Diego Vallarino
Why do small open economies sustain macroeconomic stability while experiencing limited structural transformation and modest productivity growth? This paper argues that economic discourse constitutes an endogenous informal institutional mechanism through which attention is allocated across policy domains, shaping how economic problems are framed, prioritized, and translated into reform agendas. Drawing on institutional economics, Polanyian political economy, and post-Keynesian approaches, the paper conceptualizes discourse not as an autonomous cause of policy outcomes, but as part of the institutional environment through which material constraints, social conflicts, and policy expectations are interpreted. Persistent discursive patterns may stabilize expectations and discipline conflict, but also concentrate attention on existing constraints rather than on reforms involving structural reallocation, uncertainty, or distributive contestation. The empirical analysis combines institutional economic reports with public economic discourse for 2021–2025. Uruguay is examined as a stable small open economy exposed to technological, ecological, and geopolitical pressures, and contrasted with advanced economies where similar policy domains display greater thematic rotation and stronger links to transformation-oriented agendas. The results suggest that stability and limited transformation may coexist within a conservative political-economic equilibrium. By introducing Institutional Attention Allocation, the paper shows how discourse mediates between structural conditions and the political visibility of reform.