(Page 2 of 25) - Historical Legacies and Policy Choice: Labor and Public Sector Reform authored by Paczynska, Agnieszka.

Introduction

Over the last couple of decades much of the developing world has been struggling to

implement structural adjustment programs aimed at reducing state involvement in the economy.
Studies that have analyzed the politics of economic reforms have focused primarily on the state
and have given scant attention to the role that interest groups play in the reform process. The
success and failure of reforms has been primarily explained in terms of state attributes, be they
state autonomy, bureaucratic capacity or technocratic insulation. What is striking in these
various scholarly accounts and discussions is the dearth of systematic attention to interest groups
as political actors who attempt to influence the types and pace of reforms being implemented. It
is only more recently, as the complexities and challenges of pushing through fundamental
economic restructuring became increasingly apparent, that there has been a budding recognition
among scholars that the state-centric approach may have outlived its usefulness. Despite the
renewed interest in the role that social actors play in the process of economic reforms, however,
we still lack a full theoretical understanding of when interest groups succeed in shaping the
reform agenda and when they fail to do so.

My research shows that analytic marginalization of interest groups is in fact not

consistent with a significant role they have played in the process of reform design and
implementation across a range of cases. The question that this paper addresses is what accounts
for the variation in social actors’ ability to affect economic restructuring policies? It does so by
first disaggregating the reform process. While economic restructuring program typically entails a
complex array of stabilization and structural adjustment measures, the best way to evaluate
whether and if so in what ways interest groups attempt to influence these processes is to look at
the discrete components of the reform package.

In my paper I explore how social actors attempt to influence the processes of economic

restructuring by focusing on just one aspect of economic reforms, privatization of the public
sector, and on one interest group, labor organizations, in order to more fully understand the
interaction between economic restructuring processes and interest groups as political actors. I
do so by examining the first decade of reforms in four cases: Poland, Egypt, Mexico and the
Czech Republic.

All four were faced with increasingly unmanageable economic crises and

embarked on ambitious programs of economic restructuring which included the sale of their vast
public sectors. The ability of labor organizations to influence the divestiture program in the four
cases, however, differed substantially, thus providing an opportunity to investigate the conditions
that facilitate or hinder unions’ ability to carve out an important role during structural adjustment.

In Poland and Egypt labor organizations became important players during the reforms,

while in Mexico and the Czech Republic their views were largely ignored by the governments.
In this paper I propose that the best way of understanding when labor organizations will or will
not be able to influence the design and implementation of privatization strategies is best
explained by the resources at their disposal as market reforms are commenced. Those resources,
in turn, will differ depending on the relationship that evolved between state and labor in the pre-