Abstract

BERGARA, Mario  and  MILNITSKY, Sergio. Uruguay: Incentives and Institutions in a Decade of Reforms. El trimestre econ [online]. 2018, vol.85, n.337, pp.5-50. ISSN 2448-718X.  https://doi.org/10.20430/ete.v85i337.658.

The structural reforms already implemented and in progress in Uruguay since 2005 imply a significant change in the rules of the game in the Uruguayan economy and society. Additionally, the organizational support required to make these new incentive structures effective has led to a relevant restructuring in several areas at the State apparatus.

In order to understand why it was feasible in Uruguay to deploy such a relevant and deep reform process in a short term, we apply the Institutional Economics perspective, describing the organizational transformations and explaining how political institutions and the political game affect the policymaking process and the policy outcomes. In doing so, we also analyze the role, the incentives and the relative power of the main actors.

The reform process led to new incentive structures and institutions/organizations consistent with supporting the credibility of those new rules and it implies an ideological approach regarding the role of the State. Mitigating information asymmetries and the inequitable distribution of economic power demands a compensating role from the public sector. Since discretion is supersede by better defined and open access rules, elitist and clientelistic management of power is supplanted by a more transparent and democratic political and social environment.

Keywords : institutions; incentives; public policies; reforms; Uruguay.

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