History’s Wages – State Formation and Labour Policy in Argentina and Uruguay

In the mid-2000s, left-of-centre governments in Argentina and Uruguay enacted pro-labour reforms, including sector-level collective bargaining. In the following decade, labour incomes rose rapidly and unions regained a central place in politics. Despite this, the labour institutions that structured collective bargaining (corporatism) were contested politically and legally in Argentina, while they became more stable in Uruguay with reforms to strengthen its institutional resilience. This dissertation explores why labour relations in the two countries diverged despite policy convergence. Although both countries instituted innovative policies to address poverty and inequality in the 2000s, they opted to reinstate corporatist labour laws designed in the 1940s: Argentina’s corporatist labour laws allow the state to determine which unions could represent workers during collective bargaining (monopoly representation); in Uruguay, monopoly representation is recognized by the state owing to the democratic will of the workers. I argue that the divergent outcomes in the evolution of labour relations in Argentina and Uruguay in the 2000s is due to differences in the institutional design of corporatism: Argentina’s state corporatism violates the norms of liberal democracy as it limits freedom of association, while Uruguay’s democratic corporatism respects and promotes freedom of association. Why did Argentina and Uruguay design their corporatist institutions so differently in the 1940s? I posit that the variation in the institutional design of corporatism can be traced back to state formation during the nineteenth century. Argentina’s state formation was led predominantly by military elites whose hierarchical worldview filtered into exclusionary political institutions that created an anti-pluralist political culture that by the 1940s had created the conditions for state corporatism. State formation in Uruguay was led by political parties whose elites created inclusive political institutions that cemented a pluralist political culture and that by the 1940s led to the creation of a democratic corporatist framework. The dissertation contributes to the study of how historical processes, like state formation, leave important institutional and cultural legacies that influence choices by policy makers far into the future.Ph.D