Structural State Autonomy explaining development oriented policies in peripheral contexts: The Uruguayan case (2005–2015)

This article explores the challenge of building state autonomy as a driver of development processes in peripheral economies. More specifically, it explores how to build stable and lasting political processes in economies subject to high economic volatility and external dependence. To this end, I develop the concept of Structural State Autonomy understood as a relational and situated process, immersed in global asymmetries and a product of internal dynamics that shape conflict and cooperation among local actors. I take issue with this debate by analysing the progressive fiscal reforms in Uruguay during the 2000s by studying the Tax Reform aimed at improving income distribution and the New Investment Regime that modifies capital tax exemptions. The article shows that institutionalized, stable, and broad-based dialogues between the state and society have consolidated the Structural State Autonomy in Uruguay. In effect, granting partial benefits to different groups, through articulated and non-rival negotiated agreements that include local elites, grassroots actors, and transnational capital, has allowed the implementation of successful, albeit moderate, progressive tax reforms in Uruguay.