Small latecomers into the global market: power conflict and institutional change in Chile and Uruguay

In analyzing post-liberalization models of capitalism in Chile and Uruguay, this dissertation argues that the conflict over power and distribution among the principal actors of the productive system define the model followed by the political economy. In other words, the conflict between coalitions formed by business, labor and parties is the key to understanding why the political economy follows a liberal or coordinated path. The dissertation combines a cross-regional analysis of market institutions spheres of relations and their complementarities using quantitative data; a historical sociological comparison of conflict over power and distribution for Chile and Uruguay; and a process tracing analysis of coalitional formation and bargaining over two initiatives that embody the conflict over power and distribution for the post-neoliberal period: tax and labor reforms. The findings demonstrate that Chile and Uruguay are developing different models of capitalism, which challenge the dominant approach to the region which postulates the existence of a single and coherent model. These models are the liberal one for Chile and the coordinated one for Uruguay, which implies an extraordinary potential for future cross-regional comparisons and the importance of abandoning regionally built models in order to pursue higher levels of generalization. In this regard, I propose an improved typology that integrates developing political economies into the analysis. My findings also demonstrate that the process of creating market institutions is both political and historical and, therefore, that ahistorical analyses based on economic equilibrium characteristics are insufficient to understand the causes of the differences in terms of models of capitalism. The cross-regional quantitative analysis suggests that with the exception of Chile, the model of capitalism of the Southern Cone political economies shares many characteristics with the Mediterranean ones, allowing merging the two groups of countries into a single subtype of coordinated market capitalism: the Statist coordinated type