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Entrepreneurs and Economic Behavior: A New Approach to the Study of Latin American Politics

Published online by Cambridge University Press:  24 October 2022

Wilber A. Chaffee Jr.
Wilber A. Chaffee Jr.*
Affiliation:
The University of Texas at Austin
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Central to research on Latin American politics has been the pursuit of an explanation for both the stability and the instability of its various systems. Two general modes of analysis on Latin America have emerged. One, developed on the foundations of sociology and anthropology, has evolved as structural-functional analysis and its partner, behavioralism. The second mode grew out of an economic perspective and is having a profound effect on contemporary studies. This article will give a brief review of some of the analyses that have their bases in economics and will specifically apply assumptions of human behavior drawn from microeconomic theory to the problem of explaining systems of political competition and their resultant structures.

Type
Research Article
Information
Latin American Research Review , Volume 11 , Issue 3 , 1976 , pp. 55 - 67
Copyright
Copyright © 1976 by the University of Texas Press

References

Notes

1. Charles W. Anderson, Politics and Economic Change in Latin America: The Governing of Restless Nations (Princeton: D. Van Nostrand, 1967); Albert O. Hirschman, The Strategy of Economic Development (New Haven: Yale University Press, 1958), and Journeys Toward Progress (New York: Twentieth Century Fund, 1963).

2. This is the basis of Anderson's model based on resources and of Hirschman's “reform-mongering model.” See Anderson, Politics and Economic Change, chapters 3, 4, 5, and Hirschman, Journeys Toward Progress, pp. 227-97.

3. Warren F. Ilchman and Norman Thomas Uphoff, The Political Economy of Change (Berkeley: University of California Press, 1969), and The Political Economy of Development (Berkeley: University of California Press, 1972).

4. Herbert Simon, Models of Man (New York: Wiley, 1957), and Administrative Behavior (New York: Macmillan, 1947); Richard Cyert and James March, A Behavioral Theory of the Firm (Englewood Cliffs, N.J.: Prentice-Hall, 1963); Simon and March, Organizations (New York: Wiley, 1958).

5. Graham R. Allison, Essence of Decision: Explaining the Cuban Missile Crisis (Boston: Little, Brown, 1971), pp. 69-73, 74, 298-301.

6. Ibid., pp. 69-73.

7. Peter S. Cleaves, Bureaucratic Politics and Administration in Chile (Berkeley: University of California Press, 1974). Especially see pp. 2-21 for an outline of the cultural-socialization and “development administration” approaches, along with Cleaves' basis for rejection and his explanation of political economy as applied to public administration.

8. Guillermo A. O'Donnell, Modernization and Bureaucratic-Authoritarianism Studies in South American Politics (Berkeley: Institute of International Studies, 1973), especially pp. 166-99.

9. Robert L. Curry, Jr. and Larry L. Wade, A Theory of Political Exchange: Economic Reasoning in Political Analysis (Englewood Cliffs, N.J.: Prentice-Hall, 1968), p. 117. Cleaves also notes Wade and Curry; see Cleaves, Bureaucratic Politics, p. 13, n. 22.

10. Joseph A. Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper & Brothers, 1950), p. 282.

11. Anthony Downs, An Economic Theory of Democracy (New York: Harper & Row, 1957), p. 292. Also see the discussion of politicians' motives on p. 30.

12. Richard E. Wagner, “Pressure Groups and Political Entrepreneures: A Review Article,” Papers on Non-Market Decision-Making, Gordon Tullock, ed. (Charlottesville: Thomas Jefferson Center for Political Economy, 1966), pp. 161-70. See especially pp. 165-66.

13. Mancur Olson, Jr., The Logic of Collective Action: Public Goods and the Theory of Groups (New York: Schocken Books, 1968).

14. “Political Entrepreneurship and Patterns of Democratic Instability in Plural Societies,” Race 12:4 (April 1971):461-76. An expanded and broader discussion can be found in the same authors' Politics in Plural Societies: A Theory of Democratic Instability (Columbus, Ohio: Charles E. Merrill, 1972); quotes are from pp. 20, 60.

15. Norman Frohlich and Joe A. Oppenheimer, “An Entrepreneurial Theory of Politics” (Ph.D. diss., Princeton University, 1971), and, along with Oran R. Young, Political Leadership and Collective Goods (Princeton: Princeton University Press, 1971).

16. Philippe C. Schmitter, Interest Conflict and Political Change in Brazil (Stanford: Stanford University Press, 1971), pp. 367-68.

17. William P. Glade, “Approaches to a Theory of Entrepreneurial Formation” Explorations in Entrepreneurial History, 2d ser., 4:3 (Fall 1967), p. 256, n. 4.

18. Wayne A. Cornelius, “Nation Building, Participation, and Distribution: The Politics of Social Reform Under Cárdenas,” in Crisis, Choice, and Change: Historical Studies of Political Development, Gabriel A. Almond, Scott C. Flanagan, and Robert J. Mundt, eds. (Boston: Little, Brown, 1973), pp. 392-498.

19. Wayne A. Cornelius, Politics and the Migrant Poor in Mexico City (Stanford: Stanford University Press, 1975), p. 143. Chapter 6, “Community Leadership,” is a complete description of urban caciquismo. An earlier version of this study can be found in “A Structural Analysis of Urban Caciquismo in Mexico,” Urban Anthropology 1:2 (Fall 1972):234-61.

20. Claude Lévi-Strauss, Tristes Tropiques (New York: Atheneum, 1972). Translated from the French edition (Paris: Plon, 1958).

21. Ibid., pp. 305-9, also see p. 350.

22. Ibid., p. 308.

23. Peasants in Revolt. A Chilean Case Study, 1965-1971 (Austin: University of Texas Press, Institute of Latin American Studies, 1972). Monograph no. 28.

24. Ibid., pp. 67-68.

25. Ibid., pp. 87, 93.

26. John Womack, Jr., Zapata and the Mexican Revolution (New York: Vintage, 1968), p. 228.

27. Downs, Theory of Democracy, pp. 30-31. Also see Downs, “Why the Government Budget is Too Small in a Democracy,” World Politics 12:4 (July 1960):542.

28. Frohlich, Oppenheimer, and Young, Political Leadership.

29. C. A. M. Hennessy, “The Roots of Cuban Nationalism,” International Affairs 39 (July 1963):346-58.

30. Bohemia, 16 March 1952, as quoted in Hugh Thomas, Cuba: The Pursuit of Freedom (New York: Harper & Row, 1971), p. 786.

31. Thomas, Cuba, p. 724. See Barrera Pérez, Bohemia Libre, 19 July 1961.

32. James Q. Wilson, “The Economy of Patronage,” American Political Science Review 69:4 (August 1961):369-80, proposes this model as an alternative to Downs's vote-maximization. Wilson uses examples from machine politics and stresses the use of private goods to ensure tenure in party positions.

33. Gordon S. Black, “A Theory of Political Ambition: Career Choices and the Role of Structure Incentive,” American Political Science Review 66:1 (March 1972):144-59, presents this hypothesis along with a calculus of the politician's choice and empirical evidence.

34. “Those who knew Castro when young agree that he had always a passion for a historic role, for cutting a figure on the Latin American political scene which would echo the liberators Bolívar or San Martin. To cut a dash is so universal a desire in political life that no one should be surprised to discover it among the Cubans.” Thomas, Cuba pp. 1052-53.

35. “The whole theory of political order became directly relevant to the demand and supply of public goods,” James M. Buchanan, The Demand and Supply of Public Goods (Chicago: Rand McNally, 1968), p. 9; and “A state is first of all an organization that provides public goods for its members, the citizens,” Olson, Collective Action, p. 15.

36. David A. Brading, “Government and Elite in Late Colonial Mexico,” Hispanic American Historical Review 53:3 (August 1973):412-13.

37. Ibid., pp. 405-14.

38. Stuart F. Voss, “A Tale of Two Cities: The Dynamics of State History in Nineteenth-Century Mexico” (Paper presented at the Southwestern Council of Latin American Studies, 21-23 February 1974, Waco, Texas), pp. 6-7.

39. Ibid., p. 8.

40. David A. Brading, Miners and Merchants in Bourbon Mexico 1763-1810 (Cambridge, England: Cambridge University Press, 1971), p. 211.

41. John Womack, Jr., “The Spoils of the Mexican Revolution,” Foreign Affairs, 48:4 (July 1970):678, 680.

42. Merle Kling, “Towards a Theory of Power and Political Instability in Latin America,” The Western Political Quarterly 9:1 (March 1956):21-35.

43. James Malloy, Bolivia: The Uncompleted Revolution (Pittsburgh: University of Pittsburgh Press, 1970), p. 47.

44. Anderson, Politics and Economic Change, p. 141, especially n. 6.

45. Ibid., p. 143.

46. Paul Drake, “The Chilean Socialist Party and Coalition Politics, 1932-1946,” Hispanic American Historical Review 53:4 (November 1973): 640, 641n. Also see Ernst Halperin, Nationalism and Communism in Chile (Cambridge: The MIT Press, 1965), pp. 135-44.

47. James O'Connor, “The Foundations of Cuban Socialism,” Studies on the Left 4:4 (Fall 1964):102.

48. Rolando A. Bonachea and Nelson P. Valdés, Revolutionary Struggle 1948-1958, (Cambridge, Mass.: The MIT Press, 1972), p. 6.

49. Hugh Thomas, “Middle Class Politics and the Cuban Revolution,” in Claudio Véliz, ed., The Politics of Conformity in Latin America (London: Oxford University Press, 1967), p. 251.

50. The tie between the politics of Cuba and Kling's work is noted in Bonachea and Valdés, Revolutionary Struggle, p. 6. During the 1940s and 1950s, Cubans repurchased a majority of the sugar industry and opportunities for economic advancement increased. But by the Auténtico's period, politics as a source of profit was established and rival groups used violence as the means to dominate various governmental bodies, extort funds, and fight for “a larger share of wealth, power and influence,” ibid., p. 20. Also see O'Connor, “The Foundations of Cuban Socialism,” p. 98.

51. Jaime Suchlicki, University Students and Revolution in Cuba, 1920-1968. (Coral Gables, Fla.: University of Miami Press, 1969).

52. Bonachea and Valdés, Revolutionary Struggle, pp. 7-10, gives a brief history of university students organizing the anti-Machado struggle of the 1920s and 1930s.

53. Ibid., p. 33.

54. James O'Connor, The Origins of Socialism in Cuba (Ithaca, N. Y.: Cornell University Press, 1970), p. 44.

55. Fidel Castro quoted in Lee Lockwood, Castro's Cuba, Cuba's Fidel (New York: Macmillan, 1967), p. 140.

56. Robin Blackburn, “Prologue to the Cuban Revolution,” New Left Review 21 (October 1963), p. 64, n. 40.

57. Anderson, Politics and Economic Change, pp. 142-43.

58. One of the referees of the original article pointed out that the statement about dictatorship maximizing profit is too general and needs qualification. Not mentioned is the fact that the absolute profit for a political entrepreneur is, to a large extent, a function of the basic wealth of the country. More wealth and consequently more profit is available when a country is in an economic boom, such as when the Auténticos were in power in Cuba. Similarly, a North American or Mexican leader, even in a competitive situation, can reap greater profit than a dictator in a poor country like Haiti or Paraguay. I would like to thank the referee for this addition.

59. Stanley R. Ross, Francisco I. Madero, Apostle of Mexican Democracy (New York: Columbia University Press, 1955), p. 64.

60. The two studies are Donald J. Mabry, Mexico's Acción Nacional: A Catholic Alternative to Revolution (Syracuse: Syracuse University Press, 1973), and Franz A. von Sauer, The Alienated “Loyal” Opposition: Mexico's Partido Acción Nacional (Albuquerque: University of New Mexico Press, 1974). The Mabry book is the most valuable in terms of analysis that supports the findings of this hypothesis. Mabry asserts that PAN performs “an important function in the maintenance of the Mexican political system. One of its greatest effects upon Mexico has been to aid the regularization of the political system by offering competition in major electoral contests. … The government does support PAN by allowing it to exist. … The destruction of PAN, however, would be dangerous for two reasons. For one, the government might provoke a strong reaction admitting in such terms that opposition parties are myths. Second, many PAN leaders would probably reorganize as an underground movement and add their experience and contact to already existing resistance movements” (Mabry, Acción Nacional), pp. 190-93.

61. A number of these basic works have been cited earlier: Downs, An Economic Theory; Curry and Wade, Theory of Political Exchange; Olson, Collective Action; Frohlich, Oppenheimer, and Young, Political Leadership; Buchanan, Demand and Supply. Other works that should be noted include Kenneth Arrow, Social Choice and Individual Values (New Haven: Yale University Press, 1951); Brian M. Barry, Sociologists, Economists and Democracy (London, Eng.: Collier-Macmillan, 1970); James M. Buchanan and Robert D. Tollison (eds.), Theory of Social Choice: Political Applications of Economics (Ann Arbor: University of Michigan Press, 1972); Gordon Tullock, Toward a Mathematics of Politics (Ann Arbor: University of Michigan Press, 1968): Norman Frohlich and Joe A. Oppenheimer, Modern Political Economy (Englewood Cliffs, N.J.: Prentice-Hall, 1976). Additionally there are innumerable articles and a major body of literature on game theory that should be included in such a list.