Limited state capacity and highly
incomplete processes of state formation have created a fertile landscape for the
emergence of much more significant and destabilizing forms of territorial
heterogeneity in Latin America. It is no coincidence that the most powerful
subnational policy challenges in Latin America have emerged in countries
with especially low levels of state capacity, including the three countries that
I focus on in this book: Bolivia, Ecuador, and Peru. Interestingly, all three of
these countries are unitary and not federal systems, which suggests that the
design of state institutions may actually be less important than their under-
lying strength. By focusing on policy conflicts and multilevel governance in
unitary countries, my research complements and extends a vibrant body of
scholarship on federal countries in Latin America (Argentina, Brazil, and
Mexico) that has demonstrated how subnational officials shape industrial
policy (Montero 2002), macroeconomic stability (Wibbels 2005), regulation
(Snyder 2006), democracy (Gibson 2012; Giraudy 2015), privatization (Post
2014), poverty alleviation (Fenwick 2016), and social policy implementation
(Niedzwiecki, forthcoming).
Based on in-depth field research between 2005 and 2015 in three Andean
countries, this book seeks to understand the nature of the new policy chal-
lenges that subnational governments are now posing, and to explain the
relative success or failure of these challenges. To set up the book, this intro-
ductory chapter is organized into four main sections. The first section concep-
tualizes the two main types of subnational policy challenges I seek to explain,
along with the two most common territorial and ideological configurations
that have resulted from these challenges. What are the distinctive possibilities
and limitations of “subnational neoliberalism”and “subnational statism”as
two prominent types of subnational policy regimes? The second section
examines the general causes that have made subnational policy challenges
more common in the world today. Why are we seeing more territorial hetero-
geneity within countries in terms of the pursuit of ideologically disparate
economic development models? This discussion of the main causes of sub-
national policy challenges serves as the background for my core research
question, which is not the easier question of why these challenges have
emerged but the harder question of why they succeed or fail. The third section
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assesses the importance of this trend by analyzing the chief advantages and
disadvantages of the shift toward greater territorial heterogeneity. Regardless
of why it has become more common, is this kind of heterogeneity positive or
negative? The fourth section describes the plan of the book, including a brief
overview of the theoretical framework, which stresses the importance of
structural, institutional, and coalitional factors to explain variation in the
success of subnational policy challenges.
Subnational Policy Challenges
The claim that ideological conflict over the market has become progressively
more territorialized leads me to focus in this book on the policy challenges
that are being articulated by subnational governments. I conceptualize these
challenges as coming in two related but distinct forms. The first stems from
elected subnational officials who use their authority, resources, and legitimacy
to design, implement, and defend subnational policy regimes that deviate
ideologically from national policy regimes.
8
The second occurs when these
same officials use their authority, resources, and legitimacy to question,
oppose, and alter the ideological content of national policy regimes. “Policy
regime”here refers to a package of public policies and institutional practices
that together reflect a common set of ideas and beliefs about the appropriate
role for market forces and the appropriate levels and types of state interven-
tion in economic life (May and Jochim 2013).
9
While the focus in this book is
on economic policy regimes rather than other types of policy regimes, ideo-
logical struggles between national and subnational politicians are also playing
out in other policy fields, including vis-à-vis controversial social policies in
issues such as reproductive rights and same-sex marriage. Subnational govern-
ments can and do articulate challenges in a whole range of policy fields, and
intergovernmental relations should not be reduced to economic issues alone,
but here I focus solely on economic policy disputes between territorial actors
with rival views of the market.
8
Throughout the book, I use “policy regime”and “development model”as interchangeable
terms.
9
According to May and Jochim (2013), policy regimes are “governing arrangements for
addressing policy problems”(p. 428), and “the breadth of a policy regime is largely determined
by the boundaries that one establishes in conceptualizing the problem or set of problems”(p. 437).
Whereas the American politics and international relations literatures often conceptualize policy
regimes as being organized around specific issue areas such as the environment, civil rights, or
education (Wilson 2000: 257), I use the term to refer not to any one policy area but rather to a
broader set of economic policies(taxation, regulation, privatization, and trade and financial policies)
that together reflect either a state-centered or market-centered approach to the “problem”of
economic development.
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My conceptualization of the two distinct types of policy challenges posed by
subnational officials reflects the reality that these officials can developand act on
preferences vis-à-vis both subnational and national policies; their subnational
identities do not prevent them from espousing views about national policy
regimes, and their constituents (now that these officials are elected) may indeed
push them to do so. Each type of challenge can trigger ideological conflict with
national authorities, who are now much more frequently in the position of
having to spend significant amounts of time, energy, and resources either
suppressing or accommodating these challenges. Analytically distinguishing
between these two main types of subnational policy challenges is important
because each must overcome different sorts of obstacles in order to succeed vis-à-
vis the national government. Which of the two main types of challenges emerge
in particular points in time and how exactly they threaten the national govern-
ment will vary from country to country, but what is clear is that new theories are
needed to understand these newly salient challenges.
10
The chief significance of the first type of challenge is that it potentially
represents a threat to one of the central state’sdefining attributes—namely,
the prerogative of imposing its preferred policies uniformly throughout the
national territory (Mann 1986; Soifer and vom Hau 2008). Subnational gov-
ernments that are able to develop discordant policy regimes in effect intro-
duce territorial limits on the scope of the national government’s policy
authority. Subnational governments are by no means independent states;
what they are challenging is not the sovereignty claims of the national gov-
ernment but rather its ability to enforce a single development model across
the national territory. When these subnational policy regimes manage to
persist, the result is policy regime juxtaposition, a term I use to refer to the
simultaneous pursuit of ideologically divergent policy regimes at different
levels of government within the same country. It is important to clarify here
that the emergence of this phenomenon by no means requires federalism,
even if the kinds of powers assigned to intermediate-level governments under
federalism theoretically augment their ability to build subnational policy
regimes. Whenever two separately elected governments—one national and
one subnational—can jointly claim governing authority over the same terri-
tory, this arrangement opens up the possibility of policy regime juxtaposition.
It is also important to note that this first type of subnational policy challenge
is likely to be especially threatening in developing countries, where national
leaders are typically under intense pressure to select and execute strategies that
10
One important new argument is that of Sara Niedzwiecki (2016 and forthcoming), who focuses
on a related but distinct type of subnational challenge that occurs when subnational governments
obstruct the implementation of national policies. According to Niedzwiecki, opposition-controlled
subnational governments will oppose national policies like conditional cash transfers when voters
can clearly attribute responsibility to the national government.
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will generate economic development, and thereby lessen the widening gap
with the developed world.
The second type of subnational policy challenge, however, can be just as
significant. In fact, in some situations the center may more easily tolerate
deviant subnational policy regimes, and perceive instead as the greater threat
those subnational officials who are trying to use their powers to influence the
content of the national policy regime. Ideologically divergent models in
marginalized local districts that are deemed politically or economically irrele-
vant by the national government may well be dismissed as a mere nuisance
to the center. In contrast, when mayors and governors in politically and
economically significant subnational districts try to take on the center by
contesting its policy direction, such a challenge will probably be taken very
seriously. From the perspective of presidents who can count on congressional
majorities and compliant judiciaries—not uncommon realities in Latin America
owing to the region’s long experience with hyper-presidentialism—the most
significant obstacle to the pursuit of their preferred policy preferences may
well come from subnational challengers. Subnational officials now have their
own electoral mandates to point to in articulating and justifying ideological
opposition to the president’s policy orientation, especially (but not only)
when they belong to parties other than the president’s. While I focus on
efforts by subnational challengers to alter the orientation of national policies
by forcing changes in the content of policy, others have focused on how
subnational opponents can sabotage the implementation of national policies
(Fenwick 2016; Niedzwiecki, forthcoming).
Just as the nature of the significance of these two types of challenges differs,
so too do the obstacles they tend to face. For instance, developing and imple-
menting a coherent and deviant subnational policy regime (subnational pol-
icy challenge no. 1) probably requires more in the way of institutional
capacity than challenging that of the national government (subnational
policy challenge no. 2). It also usually depends on longer time horizons,
which are not necessary in order for subnational officials to be able to lead
effective protests against the policies of the national government, but are
essential in order for them to build distinctive local models. On the other
hand, successfully challenging the national policy regime usually requires
coalitions with other subnational units, which might not be necessary when
a subnational government “merely”seeks to develop its own distinctive
model. Alliances among the governors or mayors who preside over separate
subnational jurisdictions have to surmount all of the differences that other-
wise divide these jurisdictions, including partisan orientation, level of eco-
nomic development, and size—to name just a few. What explains the success
or failure of these two types of subnational policy challenges is the central
theoretical challenge that I tackle in the next chapter.
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Although it is important to refrain from assigning greater significance, a
priori, to either type of challenge, it is also critical to note that neither type of
challenge is a necessary condition for the other. In other words, for sub-
national officials to seek to change the national policy regime does not require
that they have already built and are simultaneously defending a deviant local
model. Likewise, subnational officials who are engaged in the design, imple-
mentation, and/or defense of an ideologically discordant subnational policy
regime may or may not be actively engaged in efforts to alter the ideological
content of the national policy regime. According to my conceptualization,
any given elected subnational official can articulate either type of challenge,
both types of challenges, or neither type of challenge. While it is thus
important to appreciate the conceptual separateness of these two types of
challenges, in the real world they can generate complicated interactions. For
example, subnational officials who can successfully defend their preferred
policies locally may be less preoccupied with altering the national policy
regime, and national officials may well accept local deviations if they con-
clude it might help them head off challenges to the content of the national
development model.
In the conceptual framework on which this book rests, I take ideology
seriously by emphasizing the deeply held ideological commitments that
motivate politicians at both the national and subnational level, and that
lead them to clash over policy with politicians who are motivated by rival
ideologies. Rather than see politicians as exclusively strategic actors who
instrumentally adopt the ideological positions that best serve the interests of
the jurisdictions they govern at any given moment, I argue that ideological
differences structure political conflict, and show how genuine and protracted
ideological disagreements are now playing out across territory. The reality is
that mayors, governors, and presidents are all pursuing both ideological and
territorial interests, which sometimes align and sometimes diverge. But, by
highlighting the substance and seriousness of their ideological disagree-
ments, I underscore how politicians who lose ideological battles at the
national level are increasingly able to shelter in subnational spaces—from
which they can keep up the fight. Finally, although I see ideologically
motivated policy challenges by subnational officialsasrealthreatsthat
inflict real damage upon national officials when they succeed, a less zero-
sum dynamic may also obtain, especially in ideologically charged settings.
For example, subnational policy challengers may function as useful domestic
enemies for national incumbents to rail against and thereby better connect
with their own ideologically motivated voters.
11
More generally, whipping
11
In a similar vein, the literature on the juxtaposition of political regimes (as opposed to policy
regimes) has demonstrated that the persistence of subnational authoritarianism may be functional
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the flames of ideological conflict may redound to the electoral benefitof
both national and subnational politicians, which can be true without calling
into question the genuineness of their core ideological disagreements.
Moving from the conceptual level to the empirical, consider the cases of
Bolivia and Ecuador as countries that have witnessed powerful examples
of the first type of subnational policy challenge. In both countries, the
adoption of state-centered developmentmodelsbyPresidentsEvoMorales
and Rafael Correa in the first decade of the twenty-first century triggered
attempts by local authorities to defend market-oriented strategies in each
country’s most economically vibrant subnational jurisdiction: Santa Cruz in
Bolivia and Guayaquil in Ecuador. In these countries, separately elected
subnational authorities in alliance with local business elites have sought
to preserve within their jurisdictions the neoliberal policy regimes that
have been developed and implemented over the course of many decades,
and that arguably have helped each region achieve its predominant eco-
nomic status within the country. Market-oriented approaches in Santa
Cruz and Guayaquil, however, have clashed with the more statist course
set by left-leaning presidents, both of whom have responded aggressively
to the subnational policy challenges that they have faced from below,
though with differing degrees of success.
For an example of the second type of subnational policy challenge, con-
sider the case of Peru, where a succession of national governments has
consistently implemented and defended a neoliberal policy framework
since its adoption by President Alberto Fujimori in the early 1990s. After
theendoftheFujimoriregimeandthereturntodemocracyin2000,
Presidents Alejandro Toledo (2001–6), Alán García (2006–11), and Ollanta
Humala (2011–16) all maintained the core elements of Peru’s neoliberal
model—even as this model has been called into question and significantly
altered in most neighboring countries. Against this backdrop, it is sub-
national governments in Peru that have emerged as important spaces for
the expression of opposition to and frustration with neoliberalism, as well as
experimentation with more vigorous forms of state action in the economy.
The remarkable stability of the neoliberal policy regime at the national level
in Peru thus belies a great deal of subnational resistance and contention.
Distinct and fully-formed subnational policy regimes have yet to emerge in
Peru—at either the regional or the municipal level—but the critics of neo-
liberalism who are embedded in Peruvian subnational governments have
tried to use those offices to push back against neoliberalism as a national
policy regime. In this way, Peru shows that territorial friction over economic
to the national democratic regime, as when subnational autocrats deliver vote blocs to national
politicians (Gibson 2013; Giraudy 2015).
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development models can result in the opposite ideological configuration
from Bolivia and Ecuador; in Peru advocates of neoliberalism in control
of the national government seek to defeat its subnational critics, while in
Bolivia and Ecuador subnational exponents of neoliberalism seek to preserve
it vis-à-vis the critics of neoliberalism who govern nationally.
These three neighboring Andean countries illustrate a broader and striking
phenomenon, which is the reality that subnational officials in the contem-
porary period are using their newfound powers to pursue very different policy
approaches, ranging all the way from neoliberalism to statism. To date, we
know very little about what these heavily studied models look like, much less
how they perform, when they are being crafted, adopted, and defended by
subnational rather than national politicians. Political scientists who study the
design, adoption, and implementation of economic development models
have tended to assume a national stage, and often to question the very
possibility of subnational models.
12
If, as Evelyn Huber (2002: 468) argues in
her influential work on models of capitalism in Latin America, coherent
development models require “a considerable degree of centralization of polit-
ical institutions,”then it might be well-nigh impossible for subnational poli-
ticians to articulate and pursue coherent subnational models. At the same
time, such a view would render invisible the increasingly serious and system-
atic attempts by subnational officials not just to influence the national policy
regime, but to design their own coherent policy regimes.
According to a vibrant literature based largely in geography and urban
studies, subnational governments have indeed become important spaces for
neoliberalism around the world (Brenner and Theodore 2002; Harvey 2009;
Brenner, Peck, and Theodore 2010).
13
According to Paul (2002), the sub-
national state is playing an increasingly important role in the promotion of
transnational liberal production and circulation. Borrowing from Gramsci,
Jessop (1997) examines the “local hegemonic projects”that are created when
transnational capital and its local allies link up with subnational states. Sassen’s
work on global cities operates in a similar mode by describing the partnerships
that have developed between transnational capital and decision-makers in
cities that host the world’s leading financial firms (Sassen 1998). Geddes and
Sullivan (2012) identify a range of behaviors that local leaders around the
world have adopted to further “neoliberalization,”prioritizing goals such as
efficiency and competitiveness over social cohesion and distributive justice. In
12
Meanwhile, political scientists who study the administrative performance of subnational
governments tend to overlook the significance of their ideological orientations. See, e.g., Sabel
and Zeitlin (2012).
13
See also Logan and Molotch (1987) for a classic critique of how “conventional market
reasoning”in cities has produced “growth machines”marked by high levels of stratification and
inequality.
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Latin America, Goldfrank and Schrank (2009) show how the turn toward
neoliberalism that took place at the national level in the 1990s was actually
foreshadowed in many cases by the earlier introduction of free enterprise
zones by local authorities.
14
Not controlling the national government is a serious drawback for
neoliberals—among other things, it means that they cannot reduce tariffs,
quotas, or capital controls, and that they cannot devalue the currency to
promote export-driven growth. Reducing state intervention in the economy,
a hallmark of neoliberalism, is difficult to achieve if the national government is
actively expropriating private firms and pursuing vigorous industrial policies.
Nevertheless, it is important to recognize the wide scope for neoliberal action
that exists at the subnational level across three main fields of public policy,
including economic, social, and security policies. With respect to economic
policy, neoliberal precepts encourage subnational officials to endorse private-
sector entrepreneurship vis-à-vis those infrastructural needs (roads, highways,
ports, and irrigation systems) that are paramount for the success of export-
oriented economic activities. Precisely because of the decentralization of
many of these responsibilities during the neoliberal era, Latin America’s sub-
national governments often retain important control vis-à-vis the infrastruc-
ture that is critical for these activities (Oxhorn, Tulchin, and Selee 2004;
Smoke, Gomez, and Peterson 2007). To turn to social policy, subnational
neoliberals favor a more targeted and less fiscally generous approach to social
investments—as opposed to the holistic and universalistic policies that char-
acterize more state-centered approaches (Pribble and Huber 2011; Garay
2016). They also depend heavily on partnerships with the private sector in
the provision of social services and/or the outright privatization or concession
of utilities, including electricity, water, and sewerage. The same emphasis on
cost recovery and the preference for private as opposed to public action also
characterize the security field, where neoliberal tenets favor the privatization
of security and the expansion of roles for private security guards relative to
publicly financed police officers (Spitzer and Scull 2001; Ungar 2007–8).
Across all policy domains and service fields, subnational neoliberals try to
pare down public-sector payrolls as they aspire for higher levels of efficiency
and productivity.
Committed liberals thus have good reason to set their sights on subnational
governments, but these governments can also lend themselves to the pursuit
of approaches that are decidedly illiberal.
15
Based on research in a number of
14
See also Herrera (forthcoming) for a comparative study of how nine different Mexican
municipalities responded to pressures to adopt neoliberal cost-recovery reforms in the water sector.
15
See Parnell and Robinson (2012) for the argument that Northern scholars in urban studies
have been too quick to use neoliberalism as the dominant lens through which to study urban
environments in the Global South, ignoring other perspectives, including developmentalism and
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Latin American countries, scholars in recent years have identified a range of
policy behaviors by subnational governments that confound rather than
promote neoliberal outcomes.
16
In Brazil, Montero (2002) documents the
conditions that enable state-level governments to succeed in their efforts to
promote economic transformation via subnational industrial policy. Snyder
(2006) analyzes the new forms of subnational corporatism that emerged in a
variety of Mexican states in the aftermath of national-level economic liberal-
ization.
17
In Argentina, Wibbels (2005) shows how profligate provincial
behavior challenged attempts by neoliberal national governments to defend
fiscal balance, and Post (2014: 33) demonstrates how governors with statist
orientations and fiscal resources were “less likely to negotiate constructively
with private providers”of water and sanitation infrastructure. In Peru, Eaton
(2010) argues that societal opposition to the sale of state-owned enterprises
to foreign firms has encouraged, ironically, postures of economic nationalism
on the part of subnational elected officials. Across the region, according to
Goldfrank and Schrank (2009), national-level free-market reform has triggered
the spread of new forms of municipal socialism that focus on long-neglected
urban peripheries, at-risk schoolchildren, and social programs from which
neoliberal national governments have retreated.
18
While some illiberal behav-
iors by subnational government may thus be considered forms of socialism
(Quilley 2000; Goldfrank and Schrank 2009) or nationalism (Eaton 2010),
I use subnational statism in this book as a broader term meant to capture a
range of anti-neoliberal positions adopted by subnational elected officials.
As an economic development model, statism typically requires higher levels
of state capacity than does neoliberalism, and as a result subnational officials
will probably have a more difficult time acting on statist as opposed to
neoliberal preferences. According to Evelyne Huber’s exploration (2002: 473)
of the possibility of more interventionist social policies in Latin America,
“local governments typically do not have sufficient resources to experiment
successfully with comprehensive social policies.”Building statist policy
regimes at the subnational level is likely to be harder than building neoliberal
policy regimes for this reason, but there is much that can be done subnationally
the legacies of the “local state.”On the zeal of subnational states for “re-regulation”in the
aftermath of national-level liberalization in India, see Sinha (2004) and Snyder (2006).
16
According to Fitzgerald (2005: 102), local and regional governments across Latin America
continued to engage in planning activities even as neoliberal doctrines came to dominate at the
national level in the 1980s and 1990s.
17
At the municipal level in Mexico, Mahon and Macdonald (2010) examine attempts by city
governments in Mexico City to implement anti-poverty policies that are embedded in norms of
social citizenship, and that therefore directly challenge the neoliberal anti-poverty approach
favored by national governments. For other left experiences at the municipal level, see Carrión
and Ponce (2015).
18
On the perils of “socialism in one borough,”see Davies (1988) and Leopold and McDonald
(2012).
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to contest or derail national-level neoliberal frameworks, notwithstanding
Vladimir Lenin’s views of municipal socialism as “incapable of bringing
about larger socialist transformation”(Leopold and McDonald 2012:
1838).
19
Subnational governments, for example, often enjoy the power to
set property taxes, maintain local cadastres, grant (or deny) land-use permits,
and allow (or prohibit) the (re)zoning of land for various purposes (Campbell
2009; Faguet 2013). These powers still pale in comparison to national-level
prerogatives over tariffs, currencies, and capital controls, but, if subnational
officials choose, they can be used to target and complicate the investment
projects by private-sector actors (foreign or domestic) that neoliberal policies
are seeking to promote at the national level. Particularly in extractive sectors,
private investment often depends on securing a “social license”in the form of
sufficient levels of societal support locally for projects to go forward (Bebbington
and Bury 2013). Elected subnational officials can ally with local groups seek-
ing to deny this informal but important license, and they can endorse, sup-
port, and even lead local protests against private companies. In addition to
using their offices to throw up obstacles to the private-sector investments
that are favored by national neoliberals, subnational officials can also some-
times act on statist preferences by establishing banks and enterprises that are
owned and operated by subnational states (Tendler 1968; Trebat 1983; Eaton
2006). More generally, if Leopold and McDonald (2012: 1848) are correct and
it was “the emergence of national welfare states [that] took the wind out of the
municipalist socialist sails”in the early twentieth century, then one can argue
that the subsequent decline of the national welfare state model has created
space once again for the pursuit of more statist approaches at the local level.
At the subnational level no less than at the national level, “neoliberalism”
and “statism”are ideal types that are useful as guides to empirical analysis. No
policy regime in the real world is either purely neoliberal or purely statist, and
many blend features of both. Furthermore, each analytical category includes a
gamut of approaches that range from more moderate to more extreme. For
example, neoliberals who advocate aggressive export promotion policies can
be differentiated from those who strictly prefer to be price-takers from inter-
national markets, and likewise statists who support horizontal policies to
foment innovation can be distinguished from those who advocate heavy
subsidization and import substitution.
20
These gradations matter for the like-
lihood of serious and sustained ideological struggle in specific countries; we
19
According to Lenin, “the bourgeois intelligentsia elevates municipal socialism to a special
‘trend’precisely because it dreams of social peace, of class conciliation, and seeks to divert public
attention away from the fundamental questions of the economic system as a whole, and of the
state structure as a whole, to minor questions of local government”(Leopold and McDonald 2012:
1845).
20
I am grateful to an anonymous reviewer for this point.
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should not expect to see sharp conflict where neoliberals want to use the state
to promote exports and where their statist counterparts only push innovation
policies. But in other cases it is possible to identify well-defined and irrecon-
cilable differences between neoliberals and statists, and my core contention is
that this kind of conflict increasingly unfolds along territorial lines.
The Emergence of Subnational Policy Challenges
According to the previous section, although they have appeared in the devel-
opment literature only recently, subnational governments do indeed operate
as meaningful and attractive spaces for advocates of liberalism and statism
alike, who can use their control over these governments to articulate sub-
national policy challenges. But why have these challenges become so much
more common, in Latin America and elsewhere? A number of factors, some
global in their reach and some more specific to the region, help account for the
growing importance of territorial heterogeneity in the search for effective
economic development strategies.
One key driver is globalization, which has increased opportunities for some
subnational regions to insert themselves into the world economy as exporters
of the goods that they have comparative advantages in producing, more or less
independently from their respective national governments (Piore and Sabel
1986; Scott 1998). Less fortunate subnational regions, in contrast, have been
left further behind by globalization in ways that have triggered the defensive
creation of distinct subnational policy regimes (Brenner 2004; Geddes 2014).
In other words, globalization is especially potent because it can trigger sub-
national challenges on the part of regional winners and losers (Castells and
Borja 2004). The globalization of capital markets has also tended to enhance
the financial independence of subnational officials, who increasingly can
circumvent national governments in their attempts to raise money abroad to
fund distinct subnational projects and approaches (Savitch and Kantor 2004;
Rodrik 2010). The transition to post-Fordist production with the attendant
need to target niche markets has heightened the importance of agile local
governments and lessened the importance of the services provided by less
flexible national governments (Doner and Hershberg 1999). According to
Keating (1999: 4), “free trade, sectoral restructuring, and changes in pro-
duction technology have in some ways reduced the importance of territory,
notably by reducing transportation costs, but in other respects they have
enhanced it by increasing the importance of non-traded interdependencies,
and reshaped it by fostering new systems of production and innovation.”
In addition to unleashing these economic changes, globalization has also trig-
gered sustained political efforts at regional integration through the construction
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of supranational institutions. In Europe, supranational regionalism has strength-
ened subnational regionalism (Hooghe 1996; Jeffery 2000), thereby potentially
enhancing the power and reach of subnational policy challenges.
Democratization has also increased the scope for serious subnational policy
challenges and for the possibility of policy regime juxtaposition. Democratic-
ally elected national officials may not like the emergence of distinct subna-
tional policy regimes and, as documented in the following chapters, they can
use the full range of their powers in the attempt to attenuate policy challenges
from below. Authoritarian national governments, however, are even less likely
to tolerate subnational deviations, particularly in cases where authoritarian
actors like the armed forces have taken power to fix the national economy or to
pursue a particular vision of economic development (O’Donnell 1973;
Hirschman 1979).
21
Even if the third wave of democratization has tended to
produce thin and feeble democratic regimes more often than robust consoli-
dated democracies (Hagopian and Mainwaring 2005), transitions to democ-
racy in the 1980s and 1990s created permissive conditions for the generation of
subnational policy challenges.
Particularly where voters can cast separate ballots in national and sub-
national races, and where these races are held at different times in the electoral
calendar (Carey and Shugart 1992), democracy may well encourage policy
regime juxtaposition. After all, voters may look to different levels of govern-
ment for different policy solutions and for different levels of engagement in the
economy. For instance, voters might prefer more interventionism from local
governments and less interventionism on the part of the more distant national
government, whose actions may be deemed disproportionately to benefit
residents in other parts of the country. Or, conversely, doubting the compe-
tence of local authorities whom they can observe up close, voters may prefer
greater intervention by the national government officials whom they consider
to be better trained or more competent. In fact, we should expect that this type
of split-ticket voting will more frequently produce “divided government”
between national and subnational levels than “divided government”between
executive and legislative branches at the national level. Whereas the latter is
possible only under presidentialism (Haggard and McCubbins 2001), the for-
mer is theoretically possible in both presidential and parliamentary systems
alike. The tendency of democracy to generate vertically divided government
between national and subnational levels is important in all three of my country
21
At the same time, while authoritarianism probably limits the space within which subnational
policy challenges can emerge, under certain conditions the pursuit of subnational policy regimes
that deviate from the national policy regime may actually serve the interests of authoritarian
national governments. I am grateful to Yue Zhang for this point. See also Snyder (2006) on
Mexico, where subnational corporatism was functional to the interests of the (authoritarian)
governing party at the national level.
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cases, but especially in Ecuador and Bolivia, where many voters in Guayaquil
and Santa Cruz have supported the right locally but the left nationally.
By definition, the ability to mount subnational policy challenges depends
on some degree of decentralization, which I consider to be the main driver of
the tighter connection that has emerged between ideological and territorial
conflicts. The late twentieth-century trend toward political, fiscal, and admin-
istrative decentralization has almost certainly increased the significance of the
two types of subnational policy challenges that are examined in this book
(Eaton 2004; Falleti 2010; Goldfrank 2011). Typically taking the form of
separate elections for subnational officials, political decentralization has intro-
duced an entirely new arena for ideological contestation over the market,
creating the possibility that subnational officials will win electoral mandates
to pursue very different economic models relative to the national level. Fiscal
decentralization, meanwhile, provides a double impetus in that it both
enhances the resources that elected subnational officials can devote toward
the pursuit of their preferred approaches, while also endowing them with
fiscal policy tools they can use to behave in either a liberal or a statist fashion
(that is, either lowering taxes to promote investment or raising taxes to
finance expenditure).
22
Administrative decentralization has also contributed
to this phenomenon since it gives subnational officials real choices in terms of
how much of a role they want the private sector to play in the provision of
critical public services such as health, education, and infrastructure. While
decentralization typically refers to the transfer of political, fiscal, and admin-
istrative authority to existing subnational governments, it can also take the
form of creating these governments wholesale and/or transforming sub-
national administrative units into governmental entities. In their comprehen-
sive study of eighty countries between 1950 and 2010, Hooghe and Marks
document a clear trend toward the creation of regional authority; while thirty-
four new tiers of government were created in this period, only seven were
eliminated (Hooghe and Marks 2016: 48).
23
Decentralization has undeniably set the stage for more meaningful sub-
national policy challenges around the world, and yet it does not necessarily
imply that distinct subnational policy regimes will automatically take shape.
Subnational officials can make extensive use of newly decentralized author-
ities without their policy choices congealing into an identifiable and coherent
policy regime or challenge. The key question explored in this book is whether
22
For a contrary view see Harbers (2015: 379), who argues that ideology influences tax policy
choices at the national level far more than at the local level, where she assumes that the authority
“to set tax policy is limited ...because municipal governments are subject to the same tax regime.”
23
In addition to the creation of new tiers of subnational government, new governance
structures have emerged that bring together multiple tiers of government along with non-
governmental actors. See Abers and Keck (2013).
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subnational officials who are committed to either liberalism or statism can use
the powers of their offices to act on those ideological commitments. In and of
itself, decentralization does not tell us enough about the outcome of attempts
by subnational officials to use their powers in this fashion. Furthermore, it is
important not to overstate the significance of formal decentralization because
the reality is that subnational elected officials, particularly in the context of
weak central states, often enjoy significant de facto autonomy to act on their
ideological preferences, even in the absence of high levels of de jure policy
decentralization. As developed in greater detail in the following chapter, I find
that subnational capacity is a more critical factor than subnational authority
in explaining when elected officials can act on their discordant preferences.
In addition to worldwide trends such as globalization, democratization, and
decentralization, several other developments that are especially salient in
Latin America have increased the likelihood of subnational policy challenges
and distinct subnational policy regimes.
24
Across the region, countries have
experienced high levels of party system instability, characterized by the col-
lapse of traditional political parties in some cases (Tanaka 2006; Seawright
2012). Party system turmoil has threatened the ability of powerful economic
interests to achieve representation in the national government through the
same political parties they previously relied on for this purpose. In some
countries, the traditional parties that contested national elections have not
disappeared altogether but rather survive at the subnational level (Freidenberg
and Suárez-Cao 2014; Cyr 2017). Where parties that formerly represented elite
interests can no longer hope to win national elections or can no longer be
expected to exert great influence in national level policymaking processes, one
response might be to pay greater attention to the types of policy solutions that
subnational governments can provide. Economic elites in this situation cer-
tainly have other options, including the pursuit of non-partisan mechanisms
of representation at the national level (Levitsky, Loxton, and Van Dyck 2016),
but the greater difficulty of accessing national power via parties should throw
into greater relief the potential importance of subnational policy regimes.
Party system turbulence has taken different forms in Bolivia, Ecuador, and
Peru, but in all three cases the collapse of the national party system has
increased the importance of being able to shape and defend distinct
policy approaches at the subnational level. Control over subnational govern-
ments may be one means of partially restoring the influence in national
policy debates that at least some leading economic actors lost in the wake of
24
In other world regions, the relative weakness of the global trends emphasized here may
account for the relative absence of subnational policy challenges. The limited nature of
democratization and decentralization in the Middle East, for example, may help explain why
these challenges have yet to appear in a significant way.
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party system collapse; for others, investing in subnational policy regimes can
represent a form of “exit”from a national political system they can no longer
dominate and instead find threatening (Hirschman 1970).
Looking across the region brings into focus another common cause of the
greater frequency of subnational policy challenges in Latin America today:
ethnic mobilization. Against a backdrop of centuries of political subordin-
ation, new indigenous social movements in recent decades have dramatically
expanded their capacity to influence national level policy debates, not just by
placing indigenous leaders in key bureaucratic positions but by winning
presidential and legislative elections as well (Yashar 2005; Van Cott 2008;
Madrid 2012; Chartock 2013). While the perhaps more dramatic story here
is that indigenous mobilization has led to the transformation of national
policy regimes, it has also triggered the articulation of demands for alternative
subnational policy regimes. This can even happen simultaneously in the same
country, as in Bolivia, where eastern indigenous communities have sought to
enhance the policy authority of subnational units even as western indigenous
groups enjoy unprecedented control over national policy levers through the
dominance of the governing Movement for Socialism (Movimiento al Socia-
lismo or MAS) party (Postero 2006, 2010). More generally, where ethnic claims
overlap with territorial demands for autonomy, as in the lowland areas of the
Amazonian basis, the political mobilization of ethnic identities has prioritized
not so much the transformation of national policy regimes as the right to
pursue territorially distinct local models (Tockman and Cameron 2014). Spe-
cific policy outputs are not the only (nor perhaps even the most important)
demands made by indigenous actors, who instead are articulating a number of
proposals that range from legal system reform to far-reaching cultural changes
(Yashar 2005; Lucero 2008). Nevertheless, ethnic mobilization is appropri-
ately understood as an important new source of the subnational policy
challenges that Latin America is witnessing. Indeed, when articulated by
indigenous communities, these challenges in many respects represent a
more radical critique of economic development, along with its associated
negative impacts on cultural survival and environmental sustainability, than
the more familiar (but no less significant) struggles between liberal and statist
approaches highlighted in this book.
Advantages and Disadvantages of Policy Regime Juxtaposition
If, for whatever combination of reasons, the articulation of subnational policy
challenges has become more common around the world, is this a desirable
trend? From a normative perspective, what are the various advantages and
disadvantages of the first type of challenge that is examined in this book, that
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of territorially juxtaposed policy regimes? A more thorough, but necessarily
speculative, exploration of the costs and benefits that might be generated by
policy regime juxtaposition underscores the importance of better understand-
ing this growing phenomenon. In contrast to the literature on the juxtapos-
ition of political regimes (Gervasoni 2010; Gibson 2013; Giraudy 2015; McMann
2006), which is animated by a widely shared normative desire to promote the
democratization of subnational authoritarian enclaves, the relative merit of
market-oriented versus state-centered approaches has remained an open debate
among scholars. As a result, greater normative discord may characterize the
study of the phenomenon of policy regime juxtaposition relative to political
regime juxtaposition.
There are a number of reasons to emphasize the positive effects generated
by territorially juxtaposed policy regimes. First, the phenomenon reflects
movement away from a one-size-fits-all dynamic in which subnational gov-
ernments are not allowed to pursue development models that may elicit
majority support subnationally but not nationally. In some respects, policy
regime juxtaposition is simply an outcome that follows logically from one of
the primary motives behind decentralization, which is that it enables policy
innovation and experimentation (Cheema and Rondinelli 2007; Sabel and
Zeitlin 2012). If there are strong normative reasons to support decentraliza-
tion, including meaningful variation in citizen preferences across subnational
units and the likelihood that local politicians have better local knowledge
than do national politicians (Oates 1972; Weingast 2014), then there are
likewise strong reasons to conclude that it is positive when subnational offi-
cials can craft coherent models with their policy authority.
A second possible benefit of policy regime juxtaposition is that it may
enable voters at a given point in time to make comparative assessments of
the two regimes in contention. When only a single, national policy regime is
in place, voters can engage only in retrospective comparisons, comparing
their information about the current national model with their memories of
the relative merits of the previous national model. Cross-temporal compari-
sons are complicated, however, not just by the quality of people’s memories,
but by the exogenous factors that impact the implementation of any model.
How, for example, to compare the performance of statist models during the
commodity boom of the 2000s in Latin America with the neoliberal model
implemented during the 1980s and 1990s at a time of fiscal austerity and
financial crisis? While the comparison of territorially juxtaposed policy
regimes in real time suffers from other problems—namely, the difficulty of
comparing models across scales of government—voters may be exposed to
better and more useful information about the differences between statism and
neoliberalism when they are repeatedly exposed to and reminded of these
differences by the combative interactions of contemporary incumbents at
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different levels of government. This is especially likely if, as in my three cases,
presidents, mayors, and governors regularly and sharply criticize one an-
other’s approaches in exchanges (covered extensively by the media) that can
be personal and petty, but also more abstract and even illuminating
and didactic.
Third, policy regime juxtaposition may reduce the size and/or the frequency
of the often extreme policy swings that have been so destabilizing in Latin
America. Writing on the instability of economic strategies in Latin America,
John Sheahan (2002: 25) argues that “these countries change their versions of
capitalism much more frequently, and more radically, than European coun-
tries do.”With respect to the size of past swings, policy regime juxtaposition
may moderate the tendency of national governments to experiment with