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Contrapunto: The informal sector debate in Latin America
BOOK REVIEWS
133
(p. 68). The centrality of the moral economy to community action explains why landless peasants accepted their economic subordination to those with land as long as they were able to subsist, and also motivated the decent treatment of their workers by the small farmers. In the case of El Hogar, Costa Rica, political mobilisation took the form of land invasion by landless peasants. In this case, small landowners were struggling for survival on inadequate plots and, in the absence of surpluses which could be redistributed, the subsistence of the landless was threatened (p. 99). At the same time, large absentee landowners left land idle. This violation of the subsistence ethic was the stimulus for land invasion by landless villagers. The sense of community interdependence and the notion that social justice required the survival of all, led some small farmers to condone land invasion, even though it was against their class interests. The community of Pikin Guerrero is an interesting example of the rapid shift in peasant political behaviour from quiescence to political violence. Anderson shows that it was only when the interrelationships between peasants and the institutions of the wider society became a direct threat to peasant survival that they resorted to violent forms of struggle. In this case, peasants reacted to the political violence and repression imposed upon them by the National Guard during the last years of the Somoza dictatorship. The book merits a wide readership among academics and students from across the social sciences. It will be of interest not only to Latin American studies, but to studies of peasantry world-wide. Sarah M. Howard University of Greenwich
Rakowski, Cathy A. (ed.) (1994), Contrapunto: the Informal Sector Debate in Latin America, State University of New York’ Press (Albany). x + 336 pp. $21.95 hbk. The debate over the usefulness of the concept of the urban informal sector (UIS) has gone through a number of cycles since its discovery by the IL0 and publication in its Keyna Report in 1972. The ILO’s definition of the UIS was essentially ‘those individuals and small enterprises that are involved in economic activities outside the “modem” or urban formal sector (UPS) and this lack of precision has led to a great deal of disagreement over attempts to clarify the concept and explore its policy implications. This book provides a positive attempt to resolve many of these arguments and provide a research agenda for the future. Section I (Overview) starts witha brief overview by the editor and is followed by two historical chapters. In Ch. 2, Caroline Moser covers the debate on the LJIS up to 1983 with an excellent summary of her two earlier survey articles, while in Ch. 3 Cathy Rakowski takes the story through to 1993. Chapter 4, by Orlandina de Oliveira and Bryan Roberts, reviews empirical evidence on the UIS and the urban labour market. They conclude by advocating more state intervention, as ‘The remedies must include more appropriate government interventions, such as raising the minimum wage, enforcing social security obligations and labor laws (e.g., day care centers, equal pay for equal work) for all workers (including out-workers), generalizing welfare benefits for women with young children, and stimulating, through state purchasing and credit policies, the goods and services produced in the “informal sector”’ (p. 69). This set of
134
BULLETIN
OF LATIN AMERICAN
RESEARCH
proposals is not likely to find much favour in the free-market environment currently in vogue in Latin America. Section II (Macro Level Policy Issues) contains five chapters. In Ch. 5, Carl Liedhohn examines the side effects of government macroeconomic policies on microenterprise development. Jeffrey Franks (Ch. 6) analyses the effect of ignoring the informal sector on macroeconomic policy, for example the biases introduced in predicting the effects of changes in taxes on an economy. In Ch. 7, Alejandro Portes looks at the extent to which legislation on labour standards may affect the relation between the formal and informal sectors. In Ch. 8, Ray Bromley evaluates Hemando de Soto’s role in establishing DDP (deregulation, debureaucratisation and privatisation) ‘as the conventional wisdom for economic restructuring and growth and in building a worldwide vision of enterprise and prosperity’ @. 13 9). Gustav0 Mtiquez (Ch. 9) provides an economist’s view of the policy role of the UIS, suggesting that one must recognise the heterogeneity of the sector in this context. Section III (Micro Level Intervention Issues) contains two chapters. Chapter 10, by Maria Otero, provides an analysis of the strengths and weaknesses of government and NGO interventions in addressing the problems of the UIS. In Ch. 11, Cressida McKean evaluates training and technical assistance to small and microenterprises. Section IV (A Closer Look at Poverty, Planning and Power) contains two chapters. Chapter 12, by Venessa Cartaya, presents a critique of the tendency to equate informality and poverty, using empirical data from Venezuela. Chapter 13, by Douglas Uzzell, focuses on the distribution of power within the state and its intluence on the development of the UIS. which is relatively powerless. Section V (Conclusion) contains Ch. 15, in which Cathy Rakowski summarises the main findings of the study. pointing out where the authors agree and those areas where there is disagreement and the need for more research. This is a very useful book that should be added to the library of all those interested in the UIS in Latin America. The differing views of the UIS are given a sympathetic, though critical, analysis and the review of the contrasting positions in the debate will be a good starting point for newcomers to the subject. As the summary of the book’s contents given above suggests, the range of topics covered is wide-ranging but well integrated as a review of both previous research and the current issues still to be debated. At $21.95 hardback, this book is extremely good value for money and well within the reach of student readers. Jim Thomas London School of Economics and Political Science
Linz, Juan J. and VQenzuela, Arturo (eds) (1994), The Failure of Presidential Democracy, The Johns Hopkins University Press (Baltimore and London). xvi + 436 pp. f 54.00 hbk. Geddes, Barbara (1994), Politician’s Dilemma: Building State Capacity in Latin America, University of California Press (Berkeley and London). xiii + 246 pp. $35.00 hbk. Debates on the process of (re)democratisation have now turned beyond broad generalities to consider the precise form of the political regime most conducive to democratic aspirations. We are now well past the ‘transition to democracy’ debates and their somewhat limited parameters. I believe there are serious limits to the new post-transition paradigm if we may call it that. Before examining these, however, I shall
133
(p. 68). The centrality of the moral economy to community action explains why landless peasants accepted their economic subordination to those with land as long as they were able to subsist, and also motivated the decent treatment of their workers by the small farmers. In the case of El Hogar, Costa Rica, political mobilisation took the form of land invasion by landless peasants. In this case, small landowners were struggling for survival on inadequate plots and, in the absence of surpluses which could be redistributed, the subsistence of the landless was threatened (p. 99). At the same time, large absentee landowners left land idle. This violation of the subsistence ethic was the stimulus for land invasion by landless villagers. The sense of community interdependence and the notion that social justice required the survival of all, led some small farmers to condone land invasion, even though it was against their class interests. The community of Pikin Guerrero is an interesting example of the rapid shift in peasant political behaviour from quiescence to political violence. Anderson shows that it was only when the interrelationships between peasants and the institutions of the wider society became a direct threat to peasant survival that they resorted to violent forms of struggle. In this case, peasants reacted to the political violence and repression imposed upon them by the National Guard during the last years of the Somoza dictatorship. The book merits a wide readership among academics and students from across the social sciences. It will be of interest not only to Latin American studies, but to studies of peasantry world-wide. Sarah M. Howard University of Greenwich
Rakowski, Cathy A. (ed.) (1994), Contrapunto: the Informal Sector Debate in Latin America, State University of New York’ Press (Albany). x + 336 pp. $21.95 hbk. The debate over the usefulness of the concept of the urban informal sector (UIS) has gone through a number of cycles since its discovery by the IL0 and publication in its Keyna Report in 1972. The ILO’s definition of the UIS was essentially ‘those individuals and small enterprises that are involved in economic activities outside the “modem” or urban formal sector (UPS) and this lack of precision has led to a great deal of disagreement over attempts to clarify the concept and explore its policy implications. This book provides a positive attempt to resolve many of these arguments and provide a research agenda for the future. Section I (Overview) starts witha brief overview by the editor and is followed by two historical chapters. In Ch. 2, Caroline Moser covers the debate on the LJIS up to 1983 with an excellent summary of her two earlier survey articles, while in Ch. 3 Cathy Rakowski takes the story through to 1993. Chapter 4, by Orlandina de Oliveira and Bryan Roberts, reviews empirical evidence on the UIS and the urban labour market. They conclude by advocating more state intervention, as ‘The remedies must include more appropriate government interventions, such as raising the minimum wage, enforcing social security obligations and labor laws (e.g., day care centers, equal pay for equal work) for all workers (including out-workers), generalizing welfare benefits for women with young children, and stimulating, through state purchasing and credit policies, the goods and services produced in the “informal sector”’ (p. 69). This set of
134
BULLETIN
OF LATIN AMERICAN
RESEARCH
proposals is not likely to find much favour in the free-market environment currently in vogue in Latin America. Section II (Macro Level Policy Issues) contains five chapters. In Ch. 5, Carl Liedhohn examines the side effects of government macroeconomic policies on microenterprise development. Jeffrey Franks (Ch. 6) analyses the effect of ignoring the informal sector on macroeconomic policy, for example the biases introduced in predicting the effects of changes in taxes on an economy. In Ch. 7, Alejandro Portes looks at the extent to which legislation on labour standards may affect the relation between the formal and informal sectors. In Ch. 8, Ray Bromley evaluates Hemando de Soto’s role in establishing DDP (deregulation, debureaucratisation and privatisation) ‘as the conventional wisdom for economic restructuring and growth and in building a worldwide vision of enterprise and prosperity’ @. 13 9). Gustav0 Mtiquez (Ch. 9) provides an economist’s view of the policy role of the UIS, suggesting that one must recognise the heterogeneity of the sector in this context. Section III (Micro Level Intervention Issues) contains two chapters. Chapter 10, by Maria Otero, provides an analysis of the strengths and weaknesses of government and NGO interventions in addressing the problems of the UIS. In Ch. 11, Cressida McKean evaluates training and technical assistance to small and microenterprises. Section IV (A Closer Look at Poverty, Planning and Power) contains two chapters. Chapter 12, by Venessa Cartaya, presents a critique of the tendency to equate informality and poverty, using empirical data from Venezuela. Chapter 13, by Douglas Uzzell, focuses on the distribution of power within the state and its intluence on the development of the UIS. which is relatively powerless. Section V (Conclusion) contains Ch. 15, in which Cathy Rakowski summarises the main findings of the study. pointing out where the authors agree and those areas where there is disagreement and the need for more research. This is a very useful book that should be added to the library of all those interested in the UIS in Latin America. The differing views of the UIS are given a sympathetic, though critical, analysis and the review of the contrasting positions in the debate will be a good starting point for newcomers to the subject. As the summary of the book’s contents given above suggests, the range of topics covered is wide-ranging but well integrated as a review of both previous research and the current issues still to be debated. At $21.95 hardback, this book is extremely good value for money and well within the reach of student readers. Jim Thomas London School of Economics and Political Science
Linz, Juan J. and VQenzuela, Arturo (eds) (1994), The Failure of Presidential Democracy, The Johns Hopkins University Press (Baltimore and London). xvi + 436 pp. f 54.00 hbk. Geddes, Barbara (1994), Politician’s Dilemma: Building State Capacity in Latin America, University of California Press (Berkeley and London). xiii + 246 pp. $35.00 hbk. Debates on the process of (re)democratisation have now turned beyond broad generalities to consider the precise form of the political regime most conducive to democratic aspirations. We are now well past the ‘transition to democracy’ debates and their somewhat limited parameters. I believe there are serious limits to the new post-transition paradigm if we may call it that. Before examining these, however, I shall