2005 Reports

Political Competition and Policy Adoption: Market Reforms in Latin American Public Utilities

Murillo, Maria V.; Martínez-Gallardo, Cecilia

This paper shows that political competition generates incentives that affect the pace of adoption of market reforms in the context of policy convergence. Previous work shows the effect of financial and technological pressures in promoting policy convergence and the impact of institutional constraints on shaping the pace of policymaking. Controlling for these effects, this paper demonstrates the policy effects of political competition and ideological polarization between the incumbent and its contenders even at a time when ideological policy differences seem to be fading due to policy convergence. In studying policy adoption, the authors use duration analysis for the 18 countries of Latin America during the 1985-2000 period when most of the market reforms in public utilities were adopted.