Contingent Democrats: Industrialists, Labor, and Democratization in Late-Developing Countries Author(s): Eva Bellin Source: World Politics, Vol. 52, No. 2 (Jan., 2000), pp. 175-205 Published by: The Johns Hopkins University Press Stable URL: http://www.jstor.org/stable/25054108 Accessed: 24/07/2009 16:13 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=jhup. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that promotes the discovery and use of these resources. For more information about JSTOR, please contact [email protected]. The Johns Hopkins University Press is collaborating with JSTOR to digitize, preserve and extend access to World Politics. http://www.jstor.org CONTINGENT DEMOCRATS Industrialists, Labor, and Democratization in Late-Developing Countries ByEVABELLIN* forces matter social cent DO literature in democratic on democratization transition? Most of the re argue to the contrary. A on the role of elites and leadership, would surge of new research has focused of political the importance institutions, strategic trayed in these studies path-dependent outcome. and the consequences of is variously reform.1 Democracy por as the crafted of the elites, product enlightened for democratic choice yield of sticky institutions, or simply a conjunctural Although social forces are occasionally quiries into the strength of associational this research has been coalitions,3 that has dominated centric work decade.4 As Remmer points out, given the nod by in life2 or the role played by overwhelmed comparative enthusiasm state by the flood of for the past politics for bringing the state *The author gratefully acknowledges the assistance of Frank Schwartz, Atul Kohli, Khaled Helmy, Tom Ertman, Dan Posner, and the Singh, Deborah Yashar, Susan Pharr, Sam Huntington, on Politics at Harvard University of the Sawyer Seminar/Research Workshop Comparative for their comments on this research. Earlier versions of this paper were presented at the annual meet November of East Studies Association 1997, and the annual meeting Conference, ing of the Middle the American 1999. Political Science Association, Adanta, September 1 O'Donnell and Philippe See, for example, Guillermo Schmitter, Transitions from Authoritarian Rule: Tentative Conclusions about Uncertain Democracies (Baltimore: Johns Hopkins University Press, 1986); Guiseppe Di Palma, To Craft Democracies: An Essay onDemocratic Transitions (Berkeley: Uni Naunihal members and Richard G?nther, Elites and Democratic Consolida versity of California Press, 1990); John Higley tion in Latin America and Southern Europe (Cambridge: Cambridge University Press, 1992); Barbara on the Leninist MAComparative Geddes, Legacy in Eastern Europe," Comparative Politi Perspective inNew cal Studies 28 (July 1995); Arend Lijphart and Carlos H. Waisman, eds., Institutional Design Democracies: Eastern Europe and Latin America (Boulder, Colo.: Westview, 1996). 2 See Robert Putnam, Making Democracy Work (Princeton: Princeton University Press, 1993); Au Civil Society in theMiddle East (Leiden: E. J. Brill, 1995). gustus Richard Norton, 3 in Costa Rica and Guatemala See Deborah Yashar, Demanding Democracy: Reform and Reaction Stanford University Press, 1997); Gregory Luebbert, Liberalism, Fascism or Social (Stanford, Calif: Democracy: Social Classes and the Political Origins ofRegimes in Interwar Europe (New York: Oxford Uni Press, 1991). versity 4 Recent exceptions include Ruth Berins Collier, The Contradictory Alliance: State, Labor Relations and of of California Research Series, no. 83 (Berkeley: University Regime Change inMexico, University Labor and Democratization; California, 1992); Ruth Berins Collier and James Mahoney, Comparing the First and Third Waves inEurope and Latin America, Institute no. 62 of California, May 1995). (Berkeley: University WorldPolitics 52 (January2000), 175-205 of Industrial Relations, Working Paper 176 back WORLD POLITICS in has pushed society out, largely excluding social forces from comparative analysis.5 in political science put social It was not always so. A long tradition more social classes?center forces?and stage when specifically explain outcomes. in the tra Both liberals and Marxists democratic ing writing dition of political capitalist economy industrialization to the protagonists long pointed as the historical agents of of democratization (although there was disagreement over which protagonist played the leading role). Focused primarily on the historical experience of the early industrializing schools. countries ofWestern Europe, these scholars fell into two One led by Moraze, and Moore, identified the school, Hobsbawm, as the class agent of democracy.6 Moore summarized this capitalist class no view in his inimitable "no Accord bourgeoisie, democracy." phrase was the consequence to this school, West of ing democracy European over state the absolutist the traditional, feudal colliding with capitalists barriers it posed est, capitalists parliamentary to inter advance. Motivated by this material capitalist to create economic mobilized their burgeoning power control over the institutions and impose parliamentary state.7 A second school, led byMarshall, Thompson, Bendix, Therborn, and Stephens, identified and, most recently, Rueschemeyer, Stephens, as to this the class agent of democracy.8 the working class According achievements of the capitalist class fell far short of school, the political were in estab interested they argued, democracy. primarily Capitalists, not While forms of rule, democracy. capitalists lishing liberal supported the the introduction of representative and of government protection civil liberties, they opposed the extension of political rights to the lower classes?which for these scholars is the mark of true democracy. In 5 The Resurgence of Institu Karen L. Remmer, "Theoretical Decay and Theoretical Development: tional Analysis," World Politics 50 (October 1997), 57. See also Joel Migdal, Atul Kohli, and Vivienne and Transformation in the Third World (New York Shue, eds., State Power and Social Forces: Domination Press, 1994). Cambridge University 6 Charles Moraze, The Triumph of theMiddle Classes (Garden City, N.Y: Anchor Books, 1968); Eric Hobsbawm, 1969); and Barrington Moore, Industry and Empire (Harmondsworth, England: Penguin, and Democracy (Boston: Beacon Press, 1966). Social Orgins ofDictatorship in David and Political Change: A European 7James R. Kurth, "Industrial Change Perspective," in Latin American Press, ed., The New Authoritarianism (Princeton: Princeton University Collier, 1979). 8T.H. Marshall, Press, 1950); E. P. Citizenship and Social Class (Cambridge: Cambridge University The Making 1963); Reinhard Bendix, Thompson, of the English Working Class (New York Pantheon, Nation Building and Citizenship "The Rule of Cap Press, 1964); Goran Therborn, (New York: Wiley 103 (1977); and Dietrich Rueschemeyer, ital and the Rise of Democracy," New Left Review Evelyne and and John D. Stephens, Capitalist Huber Stephens, (Chicago: University Democracy Development of Chicago Press, 1992). 177 CONTINGENT DEMOCRATS itwas stead, the working class, organizationally empowered by capital ist development andmaterially motivated by the desire to seek political that fought for universal suf for its economic subordination, was the true class of As democrati the such, frage. working champion inWestern zation Europe.9 on at least both schools their differences, however, Despite agreed is neither three central verities of democratic transition. (1) Democracy redress an evolutionary nor necessity a conjunctural outcome; rather it is the product of struggle inwhich social forces play a central role. (2) Interest\ not enlightenment, drives regime change. And (3) among the panoply of interests material interests trump all people politically, are most to cham that social forces suggests likely that animate others. This analysis when democracy pion the authoritarian their economic interests put at odds with them state. But if capital and labor played an important role in championing countries in the early industrializing of Western of political (as the classic works economy argue),10 the ques Europe role tion is whether these social forces are likely to play a comparable A brief survey of late-developing in the context of late development. democratic reform countries shows wide variation for the democratic in the enthusiasm project. Organized in some of democratization champion of capital and labor an enthusiastic labor has been contexts (Korea, Chile, Zam bia) but amore diffident partisan elsewhere (Mexico, Tunisia, Egypt). Private sector industrialists have championed democratization in some 9 Revisionist that ascribes the rise ofWest historians have taken issue with any simple mythology or workers; to the work of a single, self-conscious social class, whether capitalists European democracy Socialism 43 see Alex Callinicos, International and Historical Materialism," "Bourgeois Revolutions (June 1989). Classes were internally divided, individual classes were often forced into coalitions with also shaped regime others to achieve political success, and other factors (institutional, international) of this process. In fact, a care change. The best works of political economy recognize the complexity and Stephens ful reading of Rueschemeyer, (fn. 8) reveals a nuanced argument along just Stephens, in Interwar Europe Revisited," World these lines. See Thomas Ertman, "Democracy and Dictatorship P?:j 50 (April 1998). institutions and the agency of elites does not the importance of preexisting But acknowledging transition. Elites do not operate in a vacuum: deny the central role played by social forces in democratic their political choices are governed not only by ideals and interests but also by social realities (for ex the ample, the economic pressure posed by the threat of capital flight; the political pressure posed by are themselves a and potentially threat of organized destabilizing popular protest). And institutions creation of the political process, subject to change in the face of political pressure and struggle. De itself is an example of institutional mocratization transformation, bought through the struggle of op resources and agendas. The question are is not so much equipped with different posing interests that as which social forces are likely whether social forces play a key role in the struggle for democratization to take up the cause. 10 this position. See Collier and Mahoney Recent studies have challenged (fn. 4), who argue per a much more negligible transition than role in the first wave of democratic suasively that labor played that proposed by Therborn and others. 178 WORLD POLITICS places (Korea by themid-1980s, Brazil by the late 1980s) but have dis dained it in others (Indonesia, Singapore, Syria). Can this variation be explained? of economic Level alone development industrialists among cannot account for it. Enthu not directly contra in per the of old capita GNP, expectations some cases sector and new versions of modernization In theory. private have proven most enamored industrialists of democratic transition pre moments in of economic decline in others, (Brazil); great cisely they siasm for democracy correlate with growth and labor does even in a context of of democratization highly suspicious some economic (Indonesia, Malaysia). spectacular growth Similarly, at times trade union movements have campaigned for democratization a of great growth context others while it in embraced have of (Korea) economic (Zambia). catastrophe have proven Cultural also proves heritage within country intertemporally similar cultural endowments asm of labor and constant. itages Egypt (both are majoritarian drawn Comparisons as between countries with as well variation reveal dramatic industrialists and Tunisia, less than decisive. cases even as culture remains for democracy, for example, possess similar cultural her un Sunni Muslim countries, relatively riven by ethnic cleavage, and saddled with a long history ofWest labor exhibits colonialism), yet organized European tudes toward democratization in the two countries. comparison poral increase dramatic within the in industrialists' cases of Brazil enthusiasm be hard pressed past fifteen years. Yet one would was a revolution in the core cultural preceded by country. This article tion in class ment. Close offers support in the enthusi an alternative atti very different intertem Similarly, and Korea shows a over the for democracy to argue that this shift endowments of either framework for democratization for explaining the varia in the context of late develop a few core cases, to more in addition cursory study of examination of several others, helps specify the conditions under which are more or less to embrace democratization. capital and labor likely to the article subscribes the central verities of the political Although economy tradition, often make opment mocratization it argues that the peculiar of late devel conditions and labor much more ambivalent about de capital than was the case for their counterparts among early industrializes. The theory will specify the conditions that give rise to this diffidence but will also suggest (and empirically anchor) the way these conditions may astic about democratic to make both social forces more enthusi change reform. The general lesson of this examination is CONTINGENT DEMOCRATS 179 that capital and labor are for the very reason that contingent democrats11 are consistent of their material interests. defenders Like their they countries will cham predecessors, capital and labor in late-developing are as democratic institutions when these institutions pion perceived advancing mocratic their material interest interests. is contingent that are not necessarily Briefly put, capital and But the pairing of material and de historical circumstances specific upon in the context replicated of late development. turns for democracy largely on two variables. For two variables are state the and capital, dependence are state and aristocratic En fear; for labor, they dependence position. labor's enthusiasm thusiasm varies inversely with for democracy class score on these two variables. Where that score is split, class attitude toward democratiza come into tion is indeterminate and other variables play. a discussion To support this argument, the article begins with of the theoretical the It logic underlying contingency hypothesis. proceeds of two core cases for capital (Indonesia and investigation empirical two and for labor (Mexico and Korea)?cases chosen for their Korea) on the cases (Mexico dramatic variation variable. Additional dependent with and Saudi Arabia for capital; Egypt for labor) are added to correct for that collinearity of other number eliminate in the two variables. appears independent Finally, cases (Tunisia, Brazil, are and Zambia) presented a to rival hypothesis.12 in the cases investigated absolute parallelism space prevents for capital and labor; it also precludes the experience of cap recounting case in all, ital and labor for every country mentioned studies (sixteen not com the of variation). counting Fortunately, intertemporal logic not the tale of require exhaustive parison does parallelism. Recounting Limited some omitted dundant cases (for example, (its experience parallels key variables) and would 11 Guillermo see O'Donnell, be largely re capital) would our that of Indonesian capital along Tunisian add little leverage to our hypothesis. Re to as describes the private sectors commitment democracy "contingent"; in "Substantive or Procedural Consensus? Notes on the Latin American Bourgeoisie," in Latin de Souza, and Akko A. Boron, eds., The Right and Democracy Chalmers, Maria Douglas America (New York: Praeger, 1992). 12 that cultural heritage determines political disposition To disprove the hypothesis toward democ and Brazil are added to the discussion of labor and capital, respectively. Using Mill's racy, Tunisia of difference, is drawn between cases showing overall similarity in cultural en method comparison a crucial dowment for capital) but possessing (Tunisia and Egypt for labor; Brazil pre- and post-1980s in our independent in outcome. To disprove the difference variables, resulting in a crucial difference toward democracy, that economic growth and prosperity determine political disposition hypothesis Zambia and Brazil are also added to the discussion of labor and capital. Using Mills method of agree is drawn between cases showing overall difference in level of economic growth and ment, comparison O'Donnell (Zambia and Korea for labor; Brazil and Korea for capital) but sharing crucial similarity prosperity their values on our independent variables, resulting in a striking similarity in outcome. in 180 WORLD POLITICS counting the tale of other omitted cases (for example, Saudi labor) our discussion with conditions (for ex only confuse exceptional are in Saudi Arabia the fact that the vast majority of workers ample, in with short-term horizons the little inter and nonnationals kingdom would est in shaping Saudi political institutions). case selection Careful cannot eliminate all the methodological prob lems involved in drawing scientific inference here. The investigation of ten cases not does independent of indeterminacy the problem when four case selection on the Furthermore, proposed. eliminate are variables dependent variable introduces the possibility of biased results.As King, only random truly verify theory.13 Nevertheless, seems sufficient to suggest the plausibility, ity, of the contingency hypothesis. Keohane, cases can and Verba observe, selection of many multiple the evidence presented if not the incontrovertibil The Theory State fear, and aristocratic toward democratization. dependence, labor's disposition elaboration. merits With regard to position Each capital, state and shape capital of these variables refers dependence to the degree towhich private sector profitability is subject to the discre tionary support of the state. Such support is typically delivered in the form of subsidized tion in the definition inputs, protected of economic market policy, position, and state close collabora containment of labor and the capital poor. Two quite different state logics may fuel such support. Where the state is developmental (for example, Japan and Korea), it identifies national prosperity with that of the private sec tor and explicitly sponsors the development of the latterwith the aim of the state is pat rapid economic growth.14 By contrast, where it also and identifies pros Indonesia (for example, Senegal), that the of but here the state's with sector, governing perity private not the achievement economic for the na is of growth rapid objective achieving rimonial tion as awhole But whatever private ognize sector that as state elites. personal gain for the the governing of state, sponsorship makes logic because diffident about democratization capitalists so much their profitability hinges on state discretion. Therefore, the rec in 13 Social Inquiry: Scientific Inference in and Sidney Verba, Designing Gary King, Robert Keohane, Press, 1994), 115-49. Qualitative Research (Princeton: Princeton University 14 The term "developmental state" was coined by Chalmers Johnson, MITI and theJapanese Miracle Press, 1982). (Stanford, Calif: Stanford University CONTINGENT DEMOCRATS 181 state and patrimonial with cases, cozy collaboration developmental not to is the contestation and economic elites, key public opposition, success. Where re to the state elites are hostile project of democratic both form (and few authoritarian rulers relish the thought of relinquishing unaccountable their distance power), private from it. sector entrepreneurs sector to be wary capital is also likely that do vary with the character of the between the relations private logic rules, Private reasons mental are careful of democratization to keep for state. Where sector develop and the state are antici and collaborative. So long as the state generally typically positive com sector not the interests of does feel pates private capital, capital to create to ensure state formal institutions democratic pelled accountability. Where patrimonial logic rules, however, private sector profitability typically resides in shady relations with state elites. Under one of the standard of conditions, transparency, selling points to prove less attractive to entrepreneurs. is In this way, democracy, likely or devel "collaborative whether governed by patrimonial profitability" for democratization enthusiasm among pri logic discourages opmental vate sector capitalists. the logic of collaborative the second variable Beyond profitability, these sector is fear. Private for democracy enthusiasm is first and concerned, foremost, with protect capital everywhere and the of its in ing property securing long-term profitability rights vestments is the guarantee of order.15 But where poverty through that hinders private sector widespread communists the mass threatens and the poor are potentially well mobilized (whether by in postwar Korea or by Islamists in contemporary Egypt), inclusion and empowerment associated with democratization to undermine the basic interests of many capitalists. At best, such inclusion threatens to flood politics with "the logic of distribution" rather con At worst, it potentially the "logic of accumulation."16 to overturn the propertyless the social order. Thus, the means a sense of is associated with democratization deep capitalists, than fers upon for many and is regarded with distrust. and fear prove to be more should state dependence Why commitment barriers to democratic among late-developing than among their predecessors? social threat significant capitalists 15 See Leigh Payne, Brazilian Industrialists and Democratic Change (Baltimore: Johns Hopkins Uni versity Press, 1994). 16 inAfrica: A Dissenting and Economic Change See Thomas Callaghy, "Civil Society, Democracy and Naomi Chazan, eds., in Donald about Harbeson, Rothchild, Societies," John Resurgent Opinion Civil Society and the State inAfrica (Boulder, Colo.: Lynne Rienner, 1994), 243. 182 WORLD as Alexander Gerschenkron POLITICS made clear,17 late development on the state. heightens Embarking com the process industrialized j already means sector and highly that private mercially integrated, competitive state seek (since the capitalists typically help with capital accumulation for late industrializers often exceeds the of start-up capital capabilities First, the dependence of capitalists in aworld of industrialization on and with trade protection individual, first-generation entrepreneurs) so form of tariff the (in barriers, on). Such height import quotas, and sector ened state dependence makes all the more private capitalists state of with elites. By wary embracing political projects unpopular econ lower start-up costs and a less integrated international contrast, success the of early industrializers less contin omy made significantly on state with much gent support, endowing greater political capitalists latitude. state the developmental mission that guides in sponsorship sector countries also many encourages late-developing private capitalists to cleave to the state and eschew the cause of democracy. Where the can state is sector to it expect private developmental, capital anticipate contrasts their interests to a This with conditions large degree. sharply Second, to be hos faced by early industrializers whose feudal state was perceived tile to capital. It was precisely this hostility that fueled capital's democ ratic conversion in the first transition. But during late-developing state is often seen to be where the authoritarian serving the of private sector capital, why embrace democracy? one wonder be more fearful of Finally, might why capital would than transition. the first after all was democracy today during Poverty no less or in than it pervasive eighteenthnineteenth-century England countries interests is today in many and so the empowerment countries, late-developing a of the poor should have posed threat to interests comparable capital's and made of The difference, early capitalists equally leery democracy. in society across lies not in the relative number of poor people however, time but rather in the degree of mass empowerment proposed by the in each era. During the first transition the hege project on a cast rather than discourse had liberal democracy distinctly one. Hence, an was under inclusionary capital's embrace of democracy stood to be entirely consistent with exclusion of the propertyless. Since come mass to has stand for mak then, however, inclusion, democracy to for contemporary democratic discourse ing it difficult justify exclu or sion based on property, in ideas, then, evolution race, gender. The democratic monic 17 Gerschenkron, Economie Backwardness inHistorical Perspective (Cambridge: Harvard University Press, 1962). CONTINGENT goes far toward explaining capitals across time. With democratization many capitalists 183 DEMOCRATS divergent spelling countries in late-developing enthusiasm for democracy mass empowerment are more diffident today, about embracing this political project. enthusiasm for democracy labor? Labor's organized on two variables: turns state and aristocratic posi largely dependence to which tion. State dependence refers to the degree labor organized on state for its and support vitality, organizational viability, depends What about its reliance on collective action to estab with everywhere, lish influence, is much more dependent upon the state than is private sector labors re this run-of-the-mill But beyond dependence, capital.18 can s on state state of a corpo liance the be deepened by the adoption clout. Labor ratist unions with financial that provides strategy in and for support loyalty exchange political labor material benefits with arrangement provides its true market power can deliver?but and organizational self-restraint. This far in excess of what at the price of its autonomy. rise to diffidence about upon the state gives dependence mocratization for reasons similar to those Labors capital. comes Labor to fear biting de in the case of that operate the hand that feeds it, that is, jeop ardizing the flow of state benefits by embracing political projects that are certain to evoke of state elites. To the contrary, organized, are its interests served by main labor believes better state-dependent not contestatory, relations with the state. taining collaborative, is for democracy The labors enthusiasm second variable modulating to which is economi aristocratic labor degree organized position?the labor vis-?-vis the organized cally privileged general population. Where enjoys such solidarity" a with the wrath stance, privileged the unorganized it is likely to exhibit a degree of "dis masses sector and/or in the informal labors aristo and especially where such conditions, agriculture. Under intervention cratic position is a consequence of political rather than a to be its interests of true market reflection labor will power, perceive a cozy the state (even if with served by maintaining relationship are authoritarian), rather than by cham the institutional arrangements to mass state accountable interests institutions that make the pioning better is, democracy). conditions Again, (that that the probability of late development heighten and hence more diffi and/or aristocratic be state dependent dent about the democratic spells typically project. Late development it is accompanied structural weakness for labor because by industrial labor will 18 "Two Logics Claus Offe and Helmut Wiesenthal, Social Theory (Greenwich, Conn.: JAIPress, 1980). of Collective Action," in Political Power and WORLD 184 in a context ization izes the "reserve of workers. Late POLITICS of situation universal global capital mobility. This of labor and undermines the power army" bargaining means the importation of industrial tech timing also to be capital intensive rather than labor intensive, and of labor surplus and further weakens the problem labor's market Such weakness labor to look to the encourages position. state for union dependence and nurturing remedies, political fostering that tends nology this exacerbates diffidence of labor who about surplus are organized in the formal an economic vis the majority, labor. The result is that the from the same time, the problems of workers that the minority are to be vis-? likely privileged contestatory politics. At and mass poverty mean sector jealously guarded by organized are of the unions quite distinct and this discourages the unions privilege interests those of the unorganized poor, to mass from for state accountability fighting preferences. Of course none of this is cast in stone. Economic growth may absorb labor surplus and diminish labor's structural weakness and dependence re upon the state. Economic public policy may growth and/or welfarist sense of social threat. Fiscal duce mass poverty and diminish capital's state may lead crisis or political internal to the authoritarian exigencies to to sector it reduce its sponsorship of private capital, leading capital as over formalized reconsider the advantage of coziness accountability the surest route may to such conditions capital and labor profitability. Under offered by democratic reform. For labor, the advantages such as freedom of holds out the promise of civil liberties reconsider democracy speech and association?the For power. capital, ized accountability bedrock holds of collective out democracy and transparency?the action and collective the promise of institutional means to more predictable influence over policy for the well organized and the well heeled. Thus, be con capital and labor may re is their commitment always on the fracted through the prism of interest and can be predicted only that and the variables of this interest basis of a clear understanding it. shape after weighing the costs to the democratic verted and benefits, cause. But to democ to power of our variables explain class commitment cases core two in in each for will be racy capital and explored depth more six from other drawn with corroboration labor, country cursory The on the state will be measured in terms of Capital's dependence re on subsidized and cronyistic dependence inputs, protected markets, sense of fear or threat will be mea state elites. lations with Capital's the organizational of poverty, sured in terms of the pervasiveness cases. 185 CONTINGENT DEMOCRATS strength of the capital poor (for example, membership Communist Party), and past incidence on the state will be measured pendence on state subsidies fits (for example, of credit popular in terms access and union members' as well and housing), levels in the violence. Labors de of union dependence to state-subsidized bene as the politically manipu lated (inflated) setting of wage levels. Labors aristocratic position will in terms be measured of differentials between found the organized and so employment, as such mandated nonwage job legally a are not exhaustive, While these variables security. they anticipate to in class commitment found great deal of the variation democracy, cases across time. both among cases and even more powerfully within A schematic and positioning of the cases is summary of the argument unorganized cial security, in matters access of wage levels, benefits and other to stable presented in Figures 1 and 2. State Dependence Low High ? Leaning Antidemocracy Indonesia Mexico Ambivalent Saudi Arabia I Democratic (by the 1970s) Prodemocracy Korea (bymid-1980s) Brazil (by the 1980s) FIGURE 1 Private Sector Capital: Champion of Democracy? State Dependence Low High s ? Leaning Null (CTM) Democratic Tunisia V) O 3* Antidemocracy Mexico Ambivalent I Egypt Prodemocracy Korea Zambia Organized Labor: Figure 2 Champion of Democracy? 186 WORLD and Capital Indonesia: Patrimonial Democratically Indonesia relatively recently of Southeast Asia's most Asian economic Democratization Fear, Capitalism, Diffident Capitalists Until successful POLITICS was and 19 for its success celebrated as one "tigers." But like many other rapidly growing Indonesia the lie to any assumption that put enthusiasm for among necessarily democracy spells countries, growth classes that are its primary beneficiaries.20 Specifically, private sector to em in Indonesia have reluctant capitalists proved consistently com to democratize brace projects the country. To explain the business the social alliance munity's character with we must state's relationship with the business of social fear within the historic explore sector the private and the of the prevalence From independence the development pioned authoritarianism, onward community. state cham consistently the devel capital, especially the Indonesian sector of private (that is,Malay) capitalist of an opment indigenous state gave entrepreneurs indigenous ness benefits such as government class. To access this end, the to essential busi preferential contracts, licenses, bank credit, and an It put into effect action trade protection. affirmative "entrepreneurial to boost the number of entrepreneurs program" designed indigenous (pribumi) by legislative fiat. And cratic capitalism," even while neurs which permitted in office.21 it embraced the practice of "bureau public officials to become entrepre was sector in of private patrimonial development sponsorship to firms Public officials distributed government support private a an eye to Officials clientele. and securing personal profit political State nature. with as of li used their control over the allocation entrepreneurs doubling own to and credit their censes, concessions, promote companies?blur sectors. Nevertheless, the and the between private ring boundary public over the first four sector flourished the private and grew dramatically decades of Indonesian independence. 19 in Suhartos Indonesia This analysis draws extensively on Richard Robison, Power and Economy et al., eds., Asia Publishers, 1990); Kevin Hewison (Manilla, Philippines: Journal of Contemporary Southeast Asia in the 1990s: Authoritarianism, Democracy, and Capitalism (St. Leonards, Australia: Allen and Unwin, 1986); 1993); Richard Robison, Indonesia: The Rise of Capital (Sydney: Allen and Unwin, and Andrew Maclntyre, Business and Politics in Indonesia (Sydney: Allen and Unwin, 1991). 20 in Southeast Asia," Comparative Politics 30 (April See Jacques Bertrand, "Growth and Democracy Class Culture in Pa Civil Society, and Illiberal Middle 1998); David Martin Jones, "Democratization, cific Asia," Comparative Politics 30 (January 1998). 21 et al. (fn. 19), 46. Robison 167; Hewison (fn. 19,1986), CONTINGENT DEMOCRATS 187 of the private sec The character of state sponsorship explains much tor's diffidence The fact that licenses, contracts, about democratization. on a access gov and credit were distributed basis, with discretionary erned by political logic (or official gain), rather than by publicly formu were that entrepreneurs rational lated, economically criteria, meant to nurture cozy relations with state elites. The wise fact that much of state elites and sector actors the business collaboration between private was not in if nature, corrupt, made shady quite outrightly political less attractive. The (a good associated with transparency democracy) as fact that many officials doubled the business reassured entrepreneurs sector interests that state elites would community anticipate private more need when for the formal formulating public policy, obviating sector of accountability. Private had reason mechanisms thus capitalists to be diffident democratization. So long as the state about championing sector prosperity, private capital had lit for reform. push political on state But if dependence support fostered private sector diffidence so com about democratization, did fear, which for the business then was in had three there Indonesia First, munity components. underlying mass the of widespread the problem and fact that empower poverty ment had historically been associated with threats to the social order. continued to deliver tle incentive economic to During the late 1950s and early 1960s more than 60 percent of In donesians lived below the poverty line.22Pervasive poverty helped fuel the popularity of a strong Communist Party, with proaching three million by the mid-1960s;23 a membership ap by 1965 the party had sense of revolution in a coup. The implicated regime-threatening at that Indonesia the time turned the propertied ary danger pervaded and pushed them into the arms classes against democratic experiments was a historic of authoritarian legacy that lingered. stability. This But even after the Communist had been decimated Party by the mil been itary in 1965 and rapid economic growth had reduced mass poverty in the 1970s and 1980s, the business community still had reason to fear mass From empowerment. turned on strategy opment containment which required the early 1980s the exploitation of the masses, onward the regime's devel labor force? of a docile not their empowerment. 22 of Hawaii Press, 1994), 57;World Hal Hill, ed., Indonesias New Order (Honolulu: University Press, 1990), 41-43. Bank, World Bank Development Report (New York: Oxford University 23 The party also organized upwards of sixteen million citizens in its mass organizations of peasants, and youth, and in the 1955 national elections itwon 16.4 percent of the pop trade unionists, women, Brian May, The Indonesian Tragedy it one of the big four parties in Indonesia. ular vote, making (Boston: Roudedge, 1978), 113. 188 WORLD POLITICS The growing labor unrest of the 1980s and 1990s only reinforced cap ital s belief that a repressive state apparatus was to economic essential success.24 the business fear of mass empowerment had a Finally, community's third component, ethnic conflict and the for class namely, tendency to take on ethnic coloration warfare in Indonesia. Because the vast ma jority of domestic capitalists hail from the Chinese minority most are Muslim Indonesians class Malay), discontent over (while inequity and exploitation is frequently channeled along ethnic/religious lines, with protest expressed in the language of Islamic populism and riots as awhole.25 Violence against the Chinese community against a recurrent the Chinese has been in community problem, growing directed intensity since the 1950s and culminating most recently in theMay 1998 "orgy of looting, plundering, and fire-raising" aimed at Chinese businesses.26 As a result, the Chinese suffer from a sense of social vul nerability that has long ledmany Chinese capitalists to prize stability over and a strong freedom authoritarian state over empower popular ment. For these ically proven reasons has histor then, private sector capital in Indonesia unenthusiastic about democratization. The private sector's dependence upon the state for its profitability, aswell as its fear of mass have empowerment have recent events prodded economic tor. Catastrophic Indonesia and long a tentative allied it with the authoritarian order.27 Nor conversion the political of the private sec crisis in 1997-98 fueled regime change in transition toward democracy. it also But quadrupled mass poverty (eighty million now live below the poverty line) and sparked violent interthnic strife.28Both have fanned the busi ness traditional fears about mass empowerment community's concerns with about the new regime's together (IMF-supported) on business-state have left business leaders cronyism, skeptical not actually hostile to, Indonesia's fragile new and this, attacks about, if regime.29 24 R. William Liddle and Rizal Mallarageng, "Indonesia in 1996," Asian Survey 37 (February 1997). 25 et al. (fn. 19), 58-60; Robison Hewison (fn. 19,1986), 274-76,315-20; (fn. 19), 3. Maclntyre 26 Country Report, Indonesia, Economist Intelligence Unit (2d quarter, 1998), 19. For accounts of ear see "Anti-Chinese lier anti-Chinese in Indonesia, 1959-68," in J. A. C. Mackie, Outbreaks violence, The Chinese in Indonesia (Sydney: Australia Institute of International Affairs, 1976). 27 Robison in Suharto's Indonesia," "Business as Usual (fn. 9,1986), 150-52; Jacques Bertrand, Asian Survey 37 (May 1997), 443. 28 Adam Schwartz and Jonathan Paris, eds., The Politics ofPost-Suharto Indonesia (New York Coun cil on Foreign Relations, 1999), 2-9. 29 Country Report, Indonesia, Economist Intelligence Unit (3d quarter, 1998), 13. contingent South Korea: Variation democrats 189 Proves the Rule30 confirms South Korean case, like that of Indonesia, tance of state the and fear for shaping political dependence sector in the context of late of private capital development. more case the Korean evidence mately, compelling provides The the impor disposition But ulti of this re lationship thanks to its internal variation. During the first few decades of the postwar era, the high level of state dependence and the preva lence of fear within tor diffidence political arenas the Korean toward and economic business community spelled From the mid-1980s, democratization. in the international developments sec private however, and domestic of state sponsorship, signaled important changes and the prevalence of social fear in the the extent of state dependence, sector with these business Coincident community. changes, private to exhibit enthusiasm reform for political began significant capitalists over time variation and democratization. This compelling provides in shaping the po confirmation of the role played by our two variables litical sically in the character inclinations contingent capital. For the of private sector capital. nature of the political sake of conciseness leanings to the intrin of private sector the logic of this period the case, analysis of South Ko in brief. At this time is given and because largely replicates rean capital's first that of the Indonesian sector diffidence about democratization. four postwar It also testifies decades the character of state sponsorship played a key role in fostering private the patrimonial rule of of private sector firms to the state's discretionary During and the success Rhee both the genesis Syngman mediation and access turned on political sector firms.31 And start of many the favor. Cronyism governed private resources tax access to (including government-controlled preferential and low-interest trade monopolies, disbursement, breaks, foreign-aid a culture of sector Neither nurtured loans) governed private growth.32 or kindled a desire contestation for transparency among political 30 This analysis draws extensively on Carter Eckert, "The South Korean Bourgeoisie: A Class in Search of Hegemony," Journal ofKorean Studies 7 (Fall 1990); idem, Korea Old and New (Cambridge: Ilchokak, Korea Institute, Harvard University, 1990); Hagen Koo, State and Society in Contemporary Korea (Ithaca, N.Y.: Cornell University Press, 1993); Karl Fields, Enterprise and the State inKorea and and Eun Mee Kim, "Economic Taiwan (Ithaca, N.Y.: Cornell University Press, 1995); Nora Hamilton in South Korea and Mexico," Third World Quarterly and Political Liberalisation 14, no. 1 (1993); (London: Zed Press, 1990). Ogle, South Korea: Dissent within the Economic Miracle George 31 Eckert (fn. 30,1990), 40; Ogle (fn. 30), 42. 32 of Chaebol," Asian Role in the Making Fields (fn. 30), 31-40; Minho Kuk, "The Governmental Perspective 12, no. 1 (1988), 110-17. 190 WORLD POLITICS Park Chung Hee the state adopted a more ethos, but this did not reduce the private sector's developmental state retained The control over the distribu dependence. discretionary tion of resources, such as credit and foreign currency, that were critical to the to nurture a culture of and this continued compli private sector, ance within as well as a lack of interest in the business po community, Korea's business elites. Later, under litical campaigns that might jeopardize the flow of state benefits.33 The to a ethos fostered private sec developmental in a second way as well. democratization By prior state's conversion tor diffidence about itizing economic development private interests. sector and identifying public welfare with the state growth, leaders Business to attentive capital's proved extremely thus felt little need to push for more formal mechanisms of accountability. the private sector's lack of interest But at this time was in democracy also fueled by fear, specifically fear of the revolutionary potential of mass an Korea emerged from the Korean War empowerment. impover were ten ished country estimated million without (an homes, adequate found revolution food, or medical care),34 and its poor had historically ary inspiration (and organizational tivist Communist wherewithal) Party. Although in a popular actual membership and ac in the Korean Communist small (at between forty and sixty thousand Party remained to the party's extraordinary citizens in a members), capacity organize mo meant network of youth, and it could labor, peasant organizations if not millions, bilize hundreds of thousands, for communist purposes.35 to threaten the the thus had the poor potential Enfranchising capitalist social order. The victory of communism tinuing state of war between North sense of danger also disinclined in North Korea and the con and South only heightened sector the were felt by capital interests. Private capitalists to embrace mass empowerment because of its potential to undermine in the 1980s Koreas development strategy. Like Indonesia a and 1990s, Korea in the 1950s and 1960s embraced strategy of export success on the repression oriented industrialization whose turned and exclusion of labor. Democratization, which empower potentially might as an unwelcome for Korean prospect capitalists. labor, loomed 33 and state supervision of access to foreign loans State monopoly of the banking system (1961-80) and grants endowed itwith substantial financial power; Fields (fn. 30), 95-96,121. 34 Parvez Hasan, Korea (Baltimore: Johns Hopkins University Press, 1976), 26. In 1953 Korea was one of the poorest countries in the world with a GNP per capita of $67 (in 1996 dollars); Byong-Nak Song, The Rise of theKorean Economy 35 Robert Scalapino and Chong-sik fornia Press, 1972), 268. (Hong Kong and New York: Oxford University Press, 1994), 60. inKorea, vol. 1 (Berkeley: University of Cali Lee, Communisn For 191 democrats contingent closed era, then, Korean part of the postwar capitalists state. the mid the the authoritarian 1980s, however, By a of from culture attitudes of capital had shifted, moving away contesta consent of frank embrace and and toward political the better ranks behind political passivity tion and democratization. The first glimmers of this shift came in business the leading when 1986-87, (the Federation confederation of Korean Industries) advanced a new political agenda, boldly independ ent of the ruling party.36 More dramatic evidence came in 1991, when one of Chung JuYung, the founder and chair of the Hyundai group, to a new established party designed political largest chaebol, to the win 17 of the ruling DJP. The party managed percent challenge vote in the and later that year Chung of elections 1992, general popular an im a bid for the even made marked Such assertiveness presidency.37 for portant departure capital. in au orientation of this new political Much away from complicity and contestation of democratic rule and toward embrace thoritarian Korea's pluralism ence upon, is in the private by the reduction explained state in addition and receipt of, support, cline in social fear.During rean state to a depend de general the 1980s and 1990s two factors led the Ko to reduce its sponsorship recession engendered the worldwide sector's sector of private industry. First, crisis of 1979 created the oil by econ indebted, trade-dependent highly a was forced to program omy. The Chun wide-ranging adopt regime sector. state support for the private reform that decreased of structural serious difficulties for Korea's loans were eliminated, reduced, policy protection and a new trade law ended the market was decreased, in the chaebol by many enjoyed positions long-standing monopoly to economic reform commitment The market.38 domestic regime's Credit supplies of the domestic eliminated in Korea were many of the rents a novel and marked that had disjuncture long sustained in the domestic interests capital of state and capital. in 1987 electoral politics shift to competitive the country's Second, to woo for the created a new political sup regime popular imperative to and social reform.39 As part of its campaign port through political 36 Eckert (fn. 30,1990). 37 Koo (fn. 30), 47; Fields (fn. 30), 60. 38 in and Economic "The State, Politics, and Chung-in Moon, Development Stephan Haggard Postwar South Korea," in Koo (fn. 30). 39 elections came in 377-79. The regime's decision to introduce competitive Eckert (fn. 30,1990), summer in 1986-87. The pending for democracy response to widespread popular demonstrations to greater interna games, scheduled to be held in Korea in 1988, also subjected the regime Olympic the effectiveness of popular protest. The business community was not tional scrutiny and heightened and Kim (fn. 30), 119-20. See Hamilton at the vanguard of this popular movement. 192 WORLD POLITICS build a popular base, the regime sought to distance itself from big busi ness by attacking the chaebol for corruption and reining inmany of on stricter controls imposed that infuriated the taxes, policies In short, structural adjustment business and political open commuity.40 no so meant state that the would solicitous of ing reflexively longer be on busi interests. To the contrary, the state directly business trampled their bank long-standing credits and The privileges. raised inheritance state ness to view it with domestic interests, leading many capitalists This business like distrust. leaders encouraged Chung creasing state more to look for new ways to make the Hyundai responsive their interests. Alongside in of to state the private sector's the reality of declining support, more to it need {or that support also made democra receptive declining tization. During the first postwar decades Korea's late industrialization sector had spelled private upon the state for capital accu dependence of the local market. and direction, mulation, entrepreneurial protection for private sector depend But by the mid-1980s many of the grounds was so ence had been eliminated. Korean industry competitive enough from foreign rivals was no longer essential. Korean that state protection a had developed state direction capital dering chaebol were sufficiently store of entrepreneurial deep experience, And many of increasingly superfluous.41 on an in-house to large provide ren the basis many of the financial services that the state had previousl supplied.42This, to gether with the liberalization of the banking sector in 1980, the cre ation of nonstate financial markets, sources financial meant and the internationalization institutions, that the business had access community of to in the states's control.43 of corporate financing beyond the private sector had overcome many of the depend encies associated with latecomer status, and this decreased dependency new to break ranks with the regime for created capital opportunities dependent By the late 1980s and embrace Finally, ness more a political general sympathetic reform. decline in fear of mass to democratization. made busi empowerment the late 1980s By expanding prosperity had decreased the sense that capital and laborwere locked in a zero-sum conflict.44 Although income inequality remained signifi 40 Koo (fii. 30), 48. 41 See Hamilton and Kim (fn. 30), 116; Koo (fn. 30), 47. 42 and Kim (fn. 30), 118. Ham?ton 43 Koo (fn. 30), 88. 44 in South Korea," in and Democratization Liberalization Tat Yan Kong, "Origins of Economic Gerd Nonneman, 1996), (Boulder, Colo.: Lynne Rienner, ed., Political and Economic Liberalization 241. CONTINGENT DEMOCRATS 193 cant,45 absolute poverty had largely been eliminated, with less than 10 percent of the population living below the poverty line.46Demands for no improvement longer the global decline of communism tions of empowerment, popular material with social welfare agendas of an international that persuaded social order. mass were fears of upheaval. In addition, the revolutionary implica mass movements that domestic aroused reduced such no longer perceived revolutionary project. Consequendy, exclusion was no longer essential as the foot soldiers could be capital to preserving the one should not the extent of capital's con Nevertheless, exaggerate on democ to remains version commitment Its contingent democracy. some of these interests. with its economic And racy's consistency interests (for example, fear of higher wages and lowered profitability of exports) still incline capital toward political repression, especially the containment thus far, at least, an overall calculation to abandon support for democracy. capital of labor. But terest has not induced of in FROMBRAZIL,MEXICO, AND SAUDIARABIA CORROBORATION cases for the and Indonesian by the Korean are cor to commitment democracy capital's contingent logic governing cases. The Brazilian roborated case, for example, by other replicates as its etiol as well in Korea, variation found both the intertemporal em sector was with the country's closely allied ogy.47 Brazil's private The conclusions suggested brace of authoritarianism in 1964, but by the late 1980s much of the sector had come to endorse democratization. The reasoning be private case. of the of that Korean this heart echoes hind change sector was the 1960s the private by fear of revolu gripped During a radical left eager to mobilize poverty, tionary insurgence. Widespread and a cold war context gave substance the economically disadvantaged, to the threat In addition, the private of insurgence. sector, highly de state for subsidies, and technology, contracts, credit, pendent a state that would to its interests and to empower be responsive sought to support an to its committed capital growth. Both factors motivated on the 45 in South Korea," World Develop of Income Distribution Hagen Koo, "The Political Economy 12, no. 10 (1984), 1030-31. Already by 1978 absolute poverty had declined to 12 percent, down from 41 percent in 1965. 46 D.C.: Li Andrea Savada andWilliam Shaw, eds., South Korea: A Country Study (Washington, of Congress, 1992), 177. brary 47 on and the This analysis draws extensively "Entrepreneurs Payne (fn. 15); Fernando Cardoso, et al., Transitions Process: The Brazilian Case," in Guillermo O'Donnell Transition from Authoritari anism (Baltimore: Johns Hopkins University Press, 1986); Leigh Payne and Ernest Bartell, eds., Busi ness and of Pittsburgh Pa.: University in Latin America Press, 1995); and (Pittsburgh, Democracy ment O'Donnell (fn. 11). 194 WORLD POLITICS containment of the left and spon regime that promised of sector.48 the the late 1980s, however, sorship private By changing sector to reevaluate had led the private its support for au conditions thoritarianism. Fear of revolutionary in light had dissipated insurgence authoritarian of the change in international conditions (the demise of the Soviet Union, the end of the coldwar) and the deradicalization of the left after two decades of repression. In addition, the authoritarian regime had proven less than fully responsive to capital's interests, privileging public enterprises economy ing fear abandon over and expanding the state's regulation of the private at the expense of sector interests.49 Thus, both declin private state support sector to and declining the private persuaded the authoritarian In this way Brazil's democrats. contingent ward an embrace their material Note private Like of democracy interests.50 that the Brazilian our core enthusiasm cultural cannot account and case also helps As contingency. theory of democratic the Brazilian parison within sector transition. support democratic an case of constitutes archetypical to their Korean counterparts, they shifted on the basis of a "utilitarian calculus" of regime sector case eliminate rival hypotheses to com intertemporal variation in private significant in the country's constancy despite in Korea, shows for democracy, This that cultural heritage alone suggests in class enthusiasm for variation for democracy. Fur case reveals case with the Korean of the Brazilian sig endowment. ther, comparison sector enthusiasm in private for democracy, nificant similarity despite context. in economic economic crisis at the mo variation faced (Brazil sector enthusiasm ment for democracy, whereas Korea was of private that level of eco suggests experiencing rapid economic growth.) This in class enthusiasm variation nomic prosperity alone cannot anticipate for democracy. a be the cases presented thus far manifest degree of collinearity to find tween our two It is possible, variables. however, independent cases where this is true, the two variables do not covary. Where prelim All inary more evidence suggests inhibitor state that, for capital, may be a dependence cases of for democracy. The of enthusiasm support this impression. powerful and Saudi Arabia a case of state but Mexico dependence provides declining persistently sector these conditions social fear for capital. Under private capital high Mexico 48 to the 1964 coup was perceived The Goulart regime that existed prior and inattentive to private sector interests. See Payne (fn. 15), 13 competent, 49 Cardoso (fn. 47), 143. 50O'Donnell(fn.ll). to be unpredictable, in CONTINGENT has been persuaded to embrace 195 DEMOCRATS democratization.51 was long the dependent stepchild of theMexican The private sector revolution. Excluded from but generously nurtured any public role in politics by the state's "alliance for profits," the private sector long in the regime's acquiesced on state authoritarianism. support, the private sec Beyond dependence was tor's alliance with authoritarianism further fueled by fear. Although the threat of a radical revo out largely been shut by the ruling and income in Mex found poverty lutionary party, inequality ican society were grounds for concern among the propertied classes and reason to an even state support apparatus. exclusionary, repressive, the rationale for capital's By the late 1970s and early 1980s, however, to unravel. Not alliance with the authoritarian that the regime began sources of or income sector fear?massive poverty private inequality? as currency had decreased. If anything these scourges worsened prob into severe economic lems and fiscal deficits crisis plunged Mexico left had the mass itwas the private during the 1980s.52 Rather, ence on the state (and its confidence in state decline. At this time were there emerged export oriented a new sector's economic depend that began to sponsorship) sector en group of private on state sup and less dependent trepreneurs markets for their prosperity. resented the port and protected They in the economy state's corrupt intervention and were vexed by many of its policy decisions, the nationalization of banks during the cur notably who sector entrepreneurs to rency crisis of 1982. As private began question the state's "alliance for profits," an important segment of them also "dis to covered democracy."53 They of began push for the democratization Mexico's political system and spearheaded political pluralization by case decreased state the political party PAN. In the Mexican sector support but invariable social threat dependence spelled private for democratization. bankrolling state In Saudi Arabia, has remained persist by contrast, dependence but social threat has declined. In this context the private sec ently high tor has remained ambivalent about democratization. The largely sector on the Saudi state is the of Indus private dependence legendary. 51 This on Susan Kaufman Purcell, "Business-Government in Relations analysis draws extensively The Case of the Sugar Industry," Comparative Politics 13 (January 1981); Roderic Camp, En Mexico Press, 1989); Sylvia (Oxford: Oxford University trepreneurs and Politics in Twentieth-Century and Private Sector in and Ricard Anzaldua, Mexico Maxfield eds., Government (San Contemporary at San Diego, of California Center for U.S.-Mexican Studies, University 1987). Diego: 52 See Sebastian Edwards, Crisis and Reform in Latin America: From Despair toHope (New York: Ox ford University Press, 1995); Kevin Middlebrook, ed., Union, Workers, and the State inMexico (San at San Diego Press, 1991). of California Diego: University 53 The phrase is borrowed from Cardoso (fn. 47). Mexico: 196 WORLD are trial ventures POLITICS and subsidized by the government. protected firms value added but survive Many register negative manufacturing nonetheless thanks to state guarantees of preset for pri profit margins vate sector ventures.54 The state's "allocative logic"55 sustains these firms as it has eliminated a source of social fear in the Saudi just major king dom. Since the mid-1970s the state has funded massive social welfare highly in the country, investing billions of dollars in health, education, nets to eliminate and social the problem of mass housing, safety sector this social the threat, however, poverty. Despite declining private to has not judged it advantageous democratization.56 Al champion an interest in have expressed though leaders of the business community projects strengthening the rule of law in the kingdom, their political ambitions have have fallen far short circulated of democratization. petitions calling even Thus, for due process as businessmen and a strengthened ju dicial system, they have continued to declare their fidelity to the Saudi as well as to the monarchical of government. system family, access to state not wish to business their elites do Clearly, jeopardize royal largesse, and this has muted cratic reform.57 As the cases presented variation has shown wide and within ence and and social cases across any impulse to push for extensive demo sector thus far demonstrate, private capital in its support for democracy, both across cases time. Two variables?degree of state depend a fear?explain good deal of this variation. an inverse the be evidence Overall, suggests empirical relationship tween variables and outcome. That is, as the levels of state dependence brace level of social the likelihood fear decline, that the private score on these increases. Where the democracy sector will two variables em is 54 See Hazem Beblawi and Giacomo Luciani, The Rentier State (New York: Croom Helm, 1987). ventures (e.g., commerce, real estate, of private sector entrepreneurs in nonindustrial dependence is even more legendary. For a colorful account, seeMichael construction) Field, The Merchants: The Big Business Families of Saudi Arabia and the Gulf States (New York: Overlook Press, 1984). 55 in Luciani, ed., Giacomo States: A Theoretical Luciani, "Allocation vs. Production Framework," The The Arab State (Berkeley: University of California Press, 1991). 56 See Helen Chap?n Metz, ed., Saudi Arabia: A Country Study (Washington D.C.: U.S. Depart ment of State, 1993). Of course, the elimination of mass poverty has not eliminated all sources of so cial threat in Saudi Arabia. Expatriate workers from the state's social welfare (largely excluded and Islamist activists all consti benefits), the Shiite minority (which suffers second-class citizenship), a tute sources of insurrection. Neither of the latter two groups, however, constitutes potential popular use mass empowerment are not cit to overturn the status quo. majority who might Expatriate workers izens and so would not be empowered by democratization. See R. Hrair Dekmejian, "The Rise of Po in Saudi Arabia," Middle East Journal 48 (Autumn litical Islamism 1994); Mahdawi al-Rasheed, "Saudi Arabia's Islamic Opposition," Current History 95 (January 1996), 16-22; Peter Wilson and Saudi Arabia: The Coming Storm (New York: M. E. Sharpe, 1994). Douglas Graham, 57 On Saudi elites' limited demands for political reform, see F. Greg Gause III, Oil Monarchies: Do on mestic and Security Challenges in theArab Gulf States (New York: Council 1994). Foreign Relations, CONTINGENT DEMOCRATS the more state proves split, dependence enthusiasm for democracy. 197 inhibitor powerful of capital's Labor and Democratization Organized If the preceding makes investigation empirical nature of instrumental capital's commitment clear the contingent and to democratization, fur and instrumental contingency a similar ther empirical study confirms on the two variables of labor. The labor's part ity organized governing are state and aristocratic support for democracy contingent dependence suggests an inverse for democracy. the evidence position. Again, these variables and enthusiasm Mexico: State Dependence, Aristocratic Democratically Diffident Labor58 The Mexican of ponent the Mexican repression tested to in sisted itself Privilege, between and case provides compelling evidence of the diffident attitude com leading allied with labor, the CTM, remained steadfastly organized even as that on civil liberties, restrictions regime regime's at of the opposition, and repeated noncompetitive elections its authoritarian the CTM per character. More surprisingly, even after the to authoritarianism its commitment regime labor may organized relationship to move began exhibit toward in a more democratization. democratic The direction.59 The CTM de nounced the regime's legalization of leftist parties in 1977, called for the expulsion of Cardenas reformist movement from the ruling party successes in 1988, in the elections held opposition protested general to and refused in the that year, 1990s. Ponte support opposition parties was that democratization labor's observes greatest fear.60 The organized question Both is, why? state dependence in explaining and aristocracy prove decisive to CTM. state of the the political First, with regard disposition depend the Mexican ence, the CTM long enjoyed an authoritarian bargain with state. In for the CTM's delivery of reliable political support exchange and industrial peace, the regime provided labor with a host of organi 58 This on Middlebrook (fn. 52); idem, The Paradox of the Revolution: analysis draws extensively inMexico State, and Authoritarianism (Baltimore: Johns Hopkins Press, 1995); University inMexico 1995); Collier (fn. (Boulder, Colo.: Lynne Rienner, Stephen E. Morris, Political Reformism 4); and Rueschemeyer, (fn. 8). Stephens, and Stephens 59 For explanations of the regime's decision to embrace democratic reform, seeMorris (fn. 58), 7-31. 60 of Mexican Workers, the Labor Congress, Victor Manuel Durand Ponte, "The Confederation Labor, and the Crisis ofMexico's 52), 15; Rueschemeyer, See also Middlebrook Social Pact," inMiddlebrook (fn. (fn. 52), 94,101-2. and Stephens and Middlebrook (fn. 8), 217-19; (fn. 58), 292, 311. Stephens, 198 WORLD POLITICS zational and material benefits. These included financial subsidies and as exclusive domain and closed (for example, legal shop), access to well as profit-sharing social-welfare schemes, pro privileged subsidized urban housing and credit, expanded social security, grams, concessions and a nationally defined minimum wage.61 Although the bargain with labor was coercive ministrative, (the state's superior lopsided it to set the terms enabled both power, of the alliance with and ad labor in a the organizational and material benefits deliv fashion),62 self-serving on its own. exceeded what labor could have ered by the state procured far in The of labor the Mexican weak structurally position organized economy tainment state essential for labor's at political sponsorship by the of basic material and social rights.63 Many factors (for exam made ple, high rates of unemployment, geographic dispersal of the labor per firm, low overall levels of union undercut the structural position of organ state economy.64 by the Sponsorship some of this weakness. state sponsor But for the of compensated logic on the inMexico of an authoritarian bargain ship hinged persistence a more on as the leverage that labor enjoyed and, key guar specifically, antor of for democratization the Because pre support regime. popular force, concentration small worker ization, and global pressures) in the Mexican ized labor sented the regime with new ways to forge political legitimacy and build popular support, it threatened to rob the labor confederation of its key political trump (and its certainty of political sponsorship). As such, it less than attractive. proved on state to labor's In addition (and the link dependence sponsorship an to authoritarian age of state sponsorship system of rule), labor's dif was also a function of its "aristocratic'' fidence about democratization position minded in the Mexican governments, of development decades economy. Despite and poverty remained rampant,65 unemployment 61 Collier "Mexicos Economie (fn. 4), 59,83; Ponte (fn. 60), 100; Lawrence Whitehead, Prospects: inMiddlebrook for State Labor Relations," (fn. 52), 73. Implications 62 75. Middlebrook (fn. 61), (fn. 52), 9;Whitehead 63 inM?xico," David Rockefeller "A Strained Alliance: Continuity Victoria Murillo, and Change no. 96-3 Center for Latin American Studies Working 1996); (Cambridge: Harvard University, Paper Middlebrook (fn. 58), 288. 64 of this structural weakness was a consequence of (or at least reinforced by) the late timing Much industrialization. Late timing resulted in an immature industrial sector, still overwhelm of Mexican dispersed firms. It led to the importation of turnkey projects ingly composed of small, geographically countries whose capital intensity did little to absorb labor surplus. It meant indus from industrialized see trialization in the context of global capital mobility, reducing the leverage of local labor. For more, Middlebrook (fn. 58). 65 In 1989, 23 percent treme poverty." Sebastian York: Oxford University of Mexicans still lived below Edwards, Crisis and Reform Press, 1995). the poverty line and 7.3 percent lived in "ex to in Latin America: From Despair Hope (New CONTINGENT DEMOCRATS remained underemployment ued to account high,66 and the informal 199 contin economy economic activ of the for a large proportion country's context In inMexico's this unionized workers formal economy ity.67 a access to stable em economic occupied position, privileged enjoying as well as nonwage that far exceeded benefits those enjoyed ployment, by the vast majority of their compatriots. These benefits included priv access ileged to state-subsidized health housing, care, financial credit, and retirement funds.68This privilege disjoined labor's interests from those of most centive to countable other and gave organized labor little in poor Mexicans strata to make forces with other subordinate the state ac join to mass interests. To the contrary, labor had an organized interest in preserving its special relationship with the state, an authoritarian meant the CTM Thus, bolstering regime. in their and other Cardenas candidates support left-leaning to support the PRI in of the 1970s and 1980s and continued even if that refused to campaigns an effort to the status quo.69 In short, diffidence about democracy has been the mark of lead CTM. State in unions trade Mexico like the and aristo ing dependence to cratic status go far toward their reluctance break with explaining sustain authoritarianism.70 Korea: State Persecution, Democratically In contrast casions Committed Exclusion, and Labor71 to the Mexican at the forefront in Korea was Economic labor in Korea has long been case, organized of the struggle for democratization. rule Authoritarian on twice during the postwar era, and both oc interrupted organized labor played an active role in the popular movements 66 In 1995 urban underemployment reached 25.9 percent and official unemployment figures for 48. urban areas clocked in at 6 percent. See The Economist: Country Profile, Mexico (1996-97), 67 In 1996 the informal sector was the source of jobs for between 20 and 30 percent of theMexican labor force. The Economist: Country Profile, Mexico 10; Country Report, Mexico, Economist (1996-97), Intelligence Unit (1st quarter, 1997), 21. 68 concessions won by the CTM generally translated into higher Middlebrook (fn. 58), 221. Wage van Ginneken, minimum wages that benefited all workers, not just union members. See alsoWounter Socio-Economie Groups and Income Distribution inMexico 1980), 68-69. (London: Croom Helm, 69 Ponte (fn. 60), 102. 70 an anonymous A counterhypothesis reader argues that internal trade union democ suggested by or aristocratic racy, more than state dependence position, might be the better predictor of organized labor's support for democracy. But the fact that democratically inclined trade unions have made pacts me with authoritarianism when handicapped by structural weakness makes skeptical; Ponte (fn. 60), inMexico," inMiddlebrook 87,100; and Enrique de laGarza Toledo, "Independent Trade Unionism research is necessary to test this counterhypothesis. (fh. 52), 159,174. Additional 71 on Eckert This analysis draws extensively (fh. 30); Koo (fn. 45); Frederic (fn. 30, 1990); Ogle Deyo, Beneath theMiracle: California Press, 1989). Labor Subordination in theNew Asian Industrialism (Berkeley: University of 200 WORLD for agitating protest, an end In 1960 workers reform.72 organizing to corrupt forces with joined sure the POLITICS scores of strikes followed student-initiated and demonstrations government.73 Similarly, during and church students, intellectuals, to reform.74 In contrast to Mexico's regime labor staunchly allied itself with that called for the 1980s workers activists to pres CTM, organized the cause of democratization in Korea. explains this divergence in labor's behavior? What The of labor's state and aristocratic dependence privilege a not labor did prove important. Overall, enjoy dependent relationship was a conse with the state in Korea. Labor's relative independence re quence of both state policy and labor's own market position. With to the state's posture contrast toward in Korea stands stark labor, gard to Mexico. In Mexico the regime's "revolutionary" it inclined origins degree toward alliance the working with class, and an strategy of industrialization (that persisted well vided it with economic sufficient space import-substituting into the 1970s) pro to accommodate labor's de In Korea, in a cold war the regime's emergence by contrast, war with context and its of civil the it North made experience extremely to the threat of communist sensitive overthrow. This spelled hostility as a toward organized vehicle for labor, which was perceived potential In addition, communist infiltration. the regime's embrace of early a on industrialization low-cost, put export-oriented premium quiescent labor. labor, setting the regime at odds with organized mands. Given ratist goon these ruthless repression of labor (not cozy corpo as the defining mark of the regime. From the alliance) emerged to labor activists during the U.S. occupation squads who hounded conditions, the legal emptying of the labor movement to the mass reign the espousal Hwan, of arrests Lack militants under and every postwar Labor therefore had little tally.75 reason to for reform every push to mass interest. sponsive interest during Syngman Rhee's to Park Chung Hee under Chun Doo "purification camps" in Korea labor, often bru government repressed torture of union incentive that would to side with make the the regime state more and re of state support thus gave labor both the independence and the to embrace the cause of democratization. But labor's inde 72 see Eckert For historical and Hamilton and Kim (fn. 30), details, (fn. 30, 1990), 352-56; 118-21. 73 (fn. 30), 13-16. 74Ogle Eckert (fn. 30,1990), and Labor Protest in 380; Jeonge Taik Lee, "Dynamics of Labor Control the Process of EOI in South Korea," Asian Perspective 12 (Spring 1988), 149; Koo (fn. 30), 39; Ogle (fn. 30), 116. 75 For details of this repression, see Ogle (fn. 30); Koo (fn. 30); Lee (fn. 74); and Deyo (fn. 71). CONTINGENT 201 to the In contrast its market position. by low levels of indus case, where high levels of unemployment, a and skill levels low for trialization, spelled structurally weak position on state en labor (and hence dependence in Korea labor propping), a rate structural Korea's strong joyed relatively position. rapid growth to an and the dramatic of led expansion tight industry increasingly labor market that strengthened labor's negotiating muscle.76 In addi pendence Mexican was DEMOCRATS also fostered the regime's shift into heavy industry reinforced labor's position by enormous and facil industrial sites that concentrated workers creating on industries itated trade-union Furthermore, organizing. by focusing tion, that relied on skilled labor, this shift in strategy insulated labor from In with the poorest of the poor in the global proletariat.77 competition struc Korea's favored labor with short, development path independent tural power, and this meant labor could look to itself rather than to state propping political to advance campaigns Korean its interests. This labor to embrace also freed not favored state elites. by scored low in terms of aristocracy. For all a eco its growing structural labor hardly enjoyed strength, privileged in Korean nomic position remained deplorably low, lag society. Wages Finally, labor also ging far behind productivity gains and substantially trailing wages many service sectors.78 Working hours were interminable.80 conditions working cult for workers, the material given sectors in Workers "came society.81 victims of economic development,"82 This cratic privilege. Worse intent of the liberate still, the harsh regime, which were hardship progress made appalling.79 was by to see themselves not especially so many in And diffi other as the principal of aristo as the beneficiaries treatment of workers was the de saw the extreme of exploitation contrast to In its the of strategy. development in labor Korea had no special, politically organized labor as the cornerstone situation inMexico, 76 Koo (fn. 45), 1030; Deyo (fn. 71), 24. 77 was made with workers in Europe and the U.S., not Bangladesh. comparison Wage 78 the 1970s only 10 percent of workers in manufacturing and mining earned incomes Throughout even half of that to the minimum set by the government. living standard Only 50 percent made equal standard. Ogle (fn. 30), 76. See also Kong (fn. 44), 240. For figures on the failure of wages to keep pace see and in South Korea (Lon with gains in productivity, Sohn, Authoritarianism Hak-Kyu Opposition in don: Routledge, between industrial workers and workers 1989), 234, n. 81. For wage differentials inKorea (Seoul: the service sector and agriculture, see Young-Ki Park, Labor and Industrial Relations Press, 1979), 102; and Young-Bum Park, Labor inKorea (Seoul: Korea Labor Insti Sogang University tute, 1993), 59. 79 even the most basic health and Manufacturers routinely ignored safety regulations; Ogle (fn. 30), 77. 80 in the world, officially clocking in at fifty workers averaged the longest workweek Manufacturing four hours per week (though some argue that sixty hours per week was amore common average). Ogle (fn. 71), 98. (fn. 30); Deyo 81 (fn. 44), 226-37. Kong 82 Lee (fn. 74), 144. 202 WORLD POLITICS to conserve and therefore every reason to support privilege democratization of the political system. case low scores on state In the Korean and aristocratic dependence em in interest labor's and position capacity for help explain organized mediated bracing democratization. FROMZAMBIA,EGYPT,ANDTUNISIA CORROBORATION of state dependence for shap and aristocratic position importance to is further corroborated by evi ing labor's commitment democracy case confirms dence from Zambia, and Tunisia. The Zambian Egypt, that low scores on both these variables incline labor toward champi trade union movement The Zambian (ZCTU), oning democratization.83 one of the strongest was based in in sub-Saharan Africa, long primarily sector This the lion's share of the copper mining. country's provided The revenues. and government the 1980s, how foreign exchange During a in international the country ever, copper prices plunged steep decline a into economic erosion in wages, crisis. Workers huge experienced of aristocratic The state, moreover, any vestige eliminating privilege.84 on an to insulate labor from the crisis but rather embarked did nothing In this context of low aristoc of labor repression.85 energetic campaign state labor movement and Zambia's racy negative emerged sponsorship, as one of the most for democratization. The enthusiastic campaigners ZCTU threw its support behind theMovement forMulti-Party Democ an extensive network of trade-union strikes, mobilizing racy, organizing and for the cause.86 Like Korea, committees, providing key leadership a an movement Zambia that once cut trade-union provides example of to harsh eco loose from the moorings of state support and exposed as a nomic conditions of democratic reform. emerges major champion case is it The Zambian also useful because the rival hy helps eliminate that pothesis and prosperity. came links enthusiasm In Zambia for democracy with labor's activism on behalf economic growth of democratization at a time of great economic crisis. Compare precisely Korean labor's agitation for democratization case, where a context of economic prosperity. this with the developed in 83 Odds: The Zambian This analysis draws extensively on Paschal Mihyo, "Against Overwhelming inHenk Thomas, and Third World Trade Unions (London: Trade Union Movment," ed., Globalization Zed Books, 1995), 201-14. 84 Low- and middle-income workers saw their wages decline by an average of 55 percent during the 1980s. See Mihyo (fn. 83), 203. 85 Ibid., 208. 86 A Study of Party Ibid., 201. For more, see L. Rakner, Trade Unions in Processes ofDemocratization: in Zambia (Bergen: Michelsen Labour Relations Institute, 1992). CONTINGENT DEMOCRATS In contrast to the Zambian case, the experience 203 of organized inTunisia replicates the pattern of the CTM inMexico high scores on state dependence and aristocratic position labor and shows that can spell labor diffidence about democratization.87 Organized labor (the UGTT) in Tunisia long enjoyed a collaborative, if troubled, relationship with the state. The a state favored the trade-union movement with sub and non financial and a host of wage for labor's generous legal context, in exchange for its members, political benefits privileged vis-?-vis workers organized workers in the country's massive and unorganized informal sector, and they far exceeded what labor would have commanded unassisted. But though state no the favored organized labor in this way, it brooked hint of po sidies, relatively benefits wage alliance.88 These on the even the part of the UGTT and answered independence to state minor with and brutal challenge hegemony unrelenting a result, the trade-union movement As has distanced itself repression. movements from the country's for them fledgling democracy, denying litical most both financial sistently thrown and symbolic its support support.89 to President In addition, Ben Ali, and authoritarianism. the UGTT has con his despite regime's Labor's desire not to increasing repressiveness and privilege has prevented it upset the apple cart of state patronage from embracing the campaign for democratization. cases cited above have shown a fair The be degree of collinearity tween state In aristocratic and however, position. Egypt, dependence remains the state dependence of the labor movement but its aris high was tocrat to a is The labor movement privilege long party declining.90 re the Egyptian worker regime, exchanging corporatist bargain with straint for essential material and organizational benefits from the 87 This section draws extensively on Eva Bellin, "Stalled Democracy: Industrialization Capitalist and the Paradox of State Sponsorship inTunisia, the Middle East, and Beyond" (Book manuscript), 4,5. chaps. 88 to bolster For example, throughout the 1990s the regime intervened in national wage negotiations the position of labor and guarantee wage gains that, while not dramatic, far exceeded what labor could command on its own. For more, see Bellin (fn. 87); and Christopher Alexander, "State, Labor, and the in Tunisia," New Global Economy and Reform in a in Dirk Vandewalle, North Africa: Development Global Economy (New York: St. Martins Press, 1996). Changing 89 of Tunisia s For example, the UGTT has refused to publish any of the reports or declarations Human Rights League (the crusading force for civil liberties in the country) in the trade union news paper; nor has it ever publicly endorsed the league's work. 90 This analysis draws extensively on Marsha Pripstein Posusney, Labor and the State inEgypt (New York: Columbia and Zachary Lockman, Workers on theNile Press, 1997); Joel Beinin University of the Egyptian (Princeton: Princeton University Press, 1987); Robert Bianchi, "The Corporatization Middle East Journal40 Labor Movement," (Summer 1986); idem, Unruly Corporatism: Associational "The Press, 1989); Ellis Goldberg, Egypt (New York: Oxford University Life in Twentieth-Century in Contemporary Foundations of State-Labor Relations Egypt," Comparative Politics 24 (January 1992). 204 POLITICS WORLD state.91 Both sorts of benefits spelled aristocracy and dependence for or ganized labor, and this politically mediated privilege wedded the trade union movement multiparty condemned to the authoritarian status quo, it unreceptive making toward Sadat began to move Egypt reform. Thus, when in leaders the trade-union system vigorously early 1970s, to reduce the influence it threatened the plan because they had under to democratic a the country's system.92 single-party to shift its stance on labor has begun however, Recently, organized to undertake In the last decade democratization. international pressure structural adjustment has forced the regime to retreat from its historic enjoyed to reform the the regime has begun labor. Specifically, bargain with labor code in ways that will ax organized treasured advan labor smost schemes that will and it has endorsed tage (job security), privatization the essence of the sphere of labor's political protection.93 With now under attack, trade-union leaders have labor's aristocratic privilege to express support for democratization.94 Persistent dependence begun makes the labor movement hesitant about dramatically po endorsing contract litical reform it has not (for example, formed an independent labor party to contest the ruling party), but declining aristocracy (and hence labor receptive the declining value of the authoritarian bargain) makes as it comes at someone to reform, so initiative. All told, or else's long to an ambivalent at labor has shifted from candid negativism ganized a score on aristocratic titude toward democratization, with declining for this the best change of heart. privilege explanation Conclusion case The labor are in this article studies presented not contingent, not is random. consistent, that capital demonstrate democrats. and This contingency, turns on for democratization Support see their economic interests served by the au capital and labor state. This, in turn, is shaped by two key factors for each so thoritarian on its level of state enthusiasm cial force. For capital, democratic hinges enthusiasm and fear of social unrest. For labor, democratic dependence on its level of state in soci aristocratic and position dependence hinges moreover, whether 91 for union leaders, included financial subsidies to the union, prestigious political positions These and nonwage benefits for workers such as job security, social security benefits, and generous leave pol icy (maternity). 92 138. See Bianchi 438; and idem (fn. 90,1989), (fn. 90,1986) 93 See Marsha Provisions," Middle East Re Pripstein, "Egypt's New Labor Law Removes Worker port 1995), 52-53. 94(May-August this development Bianchi anticipated as early as the mid-1980s. See Bianchi (fn. 90,1986), 443. CONTINGENT DEMOCRATS 205 is an inverse one, with relationship higher values of depend and into reduced enthusiasm for de ency, fear, aristocracy translating a number mocratic reform. In many countries of late-developing state extensive the structural weakness factors?including sponsorship, ety. The of democratic of social forces, pervasive dis poverty, and the evolution states led capital course?have and labor to ally with authoritarian This rather than championing democratization. diverges experience at least from the historical from that of the earlier industrializers?or of the early industrializers?and the expectations of classic challenge myth has political consequences and Marxist analysts. that liberal the same time, is capital and labor's alliance with authoritarianism in stone. The is of and labor gov capital political disposition inter erned by interest. As political and economic conditions change, At not carved ests may suggest logic of international duce may its sponsorship eliminate mass class propertied may The Our case studies may be recalculated. that may prompt such realignment. The re state to economic may force the integration and alliances change some of the conditions perceive of social forces (Korea, Egypt). Or robust growth sense of fear within and the pervasive the poverty conditions Under these and/or labor (Korea). capital democratization intertemporal variation in a new found within to embrace it. light and choose cases like Korea, Brazil, and Egypt makes this possibility clear. societal pressure for democratization, then, turns on the Predicting and labor may well be champions of analysis of these variables. Capital reasons and not universal dictum. The but for by democracy, contingent of late social forces' en conditions may dampen development particular thusiasm for democratization. ity of democratic change. enthusiasm also spells the possibil But contingency as conditions in late-developing countries