What role does the state play in the age of neoliberal economics? How autonomous is the government from both domestic and international forces in the privatization, regulation, and integration of the electricity sector? Anil Hira addresses these important questions in his detailed analysis of the evolution of energy policy in the Southern Cone. The book is divided into five chapters that include an introduction, a chapter outlining the author's theoretical framework, one analyzing the domestic efforts to liberalize energy markets, one addressing regional integration, and a concluding chapter with suggestions for improving regulations in the energy sector. He concludes that the state continues to play an important role in shaping energy policy throughout the region, and the role of the state, either through state-owned enterprises or through regulation of the energy market, continues to exert an enormous influence over pricing, reliability, and investment. Furthermore, Hira argues that regional integration, which requires interstate cooperation, is essential in order to enhance the ability of Southern Cone economies to compete in the global marketplace.

The introductory chapter asks whether the state has become irrelevant in the neoliberal age. The author argues that, paradoxically, the role of the state in regulating markets has become more important. Here, he draws upon the framework developed by Peter Evans (Embedded Autonomy: States and Industrial Transformation, 1995), asking whether governments can create policy independent of domestic and international pressures. Hira compellingly argues that the literature tends to focus on macroeconomic changes, while ignoring important differences across states and across industries, and that studies of government regulations are infrequent and generally conducted by neoliberal advocates. He attempts to fill this gap in the literature by examining the transformation of electricity markets in the Southern Cone.

The second chapter develops the theoretical framework for testing the state's ability to resist domestic and international influence over policy. Hira argues that the composition of the proliberalization and antiliberalization forces, combined with the institutions of the state, will determine policy change. He chooses to analyze the energy sector because it is basic and vital to a modern economy and, given that the sector is often seen as a “natural monopoly,” government autonomy is particularly vital to successfully liberalize the sector without simply moving from an inefficient state-owned monopoly to an inefficient privately held monopoly. He then provides an extensive list of pro- and antiliberalization forces, including presidents, government ministers, state-owned enterprises, the military, consumers, industry, subnational governments, unions, nongovernmental organizations, and public opinion, arguing that the proliberalization forces are stronger and more ideologically unified. Unfortunately, there is no empirical support for this conclusion. Additionally, while the chapter provides a useful outline of the wide array of forces that may attempt to influence liberalization, it is unclear how this forms a framework for determining state autonomy from domestic and international forces.

In the third chapter, Hira moves on to examine market liberalization in the six economies of the Southern Cone, with an emphasis on Argentina, Brazil, and Chile. He argues that there are three generations of reform in the region, with each generation improving upon the mistakes of the previous one. His descriptions of the liberalization processes in these nations are impressive and useful for scholars interested in privatization and regulation. The author argues that Brazil's and Chile's reliance upon hydroelectric power leaves consumers vulnerable to volatile prices and rolling blackouts, meaning that consumers place greater pressure on the state to maintain an active role in the energy sector. It is interesting to note that despite privatization in these three nations, large energy firms Yacimentos Petroliferos Fiscales (YPF), Petrobrás, and Endesa still have close ties to government officials. Presumably, this undermines state autonomy, although Hira does not explicitly make this claim. He also finds that prices are generally lower where state-owned enterprises continue to dominate, but that prices are more volatile and service is less reliable. Furthermore, there is a significant gap between the prices paid by residential customers and wholesale consumers. He concludes that given that privatization did not lead to markets but to oligopolies, “state intervention is actually needed to create competitive conditions” (p. 70).

Chapter 4 examines MERCOSUR's (the common market of South America's) moves toward integrating the electricity market. Hira argues that domestic forces favoring privatization and liberalization should also favor integration. Integration provides opportunities for net exporters like Bolivia and Paraguay and for net importers, especially Brazil, the region's largest consumer. While the economics of this argument are sound, it seems that domestic forces that favored privatization in Brazil may resist foreign competition. The author finds that while integration is progressing, a lack of clear regulatory policy in states like Paraguay and Uruguay inhibits investment and continued integration. He argues that if integration is properly conducted, the region has the possibility of being globally competitive. Surprisingly, the author provides little advice for how the region's governments can avoid the pitfalls of regional oligopolies, local resistance, and political and economic instability in order to create a strong set of effective regulations to ensure this outcome.

The final chapter offers suggestions on how to improve the energy sector in the Southern Cone. Given that state-owned enterprises are subject to patronage hiring and unproductive subsidization, poor service, and corruption, while privatized firms engage in collusion and are subject to the preferences of foreign investors rather than domestic or regional preferences, Hira claims that there is still an important role for the state. For the author, state autonomy is the key for improving the functioning of the former and the regulation of the latter though no specific prescriptions are offered.

In sum, I would recommend Political Economy of Energy in the Southern Cone for scholars interested in privatization or energy policy, as it provides an interesting history of the liberalization of the electricity sector in this region. Unfortunately, the lack of attention to research design and rigorous analysis undermines a work with the potential to fill a large hole in the literature.