Work in Progress

 To receive copies of drafts of work in progress, please email me here: work in progress request.

RECENTLY PUBLISHED

Credit Where Credit Is Due: Open Economy Industrial Policy and Export Diversification in Latin America and the Caribbean. Politics & Society, Vol. 33:4 (December 2005).  Andrew Schrank and Marcus Kurtz.  What are the underpinnings of rapid, export-led growth in the developing world?  While mainstream economists assume that developed country markets are easily conquered via price competition, and therefore advocate laissez faire trade and investment regimes, their critics treat price competition as a necessary but insufficient source of competitive advantage and therefore counsel caution.  Who is correct?  Does market competition offer a sufficient basis for rapid, export-led growth?  Or is an active industrial policy necessary?  We hope to answer the question by: (1) acknowledging the persistent-and arguably growing-differences between activist and laissez faire approaches to outward orientation; and (2) underscoring the manifold benefits of the activist approaches pursued by a number of Latin American and Caribbean governments in the late 1990s; and (3) accounting for activism's apparent success in the otherwise inauspicious Latin American and Caribbean context by distinguishing the open economy industrial policies in question from either their closed economy predecessors-i.e., import-substituting industrialization-or more traditional, liberal approaches to outward orientation.
 
We utilize both quantitative, cross-national data and qualitative, case study materials to achieve our goals.  The quantitative data divide the region's open economy industrial policies into their principal components-fiscal incentives and credit subsidies-and thereby provide a number of particularly fine-grained insights into their consequences.  On the one hand, the results suggest that credit subsidies have played a particularly vital role in the growth of exports from the leading Latin American and Caribbean exporters in the late 1990s and early twenty-first century.  By insulating their firms from the ingrained imperfections of their underdeveloped credit markets, activist governments and their exporters have outperformed their laissez faire rivals more or less consistently since 1995.  On the other hand, they suggest that neither international economic integration nor competitive rent-seeking need constitute an insurmountable obstacle to the successful use of industrial policy in the twenty-first century.


Growth and Governance: Models, Measures, and Mechanisms.  Journal of Politics Vol. 69:2 (May 2007). Marcus Kurtz and Andrew Schrank.  While it is well known that good long-term economic performance and good-governance are highly correlated, what is not clear is whether the principal causal pathway is from governance to growth or the reverse.  Even less often examined is the possibility that this relationship is at least in part spurious - a product of deeper underlying factors that promote both improvements in administration and improvements in economic performance.  This paper attempts to address these problems, first by assessing what we know about the measurement of "good governance" and the biases embedded in these measures, and then by directly examining the question of causal order.   Our claim is, that within the limits of admittedly problematic measures, the weight of the evidence supports the contention that growth promotes governance, but that administrative reforms do not by themselves induce substantial improvements in growth.  While these results must at this stage remain cautious, they cast some doubt on the recent emphasis on governance reforms that dominate the thinking of international financial institutions and national development aid agencies.  They suggest that growth is more contingent on good policy than good government, and that in the absence of growth, adminstrative reforms, however important, are unlikely to last or be effective. 

Growth and Governance: A Defense.  Journal of Politics Vol. 69:2 (May 2007).  Marcus Kurtz and Andrew Schrank.  The article above was the first contribution in a debate with Daniel Kaufmann, Aart Kraay, and Massimo Mastruzzi at the World Bank.  This is our response to their contribution to that debate.  Here we contend that conceptual problems have undermined efforts to measure government effectiveness, and show how as a result inappropriate sources and indicators have been used in the effort to capture this concept, with potentially worrisome implications for consumers of this data.


Capital, Trade, and the Political Economies of Reform.  American Journal of Political Science Vol. 51:4 (October 2007).  Sarah Brooks and Marcus Kurtz.   Existing approaches to the study of economic reform have focused on the mobilization of special interests that oppose liberalization, and have tended to assume that reform dynamics follow a similar logic across distinct policy arenas.  Analysis of the dynamics of capital account and trade liberalization in 19 Latin American countries between 1985 and 1999 demonstrates otherwise.  Movement toward liberalization is shaped systematically by the timing and salience of each reform’s distributional costs, and partisan political dynamics.  In turn, the timing and magnitude of costs are mediated by the economic context, while salience depends on the informational environment. Our findings thus differ from the conventional wisdom on several scores, particularly by emphasizing the ways in which good rather than bad economic conditions can facilitate reforms, the conditionality of legislative politics of reform enactment on whether reforms are characterized by ex ante conflict or fears of ex post blame, and how the type of reform induces conditions partisan influences.

WORKING PAPERS - IN PROGRESS

The Social Foundations of Institutional Order: Reconsidering War and the 'Resource Curse' in Andean State Building.  The question of state building has long been a central topic for scholars of Comparative Politics.  But while it is generally well-accepted that 'strong' states develop more rapidly, win wars, and more effectively cope with external shocks, what is less understood is why some states develop effective bureaucracies - capable of extracting resources and deploying them in pursuit of public goods - while others remain mired in corruption, rent-seeking, and predation.  Traditional answers have suggested that external conflict promotes administrative modernization, while access to comparatively easily-extracted natural resource rents impedes it.  This paper takes a different turn, arguing that bureaucratic effectiveness is a product of an interaction between social and political dynamics.  Where agriculture is not labor repressive and political elites are incorporated within the state (either through absolutist subordination or cooperative 'oligarchic democracies'), then it is likely that international conflicts will promote political modernization and resource wealth can be put to good use.  Where they do not obtain, however, war more likely provokes state failure while resource wealth is likely only to generate clientelist domination and the creation of 'rentier states.'  The paper makes this case through an examination of the post-independence political development of Peru and Chile; countries locked in a century-long strategic conflict (that spawned two major wars), and both overwhelmingly dependent not only on natural resource exports, but the very same natural resource exports.  Nevertheless, their political development followed widely divergent paths, with the former facing persistent administrative collapse and the continued inability to extract resouces or provide public goods, while the latter built an unusually effective public bureaucracy, capable of extracting and deploying resources in far more developmentally nutritious ways.


Embedding Neoliberal Reform in Latin America.  Although research in the advanced industrial nations has identified a supportive link between an expanded public sector role and economic openness, studies of the developing world have been much less sanguine about the possibilities of broader state intervention in the context of economic liberalization. We investigate the possibility that governments in Latin America may ‘embed’ economic openness in a broader public sector effort, and find that while several countries have moved toward an orthodox neoliberal model with minimal state interventions, other Latin American governments have maintained a broader public sector presence on the supply side of the economy while pursuing deep liberalization. We call the latter strategy ‘embedded neoliberalism,’ to distinguish it from the more egalitarian ambitions of post-war embedded liberalism. Cross-sectional time series analysis reveals that embedded neoliberal strategies in Latin America have grown out of a legacy of advanced import substitution industrialization, and have been promoted by non-left governments, unless labor is very strong.  The orthodox neoliberal model, by contrast, has emerged where post-war industrial development was attenuated, and where labor unions were weakened considerably by the debt crisis.


To receive copies of drafts of any of these works in progress, please email me here: work in progress request.