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Free keywords:
causal mechanisms; developing countries; institutional change; neo-liberalism; power
Abstract:
The global financial crisis has stimulated much research about the resilience of neoliberalism. However, concrete mechanisms of neoliberal resilience are yet to be elaborated. This article elaborates such mechanisms by incorporating Amable’s notion of institutional hierarchy into Mahoney and Thelen’s gradual institutional change theory. In doing this, it provides a dynamic and politically grounded framework to analyze institutional resilience. Neoliberalism is maintained over time because dominant social blocs defend those policies and institutions that they perceive as more favorable to their interests (high-hierarchy institutions), while allowing degrees of freedom in those that matter less (low-hierarchy institutions). Four mechanisms account for the resilience of high-hierarchy institutions: marginal adjustment, solidification, accommodation and compromise. I explore the potential of this framework by comparing the trajectory of two related policy domains, exchange rates and industrial policy, in countries with a long history of neoliberal policymaking: Chile and Estonia.
