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Chapter 2 conducts a systematic and comprehensive analysis of the left’s economic policies in Latin America. By way of defining the dependent variable of the study, this chapter first breaks down reforms into five main areas: privatizations/nationalizations; government spending; taxation; trade, financial, and monetary liberalization; and poverty alleviation. Second, it classifies countries based on the degree to which they carried out statist or pro-market policies. Third, it assesses the state of economic reforms in the region. Focusing on ten countries—eight governed by the left and two by the right as controls—Chapter 2 finds that, although remaining within the margins of a market economy, leftist governments were more likely to depart from market orthodoxy than their right-of-center counterparts, but that there is considerable variation among leftist governments’ policies. It also finds that nationalizations, taxation, and trade, financial, and monetary liberalization were the areas that experienced the most intervention in the economy.

Chapter 1 discusses the book’s relevance and novelty regarding its contributions to three main topics: the left, economic reforms, and party systems. It also provides an overview of the arrival of the left to power in Latin America at the turn of the 21st century amid the dominance of market orthodoxy as the prevailing economic paradigm. It discusses the reasons why the rise of the left seemed extremely unlikely—from the threat of military intervention to the disrepute of import-substitution industrialization (ISI)—as well as the domestic and international changes—including people’s habituation to democracy, the collapse of the Soviet Union, and the United States’ democracy promotion abroad—that allowed for a succession of electoral victories that seemed impossible only a decade earlier. Additionally, key concepts used throughout the book are defined, including the left, pro-market reforms, and statist reforms.

This chapter studies the drivers of the transformation of business groups in Spain and complements the traditional drivers (weak institutions and a closed economy) with new ones (industry regulation and owner ideology). These drivers vary with the ownership of business groups. First, state-owned business groups emerge following an ideology of national economic development, reduce scope with pro-market reforms, and continue to exist in line with the ideology of social stability and strategic development. Second, bank-owned business groups emerge as a result of industry regulation, and decline with deregulation after pro-market reforms. Third, family-owned business groups emerge to benefit from opportunities in a closed economy with weak institutions, and refocus in response to competition after pro-market reforms. Finally, labor-owned business groups emerge as a result of an ideology of social development, and continue after pro-market reforms in line with this ideology.