Social Spending Responses to Organized Labor and Mass Protests in Latin America, 1970-2007

This article analyzes the relationship between collective protest and social spending in Latin America from 1970 to 2007. I argue that under democracy, organized labor is in a better position relative to other groups in society to obtain social policy concessions as a consequence of their collective action efforts. Labor insiders mobilize around specific demands, and labor strikes carry significant economic and political costs on governments. In contrast, other groups in society rarely protest around specific social policy issues and are more often subject to successful demobilization tactics from political leaders. Results from an error correction model (ECM) show that in democracies, collective protest has differentiated effects on social spending. While strikes have a strong positive long-term effect on social security and welfare spending, none of the different forms of collective protest affect education or health spending. Importantly, I also find evidence of a deterrent effect of mass protests in democratic regimes; cutbacks in human capital spending are less likely as peaceful large-scale demonstrations increase.