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Advise the government of a new autocracy

ESSAY OPTION 2: Advise the government of a new autocracy
The Scenario:
The chief of staff of a long-time electoral authoritarian regime has just contacted you to
help advise it on how best to design the regime’s economic policy approach. The regime is
currently led by President Carmen Ordenado of the mass-based but vaguely right-leaning
Party of National Loyalty (PNL). This is President Ordenado’s firste term but the PNL party
has been in power for 30 years. President Ordenado’s predecessor left her with
considerable macroeconomic instability (a large fiscal deficit, rising inflation, a devaluing
currency). During her predecessor’s term, there were some workers’ strikes and protests in
several towns throughout the nation, especially during the first few years of that leader’s
term. The PNL is concerned about maintaining its support and the survival of the regime.
This developing nation is small, comprised of just 5 million people who are mainly employed
in manufacturing and agriculture. The nation suffers from high inequality, thanks to the
large numbers of urban and rural poor that engage in informal or itinerant work. The
nation’s socio-economic elites control large manufacturing enterprises, large tracts of land,
and mineral wealth. The nation’s small but growing middle class mainly holds managerial
positions in the manufacturing industry, owns small businesses in the services sector, or
work in the nation’s sizeable public sector (bureaucracy, schools/universities, healthcare
system). There is a small but sizeable urban and agricultural working class that hold formal
jobs in the nation’s manufacturing and agricultural industries and is unionized.
The regime is constitutionally presidential and has a single chamber legislature. Presidentiallegislative elections occur every five years. The president is elected by plurality in a singleround election. Legislators are elected from 100 single-member districts. Since its creation,
the PNL has won the presidential race with between 80-90% support. The ruling PNL is a
mass-based, vaguely right-leaning party that has survived in power thanks to support from
the nation’s mining, manufacturing, and agricultural elites as well as the unions of their
workers. Targeted benefits have keep the leadership of the mining worker’s union (MiFU),
the manufacturing workers’ union (MaFU), and the agricultural workers’ union (AWU) loyal
to the regime.
However, this year the PNL won the presidency with just 65% support. The candidate for the
Party of National Democracy (PND), the only opposition party that has been allowed to
register for elections, gained 35% support in the national presidential race and 40% seats in
the 100-seat national congress. The remaining 60% seats are held by the PNL. The PND was
founded by members of the nation’s small but rising middle-class services sector but has
been attracting PNL voters, as well as voters from the urban and rural poor who do not
enjoy formal sector jobs. Abstention has traditionally been high among these voters. MiFU,
MaFU, and AMU members are also increasingly dissatisfied with the PNL and its policies.
Instructions:
Faced with the challenge of stabilizing the economy and ensuring support for the PNL and
the survival of its electoral authoritarian regime, the President Ordenado needs to construct
the best portfolio of domestic and international economic policy choices for stabilizing the
economy and political situation. The government would like you to alert it to the main risks
it is facing, the main policies for addressing them, and the main rewards for doing so. Please
do this in the following order:
a. Introduce the main risks to its survival (about 350 words)
b. The best fiscal and monetary policy strategy (about 350 words)
c. The best strategy for redistribution across socio-economic groups (about 350 words)
d. The best strategy for redistribution across regions (about 350 words)
e. The best incoming foreign direct investment strategy (about 350 words)
f. The best trade policy strategy (about 350 words)
g. The best currency policy strategy (about 350 words)
h. Outline the main rewards that can be expected from these policies (about 350
words)

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