Punctuated Equilibrium in Latin American Democracies: Evidence from Budget Dynamics in Chile, Costa Rica, and Uruguay

Abstract

This article applies Punctuated Equilibrium Theory (PET) to analyze budget dynamics in three Latin American democracies—Chile, Costa Rica, and Uruguay. These countries, characterized by relatively high levels of democratic quality, bureaucratic professionalism, and institutional stability, provide demanding cases for assessing whether the Theory's empirical regularities extend to Latin America. The study uses annual data on central government spending by policy function 1990–2020. It applies standard PET tools—histograms, Q–Q plots, Shapiro–Wilk, and Kolmogorov–Smirnov tests—and estimates kurtosis, L-kurtosis, and L-skewness to assess the distributional properties of budget changes. The results show strong evidence of punctuated dynamics in all three countries; budget distributions are markedly leptokurtic, especially in Costa Rica and Uruguay, while Chile exhibits lower but still significant departures from normality. Sectoral analysis reveals that volatility is concentrated in areas such as housing and environmental protection, whereas core functions like education and public safety remain stable. These findings confirm PET's baseline pattern in institutionalized Latin American democracies and highlight the importance of contextual factors in shaping the intensity of punctuation. They also underscore the need for further research into sectoral heterogeneity, cross-national variation, and the institutional and political mechanisms underlying non-incremental policy change.