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Beyond Transitions to Democracy in Latin America

  • Marcelo Cavarozzi

Transitions into democracy: convergence and distinct paths

In mid-1982 Mexico's Minister of Finance, Jesús Silva Herzog, arrived in the United States and announced that his country was not going to continue paying its foreign debt. Silva Herzog's declaration was soon followed by debt defaults in many other Latin American countries, marking the beginning of the region's most serious economic crisis in this century. This crisis involved the partial breakdown of Latin America's financial and trade linkages to the world economy; the cessation of new credit money paralleled an interruption in the flow of capital investments, amounting to a total reversal of the financial patterns of previous decades. (The level of foreign investment, especially in manufacturing and mining, had been relatively high since the mid-1950s, albeit with significant differences from country to country).

The debt crisis coincided, not incidentally, with a convergence of the political trajectories of five of the region's more industrialised countries: Mexico, Brazil, and the three Southern Cone nations of Argentina, Chile, and Uruguay. All five governments – the South American military dictatorships and Mexico's stable authoritarian PRI regime – experienced periods of political turbulence closely related both to the severe economic disruptions and to other domestic and international influences.

One of the remarkable aspects of this 1982 political convergence was that it came after the ‘long decade’ of the 1970s, during which the governmental routes of the five countries had been extremely divergent. In Argentina, for example, instability, militarism and political violence had intensified, starting in 1969; these phenomena then spread to its traditionally more democratic neighbours, Chile and Uruguay.

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1 Héctor Schamis has thoroughly analysed the differences between the developmentalist regimes of the 1960s and the Southern Cone military dictatorships of the 1970s. In doing so, he has provided a powerful critique of the attempt to extend the application of the bureaucratic-authoritarian model to the more recent regimes. Héctor, Schamis, ‘Reconceptualizing Latin American Authoritarianism in the 1970s. From Bureaucratic-Authoritarianism to Neoconservatism’, in Comparative Politics (January 1991). However, he is mistaken in arguing that the neo-conservative formula applied in the Southern Cone is simply a more potent version of the one applied in the advanced capitalist countries. I discuss below why this is the case.

2 As Stark & Bruszt (1990) have pointed out, the new paradigm has also emphasised that the outcomes of the transitions are underdetermined, and in part, the result of contingent choices. As those authors argue:

The rejection (by the ‘interactionist model’) of structural preconditions/determinants has not propelled the best analysts in the field into a voluntarist position in which, because ‘anything is possible’, outcomes depend on the will, force of personality, skills, imagination, or creativity of the key political actors. For O'Donnell, Przeworski and Schmitter, social structure does matter; but id does not determine outcomes so much as limit, constrain, and shape possibilities. David, Stark, and Lazlo, Bruzst, ‘Negotiating the Institutions of Democracy: Contingent Choices and Strategic Interactions in the Hungarian and Polish Transitions’. Working Papers on Transitions from State Socialism (Center for International Studies, Cornell University, 1990), p. 12.

3 In this sense I agree with the anonymous reviewer who questioned my initial assertion that an expanded version of the transition paradigm could contribute to the analysis of democratic consolidation.

4 Fanelli, Frenkel & Rozenwurcel argue that the counterpart of the expansion of the public and the private foreign debt was capital flight. Whereas the interest accrued from external assets, which are received by nationals, are not registered in the national accounts, the interest on the foreign debt decisively affects the balance of payments. This chronic disequilibrium first became apparent in the Argentine case, but it later emerged also in Mexico and Brazil. Fanelli, José M., Roberto, Frenkel, and Guillermo, Rozenwurcel. Growth and Structural Reform in Latin America. Where Do We Stand? (Buenos Aires, 1990).

5 Roberto, Frenkel, Ajuste y Estabilización: Revisión de Algunas Experiencias Latinoamericanas, mimeo, presented at a seminar organised by the World Bank on ‘Latin America: Facing the Challenges of Adjustment and Growth’, Caracas, 1990, p. 11. I have not been able to locate comparable reliable data on private investment.

6 The boundaries between policy-making channels and the institutions of territorial and sectoral representation were more clearly demarcated in the cases of Brazil and Mexico. But also in Chile, during the two decades following the formation of the Popular Front in 1938, a set of strategic decentralised institutions acted quite independently from the congress, the parties and the political appointees who headed the ministries. As I have shown in my dissertation, these institutions, especially the Corporation for Development (CORFO) and the Central Bank, were instrumental in the design and implementation of industrialisation policies. Marcelo, Cavarozzi, ‘The Government and the Industrial Bourgeoisie in Chile: 1938–1964”. Unpublished PhD Diss., Univ. of California, Berkeley, 1975.

7 The activation of the peasantry was an exception to this pattern both in Brazil and Chile (in the latter case until the 1960s).

8 In Chile, Ibáñez' return to the presidency in 1952 was perhaps the turning point. With the presidential elections of that year, the Radical party was definitively displaced from the centre of the national political scene. After those elections, the party system suffered successive dislocations which led to the 1973 political breakdown. In turn, in 1958 Uruguay's Colorado Party was defeated for the first time in presidential elections during the twentieth century. This event marked the final eclipse of Battlismo (and neo-Battlismo) and the end of the moderating influence that party faction exerted on national politics during more than half a century.

9 Perhaps the only case in which development and stability were more or less harmoniously related during a relatively long period was the Mexican desarrollo estabilizador prevailing from 1952 to 1970.

10 Obviously in many instances of conflict resolution, private actors influenced the specific outcomes. However, the pattern of resolution often allowed sectoral representatives to avoid assuming the costs of trade-offs and transactions. The effects of the decisions tended to be credibly blamed, whether this was the case or not, on executive agencies.

11 Fanelli, , Growth and Structural Reform, p. 7.

12 As Shapiro and Taylor have pointed out, ‘…competition for rents which accrue to the winners of government largesse turns into widespread DUP activities…. Since almost any state intervention opens space for a rent (import quotas, traffic cops, defense contracts – the list is endless), the risk is that seeking governmental favors will override normal market activity. Rational rent seeking by individuals can produce extreme suboptimality for the economy as a whole. …the DUP school is correct in emphasizing that state intervention, for reasons both intended and unforeseen, does not necessarily lead to efficient outcomes…’. Helen, Shapiro, and Lance, Taylor, ‘The State and Industrial Strategy’, in World Development, vol. 18, no. 6 (1990).

13 Guillermo, O'donnell, ‘Las Fuerzas Armadas y el Estado Autoritario del Cono Sur de América Latina’ in Lechner, Norbert (ed.) Estado y Politico en América Latina (México, 1981).

14 As noted by Fanelli et al., during the late 1970s, the opening of the Chilean economy proceeded at a much faster pace than in Argentina (and obviously than in Brazil and Mexico as well). Uruguay's monetarist and trade-liberalisation reforms, which were launched by the military's economic czar, Alejandro Vegh Villegas, were less draconian and more compromising than those implemented in Chile and Argentina. The Chilean military government was also more successful in reducing the fiscal deficit.

15 The Argentine economy was adjusted in the sense that the trade balance picture was dramatically improved. Beginning in 1982 the recession depressed imports to 60% of previous levels. This information is provided by Fanelli, et al. , Growth and Structural Reform. Several points in this section rely heavily on the thorough analysis these authors make of the recent stabilisation attempts in five Latin American countries.

16 Fanelli, et al. , Growth and Structural Reform, p. 58.

17 The concept of ‘hysteresis’ refers to a pattern of decline or disorganisation defined by the irreversibility of certain trends once the initial cause of dislocation disappears.

18 Fanelli, et al. , op. cit., pp. 3338.

19 ibid., pp. 31–2.

20 Albert, Fishlow, ‘The Latin American State’, in The journal of Economic Perspectives, vol. 4, no. 3 (Summer 1990), p. 23. See also Albert, Fishlow, ‘Review of Handbook of Development Economies’ in the Journal of Economic Literature, vol. XXIX (December 1991).

21 Within the more circumscribed landscape of our five-country cluster, the only successful bypass of chaotic adjustment was achieved within the context of a nondemocratic regime, i.e. Pinochet's Chile. In fact, the other case which seems to be more recently veering toward controlled adjustment is Mexico, which does not either qualify as a political democracy. However, despite the obviously divergent political trajectories of these two countries during the twentieth century, the comparison of 1982–9 Chile and 1988–91 Mexico suggests that neither of the two was a consolidated authoritarian regime. Actually, at those points both regimes were under siege, and were vexed by ‘democratic tensions’. Pinochet faced strong social protests and could not elude implementing the plebiscite contemplated by the 1980 constitution. As is well known, he was ultimately frustrated in his 1988 attempt to prolong his constitutional mandate until 1998. Salinas de Gortari, in turn, inaugurated his sexenio in the aftermath of an electoral victory widely perceived as illegitimate and fraudulent. This forced him to promise the democratisation of Mexican politics. Although the events of the last three years in Mexico indicate that some liberalisation has proceeded, Salinas' overall record is, at best, mixed.

* An earlier version of this article was published in the Revista de Estudios Politicos, Madrid, No. 74, Oct./Dec. 1991.

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Journal of Latin American Studies
  • ISSN: 0022-216X
  • EISSN: 1469-767X
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