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Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Rethinking Marxism: A Journal of Economics, Culture & Society Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rrmx20 The Tenuous Credentials of Latin American Democracy in the Age of Neoliberalism Steve Ellner Published online: 07 Dec 2010. To cite this article: Steve Ellner (2002) The Tenuous Credentials of Latin American Democracy in the Age of Neoliberalism, Rethinking Marxism: A Journal of Economics, Culture & Society, 14:3, 76-93, DOI: 10.1080/089356902101242305 To link to this article: http://dx.doi.org/10.1080/089356902101242305 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the Content) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and- conditions D o w n l o a d e d
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76 Ellner RETHINKING MARXISM Volume 14, Number 3 (Fall 2002) The Tenuous Credentials of Latin American Democracy in the Age of Neoliberalism Steve Ellner Recent democratic breakthroughs in Latin America continue to lend credibility to the optimistic notion that democratization and globalization go hand in hand. Indeed, with the ending of seventy-one years of single-party rule in Mexico, and then with Alberto Fujimoris call for new elections in Peru, it was easy for Latin American democrats to be euphoric and attribute it all to the benevolence of globalization. A New York Times Op-Ed Page article by Paul Krugman called Vicente Foxs triumph a vindication of NAFTA, a success story for globalization, and proof that glo- balization tends to promote freedom (New York Times, 5 July 2000). In another plus for globalization and for the optimists who write on the subject, the Organiza- tion of American States and the Carter Center received glowing praise for their key role in Perus democratic opening. Both events are seen as part of a worldwide demo- cratic wave, as Samuel Huntington (1991) put itthe largest in history. It began with the military coup in Portugal in 1974 and peaked with the fall of Communism in Eastern Europe. I do not share the optimism of those encouraged by these developments, as the following article on democracy in the era of globalization and neoliberal policies will make evident. The world has not gone all that far in the direction of authentic democratization over the last quarter of a century. During Boris Yeltsins rule, un- scrupulous business syndicates rooted themselves in power in Russia, while Afri- can democracy has failed to put an end to internecine conflicts. Many political analysts attribute these problem areas to the specificity of conditions in both con- D o w n l o a d e d
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Neoliberalism and Latin America 77 tinents: Eastern Europes lack of a democratic tradition and Africas staggering levels of poverty. Some conclude that Latin America is a completely different story. Indeed, Huntington (1997) points to Latin American elites adherence to liberal democracy and Christianity as auguring well for democratic stability, and for that reason calls on U.S. policymakers to extend that region preferential treatment. The fate of the regimes that have emerged in Latin America during the current demo- cratic wave is thus considered to be a benchmark for the rest of the underdevel- oped world. Actually, the current prospects for Latin American democracy leave room for both optimism and pessimism. On the one hand, the continent has never been so demo- cratic. Central American nationsspecifically Guatemala, El Salvador, and Nicara- gua, where repression and military dictatorship are endemichave established rep- resentative democracies and have incorporated former guerrilla movements into the political system. Furthermore, with the exception of Chile and Uruguay, existing democratic regimes in Latin America have been around longer than at any other time in the history of each respective nation. Now for the negative side of the continentwide balance sheet. The phenomenon of hyperpresidentialism, which includes the weakening of congress and other countervailing institutions, recalls the presidents on horseback known as caudil- los who ruled throughout the nineteenth century. Part of the explanation for insti- tutional atrophy is Latin Americas response to the economic stagnation that has characterized the continent for over two decades. In their rush to implement unpopular shock treatment reforms, neoliberal presidents in Latin America have spurned congresses and even their own political parties, thus reversing a century of institution building. At the same time, they generally fail to level with voters by giving them advanced notice of austerity measures, thereby undermining democracys credibility. Disillusionment with politics and politicians reflects itself in declin- ing party membership. Political scientist Frances Hagopian (1998, 116) has com- pared statistics on popular identification with parties in major Latin American and European nations over the last two decades. While the tendency on both continents is toward decline, by the 1990s as much as 70 percent of the popula- tion identified with parties in Great Britain, 75 percent in Germany, and 63 per- cent in Italy, as opposed to 25 percent in Argentina and 49 percent in Brazil and Mexico. After ten to twenty years of neoliberal-style democracy in Latin America, attention needs to be drawn to neoliberalisms deplorable record on the political front. Such a discussion will go a long way toward debunking myths regarding neoliberalisms po- tential to deepen democracy and the natural affinity between political and eco- nomic liberties. Democracys impressive expansion on a worldwide scale has become the most tangible accomplishment of globalization, now that the latters claim of achiev- ing an economic miracle for the third world has lost credibility. The following article deals with the impact of neoliberalism on democracy in Latin America. Rather than discuss how globalization distorts democracy by influencing D o w n l o a d e d
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78 Ellner class formation and political structures, as several important scholarly works do, 1 the piece concerns itself with the ramifications of neoliberal policies and strategy at the national level. Although global trends are clearly at the heart of the deterioration of democracy, the nationalas opposed to globalfocus of the article reflects my belief that the nation-state is still very much a part of the political picture in the third world. More specifically, the defense of national sovereignty by such traditional political actors as political parties and organized labor, which appeal to nationalist sentiment in opposition to powerful foreign interests, is still a viable strategy for achieving thoroughgoing change. In contrast, writers across the ideological spectrum who highlight the all-encompassing impact of globalization tend to minimize the possibility that political actors will shape their nations destiny. 2 Indeed, this skepti- cism regarding the ability of individual third-world nations to overcome the constraints of global forces reflects itself in scholarly priorities, which have moved away from national studies over the recent past. A second part of the article critically examines the misplaced emphasis of numer- ous political scientists on centralism as a root cause for the continents political prob- lems, and their general failure to recognize the damage inflicted on democracy by neoliberalism. If this position were confined to academic circles, I would have lim- ited my discussion of it to a few footnotes. In fact, not only do key actors such as political activists, the media, and business groups defend this staunchly anticentralist viewpoint, but it constitutes a major theme in neoliberal discourse. Neoliberal Idealism and the Transition to Democracy Latin American democracy has always ebbed and flowed; the 1980s were a pe- riod of flow in that military rulers in one country after another returned to the bar- racks. But unlike in the past, the spread of democracy in the 1980s was devoid of internecine conflict and radical change. The Brazilian democratic transition was the most gradual of any country, taking as long as six years. In Chile, continuity was particularly evident in the nations economic orientation, in that the coalition of Christian Democratic and Socialist parties that won the presidential elections in 1989 retained Pinochets market reforms. Throughout the continent, recently elected presi- dents kept their pledges to military predecessors of avoiding redistributive policies, which would have sharpened social tensions. Actually, the fledgling democracies were more willing to assume political risks by initiating unpopular neoliberal reforms than had been the case with former military regimes (Pinochet being the exception). 1. William I. Robinson (1996), for instance, attributes the weakening of democracy to the authoritar- ian tendencies of hegemonic transnational capital, which displaces the former governing coalition consisting of populist parties, labor leaderships, and business sectors. 2. The globalizaton focus underestmates the importance of the defense of national sovereignty and opposition to U.S. hegemonyor writes off these struggles completely. One forerunner of this approach on the Left was Leon Trotsky with his thesis of world revolution. D o w n l o a d e d
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Neoliberalism and Latin America 79 While Latin Americans may have worried about the pressing economic difficul- ties that the newborn democracies inherited, they had reason to be sanguine about the political climate. Nonleftists were encouraged by what Huntington observed as characteristics of third-wave democracies in general: political openings which were the result of compromise arrangements engineered by middle-class parties adverse to notorious isms. But leftists also had cause to be buoyant. Social movements had triggered the struggle against dictatorial regimes, and they pointed in the direction of a novel, participatory democracy. Latin American social movements upheld dif- ferent goals and employed different methods than the new social movements (anti- nuclear, womens, gay, and environmental organizations) that, according to Alain Touraine, prefigured a new type of democracy for Europe. Nevertheless, the new social movement paradigm caught the attenton of and inspired Latin American ac- tivists and scholars in the 1980s. Some of them were emboldened by the Sandinista revolution, which privileged social movements. When Venezuelas Movement to- ward Socialism (MAS) broke off from the Communist party, it called itself a move- ment of movements and promised to subordinate party interests to those of civil society. Brazils Workers Party headed by Luis Ignacio Lula da Silva, Mexicos Democratic Revolution party (PRD) led by Cuauhtmoc Crdenas, and Perus United Left (IU) led by Limas mayor Alfonso Barrantes also developed a special relation- ship with social movements based on a two-way communicational flow. The Left, however, did not have a monopoly on utopian-tinged visions of radical democracy underpinned by an autonomous civil society. Ironically, it was exalted by some of those who embraced the allegedly new paradigm called neoliberalism. The neoliberal idealists refrained from eulogizing military regimes established over the previous two decades, even though their raison dtre was to block the triumph of socialism and radical populism. Thus, for instance, the pro-neoliberal Liberal Institutes, which sprang up throughout Brazil during the transition period, severely criticized the technocrats who played leading roles in the nations military govern- ment for being bad for capitalism. They also warned that the shock treatment approach, which ruled out open debate over market reforms, would scare off busi- ness sectors, thus forfeiting their support for neoliberal formulas. One Institute mem- ber commented, Shocks need the armed forces to impose them, and that wont con- vince anyone (Nylen 1993, 309). The neoliberal idealists stressed political reform such as decentralization, specifically the invigoration of local government and orga- nizations of civil society, while often playing down economic policy. Their discourse on the role of the common citizen in democracy might easily have been taken from the pages of de Tocqueville. This fascination of neoliberal idealists with civil soci- ety and local democracy was a logical result of their characterization of centralism as the embodiment of all evil. (The visionary dimension of neoliberalism explains why the movement attracted utopianism-prone leftists such as Mario Vargas Llosa, although many of them were subsequently overtaken by pragmatism.) The idealistic goals of this wing of neoliberalism, however, were overshadowed by more pressing imperatives. Far from a democracy predicated upon an autonomous D o w n l o a d e d
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80 Ellner civil society and decentralized decisionmaking as the neoliberal idealists envisioned, the democracy that emerged in the 1980s was a restricted democracy. The gener- als who had ruled for over a decade conditioned their acceptance of democratic transi- tion on guarantees that firebrand populists and leftists be excluded from decision- making and substantive social reforms be ruled out. In Chile these limitations were embodied in the Constitution of 1980, which to this day has blocked badly needed labor legislation sponsored by the governing coalition. The pragmatic logic of re- stricted democracy survived electoral restoration, as technocrats retained consider- able power and Congress was largely shunted aside. The same pragmatic impulse also subordinated social movements and civil soci- ety as a whole to the negotiation strategy of nonleftist political parties, once the tran- sition process got off the ground. Most observers agree that neoliberal governments, with their lean budgets and reduced presence in society, have inadvertently or inten- tionally weakened and fragmented civil society, whose vitality in Latin America has always been contingent on its relationship with the state (Roxborough 1997, 5960). Educational institutions afford a good example of how this has worked out in prac- tice. Neoliberal policies have promoted the steady displacement of public education by private schools which, at the university level, now take in 30 percent of the stu- dent population, up from 5 percent in thirty years (Arnove, Franz, Morse, and Torres 1997, 286). This process has cut into the strength of student and teachers movements, which are largely absent in privately run institutions. Neoliberal discourse was deceptive in other ways. Its emphasis on the need to circumscribe the power of the central government and promote decentralization was often a smoke screen to gain acceptance for the real end-allnamely, widespread privatization. Thus, for instance, one of the first comprehensive neoliberal statements coming out of Venezuela, entitled More and Better Democracy, was put together by media executive Marcel Granier in 1987 and issued by the business-sponsored Roraima Group. The manifesto adduced the neoliberal argument on the need to counter excessive state paternalism, promote decentralization, and treat political parties as just one more organization of civil society (Grupo Roraima 1987, 140). Nowhere, however, did the document make reference to privatization, an omission which was not surprising since the word was practically taboo in Venezuela in the decade following the nationalization of the oil industry in 1976. Once the allegedly pernicious nature of centralism gained widespread acceptance, however, members of the Group embraced privatization and the government placed practically all the nations basic industry along with the telecommunications sector on the auction block. The electricity and salt industries and port system were decentralized only to be then offered to private interests. Actually, the fate of these sectors was a foregone conclu- sion because state governments simply lacked the resources, technology, and expe- rience to take charge of their operation. With the democratic system in Latin America flawed in serious ways, those like Samuel Huntington (1991, 57) who defended the transition process opted for Joseph Schumpeters minimalist definition of democracy as elections with a mo- D o w n l o a d e d
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Neoliberalism and Latin America 81 dicum of liberty. Given the deficiencies of these fledgling democracies, a more de- manding definition would have easily disqualified them from entering the ranks of democratic nations. Latin American leftists, who had come a long way from the days when they wrote off existing democracy as bourgeois, embraced a distinct view. 3 Their substantive definition of democracy rested on the supposition that extreme social inequality (a fatal weak spot of neoliberal thinking) is antithetical to the system, and that popular participation and incorporation are intricately a part of it (Boron 1995, 1904). The substantive view concerned itself with the quality of democracy. It thus rejected the black-and-white notion of the minimalists, which has been preferred by U.S. diplomats for the purpose of tracking and censuring countries that have strayed from the democratic classification (particularly ones that threaten U.S. interests). In future years, the minimalist definition of democracy and the broader, substantive perspective would clash, not only in academic circles but also in international fo- rums such as the Organization of American States annual assembly in 1999. The State Department dismissed the concept of participatory democracy as tantamount to mob rule (Rousseau has never been liked in the United States, not even among academicians), while the term made its way into the constitutions of President Hugo Chvezs Venezuela and Fujimoris Peru. For all its practicality as an instrument to impose sanctions against governments such as that of Fujimori, the minimalist definition passes over the real shortcomings of neoliberal-style democracy in Latin America. These deficiencies include arbitrary ex- ecutive action and the exclusion of the very poorwho have come to constitute the majority of the populationfrom the political, economic, and cultural life of the na- tion. At the outset of transition in the 1980s, the expectations created by democracys triumph made these defects seem excusable, if not momentary. Fifteen or twenty years later, they are at the heart of the problems confronting the current political system thus the need (recognized by a growing number of political scientists of different ideo- logical backgrounds) to broaden the definition of democracy in order to include much more than elections every so many years. What Went Wrong with Democracy la Neoliberalism? In the early transitional years in the 1980s, political analysts generally assumed that if only Latin American democracies could survive the awesome economic chal- lenges of the period, they would create solid institutions and become increasingly democratic. Even though by the 1990s democratic regimes had withstood the test of time, this hoped-for consolidation failed to take place. Far from developing strong political parties and shoring up other institutions such as congress and organized labor, neoliberal democracy showed an unmistakable preference for strong presidents. It is 3. Marta Harnecker points out that if anything positive came out of the military dictatorships of the 1970s and 1980s, it was teaching the Left the value of democratic regimes, regardless of how limited they are (1999, 335). D o w n l o a d e d
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82 Ellner remarkable that no political party on the continent distinguished itself as being in- strumental in bringing about important changes (from any ideological viewpoint) or enjoyed the same degree of prestige that parties did in Latin America decades be- fore. Perus Fujimori and Brazils Fernando Collor de Mello represented an extreme in that they largely spurned political parties. More typically, leaders who promoted neoliberalismsuch as Carlos Salinas (Mexco), Carlos Andrs Prez (Venezuela), Carlos Menem (Argentina), and Fernando Henrique Cardoso (Brazil)made clientel- istic concessions in return for party backing. Ironically, this practice, referred to as the old way of doing politics, was anathema to neoliberal discourse (Panizza 2000, 75963). In spite of the deals, however, neoliberal presidents kept party stalwarts out of cabinet posts in charge of formulating economic policy, which were reserved for technocrats. In short, if democratic consolidation means buttressing institutions such as political parties, then the terms appropriateness for political developments in the 1990s is open to question. The change from political parties as heroes and major actors to villains left on the sidelines was nowhere more evident than in Venezuela. At the time of the impeach- ment of Venezuelan President Carlos Andrs Prez on charges of corruption in 1993, an activist of the governing Democratic Action party (AD) reminisced about the good old days of party politics: As students in the 1960s all of us who belonged to a party be it AD, Copei or the Communist Partyfelt that membership in the organization defined us as individuals. We were proud of belonging to the party that we did. Party membership is now devoid of such romantic notions, and some of us feel ill at ease about belonging to them (Alfaro 1993). Naturally, dramatic changes like these in subjective conditions have a heavy impact on objective ones. The weakness of Vene- zuelas traditional parties was made blatantly clear with the election of the antiestab- lishment Hugo Chvez as president in 1998. Chvezs fervent antiparty rhetoric struck a responsive chord, even among those Venezuelans who voted against him. Allegedly nonpolitical institutions such as the media, the business organization FEDECAMARAS, and the Catholic Church were more effective in galvanizing public opinion against President Chvez than were the vehemently antigovernment parties of the opposition. In brief, political parties are no longer what Venezuelan democracy is all about. In Peru a similar story played itself out, but with certain variations. By the time Fujimori took office in 1990, the political establishment was aging, predominantly white, and closely linked to Limas patrician society. Fujimori owed much of his political success to his image as a man of humble origin belonging to an ethnic group different from that elite. Like Chvez in Venezuela, Fujimori created a party for the purpose of launching his own candidacy. By refusing to strengthen the party, how- ever, Fujimori was truer to his antiparty rhetoric than Chvez. In Peru, short-lived, independent electoral groups oriented around individual candidacies replaced the well-established parties at both national and local levels. Each time elections were held, Fujimori created a new party while passing over his political loyalists by fa- voring business allies and military officers with government appointments. D o w n l o a d e d
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Neoliberalism and Latin America 83 The political landscape throughout the rest of Latin America vividly confirms the trend toward political party decline. Gone are the days when one party with strong influence in organized labor, peasant leagues, and the student movement did most of the work and deserved most of the credit for winning presidential elections. When such renowned figures as Juan Domingo Pern, Rmulo Betancourt, Eduardo Frei, and Victor Paz Estenssoro triumphed at the polls, voters were depositing their faith as much in the candidates respective party as in the candidate himself. This pattern is now a rarity in the major countries throughout the continent. In Chile and Argen- tina, presidents have won thanks to the support of a broad interparty alliance, not just one dominant party. Similar party fragility is evident in Mexicos governing National Action Party (PAN). Fox formed the Friends of Fox as a vehicle to gain PANs nomination, but the makeshift organization became a parallel structure dur- ing the campaign and even ended up with more members than the party itself. Fox is not at all beholden to PAN, particularly because he represents a pragmatic current within the party that is not at all to the liking of the doctrinaire rightists who control its apparatus. Unlike the above cases, extreme party fragility and fragmentation have always characterized Brazilian democracy. Even though some political scientists consider President Cardoso the only real success story in Latin American politics of the 1990s (thanks to his relatively open and gradual approach to neoliberal reforms), the notorious weakness of the nations party system has not been overcome in the least. 4 The vitality of political parties and other democratic institutions in Latin America has been undermined by globalization and neoliberal policies. That neoliberalism has triggered worker dislocations and aggravated social tensions is hardly an un- known, but political scientists have generally failed to consider it as a root cause for the deformation of democracy. In addition to socioeconomic factorsparticularly social polarization, which abrades democratic governabilitythe political dimen- sion of neoliberalism has undermined democracy in three basic ways. Neoliberalism by Deceit Those presidents who definitively broke with their nations deep-rooted tradition of state interventionism and embarked on neoliberal programs did little to prepare the general population for the radical changes that were in store for it. Indeed, dur- ing their campaign for the presidency, they defended continuity and attacked the economic planks of rivals who were identified with neoliberal policies. In the 1988 elections in Venezuela, for instance, Carlos Andrs Prez led voters to believe he would reimplement the same interventionist program of his first administration that had allegedly generated the prosperity of the 1970s, in contrast to his major rival 4. See, for example, the introduction, conclusion, and chapter on Brazil by Mettenheim and Malloy (1998). D o w n l o a d e d
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84 Ellner who was more up-front about supporting the opposite policies. Prior to his presidency, Carlos Menem identified himself with the Peronist legacy, which included national- ization of the very industries he ended up privatizing. But the most blatant example of reversal and deceit was Fujimoris 1990 campaign, which staunchly opposed the platform of neoliberal true believer Mario Vargas Llosa. Fujimoris antishock elec- toral program, which included a significant dosage of state intervention and the de- fense of free education at all levels, drew the support of the moderate and far Left in the runoff elections but, once in office, he did a complete about-face on economic policy. The bewilderment and trauma for the general population were aggravated by the abruptness with which the shock treatment of neoliberal reforms was applied. Prez, Menem, and Fujimori as well as Presidents Collor de Mello of Brazil and Salinas of Mexico unveiled their radical program just days after they took office. The argument for the shock treatment was that any forewarning or tip-off would provide the bu- reaucrats and party brokers precious time to organize resistance and allow capital- ists to send their dollars abroad. The popular sensation of being hoodwinked translated itself into outrage and then protest, which served as a backdrop to the removal of Prez as well as Collor de Mello and Ecuadors Abdal Bucaram from office. True, some born-again neoliberals (Fujimori, Menem) have been reelected, but only after using state resources to con- solidate themselves politically; their popularity was enhanced thanks to neoliberal- isms one success area: controlling runaway inflation. Neoliberalisms refusal to play fair by bringing its slogans to the electoral arena from the outset and its use of deceit reflect the unpopularity of its banners in Latin Americanotwithstanding the un- precedented promotion of its ideas by conservative and right-wing institutions, par- ticularly U.S. think tanks. Moiss Nam, Prezs former Development Minister and currently editor of Foreign Policypublished by one such think tank, the Carnegie Endowment for International Peaceinadvertently provided an idea as to why neo- liberalism has a hard time winning elections. Nam listed the array of forces that avidly support, and those that put up resistance to, neoliberal policies. The pro-neoliberal group included foreign-trained technocrats, the World Bank, and those inspired by the demonstration effect of the Asian Tigers and elsewhere. The opposite list consisted of the components of the discredited populist coalition: politicians, labor leaders, and inefficient businessmen (Nam 1993). Thus neoliberalismlike non- governing, orthodox Communist parties in bygone daysfinds itself in the unten- able position of being identified with foreign banners and ideas and pitted against native-based groups. In the long run, liberalization by deceit has discredited not only neoliberal ideas, but all politicians and the democratic system in general. This in large part explains the precipitous decline in voting participation in nine of twelve major Latin Ameri- can countries in the recent past (Hagopian 1998, 120). It also explains the electoral successes of nontraditional politicians, and why the major candidates in Venezuelas 1998 elections consisted of a former military conspirator, an exMiss Universe, a D o w n l o a d e d
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Neoliberalism and Latin America 85 successful businessman, and a traditional politician. The politician received 0.4 per- cent of the vote. Undoing Half a Century of Popular Reform History teaches that whenever a sector of the population is subject to massive displacement, it justifiably or unjustifiably blames the resultant hardships on a spe- cific group: the capitalist class, foreign interests, ethnic groups, or the like. In Latin America large numbers of people have held the political class (i.e., politicians) responsible for the disequilibrium set off by globalization and neoliberal policies. (More recently, global forces such as the International Monetary Fund and the World Bank have been targeted, as shown by the representation of Latin American causes at the Seattle protests.) This is only natural. The most cherished benefits eliminated by neoliberalism are government-sponsored ones guaranteeing job stability and so- cial security in societies where the majority is outside the formal economy and chronic unemployment-underemployment is a way of life. The relative ease with which Latin American government privatized labor and welfare programs and did away with others is striking. Neoliberal stalwarts such as Pinochet, Fujimori, Menem, and Carlos SalinasErnesto Zedillo pioneered in the privatization of social security, leaving far behind their idological counterparts in Eu- rope and the United States who were less successful in attempting to do the same. Latin Americas old populist parties, which had fought hard to achieve social security bene- fits decades before, were at best lukewarm in defending these historic conquests. Amazingly enough, presidents belonging to social democratic parties identified with the interventionist model and organically linked to organized labor often initi- ated the neoliberal revolution. At least this was the case with Venezuelas AD, Mexicos PRI, Argentinas Peronistas, and Bolivias Nationalist Revolutionary Move- ment (MNR). One political scientist called the phenomenon the Nixon-in-China Syndrome in which a cold war warrior, rather than a less hawkish Democratic presi- dent, traveled to the Communist country in Asia and reestablished diplomatic rela- tions (Murillo 1997, 222). In a similar vein, social democratic presidents in Latin America for ideological reasons were among the least expected to implement neo- liberalism. Like their counterparts in Europe who did the same, they counted on fel- low party leaders in organized labor to temper the reaction against market reforms. Not all the traditional populists supported neoliberal reform, but all of them were held responsible for its disastrous effects. The problem was not so much the lack of opposition, but rather, the type of opposition. Most important, they confined their resistance to congressional committees rather than rallying the general public in a crusade against neoliberalism (Ellner 1999b, 1169). In Venezuela, trade unionists who were party companions of neoliberal President Carlos Andrs Prez criticized the governments economic policies, but refused to vote to censure them in congress. One of the partys top labor leaders, Csar Gil, bluntly explained why: When we are in the unions we act according to the interests of the workers, but in Congress we D o w n l o a d e d
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86 Ellner have to abide by party discipline. In short, traditional populist parties have fallen into disrepute not only because of corruption and clientelist practices, as is generally assumed, but also because their leaders were too meek in opposing neoliberalism. Congress Takes the Backseat Public opinion surveys demonstrate that national congresses throughout Latin America have also fallen into disrepute, even though they have assumed critical posi- tions on neoliberal reforms (Conaghan 1994). The reason is that their opposition to neoliberalism has taken the form of foot-dragging rather than overturning executive- proposed legislation and assuming principled positions but, precisely because congresses have not served in a rubber-stamp capacity, neoliberal presidents have made a point of discrediting them. Fujimori, for instance, attacked Congress for being soft on guerrilla insurgency because it held up approval of his Draconian measures to combat the Sendero Luminoso. In fact, a major bloc in Congress was about to reach an agreement with Fujimori on the matter when the latter staged his autogolpe in 1992. In light of the emotional nature of the issue of terrorism, the accusation against Congress was the perfect justification, or excuse, for closing it down. Once this fetter was removed, Fujimori went on a privatization spree, beginning with social security and culminating with the telecommunications industry in 1994, when annual sales reached 2.6 billion dollars. 5 In other Latin American countries, congresses also got in the way of mass privatization while failing to confront the executive head on. President Menem had even less of an excuse than Fujimori to issue over three hundred decrees during his first term since the Peronistas virtually controlled both chambers, but that was the most expeditious way to dismantle the state sector created by Pern. Mexico is another case in which congress objected to an executive-sponsored neoliberal program, but failed to act decisively to halt the process. Beginning with the Miguel de la Madrid administration in 1983, the government sold off company after company. The executive also whittled away at the two untouchable industries which were insulated from the privatization program by the constitution and even by the NAFTA accord: oil and its derivatives, and electricity. Thanks to constitu- tional amendments in 1992 and 1995, private capital was able to partake in the gen- eration of electricity as well as the transportation, distribution, and storage of natural gas. The government also reduced from fifty to thirty-four and then to eight the num- ber of petrochemical products considered by law basic raw materials for industry and thus off-limits to private capital. President Ernesto Zedillo made a valiant effort to sell the liberated plants lock, stock, and barrel to foreign interests, but due to congressional insistence he had to settle on 49 percent private ownership. Had it not been for congressional resistance, Zedillo would have brought Mexico even further down the road to complete privatization. 5. Thus economic imperatives, and not Fujimoris authoritarian personality as some analysts claim (McClintock 1999, 331), explain the decision to carry out the autogolpe. D o w n l o a d e d
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Neoliberalism and Latin America 87 Executive hegemony, the neoliberal shock treatment, and the predominance of technocrats in the cabinet all go hand in hand. Although the shock treatment is not the only way to implement neoliberal formulas, it is the most logical way given the fact that the technocrats disdain democratic processes and would be hard-put to do things differently. Political analysts generally play down this relationship between neoliberalism, on the one hand, and hyperpresidentialism, technocracy, and the emasculation of congress, on the other. Some attribute hyperpresidentialism to cul- tural factors by viewing strong presidents as a throwback to nineteenth-century caudillos (ODonnell 1994). A second explanation also points to factors that are endemic to Latin American society. These writers see hyperpresidentialism as a jus- tifiable reacton to the well-entrenched practice of clientelism that breeds inefficiency and corruption, as the executive branch realizes that assuming emergency powers is the only way to get things done. In both cases, neoliberalism as a root cause for the deformation of democracy gets brushed aside. New Schools of Thinking That Dont Break with the Past These developments have placed in doubt the continued validity of standard theory regarding Latin American democracy. For years, political scientists writing on Latin America considered nonrevolutionary, cohesive, mass-based parties, with well- established links to institutions such as organized labor, a sine qua non for stable democracy. Because these parties were popularly oriented with a commitment to cer- tain nationalist goals, they invariably promoted economic development through gov- ernment interventionism, particularly in the form of the policy of high tariffs known as import substitution. Some of the political analysts who embraced the political party-institutionalist model received the blessing of the U.S. State Department or its infamous ally, the International Department of the AFL-CIO. The latter was the case with Rutgers University Professor Robert Jackson Alexander, a confirmed social democrat who for over half a century published dozens of books extolling institutionalized parties located on the U.S. side of the cold war divide. Alexander interviewed hundreds of these party leaders and developed a friendship with many of them. Heand others who wrote in a less personalized, more academic fashion while painting the same general pictureinfluenced U.S. policymakers to tighten relations with these same institutionalized parties. But there was a certain progressive side to their writing in that leaders of the multiclass, mass-based parties defended government intervention- ism much as Franklin D. Roosevelt did. Alexander and other political analysts singled out Venezuela as a showcase de- mocracy. According to them it was no coincidence that Venezuela, the most stable democracy in South America from the 1960s to the 1980s, was the only country whose major parties (AD and Copei) met all the basic requirements: they were highly dis- ciplined (unlike the Peronistas in Argentina), had strong roots in labor unions (un- D o w n l o a d e d
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88 Ellner like the Radicals in Argentina), were multiclass (in contrast to the strong class bias of parties in Chile and Colombia), went back in time (unlike the more ephemeral parties in Brazil), and were highly committed to the democratic system (again, un- like the Peronistas). In addition, their national leadership was predominantly middle class, allegedly the sector most committed to democracy. This was the magic for- mula according to the institutionalists. Now that AD and cousin parties throughout Latin America have lost credibility, political scientists and political actors have begun searching for alternative explana- tions for what it takes to build a healthy democracy and why political parties fell short of the task. Some political scientists have qualified their own previous view that strong, institutionally linked parties in themselves ensure the viability of the democratic system. Thus, for instance, Juan Linz, the dean of the party-based school, now questions the notion that the stronger the political party system, the more solid the nations democracy, by pointing out that parties can be overinstitutionalized. In effect, this means that some Latin American parties, rather than exerting a healthy influence on organized labor, have become hegemonic, limiting union autonomy along with that of civil society in general. These excesses notwithstanding, Linz and company continue to view existing strong parties as basic assets to democracy in Latin America (Diamond, Hartlyn, and Linz 1999, 27). Other political analysts go beyond Linzs moderate critique of Latin Americas party-based democracy. Like neoliberal economists and politicians, they blame cen- tralism for the continents political and economic problems, specifically for holding back much-needed state and market reforms. These writers posit a state-centric ma- trix (SCM) consisting of a nexus of vertically structured parties, overprotected, inef- ficient national industries, and corrupt government officials. As correctives, they support thorough privatization and decentralization and the complete overhaul of centralized structures, specifically political parties and the state. Few political analysts or actors would take issue with the assertion that central- ism in Latin America has bred extreme inefficiency and has blocked participation at lower levels. Nevertheless, depicting centralism as the root cause of the distortions in the democratic system in the age of neoliberalism overlooks socioeconomic de- velopments that are so glaring as to demand the attention of political scientists. First on the list is the astronomical growth of the informal economy and microbusinesses, whose members are not easily organized into unions or autonomous organizations of civil society. This tendency undermines democracy by eliminating everything that stands between the general populace and the state. Also occupying a prominent place on the list ignored by SCM political scientists is the foreign acquisition of entire sectors of the economy, formerly nurturedor overnurturedby the state. Political parties can no longer (some say they never could) be viewed as bridges between the state and progressive national capitalism; thus, they have lost legitimacy. In Venezuela the process of foreign takeover of the economy has prompted a nationalistic reaction among military officers, some of whom have lost faith in, not to say respect for, politicians of all stripes. D o w n l o a d e d
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Neoliberalism and Latin America 89 While Alexander and others who defended party-based democracies and import substitution policies were left of center on the political spectrum, SCM political sci- entists are largely absent from that space. True, some of them are critical of the shock treatment approach of neoliberalism. But there is just one short step between the primacy they assign to reducing centralized state power and neoliberalisms shrill calls for immediate, all-encompassing privatization and decentralization. (This sense of urgency rules out careful consideration of distinct options which favor national and popular interests.) There is another key area of convergence between SCM writ- ers and neoliberalism. Like neoliberal discourse, SCM writers are as critical of the nations existing political parties as they are of centralism. Thus some of them ex- plain (if not justify) hyperpresidentialism in Latin America as a logical response to political party obstruction of badly needed market reforms. They single out for spe- cial censure the veto power wielded by interest groups (read: labor unions, inef- ficient businesses, and other party clients) to which the parties are allegedly beholden (Haggard and Kaufman 1995, 227; Nam 1993; Mettenheim and Malloy 1998). Similarly, those political and social actors who are the staunchest opponents of centralism are also harsh critics of all existing parties and tend to embrace an antiparty discourse. They thus coincide with neoliberal discourse even though they do not necessarily accept neoliberal dogma. Some belong to loosely structured electoral groups rather than conventional parties while others form part of civil society, which they consider the best corrective for centralism. The radicals among these antiparty activists insist that social movements stay out of the electoral arena altogether. Elas Santana, long a leading spokesman of the Venezuelan neighborhood movement who in 1993 dissolved its national organization out of fear that political parties were about to take it over, articulated this position. Santana warned fellow social activists against emulating Germanys Green party, arguing: The moment the Greens started run- ning candidates, their activism around environmental issues lost credibility. It was their undoing as a social movement (Santana 1994; cf. Ellner 1999). Pro-neoliberal explanations for the sorry state of democratic institutions due to centralism confront one stubborn, empirical problem. The party-based centralism long characteristic of political institutions in Latin America has lost ground in the recent past, and thus can hardly be held responsible for democracys deterioration. In other words, democracys problems cannot be attributed to the selfishness and lack of willpower of political party leaders at the national level who hang on to privileges and resist state reorganization, as the neoliberals claim. Although the neoliberals deplore the lack of substantive state and party reform, considerable progress was made in the 1990s during the height of the neoliberal vogue. Indeed, until the elec- tion of Venezuelas Hugo Chvez in 1998, no Latin American president seriously challenged neoliberalismnot even its discourse. The neoliberals themselves have implemented radical reforms on the economic front, such as massive privatization, which have wrested power from the central government and undermined the posi- tion of clientelistic political parties. Furthermore, consider outstanding cases of po- litical reformsacclaimed by nearly everyonedesigned to diffuse decisionmaking D o w n l o a d e d
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90 Ellner power: widespread decentralization of services such as health, port facilities, the police force, the highway system, public transportation, airports and other sectors; electoral reform such as the election of Mexicos Federal District governor, formerly appointed by the nations president, a contest which Cuauhtmoc Crdenas won in 1997; and even political party reform, such as the primaries which chose Ricardo Lagos (Chile), Fernando de la Rua (Argentina), Francisco Labastida (Mexico), and Claudio Fermn (Venezuela) as presidential candidates. Thus, the reforms embraced by neoliberal idealists (among others) for reducing the size of the central government have not led to the lofty political changes they envisioned, particularly the invigoration of civil society. While political parties and the party-dominated labor movement have de- clined both in membership and prestige, an autonomous, dynamic civil society has not emerged to replace themthus the institutional vacuum that plagues democracy in Latin America. Concluding Remarks: Where to Look forAlternative Explanations Political scientists have adhered to two broad approaches in explaining the current failure of Latin American democracy to consolidate itself in spite of its record-break- ing duration. One group attributes democratic shortcomings on the continent to exces- sive centralism and, specifically, the concentration of power in the hands of a coterie of political leaders. Previously, the same institutionalist school was uncritical of centralism and viewed well-structured parties with collective leadership as instrumen- tal in linking large numbers of people to decisionmakers, thus guaranteeing democracys survival and legitimacy. Now the institutionalists view the national leaders of some of these same parties as embodying centralism and blame them for resisting state and economic reforms and, in general, obstructing democracys renewal. 6 A second, cul- turalist school ascribes democracys stagnation to Latin Americas caudillo tradition. Recent presidents have acted in the style of nineteenth-century military strongmen in that, once in office, they have proved impervious to popular pressure. Neither institutionalist nor culturalist explanations are dynamic enough to explain the recent challenges facing democratic institutions in Latin America. Centralism has always characterized Latin American institutions; municipal governments have stag- nated throughout the entire two centuries of independence; and paternalism, authori- tarianism, and other retrograde cultural strains cannot be considered more pronounced today than in the past. Thus, none of these factors can explain in themselves the re- cent political trends described in this article. Specifically, the two approaches fail to answer the underlying question why parties have gone from being essential pillars of the democratic system to defenders of entrenched elite interests, and why democ- racies have lasted so long while resisting popular input in decisionmaking. 6. For a discussion of this flip-flop among political scientists writing on Venezuela, see Ellner (1997, 202). D o w n l o a d e d
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Neoliberalism and Latin America 91 This article has pointed in the direction of two alternative avenues of inquiry, both of which reflect Marxist traditions. One approach shows how economic policies and economic and class transformations have undermined the vitality of the democratic system. The article has pointed to concrete ways in which neoliberal policies in Latin America have provided the national executive with excessive powers, weakened congress, and discredited the political party system. In addition, structural economic change has adversely affected democratic legitimacy. Specifically, the reemergence of democracy in the 1980s coincided with the foreign penetration of the economy set off by globalization and massive privatization. Whereas the old import substitu- tion model, which was designed to promote a national bourgeoisie, appealed to nationalist sentiment and helped legitimize democracy and governing populist par- ties, the current model based on neoliberalism has had just the opposite effect. In- deed, those who most championed the new model and seemed to benefit most from it were closely tied to foreign interests and actors. 7 Class trends consisting of the growth of the informal economy, at the expense of organized sectors (the industrial working class and the middle class), also militated against the consolidation and deepening of democracy. Alliances taking in members of the informal economy, which backed pro-neoliberal delegative democracies such as that of Fujimori, proved short-lived and untenable. Fujimoris fate in 2000 dem- onstrated that neoliberalism offered little for the underprivileged sectors. 8 But it also showed that the members of the informal economy lacked the steadfastness and or- ganizational discipline of the organized working class (a lesson that Hugo Chvez, from a different ideological perspective, learned shortly thereafter). In contrast, classic populist partes that emerged in Latin America in the 1940s strengthened democracy by forming long-lasting alliances incorporating organized labor (Ellner 2001). A second, alternative approach which helps reveal the basic deficiencies of Latin American democracy over the recent past focuses on multiple forms of participation and problems related to social inequality. This article has rejected Huntingtons asser- tion that the minimalist definition of democracy based exclusively on elections and basic liberties is a useful instrument in analyzing the phenomenon of third wave democracies. Such a simplistic and undemanding criterion plays down glaring problems assailing Latin American democracy. A broader definition drawing on Tocqueville, Rousseau, and Marx would be more instructive and would take in three basic areas: a thriving civil society, popular input in decisionmaking at all levels, and avoidance of extreme social inequality, which militates against the nonviolent participation of popular sectors. Latin American democracy during the last two decades of neoliberal ascendancy has responded poorly to all three challenges. Social inequality has increased in Latin 7. The extent to which neoliberalism represented a revolutionary change for Latin America, in which one dominant class coalition replaced another, is open to question (Ruccio 1993). 8. Kurt Weyland (1996) views the support of the members of the informal economy for Fujimori and other neoliberal presidents (whom he calls neopopulists) as representing a new model. Given the short duration of this backing, the validity of Weylands thesis is open to question. D o w n l o a d e d
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92 Ellner America over this period after having improved, albeit slightly, over previous de- cades (Roberts, forthcoming). Hyperpresidentialism has spurned traditional channels of particpation, such as political parties and organized labor, and has failed to open new channels for social movements. On the other hand, decentralization has created a potential for local participation while social organizations representing women, Indians, the landless, and neighborhood activists have achieved a vitality of their own even though they lack presence at decisionmaking levels. It remains to be seen what role social movements as well as the highly debilitated labor movement and political parties will play in any future reconstruction and deepening of democracy. The rela- tive weight of each one will largely depend on their ability to incorporate and articu- late the interests of the members of the informal economy, who have grown the most in numbers and have been the most victimized by neoliberal policies. The author is grateful for critical comments from Peter Marcuse (Columbia Univer- sity), Richard Hillman (St. John Fisher College), and Blair Alpert-Sandler. References Alfaro, M. 1993. Taped interview by Project of the Research Council of the Universidad de Oriente, Venezuela. Barcelona, 10 February. Arnove, R. F., S. Franz, K. Morse, and C. A. Torres. 1997. Education and development. In Understanding contemporary Latin America, ed. R. S. Hillman, 27194. Boulder, Colo: Lynne Rienner. Boron, A. A. 1995. State, capitalism, and democracy in Latin America. Boulder, Colo.: Lynne Rienner. Conaghan, C. 1994. Democracy that matters: The search for authenticity, legitimacy, and civil competence in the Andes. Working Paper No. 1. Helen Kellogg Institute for Inter- national Studies. Diamond, L., J. Hartlyn, and J. J. Linz. 1999. Introduction: Politics, society and democracy in Latin America. In Democracy in developing countries: Latin America, 2d ed., ed. L. Diamond, J. Hartlyn, J. J. Linz, and S. M. Lipset, 170. Boulder, Colo.: Lynne Rienner. Ellner, S. 1997. Recent Venezuelan political studies: A return to third world realities. Latin American Research Review 32(2): 20118. . 1999a. Obstacles to the consolidation of the Venezuelan neighborhood movement: National and local cleavages. Journal of Latin American Studies 31 (1): 7597. . 1999b. The impact of privatization on labor in Venezuela: Radical reorganization or moderate adjustment? Political Power and Social Theory 13: 10945. . 2001. The radical potential of Chavismo in Venezuela: The first year-and-a-half in power. Latin American Perspectives 28 (5): 532. Grupo Roraima. 1987. Mas y mejor democracia. Caracas. Haggard, S., and R. R. Kaufman. 1995. The political economy of democratic transitions. Princeton: Princeton University Press. Hagopian, F. 1998. Democracy and political representation in Latin America in the 1990s: Pause, reorganization, or decline? In Fault lines of democracy in post-transition Latin America, ed. F. Aguero and J. Stark, 99143. Coral Gables, Fla.: North-South Center. D o w n l o a d e d
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