Presidents, Ruling Parties, and Party Rules: A Theory on the Politics of Economic Reform in Latin America

Zealand, Paraguay, Romania, Spain, and Zambia, statist parties won elections, often running on a traditional platform of state intervention in the economy, only to discover that their very own governments were ready to jettison this platform in favor of market-oriented economic reforms. These turnarounds not only contradicted the parties' historical platforms, but also penalized important constituents of the parties in the short term. Invariably, these parties reacted to these reforms with utter dismay. This dislocation in executive-ruling party relations is a recurrent and understudied political issue in every process of market-oriented economic reform. In contrast to prevailing theories on the subject, which view reform implementation as contingent on struggles between the executive and antireform interest groups and opposition parties, this article argues that the key conflict to resolve is between the executive and the ruling party. If left unchecked, executive-ruling party dislocation will hamper the capacity of governments to implement reforms. This article elaborates the reasons why market-oriented economic reforms produce dislocation in executive-ruling party relations. However, it also suggests that this dislocation is resolvable, depending on the strategies adopted by the executive. Three possible responses to these dislocations are discussed. The first is a partyneglecting approach: the executive simply neglects the concerns of the party and attempts to implement the reforms by bypassing the ruling party. The second approach is party-yielding: the executive cedes to the demands of the party, in essence abandoning the reform program. The third approach is party-accommodating: the executive negotiates some compromise with the party, granting political concessions in return for the party's consent to implement reforms. All of these responses affect the politics of reform implementation. Specifically, they affect two variables: political stability during the reform process and depth of reform implementation. A party-neglecting approach engenders the highest degree of instability and, hence, implementation difficulties. The party-yielding approach might placate tensions in executive-ruling party relations, but at the expense of reform implementation. Whether reform abdication will improve stability in overall