The ANNALS of the American Academy of Political and Social Science

Neoliberal discourse often produces the impression that the world has undergone a wholesale shift toward laissez-faire and that this shift has produced economic prosperity. This article examines national economic data to discern the degree to which (1) governments have in fact retreated from the market and (2) countries have enjoyed increasing economic prosperity over a period in which they have supposedly been liberalizing. The evidence is mixed on both counts. Although international capital mobility and trade liberalism appears to have grown over the past two decades, there is little evidence of a broad scaling back of governments. Over the same period, countries have not experienced any appreciable improvement in growth, cross-national equality, employment, or national debt loads, although there is some evidence of improved price stability near the end of the 1990s.

This article attempts to generate a new understanding of economic change and household responses in Mexico. It reflects on the changing conditions of survival and reproduction among the Mexican urban working poor in a socioeconomic context of diminishing income-generating opportunities. The author argues that rising poverty has had serious effects on dimensions (beyond economic) of the lives of the poor—in particular, the erosion of the capacity of the poor to maintain networks of social exchange. The author strongly argues in favor of diachronic analyses of economic transformations and their impact on household dynamics to capture social and family processes that are not fully understood by synchronic views of household life and livelihoods. The diachronic view allowed the author to show the limits of the strategies of survival and the inadequate explanations resulting from views that uncritically assume the endlessness of resources in the hands of the poor.

This article examines the impact of structural adjustment in Peru by asking what seems to be a simple question: did the situation of small producers improve following implementation of structural adjustment measures? Though improvement is seen as economic growth, the criteria used to determine that are not uniform. This study focuses on a comprehensive set of indicators of production, diffusion of the cash economy, and revenue, exploring trends among different types of producers, classified according to what they produce and how the production is organized. It focuses on the period 1980 to 2000 and, whenever possible, presents data from 1970 for comparison purposes. The authors conclude that the key is not so much integrating agricultural producers into the market or opening rural markets but rather improving the conditions under which small producers and subsistence farmers become integrated into the market, which will require a deep understanding of how the production system of the rural poor functions.

Beginning in 1987, Peru imposed a regime of structural adjustment to transform its economy along neoliberal lines. This analysis suggests that a shift resulted in the odds of international migration and the motivations for leaving among inhabitants of Peru’s largest labor market. Before 1987, under the regime of import substitution industrialization, jobs at wages capable of sustaining a basic standard of living were widely available; those few who left the country self-selected for higher human capital and moved abroad to improve their earnings. Under neoliberalism, however, both employment and wages fell to levels that made it difficult for families to sustain themselves. In response, households—with the assistance of friends and relatives with foreign experience—diversified their labor portfolios away from the local job market structural adjustment zones. The number of migrants then rose, the diversity of foreign destinations increased, and migration became less selective with respect to human capital.

The literature on subjective well-being has focused primarily on the developed economies. The authors provide empirical evidence from a developing country, Peru. Their results—and in particular a strong negative skew in the assessments of the respondents with the greatest income gains—support the importance of relative rather than absolute income differences. Among other factors, they attribute their results to shifts in reference norms and to macroeconomic volatility. Relative differences seem to matter more for those in the middle of the distribution than for the very wealthy or the very poor. Respondents were more critical in assessing their progress vis-à-vis others in their country versus those in their community. The frustrations that the authors find among the upwardly mobile may have implications for the future economic and political behavior of a group that is critical to the sustainability of market policies.

This article is based on a four-generational study of residents in three squatter communities (favelas) in Rio de Janeiro from 1968 to 2003. It shows how the marginalization of the urban poor has deepened over the past thirty-five years through drug-related violence, the failure of democracy to deliver on its promise of voice for the disenfranchised, the stigma of place and race, the increase in unemployment, and the inability to translate educational gains into concomitant income or occupational gains. Despite significant improvements in consumption of collective urban services, household goods, and schooling, few have been successful enough to move into “good neighborhoods” or into professional jobs. Gang violence creates a pervasive sense of fear and diminishes the social capital of the communities. Despite the promise of the end of the dictatorship in 1984, favela residents feel they are more excluded. Yet they still have hope that their lives will improve in the future.

This article shows the growing activities related to the existence of three types of urban violence: the structural violence inherent in the existing social inequalities in Latino American countries, radical violence, and criminal violence. Neoliberal policies generate more inequality, exclusion, poverty, and alienation, which yield a rising tide of criminal and radical violence, which triggers more state violence and coercion, which, in turn, encourages more resistance from below. Violence and security have become a key link in the economic arena characterizing the Latin American metropolis.

Promoting sustainable economic growth with social inclusion represents a challenge for Luiz Inácio Lula da Silva, the former metalworker and leader of the socialist Workers’ Party, who won the Brazilian presidency his fourth try. The election of Lula has raised expectations at home and abroad. Although the government scored impressive fiscal victories by following ultra-orthodox macroeconomic policies, its performance in achieving economic growth and social improvement has been less than brilliant. Written in February 2004 to assess his first year in office, this article examines the challenges that Lula initially had to overcome and outlines the main points of his political economy. By the end of the first year, few great changes had taken place, except perhaps in his political party’s manner of governing. Early in Lula’s presidency, his policies were quite similar to those of earlier governments.

In cities such as São Paulo, the periphery is the locus of social exclusion, segregation, disarray, and vulnerability. Programs of inclusion seek to empower local actors to work in coordinated fashion toward improvements in the quality of life. Successful experiments show that programs to foster cooperation between local actors, NGOs, community organizations, and municipal governments have very positive effects. The challenge of these programs is to increase social capital available to poor urban dwellers by creating and reinforcing dense networks of intermediate organizations—civil associations, churches, community groups, schools, professional associations—to cushion against social decomposition. The dynamic practices reviewed here—digital inclusion, social entrepreneurship, income generation, educational subsidies, and job training—offer different ways of reducing social exclusion. All depend significantly on local organizational capacities and potential individual mobilization. Important changes occur when practices are implemented cooperatively by local actors, government officials, and professionals within organized civil society.

Democracy is a current struggle in several Latin American and Caribbean countries. Although a majority of citizens prefer democratic to authoritarian rule, indicators suggest support for democratic institutions is progressively deteriorating. From the mid-1980s onward, the problem of governability rose to prominence, and proposals to reform the state emerged. In this context, reform refers to profound political transformations that produce new institutions, new styles of leadership, and new social relations while eradicating existing ones. Conflict and confrontation result as structures associated with vested interests were dismantled and replaced by new structures that created new vested interests. Weakening states in Latin America are less and less able to deal with internal discontent. The gap between the demands placed on the state and its ability to address them explains the need for reform. In some countries, citizens have concluded that they neither want the democracy they have nor have the democracy they want.

What is known about the effectiveness of many policies is dominated by prior beliefs or myths rather than by careful analyses. This article discusses an important exception to this generalization in which, in sharp contrast to most previous and much concurrent and subsequent practice, serious efforts at evaluation were implemented from the start: the Mexican PROGRESA/Oportunidades antipoverty and human resource investment program, initiated in 1997. The article begins by introducing the program and providing relevant background material and then summarizes initial evaluation results in rural areas, where both of the authors were extensively involved in the evaluation, and then turns more briefly to the current evaluation of Oportunidades in urban areas and the longer-run evaluation of PROGRESA/Oportunidades in rural areas. This program has been an important model not only in terms of using conditional cash transfers to induce human resource investments but also in being serious about policy evaluation.