Political Competition and Policy Adoption: Market Reforms in Latin American Public Utilities

This article shows that political competition generates incentives that affect the pace of adoption of market reforms in the context of policy convergence. Previous work shows the effect of financial and technological pressures in promoting policy convergence and the impact of institutional constraints on shaping the pace of policymaking. Controlling for these effects, this article demonstrates the policy effects of political competition and ideological polarization even at a time when ideological policy differences seem to be fading due to policy convergence. This article studies policy adoption using duration analysis for the 18 countries of Latin America during the 1985–2000 period when most of the market reforms in public utilities were adopted. Studies ofmarket reforms inLatinAmerica have typ-ically emphasized the common financial and tech-nologicalpressures that limited theabilityof incum-bents to impose their ideological preferences on policy adoption during the 1980s and 1990s. This article shows that, although it is true that the ideology of incumbents cannot fully explain policy adoption, political competi-tion and the relative ideology of challengers did shape the incentives of policymakers and thus played a significant role in the adoption of market reforms. The article show