Power balances,transnational elites,and local economic governance: The political economy of development in Medellín

Abstract

Applying a non-linear political economy analysis of power balances, institutional mechanisms, and elite structures, this study sheds light on the characteristics of Medellín’s economic development since the early 2000s. Elites with minimal technological capabilities and interests in promoting the advancement of transnational capitalism have successfully secured access to sources of power. These conditions (re)produce neoliberal logics of local governance that focus on economic growth in sectors with perceived global comparative advantages and on sustaining the particular power balances in Medellín’s political settlement. This has led to failures of generating positive forward and backward linkages for productivity growth of local firms, a local labour market marked by low wages and high employment elasticities, and large income inequalities. The local governance model that perpetuates productivity and inequality problems of the city is adopted as an opportunistic discourse of Medellín’s transnationalised capitalist elite in the larger neoliberal context of Colombia’s polity and economic policy agenda. In the absence of structural reforms targeting low wages and incentivising firms to develop technological capabilities, Medellín’s low productivity and high inequality problems are likely to persist.