Political Institutions, Policymaking Processes, and Policy Outcomes: The Case of Uruguay (original) (raw)

2004, … Processes and Policy …

Uruguay generates different kinds of policy outcomes. First, relatively stable policies, such as the commercial and financial openness of the country. Second, inflexible and low quality policies, such as those related to social policies, some areas of the State reform (civil servants' wages and hiring mechanisms), the bankruptcy regime, and so on. Third, volatile outcomes across economic shocks, such as the discretionary public spending side. In the cases in which history or the availability of external enforcement devices do not lead to relatively stable policies, the main outer feature of Uruguayan policies is rigidity. The source of rigidity appears to be a mixture of institutional factors (multiple veto points, factionalized parties and direct democracy mechanisms) and political conflict (divergent policy preferences), in which it is very costly to move from the status quo, due to the credible threat of policy reversal. Political institutions in Uruguay are conducive to political compromise with a short run perspective, but not to effective cooperation about stable and flexible policies in the long run. The difficulty to achieve intertemporal political exchanges is consistent with the main characteristics of the political environment: large number of key political actors and veto points, a relevant amount of unobservable political moves, poor enforcement technologies in the economic arena, politically influenced bureaucracy, political exchanges occuring outside the legislative arena, a particular constellation of parties and preferences, and costly policymaking and institutional change.