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The Political Economy Of Labor Reform In Colombia


  • Juan Carlos Echeverry
  • Mauricio Santamaria


This paper analyzes the entire reformist effort that spans from 1990 until 2002, emphasizing the second wave that ended with the issuing of a new labor code in 2002. A successful reform has to surpass a set of deals" along the streamline of design, consensus building within civil society, submission to Congress and parliamentary debate, before it gets approved. The paper presents the story of two failed attempts for producing these "deals" within the government, along with labor unions and private sector firm confederations, before the 2002 labor reform was finally enacted. It shows what economic and social considerations created the need for reform, describes the actual policy changes implemented and evaluates their impact. The paper delves deep into the political aspects of the reform effort. Public officials of two governments pursued different lines of reform, discussion strategies and mechanisms for creating consensus, before the initiative gained momentum and circumvented key obstacles. The text of the 2002 reform proposal changed little during five years, but received important additions in the floor of Congress, with little technical support. Finally, an interesting dispute between lawyers and economists is presented regarding the role of the labor code for job creation and its function in the economic cycle. In the case of this reform, economists believed more on the computed elasticities, while lawyers believed more in the stability of established rules and in the limited role of norms. Economists should pay more attention to the workings of the political economy of reform and to the "life cycle of government", both of them critical for success."

Suggested Citation

  • Juan Carlos Echeverry & Mauricio Santamaria, 2004. "The Political Economy Of Labor Reform In Colombia," Documentos CEDE 3618, Universidad de los Andes, Facultad de Economía, CEDE.
  • Handle: RePEc:col:000089:003618

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    Cited by:

    1. Juan Carlos Guataquí Roa & Andrés Felipe García-Suaza, 2009. "Efectos de la reforma laboral:¿más trabajo y menos empleos?," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 27(60), pages 46-79, December.
    2. Marcela Eslava & Marcela Melendez, 2009. "Politics, Policies and the Dynamics of Aggregate Productivity in Colombia," Research Department Publications 4633, Inter-American Development Bank, Research Department.
    3. Andrea Acevedo Flórez & Adriana Morales Botett & Catalina Ramos Garcés, 2009. "Impacto económico y social del proyecto patios productivos implementado por las comunidades vulnerables de los departamentos de bolívar, córdoba y sucre," Revista Panorama Económico 7084, Universidad de Cartagena.
    4. Taborda, Rodrigo & Guataqui, Juan Carlos, 2011. "Manufacturing Employment and Wage Differentials After Structural Adjustment Reforms in Colombia: An Efficiency Wages Approach," Revista Lecturas de Economía, Universidad de Antioquia, CIE, June.
    5. Peña, Ximena., 2013. "The formal and informal sectors in Colombia : country case study on labour market segmentation," ILO Working Papers 994820883402676, International Labour Organization.
    6. Juan Carlos Vergara Schmalbach & Víctor Manuel Quesada Ibargüen & Melissa Manga Altamar & Vanessa Restrepo Torres, 2009. "La planeación agregada analizada desde el enfoque de la dinámica de sistemas," Revista Panorama Económico 7088, Universidad de Cartagena.
    7. Martha Yánez Contreras & Alberto Ordóñez Flórez & Luis Suarez Ávila, 2009. "Cultura de uso y explotación económica de las playas en cartagena de indias," Revista Panorama Económico 7082, Universidad de Cartagena.
    8. Efraín Cuadro Guzmán & Antonio Orozco Gallo, 2009. "Descripción metodológica y aproximación al cálculo de demanda de agua en la ciudad de Cartagena de indias para el ano 2009," Revista Panorama Económico 7081, Universidad de Cartagena.
    9. Susana Martínez-Restrepo & Juan Camilo Mejía & Erika Enríquez, 2016. "Eliciting women's willingness to take a job. Evidence from displaced and extremely poor women in Cali, Colombia," Coyuntura Económica, Fedesarrollo, vol. 46(1), pages 149-173, June.
    10. Mozambique Ministry of Planning and Development & World Bank, 2006. "Job Creation in Mozambique : Is Labor Law Reform the Answer?," World Bank Publications - Reports 12807, The World Bank Group.
    11. repec:ilo:ilowps:482088 is not listed on IDEAS
    12. Raquel Bernal & Adriana Camacho & Carmen Elisa Flórez & Alejandro Gaviria, 2009. "Desarrollo económico: retos y políticas públicas," Documentos CEDE 5269, Universidad de los Andes, Facultad de Economía, CEDE.
    13. Bernal Raquel, 2009. "The Informal Labor Market in Colombia: identification and characterization," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, September.
    14. Andres Escobar Espinosa, 2009. "The awakening of an andean tiger: can Colombia´s recent growth create enough employment?," Revista Panorama Económico 7085, Universidad de Cartagena.
    15. Nelson Alvis Guzmán & Luis Alvis Estrada & Aura Medina Fuentes & María Murillo Ibáñez, 2009. "Condiciones Del Acceso A Los Servicios De Salud En La Población De Cartagena De Indias," Revista Panorama Económico 7079, Universidad de Cartagena.
    16. Diaz Gutierrez, Julian, 2023. "Trade Effects on Substance Abuse: Evidence from Colombia's Liberalization," 2023 Annual Meeting, July 23-25, Washington D.C. 335460, Agricultural and Applied Economics Association.
    17. Fredy Goyeneche González, 2009. "Cartagena De Indias: Globalizada Desde Su Origen, Fragmentada En Su Presente," Revista Panorama Económico 7080, Universidad de Cartagena.
    18. Tomás Fontalvo Herrera, 2009. "Diseno de un sistema de gestión de la calidad modelo para los programas académicos de educación superior," Revista Panorama Económico 7089, Universidad de Cartagena.
    19. Humberto Consuegra De La Ossa, 2009. "Turismo y desarrollo económico: ¿hace el patrimonio la diferencia en el caribe?," Revista Panorama Económico 7087, Universidad de Cartagena.

    More about this item


    labor reform;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand


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