Is There A Diversity of Dependent Capitalisms in Latin America?

Is There a Diversity of Dependent Capitalisms in Latin America? https://journals.openedition.
org/regulation/13701
Revue de la régulation
Capitalisme, institutions, pouvoirs
Maison des Sciences de l'Homme - Paris Nord
24 | 2nd semestre / Autumn 2018 :

Capitalismes dépendants
Dossier : capitalismes dépendants
Is There a Diversity of
Dependent Capitalisms in Latin
America?
Peut-on parler de diversité des capitalismes dépendants en Amérique latine ?
ILÁN BIZBERG
Résumés
English Français
The Latin American continent has been considered as a paradigm of dependent economies
since the studies of the Dependency Theory in the sixties and seventies. That is why a study
of this continent is a significant contribution to this particular issue of the Revue de la
Regulation. Nonetheless, our main presupposition is that although the Latin American
countries are all more or less dependent, we cannot characterize them equally. That is why
in this article we propose a typology of the different types of capitalism that have been
dominant in this continent. In order to construct our typology we consider six analytical
dimensions that are central for the regulation theory: 1. The accumulation regime: what a
country produces, how it produces it and the manner in which it redistributes wealth
between profits and wages; 2. The international insertion; 3. The role of the State; 4. The
dominant social coalition, especially the place that civil society occupies in it; 5. The state
structure (federalism and centralization) and the political system; and finally 6. the social
contract/ the wage regime that results of the interaction of the former five dimensions.
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Is There a Diversity of Dependent Capitalisms in Latin America? https://journals.openedition.org/regulation/13701
Depuis les travaux de l’école de la dépendance des années 1960 et 1970, les pays du
continent sud-américain ont été considérés comme des paradigmes d’économies
dépendantes. Pour cette raison, l’étude du continent apporte une contribution significative
à ce numéro de la Revue de la Régulation. Notre hypothèse principale est que, bien que
tous les pays latino-américains soient plus ou moins dépendants, nous ne pouvons les
traiter tous de la même façon. C’est pourquoi, nous proposons dans cet article une
typologie des formes de capitalisme dominant le continent. Pour construire notre
typologie, nous considérons six dimensions analytiques, centrales pour la Théorie de la
Régulation : 1. Le régime d’accumulation : ce qu’un pays produit, comment il le produit et
la manière dont il redistribue la richesse entre les salaires et les profits ; 2. L’insertion
internationale ; 3. Le rôle de l’État ; 4. La coalition sociale dominante, et particulièrement
la place qu’y occupe la société civile ; 5. La structure de l’État (fédéralisme et centralisation)
et le système politique ; et, finalement, 6. Le contrat social et le rapport salarial qui résulte
des interactions des cinq précédentes dimensions.
Entrées d’index
Mots-clés : dépendance, Amérique latine, diversité des capitalismes, socio-
développementalisme, outsourcing à l’international, capitalisme rentier
Keywords : dependency, Latin America, diversity of capitalism, socio-developmentism,
international outsourcing, rentier capitalism
Codes JEL : A14 - Sociology of Economics, B15 - Historical; Institutional, O54 - Latin
America; Caribbean, O11 - Macroeconomic Analyses of Economic Development, P16 -
Political Economy
Texte intégral
1 The Latin American continent has been considered a paradigm of dependent
economies since the studies of the Dependency Theory in the sixties and
seventies. That is why a study of this continent is a significant contribution to this
particular issue of the Revue de la régulation. In an article written by Nölke and
Vliegenthart, the concept of dependent market economies (DME) is used to
describe the economies of East Central Europe. These authors situate the
discussion of dependency in the context of the school of the Varieties of
Capitalism (VOC), and consider that Hall and Soskice have a limited vision, as
they merely consider only two types of capitalism, the well-known liberal and
coordinated types. They consider that the post-socialist economies of East-Central
Europe cannot be defined as either a hybrid or an intermediary form of these two
types of capitalism. They write that in order to analyze this case, it is necessary to
propose a specific type of capitalism, which they call dependent and describe as
based on “…skilled but cheap labor, the transfer of technological innovations with
transnational enterprises, and the provision of capital via foreign direct
investment (FDI)” (Nölke and Vliegenthart, 2009, p. 672). This type of economy is
based on an assembly platform for semi-standardized industrial goods, which
depends on intra-firm hierarchies within transnational enterprises, and is
controlled by the headquarters of these enterprises (ibid., p. 680). Furthermore,
“…the TNC’s have fully integrated the Central and East European subsidiaries into
their company networks” and they control them in a hierarchical manner; they are
dependent on the decisions of their global empire, rather than of the particular
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country where they are installed. (ibid., p. 684). Furthermore, labor costs and a
disciplined labor force are fundamental to assure the competitivity of these
economies (ibid., p. 686), there is no incentive to invest on qualifying local labor,
and competitivity slowly erodes due to the competition of ever cheaper countries
further east (ibid., p. 687). As we will see below, although the Mexican economy
could very well fit into this model, the economies of most other countries of Latin
America, such as Brazil and Argentina, that in the last 15 years (before 2014)
turned their economy towards the internal market, or the Andean countries,
which depend absolutely on commodities, would hardly correspond. Although all
these economies definitely depend on the world economy, their dependence is not
the same as that of Mexico or the Central and East European countries.
2 Other authors in this issue go in the same direction. Drahokupil and Myant
likewise consider that there are different manners for countries to be dependent.
And that these differences emerge when we consider that the “dependent
variable” has to incorporate broader forms of integration into the world economy,
“...the structure of the inherited industrial bases, natural-resource endowments,
state capacity, [and] the rule of law.” (Drahokoupil and Myant, 2015, p. 4). When
we consider these variables, we find that “different forms and different
combinations may be compatible with the same form of international
integration”. Then they go on to define five forms of capitalism in the transition
economies of post-communist countries (Drahokoupil and Myant, 2015, p. 5).
3 The literature that discusses Latin America from the VOC perspective considers
that the principal characteristic defining this continent’s type of capitalism is the
societal and economic heterogeneity (Schneider and Soskice, 2009; Schneider,
2014). Similarly to Nölke and Vliegenthart, Schneider proposes a unique type for
Latin America: the hierarchical one; a unique variety that is in fact a deficient
variant of the liberal market economy as defined by Hall and Soskice. Although
Schneider interestingly emphasizes some of the most significant characteristics of
the Latin American economies (Schneider, 2014), the idea that all the countries in
the continent fit into this type is not adequate if one takes into consideration
important structural and institutional differences between certain groups of Latin
American countries.
4 And in fact, the founding authors of the Latin American Dependency School,
Cardoso and Faletto (1969), already discussed the diversity of the forms of
dependency of Latin America countries. They differentiated between countries
like Argentina and Brazil, in which local capital produced foodstuffs indispensable
for the metropoles in large areas of the colonies, and countries like Mexico and
Peru, which exported minerals that could be substituted by productions from
other countries, were extracted in isolated enclaves, with little connection to the
rest of the economy, and were owned by foreign capital. The first type of
dependence led to the existence of a local bourgeoisie that made a relatively more
stable transition from a colony to an independent country and facilitated the
beginning of industrialization, while the second had a more difficult transition to
independence, due to the characteristics of the enclave economy and the fact that
it did not develop a local bourgeoisie.
5 The global crisis of 2008 as well as the commodity super cycle that ended in
2014 revealed significant differences between Latin American countries in how
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they responded to the crisis, benefited from the super cycle, and are adjusting at
present. Although both the global crisis and the super cycle of the commodities
was a unique phenomenon that impacted most of the countries of the world, its
consequences on a particular country differed considerably depending on its
socio-political institutions and economic and social structures. One can approach
these differences in two ways: an historical one, proposing that all countries are
different, that any comparison flattens out long term differences that are crucial;
an analytical perspective, meaning that although there are significant differences
amid countries, there are also significant similarities that, while not being
generalizable to define one single mode, can serve to theorize a number of ideal
types. While the first perspective practically excludes any comparisons, the second
one allows for constructive comparisons of groups or clusters of countries with
similar structures and institutions, and which pursue growth and development in
a similar manner.
6 Both the Varieties of Capitalism School (VOC) and the Regulation Theory (RT)
consider that in some cases the dialectic between the mode of integration to the
world economy, the mode of accumulation, and the relation between actors and
the State define a socio-political configuration where the different institutions are
complementary and fit coherent capitalist forms1. These more articulated and
coherent modes of the more advanced countries have allowed the VOC and the RT
to build certain ideal types based on both structural as well as institutional
determinants. Regulation Theory added to the liberal market (US) and
coordinated capitalisms (Germany) (Hall and Soskice, 2001) another type where
the State has a crucial role (France), and still another one where banks and
industrial conglomerates play the main role (Japan and Korea) (Amable, 2005;
Boyer, 2005).
7 To analyze other less developed countries, where non-complementarity
between the institutional forms configure a non-coherent or disarticulated form of
capitalism, this article borrows its perspective from Cardoso and Faletto (1969),
who considered that the different countries developed in distinct manners
according to what they produced, their insertion to the world economy and the
different coalitions that led the development strategy. I am also closely related to a
long tradition of structuralist analysis, among others those of Barrington Moore,
Theda Skockpol, Esping Andersen, Colin Crouch, as well as that of the Regulation
Theory, centered both on structures (class structures, the structure of production,
the State) and institutions (workers’ and employers’ organizations, social
protection systems, the wage relation). In addition, this article builds upon several
of our previous analyses (Bizberg and Théret, 2012; Bizberg, 2011; 2014; 2015) as
well as those of Boyer (2014), and Marques-Pereira and Théret (2004). With
respect to my own studies, while the articles cited above (2011; 2012; 2014) dealt
mainly with four countries —Argentina, Brazil, Mexico, and Chile—, in this article
we extend our study to the commodities-producing countries, in order to develop
the idea of four rather than two types of capitalism in Latin America.
Furthermore, while the other articles were more descriptive, the present one
adopts a more conceptual perspective. Finally, the present article is a tight
synthesis of a book that will be published by Palgrave-Macmillan beginning 2019.
8 On this basis, I outline six analytical dimensions in order to define the different
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types of capitalism existing in Latin America:
1. The accumulation regime.
2. The mode of integration to the world economy
3. The role of the State.
4. Social actors and coalitions behind one or another mode of accumulation.
5. The political system
6. The social pact/wage regime.
9 This article is divided in three sections: in the first one I will define the four
distinct types of capitalism, in the second section I will analyze each of the
varieties according to the six dimensions we have just defined, and in the third
and concluding one, I will discuss the frailties of each of the types of capitalism.
1. Four types of capitalism in Latin

America: dimensions and definitions
10 In our previous studies, we found significant differences between Mexico and
Brazil, which we formalized into two ideal types of capitalism:
1. The first one, a stylization or formalization of Mexico, which shares

characteristics of the central American countries and the Dominican
Republic, is an Outward-looking Liberal Peripheral Capitalism,
which can be better characterized as an International outsourcing
capitalism. It is a disarticulated form of capitalism that depends entirely
on the demand of parent companies situated in the United States or other
central countries (mainly Germany, Japan, and Korea), and that assembles
imported spare parts.2 It produces manufactures that can have a relatively
high technological content, although as the main process occurring in this
country is the assembly of spare parts that come from all over the world,
the aggregate value added is very low. The mode of accumulation is
extensive, as productivity gains are low. Production is disconnected from
the rest of the productive structure; there are few, if any, backwards
linkages to national producers. The production chains are disconnected
between the external market and the internal final stages of production.
The country is a platform for the last stage of the production process. It
thus depends on low labor costs and high labor market flexibility, and the
repression of internal demand. The mode of consumption is thus
undeniably profit led; salaries are maintained as low as possible.
The socio-political situation that favors this type of capitalism is one of weak
social actors, a dominant coalition made up of financial capital, large domestic
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and international companies. The State is weak, having been more or less
dismantled after adopting the orthodox recipes of neo-liberalism; in fact, it
functions as an agent of the neoliberal model. The State is unable/unwilling to
impulse a developmentist industrial policy like the one implemented in Korea and
Taiwan, which resulted in the upgrading of the industry on the basis of national
suppliers of industrial enterprises.
The wage relation is based upon the repression of wages and the productivity
growth of exporting industries, such as automobile, steel, and electronics (Palma,
2005), together with low salaries and low productivity growth in the rest of the
economy.
1. A second capitalist variety, a stylization of the mode of development that

was followed by Brazil from the beginning of the year 2000 to 20143, an
Inward-looking State-led Peripheral Capitalism, or a neo or
Socio-developmentism. This capitalistic form produces both
commodities for the external market and manufactures for the internal
one. It is thus a mode of accumulation that is both based on extensive
production of commodities (in some respects also with an ever greater
productivity) and on the intensive production of some manufactured
products, such as steel, weapons, planes, biofuels, etc. The State is a
fundamental actor that tries to arbitrate between the external dependence
of a peripheral commodities-producing economy, linked to financial
capital, and an industrial production destined to the internal market. The
mode of consumption is also a settlement between both: the search for
foreign markets and attraction of foreign capitals and the inducement of
both domestic industry and internal demand through increasing wages and
a generous social protection system. It is a capitalist form that depends on
both the exports of commodities and the input of financial capital as well as
internal market growth.
The State is strong, interventionist, tries to find a balance between a wage growth
model and a profit led model; an internal market-led growth with an export-
oriented growth. It uses external resources, emanating from the export of
commodities, income of foreign portfolio investments, FDI, and debt, in order to
develop industry. It attempts to direct the economy through industrial policy and
finance it with a large development bank (the BNDES). All of which defines a neo-
developmental strategy.
This capitalistic form is based on a strong civil society that exerts pressure on the
State to redistribute. The State is thus forced to arbitrate between the
international capital, large domestic enterprises, financial interests and the poor,
the workers, the low middle classes; all sectors that constitute the social pact. The
wage relation is characterized by expansive wage policies and an expansive social
protection system oriented to universality, which tends to reduce inequality. This
scheme expands internal demand, all of which defines a socio-developmentist
strategy.
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11 These two types, nonetheless, do not encompass all Latin American economies,
most notably the ones that are essentially based on commodities, the rentier types
characteristic of Andean countries. For these countries we have constructed two
other varieties, liberal rentier and redistributive rentier capitalism.
1. The first mode is a stylization of Peru, Colombia, and partly Chile. The first
two countries share an extremely open economy, a very weak State, weak
unions, deregulation of the labor market and a reduced, assistance
oriented, social security system. The dominant social coalition is
constituted by large multinational and domestic companies, the financial
sectors, and the middle classes, excluding the popular classes. While Chile
shares most of these characteristics with these two countries, the Chilean
State has a capacity that other liberal States, such as the Peruvian,
Colombian or even the Mexican do not have. The Chilean State owns
Codelco, which controls about 30% of the country’s copper exports. Part of
its resources are kept in a reserve fund that is used as a counter-cyclic
instrument in case of a crisis; something none of the liberal countries have.
On the other hand, the State performs effectively its functions: taxes,
police, and certain aspects of economic regulation. In these three cases,
nevertheless, the dominant social coalition is equally formed by foreign and
domestic large companies, as civil society and social organizations are
weak. The mode of consumption is oriented towards profits. Wages grow
below productivity gains.
2. Finally, the fourth capitalist variety is a redistributive rentier

capitalism. It is equally dependent on the international commodities
market, but the existence of strong social actors exerts pressure and drives
the State to intervene in the economy and redistribute the rent. Bolivia and
Ecuador have a relatively strong State, which exploits or lends mineral or
oil concessions in exchange for royalties and taxes. The State has
established a compromise between the interests of the mobilized popular
classes and the multinational companies, the financial interests and the
local entrepreneurs, in order to distribute the rent of the commodities
exports between profits and wages. The popular classes are part of the
dominant social coalition, due to their organizational and mobilizational
capacity.
We can summarize the differences in the next table, which we will analyze more in
depth in the second part of this paper.
Table 1. Types of Capitalism in Latin America
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Access the PDF here

Source: Own elaboration
2. The political economy of the four

types of capitalism in Latin America:
a regulationist perspective.
12 In this second section, I will analyze the four varieties of capitalism according to
the six dimensions we have previously defined.
2.1. The mode of accumulation.

13 As I mentioned above, this dimension includes what a country produces, how it
produces it, and the manner in which it redistributes wealth between profits and
wages. Table 2 synthesizes the discussion of this section.
Table 2. Mode of Accumulation
International Socio- Rentier/

Rentier/Liberal
Outsourcing developmentism Redistributive
Low added value

Productive Commodities and
manufactures Commodities Commodities
Structure manufactures
(assembly)
Mainly
Mode of extensive/intensive
Extensive/Intensive Extensive Extensive
accumulation in some specific
sectors
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Mode of Wage/profit led Profit led Wage/profit

Profit led growth
Consumption growth growth led growth
Articulated
Disarticulated Intent to articulate Articulated
upon the
Character productive external and upon the
external
structure internal market external market
market
14 The literature analyzing the consequences of what a country produces on its

socio-political organization is significant: Cardoso and Faletto (1969) associate
what a country produced in colonial times with the rise of a national bourgeoisie;
Engerman and Sokolof (1997) link climate and socio-economic organization with
productive structure; Evans (1995) and Kay (2002) correlate rentier productive
structure with the character of the national State; Boyer (2015), Bresser-Pereira
(2015), and Salama (2012) analyze the negative relation that exists between
different types of rentier economy (commodities, land, housing, financial), “Dutch
disease”, and industrialization.
15 In the central economies, Fordism was an economic mode based on the
production of manufactured goods, where production was increased through
productivity growths (thus intensively) and through a mode of consumption that
compromised among profits and wages. Even though the Latin American
countries, or peripheral capitalism in general, have industrialized to a certain
degree, a profit led mode, which depends on the appropriation of rent on the part
of an oligarchy, has almost always prevailed. During the import substitution
industrialization (ISI) period (1945-1980), an intensive mode of accumulation was
implemented in the largest countries of the continent, accompanied by a form of
consumption based upon redistribution through wages and social protection.
Starting with the lost decade, when import substitution was abandoned, a
bifurcation of the trajectory of the different countries in the continent began.
Some countries abandoned ISI to return to the production of commodities; a
situation that included countries that had basically never industrialized (Bolivia
and Ecuador) or had de-industrialized (Colombia, Peru and Chile). Other
countries became out-sourcing platforms assembling manufactures for export:
Mexico and the smaller countries in central America. Finally, some countries tried
to continue developing industry: Brazil.
16 A fundamental distinction between the Latin American economies is whether
they mainly produce commodities or manufactures, or a combination of both.
While the first type of economy, the rentier, bases its growth on the mere
extension of production, the other types depend on its intensity, on the rise of
productivity. To a certain degree, all Latin American economies depend on
extension, as they are all partly rentier: the case of oil and other mining products
in Mexico, of agricultural, mining, and oil in Brazil. Finance can also be
considered a rentier activity, and this is the case in both Mexico and Brazil (Boyer,
2015; Bresser Pereira, 2017). On the other hand, international outsourcing
depends more on extension of investment than on innovation and productivity
hikes, as neither the State, nor the capital intend to modify the organization and
upgrading of production. As Palma (2005) has proven, outsourcing in Mexico
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depends less on productivity increases than on the differential between levels of

productivity similar to those in advanced countries and salaries in peripheral
countries.
17 Fordism, where wages follow closely and sometimes surpass increases of
productivity, is a wage-led growth, and is thus based on the increase of demand.
The liberal mode of development, which has been implemented since the demise
of Fordism, is a profit-led growth, based on offer (Boyer, 2015, Stockhammer,
2011). Socio-developmentism is likewise a wage-led growth mode, a mode that, in
an open economy, has to be careful to balance internal demand with domestic
offer, in order to prevent the growth impulse from being transferred to the
exterior through imports (Bresser-Pereira, 2015). The international out-sourcing
capitalism is based on profits, on the gap between productivity similar to that of
the advanced economies and the salaries of the peripheral economies; where the
State’s function is to repress salaries and social protection costs. The liberal
rentier economy channels rents towards profits, while the redistributive rentier
regime redistributes part of them to wages. None of these two latter models is a
sustainable growth model, as it depends wholly on the price of commodities
determined by the world market; the physical resources are depleted and there is
no effort to develop alternative economic sources. In the case of the redistributive
type, redistribution does not lead to a wage growth regime, but basically to
internal demand funneled towards imports: resources obtained by the export of
commodities (directly by state enterprises or through taxes and royalties) mostly
lead to an increase of imports, as the economy is subject to the Dutch disease and
there is practically no industrial policy.
18 In figure 1 we define the types of capitalism depending on whether the mode of
accumulation is based on rent or productivity, and whether the mode of
consumption is led by profits or wages.
Figure 1. Mode of accumulation and consumption
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19 The mode of consumption depends on the strength and character of the social
pact between State and social actors. While in countries where civil society is
strongly organized the mode of consumption has been redistributive (Brazil,
Argentina, Uruguay, Ecuador and Bolivia), in countries where civil society is
weak, they have been profit led (Mexico, Chile, Peru, Colombia). In addition, in
Mexico, and in general in the outsourcing economies, both accumulation and
consumption are disarticulated. While the mode of accumulation is disarticulated
as it is dependent on a productive structure that lies between countries (in the
case of Mexico and central America, mainly between the United States and the
home country), the mode of consumption depends heavily on remittances sent by
a significant proportion of the population that has migrated, as well as other
resources coming from all kinds of illegal activities, including drug smuggling.
This is complemented by an offer of cheap consumer products distributed by
informal commerce, some of which are smuggled into the country, do not pay
taxes, salaries, or rent as they are sold in the streets.
2.2. The international insertion.

20 The mode of integration to the world economy is fundamental in order to
analyze the peripheral or dependent economies, as they are in one way or another
dependent of the international market. Table 3 synthesizes the discussion of this
section.
Table 3. International Insertion
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Access the PDF here

21 The international outsourcing capitalism and the two types of rentier

economies share the external orientation of their economies, and although the
socio-developmentist may produce and export commodities, it is fundamentally
oriented towards the internal market. Data concerning the weight of exports in
both groups of countries confirms this: while in Brazil and Argentina the
aggregate demand is balanced between the external and the internal market, in
the case of Mexico the external market is much more significant. The impact of
exports on the growth of GDP in Mexico was 58% between 2000 and 2008, and
67% in the previous decade (1990-2000), for Chile the percentages are 48% and
39%, respectively. In contrast, for Brazil and Argentina the numbers are 27% and
29% respectively between 2000 and 2008 (Bensusán and Moreno-Brid, 2012).
22 Nonetheless, Brazil, the country that came nearest to the socio-developmentist
model, became increasingly dependent on the export of commodities and the
entry of foreign currency; by 2014, up to 66% of Brazilian exports were primary or
manufactured goods based on commodities, while in Argentina the proportion
was 70%. Colombia, Chile, Peru, Bolivia, and Ecuador export primary and
manufactured goods based on commodities at around 90%. Although the
outsourcing model exports manufactures, it is externally led to such a degree that
while we have seen an impressive growth of exports in the case of Mexico (from
30, 691 million dollars in 1988 to 390,000 million in 2014), imports have
increased consequently to attain 384,000 million in 20144. This means that there
is a disconnection between the exporting platform and the internal production, an
extremely poor integration of national production to the export sector that results
in a recurring and almost permanent commercial deficit (Palma, 2005; Dussel
Peters, 2006; Ibarra, 2008; Puyana and Romero, 2009).
23 The type of integration of a certain country to the world economy is also
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dependent on whether its State is proactive, defensive or an agent of the economic

actors of the world market5. The outsourcing model is characterized by being very
open and having a State with the role of an agent of the large (foreign as well as
national) enterprises, as it merely sets the stage for the companies to profit from
its situation as an outsourcing platform. The liberal rentier countries are also very
open and liberal, and the State is also an agent of liberalism.6 The distributive
rentier countries are in a contradictory situation: on the one hand they pose a
discursive posture of autonomy towards foreign capitals, while on the other hand
they greatly depend on foreign investment in mining, oil, and other commodities.
For example, when the MAS/Evo Morales arrived in power, the Bolivian
government modified the conditions of the concessions of the gas companies, but
did not expropriate them. On the other hand, it has recently overruled its own
legislation concerning the preservation of an indigenous reserve, the TIPNIS, in
order to allow for its exploitation by international enterprises and the coca-leaf
producers, its own social base. The government of Chile, Peru and Colombia are
totally open, they do not impose any kind of restrictions on foreign capital. This is
also the case of Ecuador, which although it is closest to a redistributive/rentier
capitalism, the fact that its economy is dollarized and does not have an
autonomous national currency, excludes any possibility of having an autonomous
monetary policy (Fritz, 2017).
24 The socio-developmentist economy is more protectionist, it applies safeguards,
subsidies, loans, and implements industrial policies. Its relation to the exterior is
much more defensive; It has, at some moment, imposed customs tariffs or
proscribed the import of certain products. The financial sector is not as open,
most banks are still in the hands of the State or of national capital. Brazil has not
signed any free trade agreements that would oblige it to be much more liberal;
especially not with the United States. Although most analysts have mentioned the
failure of the Brazilian government to control the overvaluation of its currency, in
2014, during the second presidency of Dilma, the government intended to
accomplish it by lowering the central bank interest rates (Prates, Fritz, and de
Paula, 2017).
2.3. The intervention of the State.

25 According to the regulation theory, the State is a fundamental actor which can
be defined by its autonomy, its capacity, as well as by its embeddedness in the
socio-economic context of a country. Table 4 synthesizes the discussion of this
section.
Table 4. State Intervention
International Socio- Rentier/

Rentier/Liberal
Outsourcing developmentism Redistributive
Neoliberal Intent of an Tendency towards a

State/agent Subsidiary
Character embedded clientelist/corporatist
of neo- State
State State
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liberalism
Autonomy Weak Strong Weak Strong
Relatively
Embeddedness Weak Weak Weak
Strong
Weak (Chile-
Stateness Weak Strong relatively Strong
strong)
Source: Own elaboration.
26 In the institutionalist perspective, the State is merely another institution, or at

best the arena where the conflict between different social actors occurs. In
contrast, in the tradition of the structuralist schools (Cardoso and Faletto, 1969;
Haggard, 1990; Skockpol, 1984; Moore, 1969; Evans, 1995) we deem the State to
be an actor. We agree with Evans in that a State should be defined by its strength
(its internal cohesion, its capacity to impose its interests and projects on other
actors), its autonomy, and its capacity to act as an embedded State (Evans, 1995).
Nonetheless, we go beyond this vision of the State as a neutral agent, and consider
it as a central actor in a coalition, which can lead a country to develop in a specific
direction. To be sure, it can also renounce to be an actor and act as a mere agent of
the international forces (Beck, 2002); it can be the agent of a specific sector of
society, or of a dominant coalition (Poulantzas, Amable, Boyer); it can also try to
compromise between two or more sectors of society and thus become an
incoherent actor (Théret, 1995)7. Only if it is able to build an ample social
coalition, consisting of financial capital, industrialists, middle classes and
workers, can the State become a significant actor for the development of
capitalism (as in Bismarkian Germany, Japan, Korea, Taiwan, and present-day
China) (Bresser-Pereira, 2017).
27 We can redefine the types of capitalism based on whether the State plays a
central role in pursuing capitalist development or the economy is left to the
market. We can combine this taxonomy with our prior binary classification of the
accumulation regime based on the emphasis given to either profits or wages. Our
four types of capitalism in Latin America can be arranged accordingly (figure 2).
Figure 2. State intervention against market
14 of 34 12/26/18, 3:12 PM
Access the PDF here

28 We can identify two types of capitalism where the State has a significant role. In
the first one, it orients capitalism towards the internal market through labor and
social policies that increase the internal demand though the redistribution of
profits towards the workers, and through industrial policies. In this type of
capitalism, the State exerts a strong fiscal pressure on the employers and
consumers, and tries to achieve an active integration to the world economy. It also
regulates and defends national capital and the internal market, by implementing
counter-cyclical measures in times of crisis. In general, facing a strong State, there
are strong unions and business organizations that exert pressure on the
government in order to preserve their particular or common interests, although
there are exceptions where the developmentist State is authoritarian and
represses or controls social organizations, such as Korea and Taiwan in the 50’s
and 60’s, and more recently China.
29 In the case of the redistributive rentier mode, the role of the State does not
consist in boosting an economy oriented towards the internal market through
industrial policies, investment, or innovation, but it is almost “purely”
redistributive. Political and social relationships as well as the economic ones are
defined by the fact that the State owns plants that exploit natural resources, or
that it extracts taxes and royalties from private enterprises. In many cases, its
abundant financial resources are distributed without any productive goals, they
are expended in a clientelist, or state-corporatist logic. These resources may either
be used to foster organizations serving the State as political bases (Venezuela), or,
when pressures from autonomous social organizations or movements exist, they
may foster a participatory democracy (Bolivia, Ecuador).
30 The other two forms depend more on the market and the State has a much
weaker role, either subsidiary (Chile)8 or subordinate (Mexico). In both cases, not
only the State has little autonomy from capital, but social actors are weak, and
coordination between unions, employers and the State is almost nonexistent. The
way of encouraging investment is securing high profits, low salaries, low social
security costs, a State-financed and residual/assistance-oriented welfare system, a
15 of 34 12/26/18, 3:12 PM
flexible industrial relations system, a low fiscal pressure, and low environmental
regulations.
31 The level of tax pressure is one of most eloquent indicators of State capacity. In
figure 3 we can clearly see the difference between two groups of countries: Brazil,
Argentina and Bolivia (a country where this pressure has been growing very fast
from a very low level) on one side, and Chile, Colombia9 and especially Mexico, on
the other.
Figure 3. Total tax income (including social contributions), as a percentage of GDP
Access the PDF here

Source: Own elaboration, based on Cepalstat
32 On the other hand, the Brazilian federal government has a development bank
unparalleled in Latin America and most countries of the world, the BNDES, which
handles one fifth of all the finances of the Brazilian private sector (Santana, 2011;
Hochstetler and Montero, 2012). From 1999 to 2009, its disbursements as
percentage of GDP grew from 3% to an impressive 8.5%; although it was reduced
to 5.5% by 2011. In contrast, the Mexican development banks have dramatically
reduced their intervention and limited their character. The Mexican State’s main
development bank, Nafin, has reduced its role since the 80’s. Its credit operations
for productive investment were reduced by 70% between 1996 and 2004. It no
longer finances companies directly, but serves as a guarantor for the loans offered
by commercial banks to small and medium enterprises, and can also advance
financial resources for the bills due by suppliers or clients (Manrique, 2007,
p. 111-113).
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2.4. The dominant social coalition and the type

of political regime.
33 In many respects, what the country produces and exports, how it does it and the
character of the international insertion of an economy are determined by the
orientation that the State and the dominant social coalition imparts them. If this
were not so, we would be living in a perfect Ricardian world where every country
would produce what it is best endowed to produce (Haggard, 1990). That is why
one of our most fundamental assumptions is that the type of capitalism is in fine
defined by the character of the dominant social coalition.
34 This idea has a long tradition. Cardoso and Faletto, as well as Haggard, show
how a strong and cohesive industrializing coalition (including the State) explains
the depth of industrialization (Cardoso and Faletto, 1969; Haggard, 1990). Esping
Andersen (1990) and Théret (2011) emphasize the role of the coalitions and the
State in shaping the character of the national social protection systems. Crouch
explains the cooperative or contentious character of unionism by analyzing the
relationship and coalitions around the State, the church and the guilds during the
formation of the nation-states (Crouch, 1993). Amable (2005) and Boyer (2015)
consider the participation of the salaried working class and the State as crucial to
define the types of capitalism. Finally, Bresser Pereira considers that whether a
social coalition includes rentiers and financiers, or rather industrialists and a
developmental State, is crucial to define the development possibilities of
peripheral countries (Bresser-Pereira, 2017).
35 Where social actors are strong enough to form part of the pact, and the State is
capable of creating a broad coalition including industrialists, middle class and the
working class in a compromise with agro-exporters and financial sectors, we have
either a socio-developmentist type of capitalism —if based on productivity gains—
or a rentier redistributive regime —if based on rents—. On the other hand, where
social actors are weak and the social pact is essentially constituted by the State,
multinationals, large national and foreign entrepreneurs and financial capitals,
gains in either productivity or rent are mostly oriented towards profits.
36 During the seventies and eighties, the strength of civil society depended greatly
on its participation in the democratization process, and the sequence between
liberalization and democratization. In Mexico and Chile, civil society was not
crucial in the democratization process, and thus liberalization occurred prior to
democratization. This meant a more orthodox economic liberalization, which in
turn undermined the social actors, especially unions. In this case, the dominant
socio-political coalition that emerged during the nineties and 2000s did not
include organized civil society. In addition, since civil society was basically absent
of the process of democratization, this process gave rise to a liberal, purely
electoral democracy, with strong particratic tendencies, impervious to the
interests of the working class and the lowest revenues. In some cases, as in Peru
and, at least partially, in Colombia, both the civil society and the political system
were de-structured and therefore the political system now tends to support a
“pure” technocratic government, equally unreceptive to popular interests
(Bizberg, 2011; Aziz, 2015)
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37 Where the civil society has been a central actor in the process of
democratization, this process preceded liberalization and the society strengthened
through democratization and by its resistance against the liberalization process. It
was reinforced by both processes and imposed itself as part of the socio-political
coalition that emerged during the nineties and 2000s. This was also the case in
Brazil, where trade unions and the civil society were central in the political
transition, and contributed to the creation of a socio-democratic party, the PT.
This was also the case of Argentina after the emergence of a myriad of social
movements in the wake of the deep socio-political crisis of 2001-2002. In
Argentina and Brazil, unions as well as social movements have been very active: in
the first, this was the case for the piqueteros and the human rights movements; in
the second, a myriad of different social organizations that pushed forward the
democratization process and the drafting of the 1988 Constitution have
maintained their intervention on social policies through informal and formal (the
councils) channels (IzunzaVera and Gurza Lavalle, 2012.)
38 In the rentier distributive economies (Bolivia and Ecuador), these movements,
more than the unions, have been especially significant. These countries are less
industrialized and, in the case of Bolivia, the very strong mining Confederación
Obrera Boliviana lost influence in the face of the new social movements: the
indigenous and coca producers of Chaparé in Bolivia, which are the basis of the
Movimiento al Socialismo (MAS) that led Evo Morales to the presidency
(Mayorga, 2011). In the case of Ecuador, the indigenous movement, the CONAI,
has been a central social and political actor. In both countries, they have been a
very significant mobilizing force that has imposed a popular alliance on the State.
Social movements emerged in the struggle against liberalism during the nineties,
a process that led to the arrival of a national-popular government in the 2000s
(Silva, 2009); in Bolivia, Evo Morales and the MAS, in Ecuador, Rafael Correa. In
these cases, the political system is very open to the civil society, the demand for
redistribution comes from below, from autonomous social movements. These
political regimes can be defined as either participatory or movementist
democracies (Bizberg, 2010). They can also derive towards a delegative
democracy if and when the State uses the resources obtained by the exports of
commodities in order to control social organizations in a clientelist or corporatist
manner.
Figure 4 illustrates the four types of capitalism according to the variables we have
been discussing in this article, adding the strength of civil society and the
openness of the political system. Table 5 summarizes the discussion of this
section.
Figure 4. Dominant social coalition and type of political regime
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Access the PDF here

Table 5. Dominant social coalition and type of Political Regime
International Socio-
Rentier/Liberal Rentier/Redistributive
outsourcing developmentist
Compromise
between
Oligarchic: State, Oligarchic: State,
oligarchies and
multinationals, multinationals, State / Civil Society
Dominant popular classes:
large national large national Alliance: State, Popular
Social State, middle
entrepreneurs, entrepreneurs, sectors, lower middle
Coalition classes, unions in a
financial capital, financial capital, classes
compromise with
middle classes middle classes
agro-exporters and
financial capitalism
Civil
Weak Strong Weak Strong
Society
Weak
Strong Strong
Weak representativeness;
Type of representativeness: representativeness:
representativeness Particracy or de-
democracy Participatory Movementist/Delegative
Particracy structured political
democracy democracy
system
2.5. The wage relation; the social pact

39 The wage relation does not comprise only wages, but also indirect forms of
remunerations, labor market regulations and the social security system (health,
pensions, unemployment benefits, etc.). State intervention, as well as the strength
and organization of the labor movement and of the employers organizations and
19 of 34 12/26/18, 3:12 PM
their relation, are central to define the character of the wage relation, which
reposes upon a social pact between these three central actors.
40 We have basically two situations: while in the outsourcing and in the liberal
rentier types (Chile, Peru, and Colombia) the industrial relations have been
radically deregulated and made more flexible, social protection systems have been
transformed into assistantship; in the socio-developmentist type (Brazil,
Argentina, Uruguay) although industrial relations were also liberalized, the force
of the labor movement and the fact that the government has had, at some
moments, a close relationship to worker’s and other social organizations,
contributed to the fact that social protection systems have better endured in their
traditional forms and industrial relations continue to be regulated.
41 In the case of Mexico, the corporatist relationship that existed since the thirties
has disappeared almost completely. In contrast to Chile, where deregulation of the
industrial relations was achieved with the disappearance or murder of hundreds
of union leaders and a change in legislation —the 1979 labor law approved under
Pinochet, which limited strikes, collective negotiations and relations between
unions and political parties—, in Mexico it was accomplished under practically the
same law (flexibilizing thousands of individual collective contracts), and by
circumventing it. While some of the workers in the most strategic and dynamic
sectors (oil, education, health, telephone, automobile) still have the protection of
unions, in the vast majority of the workplaces (maquiladoras, construction,
commerce, services, small and medium enterprises, the spare part auto-industry)
there are no trade unions or they only exist on paper (protection unions).
Negotiations in Mexico, Chile, as well as Peru and Colombia, occur mostly at the
local level, at the enterprise level. Unionization rates of the total of workers are
11.5% in Chile, and 17% in Mexico, while collective bargaining rates are 9.6% in
Chile and 10.5% in Mexico (Hayter and Stoevska, 2011, cited by Bensusán, 2016).
In Peru and Colombia, union density is extremely low: 5.3%10 and 3.4% 11
respectively.
42 Although industrial relations have also been liberalized in Brazil, unions have
managed to retain an important degree of autonomy and capacity of action. This
is partly due to the fact that the labor movement in Brazil was, together with
numerous other social movements, a central actor in the democratization process,
but also because it never lost its character as an interlocutor of the successive
governments, even with the more liberal ones. During the presidency of Cardoso,
for example, the government promoted negotiations between employers and labor
(the tripartite Cámaras sectoriais) in order to set conditions for the
modernization and growth of several branches of the economy. More recently,
under the presidency of the PT with Lula, the government implemented
negotiating bodies to discuss the labor law, and the tripartite Social-Economic
Council. Since the eighties, unions have managed to impose local representation,
through delegates, in some of the largest companies (Cardoso and Gindin, 2009).
43 In the case of Argentina, during the nineties, the Menem government tried to
impose, mostly by decree, local level negotiations and wage increases linked to
growth in productivity, and privatize health services administered by the unions:
the Obras sociales. The main union confederation, the peronista CGT, was able to
negotiate the flexibility of industrial relations and the privatization of public
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enterprises in exchange for preserving their control of the Obras Sociales; neither
the negotiations at the local level nor privatization of the health service went too
far (Munck, 2004, p. 11, Murillo, 2000). Moreover, the unions were re-activated
during the Kirchner and Fernandez governments to the extent that Etchemendy
and Collier (2007) qualified the relationship between the government and labor as
socio-corporatist (Palomino and Trajtemberg, 2006). Union density in these two
countries, but also in Uruguay, reflects this situation. Union density is an
indicator of the force that these organizations have in these countries: in
Argentina it’s 37.6% (of the salaried earners), while the coverage of the collective
contracts is 60%. In Brazil, the percentages are 20.9% and 60% respectively; in
Uruguay, 19%12 (Hayter and Stoevska, 2011).
44 A very direct indicator of the character of the social pact is the data on the rise
of wages, especially minimum salaries, which have an impact both on active
workers and pensioners. They are also a good sign of whether the mode of
economic growth is redistributive or liberal, and on the weight that is given to
either profits or wages. In figure 5, we can clearly see that in the liberal rentier
type (Peru, Colombia, and Chile), salaries have grown moderately, while in the
outsourcing type (Mexico) they have stagnated; in both, the State represses
salaries, especially in the outsourcing mode, as they constitute its principal
competitive advantage. In contrast, in both the socio-developmentist (Brazil and
Argentina) and the redistributive rentier countries (Bolivia and Ecuador),
minimum salaries have grown strongly.
Figure 5. Minimum wage index
Access the PDF here
21 of 34 12/26/18, 3:12 PM
Source: own elaboration based on Cepalstat
45 The character of the social protection system also shows a contrast between the
different types of capitalism. Social protection policies have a short-term impact
on domestic demand through pensions, unemployment compensations, health
investment and expenditure, and a medium and long-term impact through
productivity growth. The expansion of public resources dedicated to social policies
and health is very significant in the three countries (Argentina, Brazil, and
Uruguay) coined “socio-developmentist”. Other countries have all lagged behind
(see figure 6).
Figure 6. Public social expenditure (% GDP)
Access the PDF here

a. Central government; b. general government; c. central government
Source: Own elaboration based on Cepastat
46 Nonetheless, as Esping Andersen (1990) has written, to know how much a

country spends on welfare is not enough to understand its characteristics, it is
necessary also to understand the way resources are used. One of the main policies
where social resources are used is social security pensions. If one looks at pension
coverage (see figure 7), high levels of coverage coincide with high union density
and a redistributive economic model. The case of Chile, as an exception, is
interesting: it was one of the countries with the most widespread coverage before
the military regime, when the inclusive pension system was privatized and
converted into a capitalization scheme. Although this country has a high coverage,
the Lagos government (2000-2006) instituted a minimum salary pension for
workers who did not reach this level through capitalization; this has as a
consequence a high coverage, but a low replacement rate for higher salaries.
47 In general terms, in countries with a strong labor movement or strong social
movements, pensions and health coverage are more extended and more generous
than in countries with weaker unions. We can see this difference in the data on
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coverage of figure 7. These divergences are directly related to the governmental

policy aimed at the formalization of workers. While in Mexico and Peru practically
nothing has been done to reduce informality (one could hypothesize that
informality is functional to the type of capitalism that exists in these countries) in
Argentina and Brazil, tax incentives and stricter work inspections have resulted in
a decrease of informality (Maurizio, 2014;Berg, 2011). Although Chile has been
able to reduce informality to around 22% of GDP (Quenan and Velut, 2011, p. 52),
Bensusán (2006) considers that this has been achieved at the expense of lowering
considerably the conditions of formalization. Colombia has an almost universal
basic health system, similar to the Mexican Seguro Popular, which includes a
basket of diseases, but in contrast with Mexico, in Colombia, it is a compulsory,
subsidized, contributory system.
Figure 7. Proportion of the population covered by health and/or pension system

(2013)
Access the PDF here

Source: Own elaboration with data from: Pensions: Bosch, M., A. Melguizo, and C. Pagés (2013),
“Better Pensions, Better Jobs: Towards Universal Coverage in Latin America and the Caribbean”,
Inter-American Development Bank, Washington, DC. Health: Several country studies; Salud Pública
de México, Vol. 53, 2011
48 In Mexico, the welfare regime was closely linked to the needs of the
authoritarian PRI; it was the way in which the State exchanged benefits for
control of the social organizations in a corporatist scheme. Since the 1980’s, the
Welfare State has evolved towards a more universal, albeit minimalist scheme.
Since the mid 90’s, social programs have decidedly shifted to assistance (Valencia
Lomelí, 2008). The main social program Prospera focalizes on the poorest part of
the population.
49 Brazil and Argentina (since 2003) stand in sharp contrast to Mexico: in the first
place, the welfare regime was not radically modified, especially the case of Brazil.
It did not abandon the “pay as you go” pension system or even institute a mixed
one. Non-contributive pensions to the rural workers were expanded: 12.8 million
people get a minimum salary. Another social assistance program, called the BPC
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(Beneficio de Prestação Continuada), covers about 4.27 million old (over 65) or

incapacitated individuals which live in a home with a revenue lower than one
fourth of a minimum salary (Lautier, 2007, p. 60-62). In Argentina, in 2008 the
Fernandez government renationalized the pension funds, which had been
partially privatized by the Menem presidency. The government unified the system
under a State controlled solidary regime, eliminating the segment of capitalization
administered by the AFJP (Administradoras de Fondos de Jubilaciones y
Pensiones) (CEPAL, 2010, p. 8-9).
50 The impact of a socio-developmentist mode of growth is clear in the case of
Brazil, Argentina, and Uruguay, both in terms of decreasing inequality, reducing
extreme poverty and expanding the middle class. The significant increase in
salaries, especially minimum salaries, as well as a process of formalization of the
working force, contributed to this aim (Saboia and Neto, 2017 for Brazil). In
addition, in Brazil, there was an intensive, pro-poor housing program, financed
wholly or partly by the State, and an increased access to credit of the working
glass, which allowed them to acquire durable consumer products. The countries
closest to the liberal rentier type have also shown a very positive performance in
reducing inequality and extreme poverty, although this was less due to an increase
in wages, work formalization, or social security expenditure (as the accumulation
regime is profit oriented), than to a “mechanic” effect of economic growth.
Nevertheless, the reduction of inequality has been less significant in these
countries, with the exception of Peru. The outsourcing mode, typified by Mexico,
is exemplary for its stability in its inability to reduce poverty or inequality (figres 8
and 9).
Figure 8. Gini Index, 1996-2016
Access the PDF here

Source: Own elaboration based on World Bank database
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*Mexico data based on Cepalstat
Figure 9. Social stratification in Latin America, % Variation 2000-2013)
Access the PDF here

Source: Stampini M. et al. (2015), “Pobreza, vulnerabilidad y la clase media en América Latina”, BID,
Working Paper 591, Figure 1, p. 10
Table 6 synthesizes the discussion of this section
Table 6. The Wage relation
International Socio- Rentier /

Rentier/Redistributive
outsourcing developmentist Liberal
Increase in
Strong increase
Wage salaries Strong increase in
Wage repression of minimum
policy according to salaries
wages
productivity
Labor Non-
Strong
market Non-formalisation formalisation Formalisation
formalisation
policy (except Chile)
Union
density / Neo- Strong social
Low Low
Civil corporatism movements
society
Low coverage
Increasing
Low coverage of of contributory Low coverage,
coverage of
Pensions contributory and (except Chile) increasing social
contributory and
social pensions and social pensions
social pensions
pensions
Social Public/private Social Low social security,

Health
security/public (Brazil); plus security/public high public, low
system
/private: strong social security /private/strong coverage
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segmentation
and low
segmentation/non- (Uruguay,
coverage
coverage Argentina)
(except
Colombia)
Character
of the Uncertain Tension between
Social Assistance tendency to Assistance universalization and
protection universalisation assistance
regime
Moderate
Inequality No reduction Strong reduction Strong reduction
reduction
Moderate
Poverty Growth Strong reduction Strong reduction
reduction
3. Concluding remarks: The frailties

of the diverse types of capitalism
51 As we discussed in the introduction, the four ideal types of capitalism do not
coincide with any particular country, as they are formalizations/stylizations of the
trajectory of a country or of a group of countries. The references to a particular
country have served to stress a specific characteristic of the type of capitalism. All
real countries are, in fact, hybrids of the ideal types. In this manner, when we
analyze particular countries we are able to stress some of the weaknesses of the
ideal types.
52 The weakness of both rentier types is evident: it is their dependence on the
demand and price of the products they export, which are extremely volatile and
subject to external economic conditions. The liberal rentier capitalism depends on
economic growth to generate jobs, increase wages and consumption, and reduce
poverty; in this manner, when it does not grow sufficiently, it accumulates
redistributive demands that at one point or another may result in an open social
or political crisis. The redistributive rentier capitalism is even more unstable,
because the decline of resources coming from exports of commodities may lead to
a political crisis. As the political support to the government depends on
redistribution through corporatist or clientelist mechanisms, it is prone to a
double crisis: economic and political, as we can at present witness in Venezuela.
53 The fragility of the international outsourcing model is also its dependence on
the external economy. The case of Mexico is extremely close to this model,
although it is also partly a rentier country, as government finances depend heavily
on crude oil exports. The Mexican economy is a platform that integrates labor at
the last stages, and lowest aggregate value, of the manufacturing process. This
implies that its level of competitivity depends on low labor costs (both wages and
indirect social security costs), high flexibility of the labor market, low taxes and
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low environmental regulations. This results in the repression of internal demand,

which together with low productivity gains results in low job creation, an increase
of poverty, and a social protection system that is merely a safety net that assists
the population unable to enter the labor market. This situation entails the
accumulation of demands, a permanent or rampant crisis, especially in a large
country such as Mexico, where part of the population suffering from low job
creation and low salaries is prone to all sorts of illegal, and even criminal,
activities.
54 Finally, as can be exemplified best by the Brazilian case, socio-developmentism
did not achieve developing the country with social equity, as it de-industrialized
prematurely and culminated in a profound economic and political crisis (Salama,
2012).
55 This does not prove that this model is unsustainable, but rather that a hybrid
between a socio-developmentist and a rentier model such as the one adopted by
Brazil and Argentina is unsustainable. In fact, Brazil shared many of the
characteristics of the rentier model: increasing exports of commodities,
overvaluation of the national currency due to the entry of foreign currency
resulting from increased exports and foreign investments, and an increase of
imports (Bresser-Pereira and Gala, 2012 and 2015). This situation, accompanied
by wage-led growth, resulted in a domestic demand expansion considerably faster
than that of the domestic supply, and thus a multiplier that benefited the external
market and de-industrialization. (Bresser-Pereira and Gala, 2012 and 2015;
Aguila and Lo Vuolo, 2016; Salama, 2012).
56 The political economy of the rentier character of the Brazilian economy resulted
from a contradictory compromise of the State with both the working class and the
commodities and financial interests; a situation which also exists in the other
redistributive capitalisms and explains their fragility. While the former benefited
from redistribution, the latter profited from investment in State bonds with very
high interest rates and the rise of the exchange rate in favor of the real (Bresser-
Pereira and Gala, 2012; 2015; Marques Pereira and Bruno, 2015; Salama, 2012).
The political compromise broke up because of two factors : on the one hand, the
reduction of the government’s capacity to continue redistribution as a
consequence of the decrease of its resources; on the other hand, with respect to
the financial interests, the need of the government to reduce the interest rate, to
control the overvaluation of the real and the circulation of capital, led to the end
of the government’s capacity of arbitration between the population’s revenues and
the financial and commodity exporting interests. The institutional and political
crisis that ensued from Lava Jato resulted in the breaking up of the coalition
between the PT and the PMDB that sustained the Dilma presidency, and
deepened the economic crisis. (Costa Pinto, 2017).
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Documents annexes
Table 1. Types of Capitalism in Latin America (application/pdf – 185k)
Table 3. International Insertion (application/pdf – 393k)
Figure 2. State intervention against market (application/pdf – 88k)
Figure 3. Total tax income (including social contributions), as a percentage

of GDP (application/pdf – 434k)
Figure 4. Dominant social coalition and type of political regime

(application/pdf – 92k)
Figure 5. Minimum wage index (application/pdf – 221k)
Figure 6. Public social expenditure (% GDP) (application/pdf – 276k)
Figure 7. Proportion of the population covered by health and/or pension

system (2013) (application/pdf – 137k)
Figure 8. Gini Index, 1996-2016 (application/pdf – 1,4M)
Figure 9. Social stratification in Latin America, % Variation 2000-2013)
31 of 34 12/26/18, 3:12 PM
(application/pdf – 143k)
Notes
1 Although they are subject to increasing pressures that tend to disarticulate them
(Lechevalier, 2011; Thelen, 2014; Boyer, Uemura and Isogai, 2012).
2 A situation that resembles the dependent capitalisms described in other articles featured
in this issue of the Revue de la régulation.
3 A mode that has its roots in past economic trajectories, as we tried to show in an article
(Bizberg and Théret, 2012).
4 http://atlas.cid.harvard.edu
5 Based on the types of State as defined by Urlich Beck (2002).
6 Notwithstanding, the Chilean State implemented a tax mechanism (encaje) on foreign
portfolio investments that limited its unpredictability during the nineties; it has since been
abandoned (Ffrench Davis, 2008).
7 We are simplifying Bruno Jobert’s argument, the ambiguity of the State due to the
contradictory exigencies that the political order has to fulfil, presented by Théret in his
introduction (1995).
8 For a more detailed discussion on Chile see Bizberg 2015.
9 The fact that the fiscal pressure of Colombia has increased (by 5%) while that of Chile and
Mexico has stagnated is an indicator of a relative change in the liberal paradigm. A more
detailed discussion of this question is out of the scope of this paper.
10 http://www.redlat.net/site/wp-content/uploads/2016/06/peru-trabajo_decente.pdf
11 http://www.urosario.edu.co/urosario_files/76/7692c2f4-e5dd-46bd-
aafa-2f505d6dcff2.pdf
12 For Bolivia and Uruguay there is no accessible data for collective bargaining coverage.
Table des illustrations
Titre Table 1. Types of Capitalism in Latin America

Légende Access the PDF here
Crédits Source: Own elaboration
http://journals.openedition.org/regulation/docannexe/image/13701
URL
/img-1.jpg
Fichier image/jpeg, 132k
Titre Figure 1. Mode of accumulation and consumption
URL
/img-2.png
Fichier image/png, 19k
Titre Table 3. International Insertion
32 of 34 12/26/18, 3:12 PM
URL
/img-3.jpg
Titre Figure 2. State intervention against market
Crédits Access the PDF here
URL
/img-4.png
Figure 3. Total tax income (including social contributions), as a
Titre
percentage of GDP
Crédits Access the PDF here
URL
/img-5.png
Titre Figure 4. Dominant social coalition and type of political regime
URL
/img-6.jpg
Titre Figure 5. Minimum wage index
URL
/img-7.png
Titre Figure 6. Public social expenditure (% GDP)
URL
/img-8.png
Figure 7. Proportion of the population covered by health and/or
Titre
pension system (2013)
Source: Own elaboration with data from: Pensions: Bosch, M., A.
Melguizo, and C. Pagés (2013), “Better Pensions, Better Jobs:
Towards Universal Coverage in Latin America and the
Crédits
Caribbean”, Inter-American Development Bank, Washington, DC.
Health: Several country studies; Salud Pública de México,
Vol. 53, 2011
URL
/img-9.png
33 of 34 12/26/18, 3:12 PM
Titre Figure 8. Gini Index, 1996-2016

Crédits Source: Own elaboration based on World Bank database
URL
/img-10.jpg
Figure 9. Social stratification in Latin America, % Variation
Titre
2000-2013)
Source: Stampini M. et al. (2015), “Pobreza, vulnerabilidad y la
Crédits clase media en América Latina”, BID, Working Paper 591,
Figure 1, p. 10
URL
/img-11.png
Pour citer cet article

Référence électronique
Ilán Bizberg, « Is There a Diversity of Dependent Capitalisms in Latin America? », Revue
de la régulation [En ligne], 24 | 2nd semestre / Autumn 2018, mis en ligne le 18 décembre
2018, consulté le 26 décembre 2018. URL : http://journals.openedition.org/regulation
/13701
Auteur
Ilán Bizberg
El Colegio de México, Associate Member of the CADIS/EHESS; associate professor of the
Internationales Graduiertenkolleg “Zwischen Räumen” of the Freie Universität Berlin;
Member of the CEIM-UQAM, Montréal; ilan@colmex.mx
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24 | 2nd semestre / Autumn 2018 :

types of capitalism existing in Latin America:

1. The accumulation regime.

2. The mode of integration to the world economy

3. The role of the State.

4. Social actors and coalitions behind one or another mode of accumulation.

5. The political system

6. The social pact/wage regime.

1. Four types of capitalism in Latin

1. The first one, a stylization or formalization of Mexico, which shares

1. A second capitalist variety, a stylization of the mode of development that

2. Finally, the fourth capitalist variety is a redistributive rentier

Table 1. Types of Capitalism in Latin America

Access the PDF here

2. The political economy of the four

2.1. The mode of accumulation.

Table 2. Mode of Accumulation

International Socio- Rentier/

Low added value

Mode of Wage/profit led Profit led Wage/profit

Source: Own elaboration

14 The literature analyzing the consequences of what a country produces on its

depends less on productivity increases than on the differential between levels of

Figure 1. Mode of accumulation and consumption

Source: Own elaboration

2.2. The international insertion.

Table 3. International Insertion

Access the PDF here

21 The international outsourcing capitalism and the two types of rentier

dependent on whether its State is proactive, defensive or an agent of the economic

2.3. The intervention of the State.

Table 4. State Intervention

International Socio- Rentier/

Neoliberal Intent of an Tendency towards a

Autonomy Weak Strong Weak Strong

Source: Own elaboration.

26 In the institutionalist perspective, the State is merely another institution, or at

Figure 2. State intervention against market

Access the PDF here

Figure 3. Total tax income (including social contributions), as a percentage of GDP

Access the PDF here

2.4. The dominant social coalition and the type

Figure 4. Dominant social coalition and type of political regime

Access the PDF here

Table 5. Dominant social coalition and type of Political Regime

Source: Own elaboration

2.5. The wage relation; the social pact

Figure 5. Minimum wage index

Access the PDF here

Source: own elaboration based on Cepalstat

Figure 6. Public social expenditure (% GDP)

Access the PDF here

46 Nonetheless, as Esping Andersen (1990) has written, to know how much a

coverage of figure 7. These divergences are directly related to the governmental

Figure 7. Proportion of the population covered by health and/or pension system

Access the PDF here

(Beneficio de Prestação Continuada), covers about 4.27 million old (over 65) or

Figure 8. Gini Index, 1996-2016

Access the PDF here

*Mexico data based on Cepalstat

Figure 9. Social stratification in Latin America, % Variation 2000-2013)