State, Labor, and the Transition to a Market Economy. Agnieszka Paczyńska

labor and shaped the types of resources that labor was able to acquire in the decades prior to reform initiation. Chapter 3 explores these dynamics within the ruling parties in Egypt and Mexico and examines how they affected the parties’ relationship with organized labor. Chapters 4, 5, and 6 examine how organized labor in the four cases sought to influence the process of privatization design and implementation during the first decade of reforms. Here I focus both on the strategies that organized labor used in attempting to shape the two phases of the reform process as well as on the degree of success of these strategies. In these chapters I explore how the resources that organized labor had at its disposal when governments in the four cases initiated market reforms influenced their ability to shape privatization policies. I also link the financial, legal, and experiential resources available to organized labor when economic restructuring commenced to the pre-reform dynamics of state-labor relationship analyzed in Chapters 2 and 3. Finally, the Conclusion revisits the main themes discussed in the previous chapters. Here I also briefly explore the continuing institutional changes of the following decade of reforms. Finally, I discuss the implications of this study for understanding patterns of state-society interaction as well as institutional change.

1. See, for example, John Williamson, “What Washington Means by Policy Reform,” in Latin American Adjustment: How Much Has Happened? ed. John Williamson (Washington, D.C.: Institute for International Economics, 1990), 7–20.

2. World Bank, Bureaucrats in Business: The Economics and Politics of Government Ownership; A World Bank Policy Research Report (New York: Oxford University Press for the World Bank, 1995), 33–50; John Waterbury, Exposed to Innumerable Delusions: Public Enterprise and State Power in Egypt, India, Mexico, and Turkey (New York: Cambridge University Press, 1993), 107–34.

3. J. Samuel Valenzuela, “Labor Movements in Transition to Democracy: A Framework for Analysis,” Comparative Politics 21, no. 4 (1989): 447.

4. Aristide R. Zolberg, Creating Political Order: The Party-States of West Africa (Chicago: Rand McNally, 1966), 72.

5. Stephan Haggard and Steven B. Webb, introduction to Voting for Reform: Democracy, Political Liberalization, and Economic Adjustment, ed. Stephan Haggard and Steven B. Webb (New York: Oxford University Press for the World Bank), 1994, 16–18; Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (New York: Cambridge University Press, 1991), 180–87.

6. Barbara Geddes, “Challenging the Conventional Wisdom,” Journal of Democracy 5, no. 4 (1994): 111.

7. As a former deputy minister of privatization put it, “Privatization did not so much entail getting the state out of enterprises, but rather getting worker self-management out of them.” Author interview, Warsaw, April 27, 1999.

8. This study examines the interaction between the state and organized labor in Mexico in the period prior to the 2000 elections when the ruling PRI was voted out of office. Hence, Mexico is classified here as an authoritarian state.

9. The importance of exploring the role of historical legacies in shaping posttransition political life in Eastern and Central Europe has become increasingly clear in recent years. See, for example, Grzegorz Ekiert and Stephen E. Hanson, eds., Capitalism and Democracy in Central and Eastern Europe: Assessing the Legacy of Communist Rule (New York: Cambridge University Press, 2003).

10. Seymour Martin Lipset, “Some Social Requisites of Democracy: Economic Development and Political Legitimacy,” American Political Science Review 53, no. 1 (1959): 69–105; Karl W. Deutsch, “Social Mobilization and Political Development,” American Political Science Review 55, no. 3 (1961): 493–514.

11. Samuel P. Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968), 32–92; Philippe Schmitter, Interest Conflict and Political Change in Brazil (Stanford: Stanford University Press, 1971), 3–19; Samuel P. Huntington and Joan M. Nelson, No Easy Choice: Political Participation in Developing Countries (Cambridge: Harvard University Press, 1976), 1–16; Guillermo A. O’Donnell, Modernization and Bureaucratic-Authoritarianism: Studies in South American Politics (Berkeley and Los Angeles: University of California Press, 1973), 51–111.

12. Glen Biglaiser and Michelle A. Danis, “Privatization and Democracy: The Effects of Regime Type in the Developing World,” Comparative Political Studies 35, no. 1 (2002): 83–102.

13. Robert Kaufman and Barbara Stallings, “Debt and Democracy in the 1980s: The Latin American Experience,” in Debt and Development in Latin America, ed. Robert Kaufman and Barbara Stallings (Boulder, Colo.: Westview Press, 1989), 201–24; Stephan Haggard and Robert Kaufman, “Economic Adjustment in New Democracies,” in Fragile Coalitions: The Politics of Economic Adjustment, ed. Joan M. Nelson (Washington, D.C.: Overseas Development Council, 1989), 57–59; Joan M. Nelson, “How Market Reforms and Democratic Consolidation Affect Each Other,” in Intricate Links: Democratization and Market Reform in Latin America and Eastern Europe, ed. Joan M. Nelson (New Brunswick, N.J.: Transaction Books, 1994), 1–36.

14. Stephan Haggard and Robert Kaufman, introduction to The Politics of Economic Adjustment: International Constraints, Distributive Conflicts, and the State, ed. Stephan Haggard and Robert Kaufman (Princeton: Princeton University Press, 1992), 6–8; Przeworski, Democracy and the Market, 161–71; Bela Greskovits, The Political Economy of Protest and Patience: East European and Latin American Transformations Compared (Budapest: Central European University Press, 1998), 69–92.

15. Stephan Haggard, Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries (Ithaca: Cornell University Press, 1990), 42–46; Stephan Haggard and Robert Kaufman, “The Politics of Stabilization and Structural Adjustment,” in Developing Country Debt and Economic Performance: Selected Issues, ed. Jeffrey Sachs (Chicago: University of Chicago Press, 1991), 209–54; Peter Evans, Embedded Autonomy: States and Industrial Transformation (Princeton: Princeton University Press, 1995), 43–73.

16. Joan M. Nelson, “Introduction: The Politics of Economic Adjustment in Developing Countries,” in Economic Crisis and Policy Choice: The Politics of Adjustment in the Third World, ed. Joan M. Nelson (Princeton: Princeton University Press, 1990), 3–32; Miguel Angel Centeno, Democracy Within Reason: Technocratic Revolution in Mexico (University Park: Pennsylvania State University Press, 1994),