Learning from Foreign Models: Latin American Policy Reform

Latin American Politics and Society, Fall 2006 by Wise, Carol

Kurt Weyland, ed., Learning from Foreign Models: Latin American Policy Reform. Baltimore: Johns Hopkins University Press, 2004. Tables, index, 302 pp.; hardcover $60, paperback $22.95.

This collection of essays on social sector reform in Latin America offers a refreshing look at the origins and political complexities of implementing new policy regimes in issue areas traditionally dominated by populist inclinations. The volume includes three conceptual chapters by Kurt Weyland, Joan Nelson, and Sarah Brooks on learning, diffusion, and external influences on policy choice; and six subsequent chapters on different country experiences (Argentina, Brazil, Chile, Colombia, and Mexico). The latter focus on three main areas of social sector reform: social security and pensions, unemployment insurance, and healthcare. A main virtue of this edited collection lies in the blending of the rich conceptual material in the early chapters with firsthand accounts of the intricacies of social policy reform in the region.

In his introduction to the volume, Weyland poses two key questions: how and why might a given state's social policy paradigm emerge as a model for other states to adopt or emulate? Under what conditions does emulation serve to improve policy, and when does it lack substance? While the concepts of learning and diffusion form one analytical axis to the volume, the debate as to whether policy reform is the result of states' "autonomous learning" or of external influences, such as the World Bank and the Inter-American Development Bank (IADB), constitutes another. The country chapters suggest a somewhat ambiguous relationship between foreign influences and the adoption of new policy models.

A policy model, according to Weyland, is an overarching idea, a coherent design principle that proposes a fresh solution to an old problem. This process of constructing a new paradigm in a particular policy area invariably occurs in the throes of political-economic upheaval, which enables a specific reform proposal to emerge as the most viable solution to the troubles at hand. Weyland relies, perhaps too heavily, on Chile's pension privatization plan of the 1980s as a prime example of how a new policy model can emerge as part of a broader shift in economic strategy. Implemented in the wake of the country's 1981 financial crisis by a market-oriented authoritarian regime, this new, bold market paradigm gained support from the country's economic elite as a way simultaneously to resolve the failures of the PAYG plan and to achieve higher investment and savings rates. Workers in the formal sector, however, had no choice but to bear the transition costs. Chilean policymakers could experiment with pension privatization until they got it "right," which, over time, they more or less did. (In their chapter on Chile, Louise Haagh and David Bravo caution that "the labor movement had long been calling attention to the estimated 400,000 cases of arrears in pension contributions by employers...and the legal nullification of [these] debts after five years" [pp. 187-88].)

As the Argentine and Brazilian chapters on pension reform readily show, the exigencies of representative politics within these democratic regimes impeded the full adoption of a Chilean-style private pension model precisely because of the perceived adjustment burden and potential inequities involved. This is where the concepts of learning and diffusion weigh in, as transmitters of a foreign policy model such as Chile's, but also as filters that work to adapt that model to the particularities of a different setting.

Learning, for example, is defined here as a deliberate, active process, "a change in beliefs.. .or the development of new beliefs, skills or experience." (Weyland relies here on the work of Jack Levy, 1994.) The diffusion of a policy model, Weyland argues, can be direct or indirect. Direct diffusion occurs when policymakers have regular contact with countries that share endowment traits and institutional structures. Indirect diffusion relates to the efforts of third parties, such as the international financial institutions (IFIs), to encourage the adoption of a certain policy model or reform strategy.

Nelson, in her chapter on "External Models, International Influence, and the Politics of Social sector Reforms," suggests that a main reason for the emergence of the Chilean pension reform model as a policy template was its sheer simplicity. Pension policy, she argues, is not as institutionalized as, say, health or education policy, both of which entail more complex issues and a thick web of stakeholders. In the case of healthcare, and as confirmed by the country analyses in this volume, no single, compelling model has emerged, despite the plodding efforts at reform over the past two decades. As for the role of external factors, Nelson argues that "governments are more likely to adopt partial and selective features of other countries' policy and institutional arrangements, seeking combinations that meet their own political as well as technical and economic needs and constraints."