The technocratic barrier to wage policy: theoretical insights from the Chilean Concertación

During the Latin American left turn, most governments rapidly understood the importance of committing to macroeconomic equilibriums, successfully managing to combine this goal with a wide array of social policies. Wage policy proved to be a conflictive arena coming from a period of harsh austerity measures. This article provides unique insights, from the Chilean Concertación governments (1990-2010) about the importance intra-left conflicts had in the advancement of labor collective rights. The working hypothesis is that the conflict between party leaders and technocrats alongside a perceived trade-off between growth and distribution is a prime factor for understanding wage reform outcomes. The analysis relies on a mixed-methods approach combining regression analysis and process-tracing. Chile’s labor reform attempts during the Concertación governments, with feeble societal linkages, provides relevant theoretical insights for the understanding of how the abovementioned perceived trade-off may have played in other cases, not only in Latin America but also in other regions of the developing world. The analysis is novel in bringing intra-left conflict back in as an important driver for labor relations reforms and improves our understanding of the political economy of intra-left conflicts during the post-neoliberal period