Over the last decade and a half, a dominant political and economic theme has been the so-called “Rise of the Left.” Largely, this has been portrayed in a sort of binary framework along the lines of Jorge Castañeda’s “good left” and “bad left” where the good left works within existing democratic and market frameworks and the bad left subverts democratic and market processes in favor of populist and authoritarian rule. The reality is obviously much more nuanced than that. Chile’s left is still much different than the left that is governing in Brazil or Uruguay. Similarly, within the “bad left” there is tremendous variation across countries. This is particularly true when it comes to economic policy, where policy making varies dramatically across different countries.
Within this framework, I think Ecuador is particularly interesting. While it is typically grouped with the bad left on both its democratic and economic record, it differs dramatically from those countries in many ways in its political economy. Over the next few days, I will be doing a series of posts examining Ecuador’s political economy during Rafael Correa’s presidency. I will argue that it is built largely on a pragmatic foundation, as evidenced by recent overtures for a free trade agreement with the European Union, an auction of exploration blocks in the Amazon to private companies, and Ecuador’s continued dollarization. Beyond that, I will argue that Correa can be opportunistic in taking advantage of situations like the state of world financial markets to default and joining the Alianza Bolivariana para los pueblos de Nuestra América (ALBA), while having a much larger role for the state within the domestic economy.