Neo‐liberalism, big business and the evolution of interest group activity in Latin America

• Published date: 01 November 2014
• DOI: http://doi.org/10.1002/pa.1439
• Author: Alex E. Fernández Jilberto,Barbara Hogenboom
• Date: 01 November 2014

■Special Issue Paper

Neo-liberalism, big business and the

evolution of interest group activity

in Latin America

Barbara Hogenboom

1

*and Alex E. Fernández Jilberto

2

1

Centre for Latin American Research and Documentation (CEDLA), Amsterdam, The Netherlands

2

University of Amsterdam, Amsterdam, The Netherlands

In the 1980s and 1990s, the confluence of the third wave of democracy, neo-liberal economic reforms and economic

crises in Latin America, produced several significant consequences for the region’s underdeveloped interest group

systems. By using an international political economy approach, this article examines these developments and

particularly how neo-liberal policies affected the political fortunes of big business plus the broader political fall-out

from neo-liberal policies. In essence, we make the argument that, for three reasons, the consequences of the confluence

of these three developments for Latin America’s emerging interest group system are mixed in terms of a more

pluralist, open-access system. First, the influence of big business persists and in many ways has been enhanced as

the economically and politically privileged position of large private companies since the 1980s has given way to

economic concentration, transnationalization and the rise of multilatinas (Latin American multinational companies,

which primarily operate across the region). Second, political opportunities have been opened for a range of interests,

many from the left, that likely would not otherwise have emerged so early in the region. Third, the election of leaders

opposed to neo-liberal policies may transform Latin America’s political economy and aid in the democratization of its

interest group system. Copyright © 2012 John Wiley & Sons, Ltd.

INTRODUCTION

The past 30years has seen the development of an

extensive literature on neo-liberalism and its effects

on Latin American politics, and more broadly, on

the region’s political economy. This includes studies

of the impact of neo-liberal policies on individual

countries and the fall-out from these policies, such

as the rise of politicianswith anti-neo-liberal agendas.

In contrast, there is little specific analysis of the

effects of neo-liberalism on Latin America’semerging

interest group systems as they transitioned from the

strictures of authoritarian state corporatism to a

modified corporatism to, in some cases, a fledgling

pluralism.

This article attempts to fill this analytical void

by focusing on the effects of neo-liberalism on the role

of one of the long-time political forces in the region—

big business. Big business is defined in this article as

large national businesses based in the region as well as

large foreign corporations operating in Latin America.

It is contrasted with small-sized or medium-sized

business that tends to be confined to a particular

locality with a relatively small number ofemployees

and capitalization. Besides neo-liberal policies,

this role of big business was also shaped by the

simultaneous transition to democratic rule and

several economic crises. Thus, in large part, the

analysis in the article is based on an international

political economy assessment of the interaction of

large companies, Latin American economies and the

region’s politics with international economic and

political influences. It shows that the privileged

position of big business since the 1980shas produced

several important changes: economic concentration,

transnationalization and the rise of multilatinas (Latin

American multinational companies, which primarily

operate across the region). In combination, these

simultaneous developments and the political fallout

from neo-liberal policies and the reaction of big busi-

ness to this fallout provide insights into the evolution

of Latin America’s interest group systems in general.

In terms of the developmentof the region’s interest

group systems in a directionof the established liberal

democracies, characterized by increased pluralism,

open access and the professionalization of strategies

*Correspondence to: Barbara Hogenboom, Centre for Latin

American Research and Documentation (CEDLA), Amsterdam,

The Netherlands.

E-mail: b.b.hogenboom@cedla.nl

Journal of Public Affairs

Volume 14 Number 3 pp 283–295 (2012)

Published online 21 May 2012 in Wiley Online Library

(www.wileyonlinelibrary.com) DOI: 10.1002/pa.1439

Copyright © 2012 John Wiley & Sons, Ltd.