Introduction

Abstract

During the 1980s, many social scientists expressed a renewed optimism about the prospects for democratic growth across the world.¹ This optimism was triggered by key events including the collapse of dictatorships in Southern Europe during the 1970s, in the Southern Cone Latin American countries and also in East Asian countries.² The year 1989 in particular marked a ‘watershed’ in world politics with the fall of the Berlin Wall which signalled the beginning of the end of Communism in the Soviet Union. Huntington, among the more extreme analysts, claimed that a ‘third wave’ of democracy was sweeping across the globe.³ In the same period, an economic debate which had been growing in importance during the previous decade became yet more influential. The central issue concerned the limits of the postwar model of a mixed economy which was increasingly questioned in the industrialized countries.⁴ The efficiency and performance of the public sector were deemed to be constraints on economic growth. A reconsideration of the nature and role of the state in developed and developing market economies led to the view that government involvement had been excessive.⁵ Attempts were made in the former Soviet Union to replace the old model of central planning with one that was more market-oriented and export-led. In the aftermath of the 1982 debt crisis, most Latin American governments decided to pursue dramatically different economic policies and abandoned the former model of import substitution industrialization (ISI) for a neoliberal model which had at its heart a reduction of the role of the state in the economy.