This article analyses critically the applicability of current theories of welfare state retrenchment to the 2004 public pension reform in Mexico, with the 1995 reform acting as a complementary case. In particular, this article contributes to the literature by analysing the reasons for which a potentially unpopular reform was successfully enacted. Available evidence suggests that – contrary to the existing literature's assertions – Mexican politicians responsible for the 2004 reform sought credit for these changes, rather than to avoid blame. Also, by presenting the reform as necessary to enhance socioeconomic equality, politicians were able to gather substantial popular support and defeat labour unions opposing this pension restructuring process. Hence, we propose that by framing the public debate as a matter of social justice, promoters of pension reform increased significantly popular support for the retrenchment of important benefits from a core group of civil servants, and successfully pressured Congress to promulgate this reform. We suggest that this created a reform path that will facilitate future efforts at reforming the remaining public pension schemes in Mexico.
Labor Politics in Latin America assesses the capacity of working-class organizations to represent and advance working people’s demands in the era of globalization and neoliberalism, in which capital has reasserted its power on a global scale. The book’s premise is that the longer-term sustainability of development strategies for the region is largely connected to the capacity of working-class organizations to secure a fairer distribution of the gains from growth through labor legislation reform. Its analysis suggests the need to take into consideration the wider structural changes that reconfigured the political maps of the countries examined (Argentina, Brazil, Chile, Mexico, and Venezuela), for example, globalization and its impact on democratic transformation in the region, operating within longer time frames. It is precisely this wider structural analysis and historical narrative that allows the book’s case studies to show that, even in the uncovering of substantial variation, what becomes evident in the study of Latin America over the last three decades is the overwhelming reality that for most workers in the region, labor reform—or the lack thereof —in essence increased precarity and informality and weakened labor movements.
The literature addressing market dynamics typically assumes that reforming labor legislation has a direct impact on economic performance, the configuration of labor markets, and the strength of labor organizations. Within this literature one prevalent school of thought advocates flexibilizing labor laws as the key to creating economic prosperity, enhancing labor productivity, increasing formal sector employment, and successfully fighting poverty and socioeconomic inequality. I test these assumptions by analyzing the case of Brazil between 1995 and 2010. My findings suggest that reforms seeking to flexibilize the Brazilian labor code do not significantly change the country's labor market or economy. I propose that transformations in international economic contexts as well as differing policy orientations of successive Brazilian federal governments may hold more explanatory power in accounting for labor market changes during this time period.
This paper analyses the Mexican banks’ loan policies since 1995. Based on a series of interviews, we find that Mexico’s financial system is currently experiencing two crises. First, banks lack confidence in the business practices of small and medium size enterprises. This negative attitude is reinforced by the bankers’ perception of a culture of non‐repayment. Banks also loan little to big businesses, which rely on the international money market. Second, bankers believe small and medium size business owners lack confidence in the Mexican financial system. Consequently, loan activities are down significantly. Socio‐economic growth and development in Mexico will depend upon a profound change in structures, practices and attitudes surrounding loan activities.
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