Latin America's dysfunctional democracy

Denise Dresser, Project Syndicate

In Latin America, many people live with outstretched hands. Throughout the Hemisphere, paternalistic governments accustom people to receiving just enough to survive instead of participating in society. Across the region, politicians that writer Octavio Paz once referred to as "philanthropic ogres" create clients instead of citizens, people who expect instead of demand.

Democratic Latin America limps sideways because it can't run ahead. There are too many entry barriers to the poor, the innovative, and those without access to credit. There are too many walls erected against social mobility, competition, and fairness in politics and business.

As a result, although Latin Americans can vote in a more democratic environment, they can't compete in a globalized world. Standards of living fall, incomes stagnate, hopes are dampened. So people start to march in the streets in Bolivia. Or believe the promises of the populist President Hugo Chavez in Venezuela. Or think about a return to the one-party past in Mexico. Or yearn to toss all the bums out -- a sentiment that now seems to be taking root in Brazil. Or to vote with their feet, as in Mexico, where one of every five men between the age of 26 and 35 lives in the United States.

The region is both more democratic and more unequal than it was ten years ago. United by the right to vote, Latin Americans remain divided by poverty. Latin America's economies are organized in a way that concentrates wealth in a few hands, but then leaves it untaxed, depriving governments of the resources needed to invest in their citizens' human capital.

Few governments in Latin America today have committed themselves to making such an investment. Instead, what Latin America's people get in the democratic era is a lot of public works -- bridges, highways, and massive structures that are designed to elicit short-term political support. In such projects, politicians manipulate and buy voters instead of truly representing them.

Such distorted priorities reflect a simple reality: democracy in Latin America seems incapable of dismantling old networks of clienteles and their traditional power-sharing arrangements. The old elites remain, locked inside their gated communities, fending off the poor, whom they have no incentive to empower, because plentiful cheap labor is so beneficial to those who employ it.

This means that broad swaths of the population don't finish high school, don't attend college, and don't become empowered citizens of their own countries and the world. They remain at the service of socio-economic systems in which personal relationships matter more than qualifications and skill, in which positions are doled out on the basis of loyalty, not merit. Doors open to those with the right name and the right connections, and contracts are assigned with a slap on the back and the wink of an eye. State monopolies are sold to friends who then become multibillionaires, like Mexico's Carlos Slim.

Despite unrest in Bolivia, and populist politicians on the march, Latin America isn't on the verge of an economic meltdown. Indeed, the region remains largely stable. But that isn't enough to propel people from a tortilla factory to a software company, to create a broad middle class, and thus to assure social mobility.

Democracy may be working well enough in terms of free and fair elections. But something else is malfunctioning, and it transcends particular presidents, whether the president is Venezuela's populist Chavez, Mexico's conservative Fox, or Brazil's left-leaning Lula. It has to do with a deep, historic, structural reality.

Latin America's dysfunctional democracy is the result of a pattern of political and economic behavior that condemns Latin America to stagnation, independently of who governs. It stems from a pattern of postponed or partial structural reforms, of privatizations that benefit elites but hurt consumers.

This has sustained a model that places more value on the extraction of resources than on the education and empowerment of people. Bountiful resources such as oil are a bane for democracy in developing countries, because when a government gets the revenues it needs by selling oil, it doesn't need to collect taxes. Governments that don't need to broaden their tax base have few incentives to respond to the needs of their people.

Indeed, governments that are built on clientelism instead of citizenship don't need to respond at all. They produce skin-deep democracies in which people have a vote but don't really have a stake, in which wealth is increasingly concentrated and income disparities are harder to breach.

Worse still, such governments -- whether authoritarian or nominally democratic -- turn their citizens into recipients instead of participants. They create people who live with their hands held out instead of their heads held high.

The writer is Professor of Political Science, Instituto Tecnolsgico Autsnomo de Mixico.