LIBERALIZATION & MOVEMENTS

A close election in Peru has pinned socialist candidate Pedro Castillo against Keiko Fujimori, former congresswoman and daughter of former President Alberto Fujimori. The contest has revealed deep polarization in the country between social movements opposed to foreign investment and those who favored market liberalization that has defined Peruvian politics since the 1990s.

In a 2008 article, MOISÉS ARCE shows the links between these two poles, examining how the policies of the Fujimori regime and decentralization efforts under his successor, Alejandro Toledo, reinvigorated social struggles in mining, agriculture, and industrial labor.

From the article:

“Following the 1992 autogolpe, Fujimori recentralized political authority and effectively created a system with few or no veto points, which, in turn, allowed for dramatic policy change. During this period, Fujimori enjoyed majority support in Congress and was able to minimize political dissension within his own party, thereby expediting legislative approval for policy initiatives drafted by the executive. Fujimori also reversed the decentralization initiative that had created 13 regional governments in 1989. The period of the Fujimori regime, indeed, was characterized by a general decline in strike activity, largely because the political environment delegitimated the use of protest and the economic conditions eroded and weakened collective action.

In contrast to Fujimori’s authoritarian regime, the democratic government of Toledo provided an environment that facilitated greater levels of mobilization. Unlike Fujimori after his autogolpe, Toledo did not have majority support in Congress, and disagreements within his party were customary. In 2002, Toledo restarted the decentralization process that the Fujimori regime had abruptly interrupted. Not surprisingly, Toledo’s democratic government faced many mobilizations. Outside the capital, in September 2001, peasants in Cuzco seized the city’s airport, demanding the construction of an access road to Quillabamba. Later that month, residents of Puno arrived in Lima requesting that the government build through Puno, instead of Cuzco, the so-called intercoastal highway (carretera interoceánica) between Peru and Brazil. The following month, 15 different mayors from 3 poverty-stricken regions, Junín, Huancavélica, and Ayacucho, arrived in Lima demanding more public works. In August 2002, rice producers in Tarapoto went on strike demanding a financial bailout from falling rice prices. At least 13 different departments, mostly in the poorer regions of the country, harbor several active and latent conflicts involving local communities and transnational mining corporations over the extraction of natural resources. Perhaps no other protest was as powerful as the one that rocked Arequipa in June 2002, when citizens violently resisted the sale of the city’s electric companies. Overall, this upsurge in localized protests was unprecedented. The cycle of contentious activity in Peru is exemplified by the Arequipa uprising and other geographically segmented conflicts against foreign direct investment. Many scholars have identified foreign direct investment as the hallmark of globalization and economic liberalization policies; therefore these conflicts can be seen as reactions to neoliberal or market policies.”

Link to the text.

• “Fujimori’s campaign rhetoric appealed to lower and lower middle classes by advocating stabilization measures that would minimize recession and job loss.” A 1997 article by Susan Stokes analyzes Alberto Fujimori’s jump from his campaign promises, which rejected “shock” fiscal adjustment, to his economic policies once in power. Link.
• “As political liberalization legalizes the right to organize, state reforms have restricted access to state resources and jeopardized pockets of local political, material, and cultural autonomy that indigenous communities had carved out.” Deborah Yashar looks at indigenous organizing in Latin America in the 20th century. Link.
• In NACLA, Ana Watson and Conny Davidsen examine failing state Covid-19 responses and an uptick in resource extraction in the Amazon region of Peru. Link. And Alejandra Dinegro Martínez takes a closer look at a national rural bloc of voters and the dynamics of the current election. Link.

NEW RESEARCHERS

Politics of Drought Relief

In her job market paper, PhD candidate in economics at Boston University LISA TARQUINIO examines the political motivations behind drought relief allocations in southern India and their implications for agricultural productivity.

From the paper:

“This paper studies the geographic targeting of drought relief in three Indian states. I document the degree to which relief is provided on the basis of official measures of need and identify the distortion of allocations due to political motives. India has developed a comprehensive drought management program with relief measures including food and water pro vision, agricultural extension support, direct cash transfers, and increased public employment. With climate change predicted to increase the interannual variability of the Indian monsoon, reducing households’ vulnerability to rainfall extremes and ensuring effective (private or public) insurance is all the more critical. A key feature in the evolution of India’s program is the movement towards a rules-based allocation, national guidelines that base the allocation of relief on environmental criteria, though it did not explicitly remove scope for discretion. I demonstrate that states’ targeting of relief only partly aligns with environmental measures of drought. Furthermore, targeting does not adhere to national guidelines for allocating drought relief. Instead, allocations are disrupted by the political motivations of the state ruling party. The likelihood of an area receiving relief increases in the electoral competition faced by the ruling party.”

Link to the paper, link to Tarquinio’s website.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org.

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• “Like the products it carries, the ship is a transnational project: Japanese-owned; Taiwanese-leased; German-managed; an Indian crew; its Panamanian flag indicating the ship’s registry in that offshore haven which grants asset-owners tax exemptions and enables the employment of cheaper foreign labor.” New on PW, Mona Ali examines what the Ever Given reveals about the global economy. Link.
• “The Great Recession is also substantially at fault for the student debt crisis, and the geographic contours of the downturn carry implications for how student debt has been experienced throughout the country.” Also new on the blog this week, JFI Fellow Sérgio Pinto and Senior Fellow Marshall Steinbaum on hysteresis and the student debt crisis after the Great Recession. Link.
• Join the Basic Income Research & Action Lab seminar, hosted by JFI, on June 14 at 12 pm ET for an international look at guaranteed income messaging, featuring Anne Price, Barb Jacobsen, Tatiana Roque, and Catherine Thomas. Register here.
• On June 24 and 25, JFI will be participating in a UBI workshop on experiments, policies, and strategies, hosted by the Márica Basic Income Evaluation in Brazil. Link for more information, and sign up here.
• Nicholas Muller on the green interest rate, “which depends on temporal changes in the pollution intensity of output.” Link.
• Martin Sandbu on labor shortages: “You can see shortages everywhere except in the data.” Link.
• Saori Shibata on the political economy of digitization in Japan’s service sector. Link.
• Fergus Green and Richard Denniss on “the economic and political case for restrictive supply-side climate policies.” Link.
• “An additional Senator or Representative per million residents predicts an additional $670 dollars in aid per capita across the four relief packages.” Jeffrey Clemens and Stan Veuger on the small-state bias of federal Covid-19 relief legislation. Link.
• In the Boston Review, Chris Hong, Robert Manduca, and Nic Johnson review Ariel Ron’s new book Grassroots Leviathan, which explores a grassroots farming movement to challenge the slaveholding south. Link.
• “This paper examines the politics of compensation and rent distribution following the process of a large-scale expropriation of family lands for an oil palm plantation in Ghana’s eastern corridor.” By Adwoa Yeboah Gyapong. Link.
• “A 25% minimum tax [on the profits of multinational companies] would increase corporate income tax revenues in the EU by about €170 billion in 2021.” A new report from the EU Tax Observatory by Mona Barake, Theresa Neef, Paul-Emmanuel Chouc, and Gabriel Zucman. Link.
• “This article outlines the development of gender disparities in education for 28 Latin American and Caribbean countries for the period from 1880 to 1949. We explore in particular the hypothesis of a U-shaped development of women’s education during economic development. The basic economic mechanism was that if relative female labor market prospects were better, the families might have invested slightly more in the education of their female offspring, and vice versa. For the downward sloping part, we find some evidence, although this part is relatively small. The upward sloping part is strongly confirmed. We also find evidence for pronounced differences within the region: While South American countries like Argentina and Uruguay already had relatively high gender equality in the late 19th century; Central American countries had traditionally lower levels. Non-Hispanic Caribbean countries performed better in terms of gender equality, as well as in overall numeracy.” By Kerstin Manzel and Jörg Baten. Link.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org