Book Review: Diversity of Capitalisms in Latin America

This volume by Ilán Bizberg—one of the main interlocutors of the Regulation School in Latin America—is an exploration of the political economies of Latin America and an attempt of identifying and exploring the dimensions that explain the diversity of democratic-capitalist organization in the region. The result is an ambitious, useful, and information-packed book that, at times, understandably stumbles upon attempting to take into account everything that could possibly contribute for said diversity.

The book is timely in two respects: first, it sheds new light on the complex and diverse political economies of Latin America at a moment of deep turmoil and pivotal changes in the region. Second, it adds to a currently rising debate on the horizons for the study of Comparative Capitalisms (see Amable 2019) by adapting some of the insights of the French Regulation Theory and the concept of Social Blocs to an applied analysis of nine Latin American countries.

The volume is divided into nine chapters that can be bundled into three parts. The first two chapters are dedicated to the theoretical underpinnings of the book, where the author positions himself in respect to the vast literature of comparative capitalisms, proposes a theoretical framework, and briefly applies it to the selection of nine Latin American countries. The extensive middle section is dedicated to an in-depth exploration of the six “analytical dimensions” that compose the author’s typology of the region’s capitalist diversity. The final chapter is not only a conclusion and summing up, but it goes beyond that to nuance some of the perspectives presented in the book: the region is in the middle of a process of change, and some of the considerations concerning the political economies of Argentina, Brazil, and Mexico (the three largest economies in the region) could undergo dramatic changes after current political processes, which could further complicate the work and are thus kept outside of the text’s scope until the concluding chapter.

After presenting a grounded critique of neoinstitutionalism, and its application to the Latin American region, the author presents his actionalist-structuralist approach to political economy. Bearing similarities with the understandings of Amable (2017), Bizberg presents institutions as the result of more or less lasting sociopolitical compromises. However, his approach aims to also find a role for the state as more than “an arena where social actors confront each other, but a proper actor” (19), also taking into account an economy’s insertion in global markets. Considering the level of dependence of most Latin American nations on foreign capital, the latter preoccupation seems only fair.

With this in hand, Bizberg presents the six dimensions that will guide his analysis: (1) the accumulation regime; (2) the mode of integration to the world economy; (3) the role of the state; (4) social actors and dominant coalitions; (5) the political system; and (6) wage relations (what he also calls the social contract). After making the case for each one, the author presents the reader with a factor analysis based on State Power/Social Security and Economic Openness/Deregulation and finds four country clusters.

The author adopts an interesting strategy: after diagnosing a major divergence between the two largest countries, Brazil (until 2014) and Mexico, the author identifies these as, respectively, the ideal types of socio-developmentalist and international outsourcing capitalisms. The former—which also includes Argentina and Uruguay—is a mode of accumulation based on state intervention aimed at equilibrating between maintaining the production of commodities for export with internal market stimulation, and a reduction in poverty and inequality. The polar opposite of this mode is a stylization of the Mexican economy based on the assembly and export of manufactured products. For this to work, salaries and benefits must be kept low (which is facilitated by the weakness of social actors), thus increasing poverty and inequality.

However, this is not the whole story. The author also identifies those nations that are almost completely dependent on the production and export of commodities as rentier economies, which are also divided into two groups. Liberal-rentier economies (Chile, Colombia, and Peru) are typified as export-oriented economies that have a profit-oriented mode of consumption, with little state intervention and a frail civil society. Redistributive-rentier economies (Bolivia and Ecuador) are also export-oriented, but their mode of consumption is oriented more toward wages. These nations are characterized by movementist democracies that are sensitive to social demands and are thus more likely to engage in redistribution.

Already, it is noticeable that the author’s typology is a lot more nuanced than the one proposed by neoinstitutionalist accounts of the Varieties of Capitalism tradition, where the entire region is characterized as examples of Hierarchical Market Economies (see Schneider 2013). This is a welcome development that seems to embrace complexity in a region where policy and politics depend on societal alignments as well as on developments in the center of capitalism. Such intricacy, however, does come at a price, one that perhaps could have been mitigated.

As stated above, the author picks six analytical components, each with its own chapter. The first two deal with the accumulation regime and the mode of integration to the world economy, drawing from the Regulation School and dependency/world-systems theory, giving particular emphasis to these countries’ placement on global value chains, and their capacity to defend against pressures that may increase the deterioration of their means of exchange (a term derived from Prebisch and Singer). There is a lot to like in these two chapters, in the sense that it gives data and information that differentiates economies that are all—to a lesser or higher degree—dependent on the rents coming from commodities.

With that, let us move on to the murkier part of Bizberg’s book: his considerations about the state and dominant social coalitions. Chapter 5 is dedicated to the role of the state, and though it starts with a laudable aim as to correct the persistent absence of the state in neoinstitutionalist accounts, it confuses the reader by claiming the state is more than an arena where different interests are played. Although the author agrees with the claim that the state is “connected to a coalition of social actors and acts on behalf of them” (118)—following the tradition of Nicos Poulantzas and subsequent scholars such as Amable and Boyer—he aims to go beyond that. Since no political conflict ever yields an absolute winner, the state still has the capacity to act against dominant actors. As such, the structural design of each Latin American state will mediate these conflicts differently.

Although interesting, this view on the state raises more questions than it answers, and this shows for the remainder of the book, since the author is always confronted with the fluidity of political and institutional forms in the region, being forced to date his analyses for each country. In other words, if the analysis of a socio-developmentalist and strong state in Brazil is only valid for such a short (2003–2014) period, do we really need to explore the structure of the state apart from the political struggle of social actors? Does this not show us that institutional forms in Latin America are replaced too often and are too sensitive to political pressures coming from certain organized groups (see Bresser-Pereira 2017; Diniz and Boschi 2002)? At each step of the way of his exploration on types of Latin American states, he seems to talk about institutional frameworks or policymaking, which are both contingent on the struggle between social groups. This could be made clearer if analyzed in conjunction with his subsequent chapter on dominant social coalitions. Another solution—that the author also rejects—would be to focus more on state capacity and policy space, characteristics that are more permanent than types of intervention or ideology.

The subsequent chapter on dominant social coalitions follows, and, although it solves some of these issues, it sits a bit uneasily with the previous one. In the first page of chapter 6, the author writes:

As such, it seems the dominant social coalition is the dimension of change, and it has a great role in influencing the other dimensions of Latin American political economies. The author presents some insights on the immediately past (or still ongoing) coalitions in the nine selected cases and then moves on to a rich exploration of the transit between one pact and another. This is the chapter that better presents the strength of the book as an agenda-setter, since more research on the causes and consequences of coalition change in Latin America is—more than ever—necessary.

The following chapters are dedicated to mediating forces between the interests of different social groups, namely, the political system and the wage relation. Regarding the former, the author proposes that more decentralized federal systems are conducive to more active civil society, an affirmation that is met with its own caveats on cases like Chile, for example. On the matter of wages and labor regulation, the author delves deeper into an integral part of the accumulation regime, and one of the more contentious policy arenas in the region, prone to constant replacement and some distance between legal design and actual practice (Bensusán 2006; Cook 2007). Both chapters are very informative, but one is left wondering if the themes they are devoted to are not also the product of coalitional alignments.

Luckily, the author does dedicate some time to the new upheavals in Latin America. The concluding chapter closes the book quite nicely, since it answers a few of the practical—and somewhat circumstantial—questions left opened. First, the author adds some nuance to his typology acknowledging the limitations of ideal-typical understandings of nations. Most importantly, he addresses some of the new developments in his most representative cases (Brazil and Mexico), which might witness a U-turn in their entire political economies.

In the end, the sheer amount of information and the theoretical ambition of the book make it worth reading. At present, change seems to be ubiquitous, and dynamic interpretations of peripheral capitalisms are more than ever necessary. As such, Bizberg’s book points in the right direction, opening many avenues for future research that will certainly have a less static and monochromatic view of the region’s capitalist development.