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Abstract
Why is it that Argentina and Mexico, two countries with extremely similar pre-1980s levels of exposure to trade, ended up pursuing such different paths to trade liberalization and achieving such different levels of trade exposure in the 1990s? What made Mexico a high reformer and stalled Argentina's strategy of trade liberalization? Why were the goals and strategies of these programs so dramatically different? In this dissertation I argue that distributive conflicts drive policy selection and, therefore, the scope and pace of the trade liberalization processes as well.
The argument I present in the following pages is simple: distributive conflicts reduce the governments' capacity to enact more universal macro-economic policies and, therefore, reduce the government's ability to secure trade liberalization. Such difficulties to sustain trade liberalization through macro-economic management force governments to scale down reforms or to devote considerable amounts of economic and political resources to consolidate their reform strategies. Therefore, high inter sectoral conflict either makes industrial restructuring and extremely expensive endeavor or blocks reforms altogether, turning a coherent industrial policy into an intractable project.
