Divergent Trajectories: Healthcare Insurance Reforms in East Asia ...

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Illan Nam, Colgate University, Feb 2011Draft in progress, please do not quote or citeYet, electoral pressures alone do not adequately explain the variations we find withrespect to the two dimensions of social policy outcomes: for one, while competitivepressures may induce parties to introduce expansive social policy as an attractiveelectoral strategy, this does not tell us why they choose more targeted versus universalexpansion. Relatedly, electoral pressures also do not account for when parties findredistributive and solidaristic policies more attractive than less redistributive options.A more encompassing explanation to at least some of these questions might befound if we examined variations in policy strategy in the context of how party systemdevelopment and institutionalization structures electoral competition. While democratictransition certainly ushered in a more competitive electoral environment, the partysystems in which these elections were contested differed substantially, especiallybetween countries in Latin America and East Asia. Disparities in the organizationalmaturity of the parties as well as in the levels of party system institutionalization anddegrees of nationalization generated different challenges and imperatives to bothreconstituted as well as newly formed parties. This, in turn, may affect their strategiccalculations about policy choice. Parsing out differences in the effects that party systeminstitutionalization, nationalization, and organizational maturity yielded upon electoralcompetition may offer a more theoretically robust framework for understanding howelectoral pressures motivated different trajecotires of health policy prescriptives acrossthe cases.THE ARGUMENTThis work seeks to explain the variation in healthcare insurance reform outcomeswith respect to scope of universalism and solidarity. The model I present privileges the24
Illan Nam, Colgate University, Feb 2011Draft in progress, please do not quote or citerole that cross-class coalitions between formal and informal sector workers played as wellas the effects of party system institutionalization in shaping electoral competition toexplain the divergent healthcare reform outcomes we find in developing democracies.Since the 1990s, deepened integration into world trade and capital markets hasbeen accompanied by growing labor market insecurity for both formal and informalsector workers. Along with greater openness, countries in Latin America and East Asiaimplemented changes to labor market regulations that produced rising labor marketprecariousness during the 1990s and beyond. Neoliberal reforms in Latin Americasubstantially reduced the density and breadth of labor organizations and led to theattrition of formal-sector workers (Murillo, Roberts). Reform and downsizing of thepublic sector eroded the living standards and size of middle class workers that this sectorhad created during the import-substitution era. In East Asia, too, globalization introducedsignificant pressures upon the working and middle classes. A surprising feature of EastAsian labor markets is that, although developmental policies created a large and vibrantclass of skilled and white-collar workers, many of these workers nonetheless belonged tothe “irregular” sector, as they were either self-employed or contract workers. These“irregular” employees accounted for more than a third of the active working populationduring the 1980s, and their share rose even higher during the 1990s and 2000s.Yet, while workers across both regions experienced more insecurity in the termsand status of their employment, the policy response to compensating workers has beenquite varied, as has already been recounted. In South Korea, the policy response was topush for a reform that increased redistribution between formal and informal sectorworkers, and in particular, between upper-income and lower-income workers. In Chile,25
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