Economic and social development: A critique of the neoclassical perspective. The case of Uruguay, 1985--1998

This dissertation looks at the development of Uruguay from 1985 to 1998, placing the case in a comparative framework, and focusing on how political and social citizenship influence the relationship between economic and social development.;The dominant neoclassic paradigm in Latin America today claims that economic growth led by market logics is the basis of development. It further claims that social citizenship as it developed in the region is harmful to both economic development and social equality. Also neoclassical perspectives are wary of too much democracy. In a way, they see political incorporation and social demands as threats to sound technically based policy choices. The story of Uruguay posed here in a comparative perspective strongly questions this view of development and rescues the positive role of both democratic politics and universal social policies.;This dissertation shows how structural economic adjustment and the opening of the economy need not always be correlated with increasing inequality and poverty, nor do they need to be carried out through technocratic policies that shut out demands from the population and the organized groups in society.;Between 1985 and 1998, Uruguay presents compared to the rest of Latin America, the best results in social development and average and above average results in economic growth. This, I show, was achieved by the combined effect of political democracy and a robust welfare state. In this sense Uruguay constitute a unique case of social and economic transformation in Latin America. The coalition of middle and working classes led by the left parties was possible because a welfare state that reached both the middle classes and the poor, and a democratic system that truly incorporated people into the decision making process was present.