Capital Mobility, Veto Players, and Redistribution in Latin America During the Left Turn

Abstract

This article offers an explanation for the intensity of redistributive policies from Latin American leftist governments during the so-called ‘left turn’. It challenges the idea that the recent radical leftist governments are the product of region-specific characteristics. Based on theoretical models that analyze the implications of inequality in democracies and the moderating effects of different economic and institutional structures, it argues instead that the left’s redistributive policies were more intense in countries where capital mobility is low and there was no pro-elite legislative veto player. To evaluate this explanation, we offer original evidence from time-series -cross-section regression models of social spending, based on data from thirteen Latin American countries over the years 2003 to 2015. The results show partial support for the explanation: there is strong evidence that social spending decreased with the ideological distance between the president and the pro-elite veto player, but only weak evidence that capital mobility attenuated this effect.

Keywords

• capital mobility
• Latin America
• left turn
• redistribution
• social spending
• veto player