Robinson privatization comment 2 with figs

CARDOSO, MENEM, AND MACHIAVELLI: POLITICAL TACTICS AND PRIVATIZATION IN LATIN AMERICA Daniel Treisman Department of Political Science University of California, Los Angeles 4289 Bunche Hall Los Angeles, CA 90095-1472 Treisman@polisci.ucla.edu Published in Studies in Comparative International Development, Fall 2003, 38, 3, pp.93-109. 1 Introduction In “Implications of Shleifer-Treisman Deals: Lessons from the Porfiriato,” James Robinson pays Andrei Shleifer and myself the compliment of applying an analytical framework we devised to try to understand economic change in contemporary Russia to the land reforms of Porfirio Díaz in late nineteenth century Mexico. He identifies some interesting parallels. In this note, I repay the compliment by taking a liberty. The twentieth century has also witnessed many attempts at reform in Latin America. Here, I consider the use of political tactics in a couple of more recent cases—the privatization reforms of Carlos Menem in Argentina and Fernando Henrique Cardoso 1in Brazil. Both Menem and Cardoso inherited economies with large and inefficient public sectors, which had been built up during the years of populism and military rule. In Argentina, as of the late 1980s state-owned enterprises spent some 15-18 percent of GDP every year (De la Balze 1995, p.89). Many were completely dependent on public subsidies. In 1989, the 13 largest (excluding the defense industry) had an ...