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Social Sector Reform in Latin America and the Role of Unions

  • Daniel Maceira
  • Maria Victoria Murillo

This paper analyzes the reaction of teachers` and doctors` unions to a series of social sector reforms in the region, including administrative decentralization, provider payment mechanisms, and the introduction of performance evaluation and private provision. It combines the literature of economics and political science to understand the conditions that shape different patterns of union behavior and their effect on policy implementation. The paper suggests that the main conditions influencing union behavior in the health sector are related to the structure of the market (size and level of competition) due to the predominance of the private-public mix in its employment. In education, where the public sector is the main employer, political alignments and the organizational features of teachers` associations also play an important role in explaining the behavior of providers` organizations. Considering the exogenous character of most of these variables, the paper concludes by making some policy suggestions to align the objectives of unions and policymakers through regulatory reforms.

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Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4275.

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Date of creation: Jul 2001
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Handle: RePEc:idb:wpaper:4275
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  1. Cukierman, A. & Tommasi, M., 1997. "When Does It Take a Nixon to Go to China," Papers 30-97, Tel Aviv.
  2. Hart, Oliver D, 1988. "Incomplete Contracts and the Theory of the Firm," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 119-39, Spring.
  3. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
  4. Ellis, Randall P. & McGuire, Thomas G., 1986. "Provider behavior under prospective reimbursement : Cost sharing and supply," Journal of Health Economics, Elsevier, vol. 5(2), pages 129-151, June.
  5. Mailath, George J & Postlewaite, Andrew, 1990. "Asymmetric Information Bargaining Problems with Many Agents," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 351-67, July.
  6. Freeman, Richard B, 1986. "The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success," American Economic Review, American Economic Association, vol. 76(2), pages 92-96, May.
  7. Hoxby, Caroline Minter, 1996. "How Teachers' Unions Affect Education Production," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 671-718, August.
  8. Melnick, Glenn A. & Zwanziger, Jack & Bamezai, Anil & Pattison, Robert, 1992. "The effects of market structure and bargaining position on hospital prices," Journal of Health Economics, Elsevier, vol. 11(3), pages 217-233, October.
  9. Dranove, David, 1988. "Demand Inducement and the Physician/Patient Relationship," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 281-98, April.
  10. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
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