Policy effectiveness in Latin America and in the OECD: contrasting the role of institutions and state capacity

In this paper, I evaluate the political performance of Latin American democracies through a focus on their policy effectiveness, or the degree to which they are able to provide public goods and services which citizens value and that are judged as necessary for long-term economic and human development. Following Lijphart’s ‘Patterns of Democracies’ and Roller’s (2005) more recent more systematic evaluation of the policy effectiveness of 21 OECD democracies, I map the performance of 18 Latin American countries across 7 different public goods between 1996 and 2006 to build an index of policy effectiveness for each democracy in the region. Unlike these previous studies, however, I show that the most powerful differences in performance do not arise from differences in political institutions or ‘rules of the game’ such as the electoral system or the vertical dispersion of power in the country. Rather, I show that in Latin America more basic issues of past democratic experience, state capacity and policy-making capabilities can explain variation in policy effectiveness to a much greater degree. I conclude by testing a unified model of political institutions, democracy and state capacity in Latin America and in advanced OECD countries to evaluate whether the causal dynamics at work in the different samples are indeed fundamentally different, or whether the ‘Lijphartian’ and state capacity approaches are actually complementary.