Why Reform Fails: The ‘Politics of Policies’ in Costa Rican Telecommunications Liberalization

Abstract

As the "Washington Consensus" reforms lose momentum, the Inter-American Development Bank (IDB) is calling to shift the focus from the content of policy choices to the political process of their implementation. The analysis of the paradigmatic case of telecommunications reform in Costa Rica underscores the importance of these "politics of policies". At the same time, however, it shows the shortcomings of an overly technocratic understanding of these: the failure of repeated liberalization initiatives was not only due to policy-makers' errors in steering the project through "the messy world of politics" (IDB), but it is also the policies' content that shaped the actors' responses. The liberalization project was able to muster bi-partisan support in the political arena; however it provoked broad popular mobilization against it, and thus became a catalyst for the disintegration of the country's long-standing two-party system. Although the IDB warns of a "trade-off" between representativeness and policy effectiveness, the analysis of the Costa Rican case shows quite to the contrary a causal link between the two: It is precisely a lack of representativeness that can crucially undermine policy effectiveness.