Models of socio-economic compensation under COVID-19 in Latin America: insiders, outsiders, and the politics of crisis

Abstract The unprecedented magnitude of the coronavirus disease 2019 crisis provides an ideal setting for a “Second Image Reversed” approach, that is, how nations refract common external challenges. In most of the advanced world, the policy package of socio-economic compensation has been broadly similar. We argue that the social and labor policies to counter lockdown effects in Latin America displayed way more diversity. The study identifies four national patterns of socio-economic responses, Coordinated (Argentina), Assistentialist (Brazil), Liberal (Chile), and Residual (México), according to (1) the type of initiatives directed to formal (insiders) and/or informal (outsiders) sectors of the labor market and (2) the volume of policies catered to each segment. We argue that traditional social policy drivers and contemporary theories on labor market dualization are unable to explain this wide variation. Rather, the study focuses on the coalitional incentives of presidents and the direct pressure of organized social actors.