Since 1990, spending on large infrastructure projects has increased across Latin America.  This trend is puzzling because it comes at a time of democratization and decentralization thought to hinder investment in long-run and spatially concentrated projects.  This talk explains the over-time growth in investment by highlighting the financialization of infrastructure.  Private sector involvement in infrastructure projects created a fiscal illusion in which the costs of infrastructure accrued off government balance sheets.  Politicians shifted the extremely high costs on to future governments. Private sector financing also resulted in an arena shift in which legislatures were cut out of budget decisions made primarily within finance ministries.  Presidents allocated or renegotiated infrastructure contracts to finance their campaigns, and only had to overcome constraints from the administrative state.  Qualitative evidence from Peru, Colombia, and Ecuador shows how changes in the model of building infrastructure help to explain the increase in level and project size over time, whereas campaign finance needs and bureaucratic hurdles shape individual country trajectories.

• Alisha Holland, Associate Professor, Harvard University Government Department

This is a virtual event.

This event is in partnership with the Center for Latin American Studies and Hinckley Institute of Politics.