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Abstract
This dissertation investigates the ideas and preferences of economic elites in Latin America, a region marked by profound economic inequality. In an interview with a prominent businessman, he deftly illustrated how economic power translates into political influence: “How do I reach out to the government? Through WhatsApp. It is very easy to speak to any president. You invite them to your home and they come”. This anecdotal evidence is corroborated by a vast literature on the political clout of economic elites which grants them a higher chance of tilting policy their way. Yet, particularly in the developing world, we know much less about their worldviews and policy preferences.
To contribute to our understanding of these powerful actors, the first part of my dissertation focuses on describing economic elites’ opinions on development. To do so, I conduct around 130 in-depth interviews with economic elites, where I focus on their explanations about poverty and inequality. I look for variation across different sociodemographic variables and incorporate a cross-national perspective by studying elites in three countries: Honduras, Mexico, and Uruguay.
My findings reveal that there is a common elite ideology that prevails across countries. That is, elites see the private sector as essential in pushing forth a country’s development and that employment and education are the main ways out of poverty. While they have varying levels of appreciation of state capacity, they all believe that the state plays a crucial role: first, in creating the right conditions for the private sector to prosper and, second, to provide citizens with quality basic services in an effort to equalize opportunities.
However, there are also important cross-country differences that should not be dismissed, and these are more prevalent than differences within countries, suggesting that national context shapes these worldviews in some way. In general, Uruguayans tend to focus more on individualistic causes of both poverty and inequality. Besides their worry about the declining quality of education, they believe the country provides citizens with opportunities to thrive. In Honduras, elites have much more structuralist views of both poverty and inequality. They are deeply dissatisfied with the state’s performance in welfare provision and with its ability to help businesses thrive. Mexicans are more alike Uruguayans in that they believe the emphasis should be placed on equalizing opportunities rather than income, and that this should be done by lifting the floor for the poor. However, alike Hondurans, they also recognize that there are injustices around some wealth concentration, mainly tied to corruption or to government-facilitated monopolies.
To understand how elites engage in public discussions around issues of development, I collect and analyze a unique dataset of web-scraped elite statements. I find that when elites speak up, they frequently talk about employment and taxes, much less about poverty, and almost never about economic inequality. These statements echo patterns observed in interviews, where poverty discourse is closely linked to economic development and taxation concerns focus on investment implications and political ramifications of taxing the wealthy.
Because taxation is a key policy to fight poverty and inequality, I then further investigate tax attitudes. Interviews suggest that at least two important dimensions explain the elite’s justifications for rejecting taxes: their mistrust of the state and their rejection of the normative importance of income inequality. To test these claims, I conduct a survey experiment among Latin American MBA students, a population of future business leaders. I expose respondents to two different tax increase proposals, one in which the private sector has an active role in its administration. I also vary whether the proposal is framed to combat poverty as opposed to inequality.
Results suggest that economic elites are indeed more willing to support tax increase initiatives when business associations take a more active role in its implementation. Importantly, the findings also reveal that the enthusiasm for using tax funds to finance NGOs is quite low. In fact, respondents preferred that the tax money go to social policies. This implies there is a certain level of trust in public welfare programs, at least in comparison to NGOs.
In all, this dissertation offers novel and unique data on the views of economic elites in Latin America around crucial issues of development. Through a multi-method approach including interviews, analysis of public statements, and a survey experiment, it contributes to our understanding on the complexities of elite ideology. By studying elites as individuals and incorporating a comparative perspective across three countries, this research offers a nuanced view of how context shapes elite ideology. Furthermore, this work has significant policy implications. By analyzing elite attitudes towards key societal issues, we can better inform policy decisions and identify opportunities for collaboration in addressing economic inequality and promoting inclusive growth.
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