Abstract
The economic crisis of the beginning of this century in Latin America has questioned that a neo-liberal kind of populism may solve the puzzle of how to implement pro-market economic reforms by democratic regimes in less developed countries. Populism is both prone to corruption and incompatible with the necessary institutional reforms (the “second generation” reforms) complementing the economic reforms. Non-populist politicians may not have this handicap, but they could not overcome the labor resistance to their pro-market reforms either. Still, under certain conditions, democratic politicians can implement these reforms without suffering from the costs of populism.
Highlights
The economic crisis of the beginning of this century in Latin America has questioned that a neo-liberal kind of populism may solve the puzzle of how to implement pro-market economic reforms by democratic regimes in less developed countries
Do the rather mediocre results of the pro-market economic reforms that were introduced under democratic circumstances in Latin America in the 1990s show that sustained economic growth requires the previous existence of a dictatorship to have carried them out? Are new democracies which did not have reformist dictatorships condemned to greater economic instability? The specialized literature used to maintain that it was difficult for democratic regimes of less developed countries to undertake pro-market economic reforms in view of the predictable resistence from important social actors such as trade unions
Perhaps populist politicians are more ready than other democratic politicians to face up to those who are resistent to reforms, and to trade unions, but the temptation to fall into corruption, which in the long run renders them sterile, and their incompatibility with necessary institutional reforms that complement economic reforms, is very high
Summary
Do the rather mediocre results of the pro-market economic reforms that were introduced under democratic circumstances in Latin America in the 1990s show that sustained economic growth requires the previous existence of a dictatorship to have carried them out? Are new democracies which did not have reformist dictatorships condemned to greater economic instability? The specialized literature used to maintain that it was difficult for democratic regimes of less developed countries to undertake pro-market economic reforms in view of the predictable resistence from important social actors such as trade unions. The new democracies which were not “lucky” enough to have had this kind of “reformist dictatorship” would find it very difficult to escape a destiny of crisis and economic backwardness This reasoning, which seems to rescue the theory of the advantages of dictatorships over democracies in less developed countries to achieve stable economic development and the recommendation that pro-market economic reforms precede democratization of these countries, is based to a large extent on the assumption that only populism is capable of overcoming social resistence in general, and trade unions in particular, under democratic conditions. Between economic reforms, populism in new democracies and trade union activism?
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