The Construction of Democracy: Lessons from Practice and Research (Democratic Transition and Consolidation)

The Construction of Democracy

    Jorge I. Domínguez and Anthony Jones, Series Editors

The Construction of Democracy Lessons from Practice and Research

Edited by

 .   and

 

The Johns Hopkins University Press Baltimore

© 2007 The Johns Hopkins University Press All rights reserved. Published 2007 Printed in the United States of America on acid-free paper 2 4 6 8 9 7 5 3 1 The Johns Hopkins University Press 2715 North Charles Street Baltimore, Maryland 21218-4363 www.press.jhu.edu Library of Congress Cataloging-in-Publication Data The construction of democracy : lessons from practice and research / edited by Jorge I. Domínguez and Anthony Jones p. cm. — (Democratic transition and consolidation) Includes bibliographical references and index. ISBN-13: 978-0-8018-8595-2 (hardcover : alk. paper) ISBN-: --- (hardcover : alk. paper) 1. Democracy. 2. Democracy—Case studies. 3. New democracies. 4. State, The. I. Domínguez, Jorge I., 1945– II. Jones, Anthony, 1940– JC423.C695 2007 321.8—dc22 2006034765 A catalog record for this book is available from the British Library.

To Diego Hidalgo, who made the Club of Madrid possible

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Acknowledgments

 

ix

    

1 Building and Sustaining a Contemporary Democratic State

1 3

 .    

2 Strengthening Pluralism and Public Participation in New Democracies

20

    -

3 Economic Challenges for the New Democracies

45

 

        77 4 Constitutional Design and the Construction 79 of Democracy: A Citizenship Regime Perspective     

5 Executive-Legislative Relations and Democratic 103 Consolidation: A Review and Some Questions       

         121 6 Toward More Balanced Approaches in the Reform of the State   

123

viii

Contents

7 Military, Police, Politics, and Society: Does Latin America Have a Democratic Model?

148

 

8 Controlling Corruption: Government Accountability, Business Ethics, and Sectoral Reform

177

 -

 

     9 Brazil: The Ethics of Responsibility

201

205

  

10 Latin America: National and Global Factors 209 in Democratization and Democratic Consolidation  

11 Democracy: A View from India

218

 . 

12 Portugal: Executive-Legislative Relations

221

  

13 The Latin American Military Enigma  

239

Epilogue

 . 

List of Contributors Index

245

241

224



The Club of Madrid is the sponsor of this book. We are grateful to the Club of Madrid and its members for their many contributions to our work, including the insightful ideas, debates, and conversations at the meetings of members and experts that have helped to inform this book. We are also grateful to the Fundación para las Relaciones Internacionales y el Diálogo Exterior (FRIDE), and especially its founding president, Diego Hidalgo, and to the Gorbachev Foundation of North America, which created and supported the Club of Madrid and made this book possible. Amanda Pearson vastly improved the text, written originally in several different languages, and Kathleen Hoover worked on innumerable tasks for this project. Our editor at the Johns Hopkins University Press, Henry Tom, has been a steadfast counselor and friend. We thank them all for making our task more enjoyable. We dedicate this book to democrats everywhere.

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The Construction of Democracy

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 

    

The construction of democracy requires vision, ambition, and decisiveness. Democratic designers must imaginatively seek to build a polity unlike anything their people have previously known, with the perils and obstacles inherent in such a task. Yet democratic designers must also nurture, not inhibit, the liberties and capacities of those elements that they pledge not to control: civil society and the market. Such self-restraint is likely to increase the probability that democratic polities will deliver the freedom and prosperity that citizens want. The construction of democracy, however, is difficult, and historically it has been rare, precisely because the negotiations inherent in such a project are neither readily created nor easily sustained. The scholars whose chapters appear in part I explore all of these themes. Domínguez and Jones describe “designer democracies” and highlight the principal “big picture,” or macro themes, of the book. They emphasize that the construction of a democratic regime rests on the relational balance between society and its constitution and institutions. They insist that democracies that deliver must do more than merely kneel before the altar of formal institutions; above all, the democratic state must be capable of empowering its citizens to develop to their fullest. The democratic state must nevertheless also constrain those officials who could succumb to corruption and those soldiers who could attempt to seize power, and it must restrain itself by allowing—and thus enabling—free markets to generate economic growth. Ekiert and Grzymala-Busse address the worry that “unbridled participation” might undermine democratic polities, highlighting three factors. First, responsibility requires social and political actors to exercise self-restraint; participation should occur within the rule of law. Second, representativeness seeks to ensure that no significant group within civil society is excluded or silenced, and this requires the promotion of mechanisms to empower minorities and the poor. Third, democracy also

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The Construction of Democracy

requires that public institutions be responsive to political participation, not only as a result of elections, but also as an expression of interests and demands formulated in the normal course of political contestation. The strength of support for newly established democratic regimes is determined by the choices that politicians and parties make to constrain their personal preferences that they may serve democratically the preferences of voters who put them in office. Richards argues that economic development and growth greatly increase the likelihood of democratic consolidation and sustenance. In Latin America and the formerly communist states of Europe, new institutional foundations for property rights had to be created; comprehensive economic reforms served market-based economic growth best. States in emerging democracies must also provide access (especially for the poor and for various minorities) to education and public health and must try to reduce poverty so that all citizens can participate fully in social, economic, and political life. Only then will citizens be able to partake in democratic politics and discover the full array of their liberties in the context of prosperity.

 

Building and Sustaining a Contemporary Democratic State  .    

The construction of a democratic polity is always a work in progress. Constitutional democracy, as the world had come to know it by the dawn of the twenty-first century, celebrates and facilitates partisan contestation and guarantees the rights of those who disagree to do so publicly and vigorously. In any country, moreover, constitutional democracy depends on sufficient uncertainty about the distribution of political forces such that opposition parties believe that they have a fair chance of winning the right to govern, either outright or in coalition. Democratic politics honors the votes of ordinary citizens even when they turn statesmen out of office and respects such outcomes even if voters are lacking in knowledge or are misinformed. The constitutions of democratic polities enshrine the rights that make governability challenging and, at times, create institutions that make governance unusually difficult. In light of these characteristics, it should not surprise us that democracies sometimes fail in countries around the world; what should astonish us, though, is that so many polities have been democratic for so long, at times in the face of seemingly insuperable odds. Those of us who observe and study the rise of democracy can only feel an awed admiration for the citizens and politicians who have crafted, conditioned, and supported this extraordinary human accomplishment in such a variety of settings throughout the world. Prior to the second half of the nineteenth century, however, the crafting of constitutions during intense but short periods of time was rare. Democracies would arise mainly from the interplay of domestic political, social, and economic forces, though many of these forces emerged as part of processes that unfolded at approximately the same time in different countries. The challenge to established ecclesiastical power that followed the French Revolution, and the comparably far-reaching effects of the Industrial Revolution, weakened long-established patterns of dominance and gave

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Macro Issues of Democratic Construction

rise to new economic, social, and political organizations that demanded new rights and eventually access to power. In most instances, the often-piecemeal constitutional or legal changes introduced in each political system were the result of sharp domestic conflicts over a fairly long time (Lipset and Rokkan 1967). During the late eighteenth century, the deliberate crafting of a constitution during a few weeks was unprecedented, which highlights the historical salience of the adoption of the U.S. Constitution in 1787. By the late nineteenth century and especially early in the twentieth century, however, the willful crafting of a country’s political architecture—”designer democracy”— became a common way to shape and reshape political systems throughout Western Europe and in Australia, Canada, New Zealand, and Japan. In these cases, political leaders explicitly borrowed and adapted constitutional and legal provisions from other countries. In the aftermath of World War II, the explicit enterprise of creating new democratic constitutions and other political rules under strong international pressure was especially noteworthy in Germany and Japan, though with the onset of decolonization such practices spread through Asia, the West Indies, Africa, and the Pacific Islands. Designer democracies are even more common at the start of the twenty-first century, and transnational and interstate factors play explicit and important roles in processes of democratization. Indeed, democratization has become firmly inscribed on the global agenda. Nongovernmental organizations monitor democratic gains and losses worldwide, ranking countries on the extent of their adherence to democratic practices. The decision to design a democracy means that the state must make difficult choices: Should the state adopt or reject specific rules? What criteria should the state employ to make decisions? How does the state limit guesswork and develop its ability to make prescient and reliable decisions? And how does the state forecast the unintended outcomes from its conjecture?

The Origins of This Book Since the beginning of this millennium, citizens and political leaders have had resources that were not available to earlier pioneers—namely, the existence of a large and growing number of people who have dealt with similar problems of democratic craftsmanship and implementation. Among this group of people are the former heads of state and heads of government that democratized in the closing decades of the twentieth century. These political leaders offer advice on how to design a democracy on the basis of the lessons they have learned from the difficulties they have faced in comparable circumstances. The purpose of this book is to

Building and Sustaining a Contemporary Democratic State

5

synthesize these lessons and disseminate the collective lessons from their political experiences. This volume draws on the work presented at the Conference on Democratic Transition and Consolidation, held in Madrid in fall 2001, only weeks after the terrorist attacks of September 11, 2001. Planned long before those terrible events, the organizers of the conference went ahead as scheduled, in part to affirm the value of constitutional democracy as it faced yet another dramatic peril. The most public component of the conference was a summit meeting of three dozen incumbent and former presidents and prime ministers, most of whom were from countries that had moved away from authoritarianism since the early 1970s, the time period now known as the “third wave” of democratization.1 Several of the leaders at the summit meeting subsequently organized the Club of Madrid, a nongovernmental organization whose members are former presidents or prime ministers of democratic polities. The Club of Madrid, which has sponsored this book, strongly affirms the worth of democratic values and practices and is proud to bear the name of a city massively hurt by yet another large-scale terrorist attack on March 11, 2004. Immediately before the summit meeting in fall 2001, the same conference had convened nearly a hundred experts—scholars, former government officials, and other practitioners with particular knowledge of democratic change—into eight working groups to examine different dimensions of democratic politics and democratization. The discussions at these workshops were prolonged and intense. The academic coordinators of the eight working groups were also the rapporteurs for the groups, synthesizing their discussions to advise, both orally and in writing, the subsequent summit meeting of incumbent and former heads of state and heads of government. Most of the authors in this book participated in some capacity in the Madrid conference. Grzegorz Ekiert, Richard Simeon, Rut Diamint, and Susan Rose-Ackerman served as academic coordinators and rapporteurs of their respective working groups. They provided the crucial link between the discussions of the experts and the deliberations at the summit meeting of incumbent and former presidents and prime ministers. Anna Grzymala-Busse, António Octávio Cintra, José Luis Méndez, and Andrew Richards participated as experts. The former prime minister of India, I. K. Gujral, the former prime minister of Portugal (and as of January 2006 its president), Aníbal Cavaco Silva, and the former president of Colombia, César Gaviria, moderated the group discussions of experts and also participated in the summit meeting, as did the then-incumbent president of Brazil, Fernando Henrique Cardoso. Their chapters in this volume address some of the most central issues in the construction of democracy—issues that leaders of various countries cannot ignore if they are to be successful.

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Macro Issues of Democratic Construction

The Tasks of This Book The scholars who have contributed to this book draw upon their own research and thinking on the subjects of their articles and incorporate the impressive collective intellectual resources gathered at that conference. An important goal of this volume is to inform readers of methods for approaching the construction of democracy in today’s world by providing an analysis of the experience of scholars and former heads of state and heads of government. That foundational conference, as does this book, sought to illuminate key issues in the construction and sustenance of democratic states. We have resisted the temptation to offer a panacea for successfully constructing a democracy. Indeed, perhaps the strongest conclusion we draw from our collective thinking is that citizens and political actors should take into account the context of their respective societies when fashioning constitutions, laws, regulations, and practices that seek to build or reinforce democracy. We do not recommend a “cookie-cutter” approach to the construction of democracy. Our second clear conclusion, however, is that nations have much to learn from the positive and negative experiences of other countries. Nations must first have a clear appreciation for other outcomes and for the range of variation in constructing democracies before they adjust or apply these lessons to their particular contexts. The authors of this volume, therefore, have deliberately cast their net wide. They draw inferences based on detailed research on particular cases, but they also present farranging and comparative analyses; these chapters will be of broad interest to reformers because they highlight ideas that, in different specific contexts, should be either considered or discarded. As a result, the purpose of this volume is not to prescribe which choices democrats should make, but rather to highlight the options they might consider. At times, to be sure, the authors of the chapters indicate that the preponderance of the evidence points in a given direction, but our principal collective purpose even in such instances is to present a full, albeit succinct, and fair account of the nature of the choice. The choices that democrats face focus principally on four themes. First, democrats depend on, and must guarantee, the liberties of citizens and politicians to speak out, contest, and participate in politics. The constitution of liberty must unambiguously protect the rights of citizens to act and also protect the rights of citizens from being compelled to act when faced with possible attempts by the state to intervene inappropriately in the private sphere—what Isaiah Berlin (2002) identifies as “positive and negative liberty.” Liberty depends on equality before the law when citizens exercise their consti-

Building and Sustaining a Contemporary Democratic State

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tutional rights. Moreover, the relationship between positive and negative liberty is complex because some citizens may wish the state to compel other citizens to act or stop acting in particular ways. Democrats must choose institutions to address this tension. Second, democracy is fundamentally concerned with the rights of the majority of citizens to choose political leaders who will rightfully govern the country, select and implement policies, and demand compliance with these policies. In this respect, too, equality matters, for citizens in a democracy face equal responsibilities before the law. Combining the rights of the majority to govern and the rights of the minorities to their liberties—be they social, political, religious, linguistic, or territorial—is difficult, but it is a central choice that must be addressed as part of the construction of democracy’s constitutional architecture. It is essential to obtain the consent of the governed. Third, democratic regimes must have an effective internal configuration; the constitution should provide for the representation of the interests and perspectives of majorities and minorities. An effective internal organization demands that the articulation and aggregation of preferences and the making of rules be efficient, which requires a well-designed relationship between the executive and legislative branches. This configuration honors and implements the rule of law, ensures that the rules enacted by the government are applied and observed, and thwarts, corrects, and, if necessary, punishes any violators of these laws. Effective governments avoid—or at a minimum constrain and punish—official corruption. Finally, the very word democracy evokes not just the role of the people, as exercised by the majority, but also the role of power and other means of rule. Thus, a fourth theme is the capacity of the state to enforce the will of the majority and protect the liberties of all citizens. Many third-wave democracies exist in countries where state capacity has been weak, and even authoritarian regimes have at times demonstrated an inability to impose the will of rulers. Third-wave democracies must build or strengthen the state to make it possible for the majority to govern and guarantee that liberties are not violated under the law. As a result, states face additional choices regarding the creation of means of lawful coercion—in Max Weber’s classic formulation (1958), states need to succeed in claiming a monopoly over the legitimate use of physical force in a given territory—while at the same time respecting the democratic procedures and liberties inscribed in the constitution. The themes in this volume are important to consider when putting democratic institutions in place, not least because they directly affect a government’s ability to improve the lives of citizens. It is increasingly the case that citizens are drawing a distinction between “democracies that deliver” and those that do not. In those countries still undergoing democratization, whether or not people see democracy as valuable and

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Macro Issues of Democratic Construction

worthy of being defended is intimately connected to its survival and growth. Democracies should deliver, of course, with regard to the core themes of a democratic regime, and in many other ways. As Amartya Sen (1999) has emphasized, democracies should expand and widen human capabilities, not just the capacities of states, rulers, or others who are already powerful. Democracies should make it possible for human beings to secure jobs, food, clothing, and shelter. Democracies ought to foster the kind of economic growth that, in due course, leads to prosperity. In the final analysis, democracy at its best should move people closer to the dream enshrined in the U.S. Declaration of Independence—the pursuit of happiness. In this book we seek to contribute to efforts around the world to defend, promote, and strengthen democracies that deliver. We hope to inform those who think and act politically to construct and sustain regimes that carry the promise, and promote the hope, of democracies that deliver.

The Democratic Regime: Societies, Constitutions, and Institutions Democratic regimes must serve their citizens. This means that citizens must have the right to associate freely and participate in fashioning the fabric of civil society, or to abstain from such participation and associational life if they so prefer. During the political transitions that took place between the mid-1970s and the start of the 1990s, these important democratic ideas were often problematic. Political practitioners and scholars alike worried about the potentially adverse effects of “unbridled participation,” as Grzegorz Ekiert and Anna Grzymala-Busse put it, on both economic reform and political transformation. The first set of choices in crafting democracy, therefore, has great bearing on the participation of citizens; civil society, political parties, and the party system as a whole play key roles in this process. Accordingly, in chapter 2 Ekiert and Grzymala-Busse identify three criteria that must be met. Responsibility requires political participants to exercise self-restraint. Participation should occur within the rule of law and should not question the democratic system itself. The choices that civil society associations make, therefore, crucially strengthen or enfeeble democratic regimes. Politicians, parties, and civil society activists should refrain, in particular, from seeking to “pillarize” society by creating and sustaining several coexisting civil societies in the same polity, as well as organizing interests and passions into communities that are ethnically, linguistically, and culturally distinct. Representativeness seeks to ensure that no significant group within civil society is excluded or silenced, and this requires the promotion of mechanisms to empower

Building and Sustaining a Contemporary Democratic State

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minorities and the poor. Two choices that the state makes are equally important for the consolidation of democracy: restraining its own power and fostering the public voice of its critics. Democracy requires, third, that public institutions be responsive to political participation, not only as a result of elections, but also as an expression of interests and demands formulated in the normal course of political contestation. The strength of long-term support for newly established democratic regimes is determined by the choices that politicians and parties make to constrain their own preferences in order to serve democratically the preferences of those who put them in office. To increase the likelihood that outcomes would favor democratic consolidation, Ekiert and Grzymala-Busse highlight the importance of the domestic cultural, social, economic, historical, and geographic contexts as the crucible for decision making. Political parties are the helmsmen that must steer between the demands of responsibility, representation, and responsiveness. Institutional crafting, in turn, should foster political liberties and defend the right of the majority to govern. One key institution that is not formally a part of the constitution of liberty but provides essential support for the liberties in the constitution is the mass media. Journalists may monitor the abuse of power, disseminate the values of democratic politics, facilitate competition, and expose extremists, but for the media to play such roles it, too, depends on the enforcement of rights to freedom of expression. Finally, Ekiert and Grzymala-Busse emphasize that international public and private institutions can foster best practices, distribute information, monitor performance, provide funding, and at times impose sanctions to defend, develop, and strengthen democratic practices and institutions. Both governments and civil society associations in various countries may take the leadership in this regard. How, then, to choose design principles to build on these core ideas? In chapter 4, Richard Simeon and Luc Turgeon spell out key principles for constitutional design in the construction of democracy. The first is to make a clean break with the previous authoritarian regime. Those who are crafting a democratic constitution must establish a framework of rights that political leaders and the public will support, thereby linking the design of institutions to previous considerations regarding civil society and political parties. They must fashion rules that protect rights that are consistent with, and enforceable under, democratic rules. The second principle is the provision of access for those in civil society who lack the resources to make their presence and numbers heard and felt, namely, the poor and minorities. Democratic design must permit the representation of salient differences (e.g., language, religion, ethnicity, culture, gender, and social class) and provide means to negotiate between these diverging claims to representation and influence.

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Macro Issues of Democratic Construction

The third principle is to shape a democratic state that will be present throughout the pertinent territory and capable of delivering and protecting rights and access. In addition, it must deliver the public services that citizens would expect, such as education, health, and physical infrastructure. The democratic state should enable all citizens to want to belong to the new political community. The fourth principle is especially pertinent to constitutional design—namely, the transformation of a divided society into a political community capable of coping with its disunity in a civilized manner. Simeon and Turgeon underscore the concept of a “citizen regime” that attempts to give life and meaning to its constituent components: rights, access, and belonging. Such a constitution would provide a framework for public debate between citizens about the burdens they consider reasonable to place upon each other and would foster the public dialogue that facilitates the peaceful resolution of disputes. The stakes in constitution making are high. Constitutions transform the relations among contending groups and the terms of their association. They provide for the mechanics of new democratic states by structuring incentives and constraints for all actors. Constitutions should aim to limit the effects of individual self-interest while maximizing public support for the constitution itself; the choice that crafters face is how to accomplish the latter while holding the former in check. The process of constitution making for democratic politics requires that those who craft the text—and specify rights, duties, and institutions—also submit the result for public deliberation and ratification; this illustrates that such a foundational scheme ought to seek support from more than a bare majority of the public. For this key democratic act, the consent of the governed should involve the active consent of most of the governed, that is, a super-majority that expresses its approval through a plebiscite. The next large question focuses on the selection of the specific institutions for an effective democratic regime. In chapter 5 Marcelo Barroso Lacombe and António Octávio Cintra shed light on the roles of the executive and the legislative branches as well as their relationship during democratic consolidation. They give special attention to the choice between parliamentary and presidential systems. Parliamentary systems, they note, are based on the unified control of the legislative and executive branches. Parliamentarianism rests on the hierarchical preeminence of the cabinet, where governance is highly efficient and the cabinet’s proposals are likely to be accepted. Presidentialism relies on separation of the executive and legislative branches and are, consequently, less efficient and more prone to gridlock. Some constitution crafters prefer the greater inefficiency in order to protect liberties, civil society, and private markets from the Leviathan state. Arguably, this was a key reason for the framing of the U.S. Constitution. The practical problem, however, is

Building and Sustaining a Contemporary Democratic State

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that clashes between the executive and legislative branches in presidential systems are also more likely to produce not only inefficiencies, or even gridlock, but also systemic malperformance and breakdown. Some Latin American cases continue to exemplify such outcomes. Consistent with the principled needs (noted previously) for representation, access, and belonging, democratic polities should also require accountability; that is, they should provide mechanisms for monitoring the performance of politicians. Parliamentary systems are based on indirect accountability, whereby voters elect parliamentarians. Parliamentary parties are cohesive and disciplined, and the cabinet is answerable to parliament’s partisan majority. In presidential systems, electorates cast different votes for different branches, which may balance, compete, or collide with one another as Lacombe and Cintra make clear. Whereas accountability is inherently a retrospective procedure, in parliamentary systems it is much easier for voters to assign responsibility than it is in presidential systems, particularly when term limits are strict. It is for these reasons that Lacombe and Cintra, Ekiert and Grzymala-Busse, and former prime minister of Portugal Aníbal Cavaco Silva explicitly recommend political arrangements that are more parliamentarian than presidential. In heterogeneous societies with significant minorities, special attention must be paid to the electoral law. Proportional representation guarantees the greatest access for minorities whose members live throughout the state’s territory. Single-member plurality (“first past the post” or “winner takes all”) systems provide better access to minorities whose members live in geographically concentrated spaces. Proportional representation open-list systems require voters to choose a party but also permit or require voters to select their preferred candidate from the list. This scheme attempts to combine the two previous electoral procedures but often serves neither purpose as well. Perhaps the least stable scheme is a presidential system that has midterm elections, multiple parties, and proportional representation, because it is most likely to ensure that the president will lack a legislative minority after midterm, and often even from the start of the presidential term. There are ways to reduce the risks evident in presidential systems, all of which move the presidentialist design toward parliamentarianism. For example, the efficiency of presidentialist systems increases if presidents and legislatures are elected on the same day and serve coterminous terms; that is, legislators face no “midterm” elections. This bilateral symmetry of electoral calendars improves the likelihood that the president and the majority of the legislature would be political allies. Similarly, efficiency is likely to increase if the executive branch lacks strong governance prerogatives, such as decree powers with the force of law, whose existence risks abuse and a serious rift between executive and legislative branches.

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These concerns address key elements for the construction of a democratic regime, such as the centrality of liberties, the prospects for the majority to govern, the protections of minorities, and the effectiveness of the democratic regime’s institutional design. We now examine design elements regarding the capacity of the democratic state.

The Democratic Regime: The State and Its Performance Democratic states need to achieve a strategic balance by dividing or otherwise constraining state power to prevent authoritarian rule or abuses, while at the same time coordinating within the state—or between its agencies, civil society, and market organizations—to strengthen its capacity to accomplish valued goals. In those countries transiting from authoritarianism, José Luis Méndez argues persuasively in chapter 6, simply dividing state power will likely create fragile democracies and fragmented and unstable political systems incapable of serving the public. Contemporary democratic states, Méndez reports, have followed a variety of schemes to address this strategic choice. One option is privatization, which constrains the state through such policies as trade liberalization, deregulation, and the sale of state enterprises. As a consequence, privatization of the tasks hitherto performed by the state can relieve it of the burden of too many functions, thereby enabling the state to perform a few core operations better. The state can shed its “fat” in order to become “fit” to govern. Coordination occurs mainly through the market or through the activities of civil society organizations. Although this choice may seem attractive, it often risks giving away public property at extremely low prices, reducing dangerously the proper regulation of market or societal activities, and rendering unaccountable many roles and activities that should be justifiably subject to public monitoring. A second choice is some combination of delegation, deconcentration, and decentralization of the state’s tasks to subnational entities. Delegation authorizes voters to elect municipal and provincial authorities. Deconcentration empowers municipal and provincial authorities, no matter how chosen, to exercise substantial discretion over government expenditures. Decentralization requires that subnational authorities, regardless of the means of their election or authority over the budget, raise financial revenues for official expenditures that take place in their jurisdiction. The absence of delegation, deconcentration, and decentralization approximates the territorial organization of an authoritarian regime. The presence of all three is most likely to promote democracy and gains in policy efficiency at the local level, but it is difficult to enact because central governments would resist surrendering so much power.

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Delegation without deconcentration or decentralization is most likely to engender local democratic crises because elected officials will be compelled to renege campaign promises or engage in corruption—either of which lead to understandable voter alienation. Delegation and deconcentration without full “hard-budget” decentralization is most likely to engender fiscal crisis because it institutionalizes moral hazard. Elected local officials will overspend, certain that the national government will in due course bail them out. Brazil’s financial panic of January 1999 was born when a state governor actualized such a design nightmare. Argentina’s financial crisis in the late 1990s, culminating in a massive collapse at the end of 2001, was caused in part by arrangements that enabled provincial governments to rely on the central government’s purse, contributing to the latter’s uncontrolled deficit. Méndez calls attention to a third choice faced by democratic states, namely, how to structure the civil service. The purpose of a classic civil service is to avoid the socalled spoils system whereby rulers distribute government jobs to their supporters regardless of qualifications. Civil service rules depoliticize official hiring, evaluation, promotion, and compensation; they are designed to reward technical expertise and merit, regardless of partisanship. A civil service fosters public support through the rule of law rather than the dispensation of favors and also enables an opposition party that wins an election to “hit the ground running” on the day after victory. One of the negative aspects of civil service regulations, however, is that they limit the power of elected politicians to govern democratically, as mandated by their constituents. More recently, “new public management” models recommend that civil servants be appointed for a fixed term, renewable only upon an evaluation for good performance. Contract procedures are also to be used within and between agencies to stipulate required levels of performance. In general, this new approach seeks greater flexibility and has a clearer orientation toward results, whereas the classic civil service model focuses on the means for official appointment and the adherence to official rules. The difficulty with the new approach is that contracting in this fashion is independent of such valuable civil service traditions as long-term commitment, accumulated experience, and shared responsibility, and it does not necessarily generate more or better “vision.” Let us suppose, however, things go wrong. The state, we noted earlier, must possess a monopoly over the legitimate exercise of force. Such force is characteristically exercised through the police and the armed forces, whose role and performance is explored in Rut Diamint’s analysis in chapter 7, which gives special attention to Latin America, one of the two key regional contributors, along with Eastern Europe, to the third wave of democratization. Carlos Blanco develops convergent themes in chapter 13. At the outset, it should be clear that there is much to cheer. Only once (in

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Ecuador, in 2000) since 1976 have the armed forces in a Latin American country overthrown a civilian president chosen in a democratic general election. Respect for human rights, public liberties, and fair elections gained ground in Latin America during the closing quarter of the last century. And yet, much has not gone well with regard to the military and police. In the Latin American context, Diamint notes, the legacy of past military rule hovers over democratic regimes. The inner workings of institutions in this region still function at cross-purposes. Latin American military officers often prefer personal relationships and direct contact with civilian authorities rather than institutional relations more consistent with democratic constitutionalism. Latin American officers often consider all of their actions to be state secrets, whereas democratic civilians should prefer greater transparency. Military officers are often unprepared for the policy changes that follow democratic elections. Civilians in the executive and legislative branches are often ill-equipped to exercise their proper authority over a broad range of issues: military weapons and equipment acquisition; the definition of military missions and the identification of new threats to the state and its people; the relationship between national armed forces and United Nations’s peacekeeping missions; the role of the military in fostering peaceful cooperation with neighboring states; and the role of the military in areas such as disaster relief, technological development, or the management of infrastructure and key enterprises. Even more problematic is the often still ill-defined role for the military in the maintenance of law and public order—a grave concern for democrats in countries where the military from the 1960s to the 1980s killed many citizens it considered to be “enemies” of the state. There is an especially urgent need to develop competent and professional police forces, detached from the armed forces, and firmly placed under civilian authority. Since the 1980s, the rate for common crimes in Latin America has risen substantially in all of the capital cities, and often far beyond their urban borders. Citizens understandably demand that a democratic state protect them from crime and violence, and yet police competence in addressing this crime pandemic is often lacking. Moreover, treatment of citizens by police officers is often arbitrary. Although community policing has been adopted in various countries, it has proven difficult to eliminate police corruption. The results of community policing have also often been uneven; for example, in Peru, Guatemala, and Colombia, such practices have at times led to violent vigilantism. Corruption of all kinds is a problem endemic to many third-wave democracies. In chapter 8, Susan Rose-Ackerman defines corruption in government as the illegal use of public power for private or political gain. Corruption generates social harm by undermining the rule of law and public trust in government officials. It disadvantages

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the most efficient rule-abiding firms because contracts and other benefits are granted to less-efficient firms that break the law to gain governmental preferences. Corruption fosters the design of inappropriate government projects to maximize illicit rents, contributes to inequalities, and punishes those honest taxpayers by making them pay for the costs of corruption. Democracy can provide one remedy against corruption: elections to defeat culpable elected officials and their appointees. Nevertheless, the financing of democratic elections can itself generate corruption in ways unknown in authoritarian regimes. Transparency rules regarding private financing of campaigns provide the most common essential defense against rampant corruption associated with elections. RoseAckerman argues that mass media institutions should also be free to criticize public officials, especially at election time, to shine a bright light on nefarious officials and their practices with little fear of running afoul of libel laws. Campaign finance regulations, in contrast, are more problematic in emerging democracies. If too restrictive, they will encourage illicit donations; it is also likely that the state provides inadequate public financing for campaigns. Even in consolidated democracies, people are highly creative in finding ways to circumvent the regulations limiting campaign expenditures. Apart from elections, governments can also reduce the likelihood of corruption by making information on budgets, laws, regulations, and executive decrees routinely available (in print and on the Internet) to the public. Freedom of information acts should be a key component of the structures to fight corruption, and the state should make it easier for civil society organizations to monitor the public sector. Some state institutions can be designed to keep other state institutions accountable. Independent election commissions have played important roles in preventing and eliminating electoral fraud and constraining election-related corruption in many Latin American countries where such abuses had long been rampant. Legislative investigative commissions that represent and include the various political parties in parliament may expose key instances of corruption. Courts and public prosecutors may also exert proper powers, provided they are independent of partisan control and open to suits by citizens and public interest groups. Rose-Ackerman’s chapter also calls attention to sectors of state action that are especially vulnerable to corruption, such as tax and customs collection, privatization, and large-scale procurement. There are many ways, she notes, in which these sources of corruption may be controlled. For example, trade liberalization may reduce the incentives for pilfering inherent in customs collection; tax rate simplification, and levying taxes on bases that are difficult to hide and underestimate, may curtail tax evasion and tax bribes; the state may reward tax and customs collectors for good performance. The

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lack of transparent processes and criteria for choice in privatization and procurement decisions can make these decisions subject to much favoritism and corruption; the key remedy in these instances is not only transparent procedures, but also competitive bidding. At the conclusion of her chapter, Rose-Ackerman presents a hierarchy of feasible strategies. She recommends early adoption of those corruption-fighting measures that are likely to elicit least resistance, such as a freedom of information act; greater ease of registration and operation for civil society organizations; implementation of rewards to business firms that adopt anticorruption codes of conduct, and the installation of transparency rules. Democracies that deliver must at some point deliver favorable economic performance, which is the subject of chapter 3 by Andrew Richards. He ably summarizes the strong case that economic development and growth greatly increase the likelihood of democratic consolidation and sustenance. The policies that emergent democracies must pursue to reach such happy outcomes, however, vary considerably. In the formerly communist states of Eastern Europe, markets had to be established; in hitherto statist Latin American economies, reforms had to be enacted. In nearly all of these societies, new institutional foundations for property rights had to be created. The strong popular demands for an immediate solution to economic and social problems, and the resistance to reforms by those who expected to lose from them, made these tasks slow to materialize. In Southern, Central, and Eastern Europe, Richards argues, political reforms preceded or coincided with economic reforms. The democratizing political reforms were indispensable for the adoption of a market economy. In Latin America, it was a dictatorship (in Chile) that led the way to enacting market-oriented reforms, but in most other cases economic reforms were simultaneous with, or preceded by, political openings that would in due course result in democratization. Much ink was spilled in the 1990s over the pace of economic reforms—should reforms be achieved through gradualism or a “big bang”? Since then, the evidence has become clear: comprehensive economic reforms serve market-based economic growth best. In some instances, the practical distinction between gradualism and the “big bang” turned out to be almost trivial. In other instances, polemics in favor of gradualism were merely a cover to avoid significant reforms; countries that were timid in their reforms experienced inferior economic results. The state certainly did not wither away under Marxist-Leninist regimes in Europe, nor has it diminished with the adoption of market-conforming strategies. States in emerging democracies must provide access (especially for the poor and for various minorities) to education and public health and must try to reduce poverty so that all

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citizens can participate fully in social, economic, and political life. Only then will citizens be able to partake in democratic politics and discover the full array of their liberties. States must also invest in developing or modernizing infrastructure and provide incentives to investors to do the same. States must reform court systems to strengthen the rule of law, facilitate conflict resolution and adjudication, enforce contracts, and punish those who violate the rule of law as it regulates markets. Democrats should differ over redistribution policies. Market-preferring liberals2 and social democrats should disagree over the relative priority of social equality in the formulation of public policy. At the heart of this disagreement is the assessment regarding the compatibility between efficiency and egalitarian policies, as well as the rectitude attached to the value of equality itself. Liberals and social democrats seldom (and today, rarely) differ over the priority of reducing poverty to ensure that all citizens reach a minimum standard of livelihood that empowers them to exercise their rights and fulfills their duties, but they disagree with regard to their tolerance for rates of growth that benefit some people disproportionately more than others. Richards concludes by noting the extraordinary resilience of third-wave democracies in the face of the scholarly and public pessimism that faced their birth. They survived despite catastrophic economic performance in many postcommunist countries in the immediate aftermath of the collapse of communism in Europe and despite the crisis-punctured economic experience of most Latin American countries. The extraordinary absence of military coups d’état, noted earlier with regard to Latin America, is no less astonishing as it pertains to former communist Europe, notwithstanding such a record of economic performance. Democracies that survived despite poor economic results should thrive if economic outcomes improve. The choice for economic growth is, therefore, compelling to deliver prosperity and the accompanying services and increase the likelihood that democracies will become consolidated and perform well.

Conclusions The triumph of democracy—though “ensured” by economic development and growth—mercifully has other sources as well, namely, the public values, commitments, and behaviors of politicians and peoples, and the effectiveness of the institutions that they have crafted. More important is the set of internalized collective identities that were forged by living through and struggling with their political experiences. These points are highlighted forcefully in the comments by Colombia’s former president, César Gaviria, India’s former prime minister, Inder K. Gujral, and Portugal’s former prime minister, Aníbal Cavaco Silva.

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Cavaco Silva emphasizes in chapter 12 the utility of economic growth for democratic transition and consolidation in order to reduce unemployment, improve wellbeing, and achieve a better distribution of income. Both Cavaco Silva and Gujral agree on the importance of well-crafted institutions, but in chapter 11 Gujral also raises the importance of “the spirit of the law” for democracy. The issue of democratic transformation, Gujral reminds us, cannot be limited to a legal-constitutional perspective. The foundation of democracy through experience, accretion, habit, and leadership takes time, and it surely extends beyond the prescriptions in formal constitutional parchments. We affirmed at the outset that our strongest recommendation is that there is no panacea for the establishment of democratic transition and consolidation worldwide because we emphasize the importance of specific contexts and their variation. We, therefore, second Prime Minister Gujral’s admonition. The prospects for democratic politics depend on past legacies, moral configurations, and imagined hopes. Gaviria persuasively argues in chapter 10 that democracies that do not deliver on the dreams and expectations of their citizens lose popular support and face the risk of authoritarian usurpation. This goes beyond providing the kind of economic performance that people expect, including ample room for civil society to be an influential actor on the political stage. Without a healthy civil society, he argues, democracy cannot reach its full potential. Gaviria thus reemphasizes one of the key points of this volume. He also contends that the international community has an important role to play in defending and strengthening democracy. National leaders and governments cannot behave as if they were independent of the rest of the world; if they become isolated, their hold on power will eventually weaken because of external pressures (and potentially very costly economic and political sanctions). As Gaviria also notes, survival and prosperity in a global age depends on countries and leaders playing by democratic rules. Our task in this book is necessarily modest. We hope to shed light on the choices that politicians and peoples face as they seek to construct a democratic political system and call attention to the specific set of issues over which there is some discretion, namely, what we call the design aspects of democratic politics. The design of constitutions and institutions that seek to guarantee liberties ensure the rights of majorities and minorities, craft effective democratic institutions, and strengthen the capacities of the democratic state. The ultimate aim is to improve the prospects for democracies that deliver in an increasingly interconnected international context. We can do no better in concluding than to quote from an article by Fernando Henrique Cardoso (2001, 5–14), former president of Brazil, and the author of chapter 9 in this book. As he notes, “[W]e must consider that we are living on the thresh-

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old of a new era, in which democracy is even stronger because it is imbued not only with classic values but with new values that go beyond the limits of the nation state. Today democracy embraces global citizenship as well as general and universal values, but these, in turn, should not simply be presented in this generic form, as if they contradicted the existence of local interests, national interests, or the particular interests of each citizen and each situation. Thus there is a great deal of work to be done, not only intellectual but also practical, in order to comprehend the dimensions of the challenge we now face.”  1. Samuel P. Huntington (1991) coined this label. 2. We employ the term in common use in Europe and Latin America. Liberals are most likely to favor market-conforming policies and least likely to favor state regulation of, or extraction from, economy or society.

 Berlin, Isaiah. 2002. “Liberty: Incorporating Four Essays on Liberty.” In Liberty: Incorporating Four Essays on Liberty, ed. Henry Hardy. Oxford: Oxford University Press. Cardoso, Fernando Henrique. 2001. “Democracy as a Starting Point.” Journal of Democracy 12, 1: 5–14. Huntington, Samuel P. 1991. The Third Wave: Democratization in the Late Twentieth Century. Norman: University of Oklahoma Press. Lipset, Seymour Martin, and Stein Rokkan. 1967. Party Systems and Voter Alignments: CrossNational Perspectives. New York: Free Press. Sen, Amartya K. 1999. Development as Freedom. New York: Knopf. Weber, Max. 1958. “Politics as a Vocation.” In From Max Weber: Essays in Sociology, ed. H.H. Gerth and C. Wright Mills. New York: Oxford University Press.

 

Strengthening Pluralism and Public Participation in New Democracies     -

The distinct contributions of public participation to democratic transitions and consolidation have long drawn the attention of both politicians and scholars. Pluralism and mass political participation are among the core principles of democracy, yet successive social science debates on democratization and democratic consolidation reflect uncertainty regarding their impact on the stability and quality of new democracies. Several questions that are deeply embedded in analytical, normative, and policy concerns animate these debates. Which levels of political participation are helpful or sufficient for a healthy democracy? Which forms of public involvement most benefit democratic politics? What are the proper institutional channels through which broad segments of the population can and should participate in democracy? Under what conditions can popular participation endanger new democracies? Which institutional arrangements can channel political participation in the service of democratic consolidation? During the past decade or so, academic reflection on the challenges and dilemmas of constructing liberal democracy has shifted from concerns about broad structural preconditions, competing ideologies, and elite interactions to an emphasis on institutional choices and institution building, the capacity of international actors to shape democratization, and patterns of relations between elite and popular actors. The post–cold war global environment has also made it possible for governments, international organizations, advocacy groups, nongovernmental organizations (NGOs), and foundations to participate vigorously in promoting democracy and human rights. These organizations have been eager to develop practical policy proposals to directly assist nations after a regime change to succeed in stabilizing and consolidating their new democratic institutions.

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This chapter summarizes the current thinking on the role of political parties and civil society organizations in strengthening new democracies and outlines a number of practical proposals that may be of interest to both scholars and policy makers. The analysis draws on both the existing social science literature and expert discussions that took place during the Conference on Democratic Transition and Consolidation, held in Madrid in October 2001.1 The pertinence of this chapter to the Latin American experience is reviewed in reflections of the former president of Colombia and former secretary general of the Organization of American States, César Gaviria, in chapter 10.

The Determinants of Democracy The dominant approaches to the process of democratic transition first focused on the broad societal and economic preconditions for democracy: stages of economic development and affluence, social inequalities, levels of literacy and education, existing political culture, and historical traditions.2 From this perspective, thresholds of developmental characteristics and historical legacies that shaped social and economic structures defined the possibilities for successful democratic transitions. Moreover, democracy was not the only possible—or even likely—outcome of regime change. In the context of the cold war, broadly based public involvement and popular mobilization against nondemocratic regimes often provoked the worry of a communist takeover and were treated with suspicion, especially where broad structural preconditions for democracy were missing.3 The destabilizing interaction between rapid mass mobilization and weak institutional channels of participation was seen as a common weakness of the political order in democratizing societies (Huntington 1968). Scholars examining the transitions to democracy in Southeastern Europe and in Latin America in the 1970s and early 1980s subsequently shifted their analytical attention from preconditions to elite agreements and “pacts.” Democratization was seen as a contingent process in which social and economic crises, popular upheavals, or external events undermined authoritarian rule and forced liberalization. In this context, the old ruling elites and their opposition counterparts negotiated over who would now govern and in which institutional framework. The character and enforcement of these agreements would determine democracy’s subsequent success or failure.4 Thus, deliberate political crafting and elite skills, rather than broad developmental preconditions, could determine democratic outcomes (Di Palma 1990). Within both of these two broad approaches, the role of civil society and political participation remains at a curious level of generality. For scholars who focus on democratic preconditions, political participation is a desirable democratic outcome but not a

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critical precondition for democratic consolidation. For scholars who focus on pact making, civil society and political participation have a more direct role in consolidating democracy, because popular backing determines the relative strength of the regime and its opponents (and the particular factions—soft- and hard-liners—within the two groups). These approaches, however, specify neither the kind of political participation that would facilitate democratic consolidation nor the determinants of such participation, whether in the domain of civil society organizations or of political parties. The collapse of the Soviet bloc and the fragility of many of the new democracies refocused scholarly attention on the health and quality of democracy, rather than its mere institutional existence.5 Extensive liberties, secure political and social rights, and active citizenry emerged as fundamental factors in determining the quality of democracy. Social capital and the importance of civic engagement have become prominent ideas in academic and public discourse. Scholars also rediscovered the concept of civil society, its significance for democracy, and debated the relationship between civil society, social capital, and the performance of democracies.6 Despite this ringing endorsement of civil society’s importance, the ambiguity about the desired traits of public participation persists. Massive regime change in the postcommunist world was one reason for the changes in the thinking about democracy and democratization. The popular mobilizations of 1989 played an enormous role in bringing down the communist regimes in Poland, Hungary, East Germany, the former Czechoslovakia, and Romania.7 In Poland, especially, the role of the powerful Solidarity movement proved crucial in bringing about both the Round Table negotiations with the Communist Party, and the subsequent democratic transition. On the other end of the spectrum, nationalist mobilization directly contributed to the bloody breakup of Yugoslavia. As a result, analyses of the postcommunist transitions to democracy and the attendant challenges have tended to focus more on civil society and relations between mass and elite politics. Postcommunist countries and other late democratizers faced challenges of multiple transitions where political regimes, economies, and social systems were all simultaneously transformed. Democratization also unfolded in a more demanding international context dominated by global economic forces and assertive international actors committed to promotion of democratic principles and market economies.8 Under these new conditions, mass political mobilization was no longer seen as a threat to emerging democracies. To the contrary, the passivity and apathy of citizens and voters and the weakness of political parties and civic organizations were considered major impediments to successful democratization and the most difficult challenge to overcome (Przeworski 1995). In two influential analyses, Ralf

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Dahrendorf (1990, 1997) argued that, although the economic and political transformations would occur relatively quickly and easily, the rise and consolidation of a healthy civil society would take decades, if not longer. This, he and others argued, was the greatest deficit faced by the nascent contemporary democracies—and one that could well lead to the rise of new autocracies, ruled by “demagogues, priests, and colonels [rather] than democrats and capitalists.”9 Thus, the strengthening of civil society became a top priority for both domestic democratizers and a variety of international actors whose role in supporting and shaping emerging democracies has expanded greatly in recent years. This view was not without controversy—other scholars, especially those concerned about the process of economic transformation and the creation of a liberal market economy, worried about the threat of unbridled political participation as a potential obstacle to both economic reform and political transformation.10 For example, the economic “losers of the transition,” if numerous and organized enough, could vote out proreform governments and block the entire reform process. Even as popular mobilization brings about regime change and subsequently fosters accountability and democratic norms, its excesses could derail both the democratic transition and the accompanying market or state reforms, affecting the function and stability of democracy in negative ways. Diamond in fact argues that “a hyperactive, confrontational, and relentlessly rent-seeking civil society can overwhelm a weak . . . state with the diversity and magnitude of its demands, saddling the state with unsustainable and inflationary fiscal obligations and leaving little in the way of a truly public sector that is concerned for the overall welfare of society.”11 What, then, is the role of public participation in democratic transition and consolidation? How dangerous for democratic stability is an assertive and mobilized civil society that is prone to unconventional political participation? And what should be the role of external, international actors in the democratization process? There is a broad consensus in the existing literature and among experts that public participation is an indispensable part of building democracy. In democratic transitions, popular mobilization and protest movements play a critical role in spurring regime change and in preserving the momentum of reform. Their active presence can raise the cost of political repression, strengthen the hand of reformist elites, create alternative networks of activists and political leaders, and secure newly acquired liberties and rights. In new democracies, active citizen participation can impart habits of civil engagement, build trust and facilitate the rule of law, enhance society’s monitoring capacity and elite accountability, and control corruption. For new democratic leaders, a strong civil society and strong political parties enhance state capacity, increase pub-

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lic legitimacy and compliance, and facilitate the implementation of new public policy. The goal of this chapter, however, is not to reaffirm the need for strong public involvement in the democratic process. Both historical evidence and theoretical reflection leave little doubt that engaged and concerned publics are the critical aspect of a secure and well-functioning democracy. Rather, the aim is to offer a more specific and policy-sensitive account of the major dilemmas involved in constructing a robust pluralism that can reconcile the diverse values and interests underlying the liberal political order and facilitate consolidation of democracy. In short, we need to disaggregate the notion of participation to identify and evaluate specific types of public involvement. Not all forms of participation have democracy-enhancing qualities—a robust civil society can be used to build a dictatorship as much as to bolster democracy.12 Therefore, it is important to focus on the kinds of public participation that facilitate democracy and the ways in which it can be enhanced, channeled, and supported. This may be summarized in the form of two rules:

·

·

The first rule concerns the desired qualities of public participation. They could be summarized as the “three Rs”: political participation and its organizational vehicles must be responsible, responsive, and representative, to facilitate consolidation of new democracies. The second rule concerns the determinants of such participation. They could be summarized as the “three Cs”: the domestic context, institutional crafting, and international conditionality. These factors draw attention to the specific conditions and challenges existing in a given country. They influence the degree to which public participation can be responsible, responsive, and representative. They also offer suggestions about policy tools that in particular cases can strengthen beneficial participatory capacity of diverse social and political actors.

In the sections that follow, we first examine these two rules in detail. We then discuss how they apply to the two dominant manifestations of public participation in modern societies: civil society organizations and political parties. We argue that both civil society and, in particular, political parties have a crucial role to play in consolidating democracy. Because current democratic transitions take place in resource-poor societies, external support for civil society organizations and parties is indispensable. Consequently, support for democracy building should receive higher priority among aid-granting institutions and organizations. It should be equal to the support provided for building market economies in terms of resources and efforts.

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Standards of Public Participation in Democratic Consolidation Recent historical experience shows that even high levels of protest and mobilization can be absorbed by newly founded democratic regimes with relative ease (Ekiert and Kubik 1999). Moreover, high levels of political participation have often improved democratic performance and preserved the reform momentum. In Poland, for example, robust contentious politics contributed significantly to the speed of transition, consistency of reform policies, and accountability of new governments. In South Africa, the overwhelming support for the new African National Congress government in 1991 and in 1994 lent the new democratic rulers considerable popular legitimacy and policy leeway (Mattes 2002). In fact, insufficient or low public participation may result in premature stabilization of semireformed institutions, the erosion of political liberties and rights, and authoritarian backslide. The weakness of civil society linkages and organizations has proven worrying in several postcommunist cases (Rose 1995; fish 1996, 1995; Howard 2002) and elsewhere where democratic reforms stalled. Accordingly, one of the major dilemmas facing democratizing elites is how to enhance public participation, while harnessing it to the best democratic effect. What kind of political participation fosters democratic consolidation? The “three R” standard of responsibility, responsiveness, and representativeness means that certain kinds of political participation need to be prioritized and encouraged while others should be constrained or even prohibited. First, responsible political participation does not call into question either democracy or the rule of law. It thus helps to fulfill one condition of democratic consolidation—an elite and popular consensus on the rules of the democratic game—and promotes democracy as the “only game in town” (Gunther and Higley 1992). Responsible public participation can hardly rest on extremist or populist appeals, enticement to hatred and violence, or on antisystem mobilization. The presence of such strategies of mobilization poses the most serious threat to new democracies. State and law enforcement agencies should not hesitate to confront antidemocratic forces and combat extremism in all its forms. It should be emphasized, however, that the struggle with political extremism must not serve as a cover for political repression, as has been the case in many countries after the terrorist attacks of September 11. Constraints on public participation should be legally established and clear, with monitoring by independent judicial institutions and free media to prevent abuses. This standard of responsibility also applies to the internal workings of parties and organizations—well-defined procedures, accountability, transparency, and respect for law should characterize their governance and finances.

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Second, public participation needs to be representative; for a democratic consensus to exist, no significant group within society can be excluded or silenced. The basic standard here is that of universal suffrage: if swathes of population are excluded on the basis of race, religion, gender, literacy, or property ownership (as in nascent Western democracies in the nineteenth and early twentieth centuries), full democratic representation is nonexistent. A more demanding standard would focus on ensuring that the entire societal spectrum is represented so that disadvantaged groups, such as minorities and the poor, are given the resources to both organize and voice their demands. Strong legal guarantees against discrimination, protection of independent communications media, and general respect for pluralism and diversity create the most hospitable environment for representative public participation. Third, for public participation to promote democratic consolidation, it must be responsive to the needs of popular constituencies. If political parties and civil society organizations are to function as organized and institutionalized expressions of popular interests, identities, needs, and demands, they cannot be reduced to small groups of elites operating exclusively in the national capitals or in the seats of power. They also can neither exclusively represent concerns of outside actors that are not shared among the population nor simply become rubber stamps that justify policies undertaken by nonrepresentative governments. Finally, for public organizations to be responsive to the needs of their constituencies, they must be transparent and accountable to their members, voters, and public authorities. Their involvement in various business activities or pursuit of private rents at the expense of public goods needs to be discouraged. In short, responsive public participation avoids being caught between the Scylla of nominal representative groups that “float” above society without any obligations or linkages, and the Charybdis of rent seeking, corruption, and clientelism (Kitschelt 2000, 873–74). Because popular preferences regarding the regime can be crucial to democratic consolidation (Alexander 2002), these standards for public representation are not merely wishful thinking—they represent a basic condition for the existence of democracy. How, then, can these standards be achieved? Context, crafting, and conditionality all determine the extent of the “three Rs” of public participation. As the experiences of South Korea, Mexico, and Taiwan show (Carothers 2002, 15), the domestic context should be understood as more than just the existence of democratic “preconditions,” the type of former authoritarian regime (Linz and Stepan 1996), or the specific sequence of transformations. Rather, it is a complex matrix of the cultural, social, economic, historical, and geographic factors and specificities associated with each democratic transition and consolidation. Every regime change is unique. Consequently, any strategy or policy recommendation has to be tailored to the specific con-

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ditions of a given country. In particular, one should distinguish between two basic types of democratizing societies: those that are divided, and those that are cohesive and more egalitarian. The former—characterized by major insurgencies, by old regime forces that resist democracy, by ethnic and communal conflicts, and/or by severe socioeconomic inequalities—present a different set of challenges and require different policies to achieve democratization. Thus, policy choices and strategies are not universally valid but can be reasonable and effective only in relation to the specific political, legal, social, and institutional conditions in which they are applied. The choice of strategies and policies also needs to be time-sensitive with regard to both the stage of democratization and the political epoch in which it occurs. Policies that are effective during the pretransition or power-transfer period may become ineffective or even counterproductive during the consolidation period. Thus, the context matters greatly in identifying and devising policy recommendations. As other scholars have pointed out (Przeworski 1995, 52), “One cannot assume that all the political and cultural conditions that characterize the countries in which democracy was established decades ago are present in the countries that have only recently experienced transitions to democracy.” In this process the involvement of specialists with extensive knowledge of local conditions is indispensable. Institutional crafting is another determinant of the forms of public participation. Democratic political participation can be enhanced by carefully designed institutions that maximize political liberties, grant inclusive and equal citizenship to all citizens, protect the autonomy of individuals and organizations, and expand the influence of citizens on the leadership selection and decision-making process. Even where there is broad democratic consensus and society is not sharply divided over basic regime questions, specific institutional solutions can prevent excessive political fragmentation, a lack of representation or responsiveness, or destabilizing political participation. Such institutions thus help to ensure a higher level of governability, more efficient administration, better cooperation between state and civil society, and greater political stability. The institutionalization of free and independent media protects and strengthens democracy by defending rights and liberties and promoting popular accountability and serves as an important check on government and public policy by exposing corruption and political repression, and publicizing participatory efforts (Gunther and Mughan 2000). In a democratic system, restrictions should not be placed on the media, which should be allowed to express diverse opinions and freely deliver available information. In designing the institutional framework for the media, steps should be taken to avoid monopolies on information, opportunities for political interference, and excessive concentration through state or private ownership. Mixed

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systems with public and private ownership and partisan and nonpartisan organizations should be encouraged. As researchers from the World Bank discovered, “Countries with more prevalent state ownership of the media have less free press, fewer political rights for citizens, inferior governance, less developed markets, and strikingly inferior outcomes in the areas of education and health” (Djankov et al. 2001, 31). Although the media should operate in a clear and stable legal framework, overregulation and excessive controls should also be avoided; judicial oversight and self-policing through corporate, professional organizations is preferable. As Leonard Sussman noted in the recent Freedom House report, “To be recognized as a genuine democracy, a country must remove the barriers to freedom of the news media. At the same time, the press is expected to fulfill its journalistic responsibilities as an essential part of free society. That commitment requires diverse reportorial, editorial, and analytical coverage of domestic and international affairs, interaction between the public and the press, and the accessibility of the media to the information-poor-all without distortions of truth by sensationalism and bias” (2003, 29–30). In sharply divided countries, where democracy is less likely to develop and endure, two broad institutional strategies are available. First, a democratic government could recognize existing boundaries between groups and introduce a variety of institutional mechanisms to ensure their peaceful coexistence (e.g., grand coalitions; mutual vetoes in decision making; proportionality in allocation of opportunities, resources, and offices; and various decentralization strategies). Second, a government could seek the attenuation of group boundaries through the promotion of integration strategies (e.g., building national identity; promoting organizations transcending main cleavage lines; or forcing ethnic or regional organizations to broaden their constituencies by enacting specific electoral or membership rules that require reaching certain thresholds of support). Both strategies, of course, should be tailored to specific local conditions in order to succeed.13 Finally, international conditionality can be both problematic and helpful, depending on the particular solutions employed. Recent experiences show that aid conditionality can be a very effective strategy in supporting pluralism and strengthening nascent democracies.14 Because participation requires not only opportunities, but also resources, and democratic consolidation often takes place in relatively poor countries, international donors can play an enormous role in funding and supporting public participation and organizations that are responsible, responsive, and representative. At the same time, however, outside actors must behave responsibly and responsively. There is a real danger that their well-intentioned actions can supersede and stifle local organizations and grassroot-mobilization efforts and impose imported social agendas. Moreover, in areas where central state control is not fully

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established, such internationally sponsored organizations can not only usurp the place of local civil society, but also control political and social agendas without proper accountability and democratic legitimacy, thereby becoming a de facto substitute for the state.15 Thus, sensitivity to these potential problems is essential: any external support should include explicit conditions that define the use of resources, rules of accountability, and traits of recipient organizations. Finally, although external support is crucial, parties and civil society organizations cannot be the exclusive subsidiaries of foreign organizations. The government should deliver at least some subsidies to social and political organizations and exempt them from fiscal charges through favorable tax provisions. These subsidies should not reduce the autonomy of recipient organizations or facilitate patron-client relations. Instead, the guiding principle is to institute fairness and to reduce disparities between organizations rather than promote donor goals (other than democratic consolidation). These principles apply equally to both domestic (private and public) and foreign donors.

Strengthening Civil Society There is considerable consensus among scholars that a vibrant civil society buttresses democracy: “Civil society is no guarantee of democracy, but it is necessary for democracy and can serve important democratic functions. A flourishing pluralist civil society and strong democratic government are reciprocally supportive.”16 Furthermore, Schmitter (1997, 240) claims that “the presence of a civil society (or, better said, of some degree, distribution, or type of civil society) contributes positively to the consolidation (and later the persistence) of democracy.” Similarly, Diamond argues that during the process of democratic consolidation “civil society may perform a number of crucial functions: scrutinizing and containing the power of the state; educating people about public affairs, political issues, and their civic rights and duties; increasing citizen participation, efficacy, and skill; developing a democratic culture of tolerance, moderation, and willingness to compromise; providing additional channels for interest representation; recruiting and training new political leaders; monitoring elections and government performance; and generating democratic constituencies for market reforms.”17 There is far less agreement, however, on how civil society should be defined and which groups and organizations are its legitimate members. The existence or high density of various social organizations is not sufficient for making democracy work. For civil society to perform its democracyenhancing functions, it needs to avoid three dangers: (1) pillarization (existence of competing and mutually exclusionary civil societies within the same territory); (2)

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privatization (reduced representative function in favor of narrow, particularistic interests, as well as prevalent rent-seeking and clientelistic modes of organization); and (3) absence of civility (lack of respect for rule of law, intolerance, extremism, and use of violence). Thus, a pluralist civil society must support liberal principles such as diversity, tolerance, and respect for the rule of law by adhering to universal democratic norms that transcend cultural and geographic boundaries: “The norms and practices of civil society are relevant to the consolidation of democracy in all cultural and geographical areas of the world, provided that the generic type of democracy that actors seek to consolidate is modern and liberal—that is constitutional, representative, accountable via multiparty competitive elections, tolerant of social and ethnic diversity, and respectful of property rights.”18 How, then, can context, crafting, and conditionality help to shape civil society organizations that can avoid the above problems and perform their democracy-facilitating functions? First, the domestic context is a crucial determinant of strategies that should be employed. Where societies are fragmented by ethnic divisions, extreme income and wealth disparities, or lack of democratic consensus, civil society organizations can become a powerful agent for bridging these divisions and reducing distributional conflicts, but they can also aggravate the divisions and intensify the conflicts through exclusionary organizational strategies, extremist and secessionist political agendas, and contentious political participation. In fact, a segmented, polarized, and politicized civil society is likely to emerge in such societies unless innovative policies are implemented to create incentives that counterbalance such trends. As Lipset (1981, 439) warned a long time ago, democracy “requires institutions which support conflict and disagreement as well as those which sustain legitimacy and consensus.” Therefore, in divided societies, associational life should not be segregated along ethnic, religious, territorial or linguistic lines, because such a pattern of organization hardens boundaries and identities, promotes intractable group conflicts, and encourages further segmentation. Accordingly, legal and institutional steps should be taken to create incentives for cooperation and for coalitions across dominant cleavages. They may include the promotion and subsidization of corporatist or professional organizations that transcend ethnic and religious boundaries or national organizations that surmount regional divisions. Such organizations may be accorded higher prestige, a larger share of subsidies, special privileges, or inclusion in the policy-making process. The goal is to avoid the formation of what Schmitter calls “pillarization of civil society” with “several civil societies-all occupying the same territory and polity but organizing interests and passions into communities that are ethnically, linguistically or culturally distinct” (1997, 248).

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Second, to fulfill their representative and responsive functions, civil society organizations need a set of institutional guarantees: a predictable and stable legal environment; freedom of association; endorsement of pluralism; and protection of civil liberties. These conditions can provide a guarantee of autonomy to civil society organizations, and they should be institutionalized and vigorously defended by public authorities. Diverse and independent mass media should be either protected or developed where they do not exist already. As early as possible in the transition process, it is important that laws regarding these freedoms are established and enforced. By the same token, to ensure that civil society organizations remain responsible domestic actors, they must commit to nonviolence, account for their financing, and govern with democratic procedures. Their internal practices and statutes ought to be transparent and predictable but not subject to outside manipulation; such practices prevent both the illegal use of resources and the infiltration of these organizations by forces hostile to democracy. Accordingly, the nature and behavior of civil society organizations should be regulated (e.g., with registration procedures) to ensure that they are characterized by nonviolence, tolerance, and civility. Violent and openly antidemocratic organizations should be prohibited and legally excluded from the political process. Because overregulation can stifle and unnecessarily constrain civil society activities, rules of exclusion should be assiduously designed and monitored to prevent abuse and repression of legitimate organizations. Finally, decentralized decision making that provides a degree of self-governance to regions, as well as ethnic and religious enclaves, should be endorsed (Coleman 1992). Civil society organizations should have access to the decision-making process through advisory councils and consultative channels and participate in policy implementation. Some successful examples include neighborhood-level participation in the allocation of public funds or in preventative health programs in rural areas. Institutional engineering can also protect the autonomy of civil society from undue influence and direct interference by the state or other political actors. By enforcing transparent accounting, disclosing donations and assistance, and setting norms of internal accountability, institutional engineering can explicitly limit interference in the internal affairs of civil society organizations by other actors. It is important to emphasize that, in their struggle for empowerment, civil society organizations should neither usurp nor contend for political power. Competition for political offices, especially on the national level, should be the domain of other actors and of political parties in particular. Specific legal regulations can establish these boundaries: only independent citizens or political parties should nominate candidates for national office. Conversely, political parties should not seek to co-opt core

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civil society organizations, because doing so undercuts the free articulation of diverse social interests and identities. Cooperation among public actors is essential but needs to be based on the principles of autonomy and partnership. Recent calls for “fostering strong connections between political parties and civil society groups” (Carothers 2002, 19) should not underestimate the potential for one set of actors to subordinate the other and use civil society organizations as fronts for political activities. Where civil society organizations are fostered at the expense of developing a political party system, as in Peru and Venezuela, opportunities for personalistic rule and demagogues grow, with little opposition from the underdeveloped political parties and parliaments. Legal requirements and electoral laws can largely help to define the boundaries between parties and civil society organizations, but implicit practices that characterize specific polities are equally important. Giving these organizations legal status, which would allow them to enter contracts and defend themselves in courts, may prevent undue restrictions of their autonomy. This status can be withdrawn for groups that violate the basic tenets of nonviolence, nondiscrimination, and toleration of other groups. Similarly, the boundary between public activities and private rents should be clearly defined, especially if organizations receive public subsidies. Third, international support based on conditionality can impart valuable resources and technical assistance and can provide considerable incentives for fostering responsible and representative civil society organizations. International organizations, foreign states, and global NGOs can work to support nascent pluralist groups, and to offer their expertise in the logistics of organization and mobilization. In light of the disparities in resources, skills, and expertise, these foreign actors can have enormous influence on the shape of emerging civil societies. Consequently, they should wield this power with caution and consideration. In principle, external actors should focus on supporting the establishment of democratic infrastructure instead of specific organizations. Otherwise, a real danger exists, especially in very poor countries, that (1) civil society organizations are fostered at the expense of political parties, the state administration, and representative institutions; (2) local civil society becomes dependent on their international partners or patrons and focuses on achieving the latter’s targets, rather than representing or responding to domestic constituencies; (3) public activities become monopolized by a narrow group of professional organizers, preventing transfer of skills to local communities, distorting the local balance of power, and affecting accountability of civil society organizations. Purposeful shaping of emerging civil society by either domestic or international actors should prioritize nonviolent, prodemocratic associations that have unconstrained membership and govern themselves according to democratic rules. In divided societies, organizations that transcend the main cleavage lines are especially

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valuable and worthy of support. Similarly, organizations that give voice to unrepresented segments of the population should be subsidized. International and domestic conditionality can also prevent the permanent domination of civil society activities by a few large organizations or one type of organization (e.g., labor unions or industry groups) that can systematically bias the policy-making process by encouraging a multiplicity of diverse actors through carefully targeted technical and material assistance. The size of the recipient organizations is less important than their aims and their role in local communities: supporting mass parties and mass organizations should not necessarily be the priority. Funding organizations that act on the basis of the above commitments not only support potential democratic actors, but also create incentives for nondemocratic actors to become more moderate or split into competing organizations. Finally, to avoid the overrepresentation of the leading class, sectoral, and professional interests, public and private sponsors should first assist those organizations representing poor or marginalized sectors of society. Provision of mixed sources of support is important. The state should offer nonpartisan subsidies and tax exemptions, provided that the civil society organizations fulfill the basic conditions of nonviolence and respect for the rights of others to organize. Similar criteria should be used by foreign donors. Any organization—including religious ones—that commits to democracy and collective good should be eligible for public funding. There are also reasons to believe that in societies with a dominant religion state sponsorship may provide the opportunity to influence activities of religious organizations and their commitment to democratic norms. Public resources should be both transparent and beneficial to organizations that provide public goods (e.g., charities), without interfering in their internal operations. Indirect state support is preferable. Such support is channeled through intermediaries (foundations, councils), provided through endowments or seed money rather than permanent subsidies, distributed on a limited basis (via matching funds, for example), and subject to time limits (such as sunset clauses.) Moreover, technical assistance should take priority over financial aid. Another possibility worth testing is “preference vouchers,” where citizens receive a fixed sum each year to contribute to the civil society organizations of their choice. This strategy, however, will not work in divided societies. In short, to ensure a responsible, responsive, and representative civil society, policy efforts should encourage a diverse and cross-cutting organization of civil society with actors committed to democratic norms in their external and internal activities. On the other hand, public authorities and international actors should steer clear of either interfering in the internal affairs of civil society organizations or stifling their

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growth, mission, and relations with their own constituencies through financial or technical dependence.

Strengthening Political Parties The development of political parties provides the indispensable institutional basis for democratic pluralism, representation, and public participation. Parties are essential to modern democracies: “Without political parties organizing and structuring to some extent the competition for power at all levels of government (the transnational, the state, the regional, or the local level), democracy, particularly in large urbanized societies, is not possible.”19 They are, as Lipset put it, “by far the most important part of the representative structure in complex democratic societies” (1960, 53). Despite the emergence of other actors and interest mediation mechanisms, institutionalized political parties (with stable organizations and orientations, strong societal roots, popular legitimacy, and internal structures for leadership turnover, candidate selection, and local representation) are a mainstay of modern, stable democratic rule (Mainwaring and Scully 1995). Political parties play numerous roles. Among the most important are aggregating and representing popular interests, codifying information about policy alternatives for voters, legislating and taking responsibility for policy decisions, and recruiting future political elites. They are thus key to representation, legislation, and public accountability. Even in strong presidential systems, political parties provide indispensable tools of electoral mobilization and legislative input and protect the balance of power among the branches of the government. Finally, because they are directly involved in policy making and have formal access to state power (one that is, by definition, denied to most civil society organizations), political parties are more directly engaged in establishing democratic governance. Thus, countries that develop strong parties have a considerable advantage in the process of democratic consolidation (Schmitter 1992). As a result of these responsibilities, parties may matter more for democratic consolidation than civil society organizations. First, parties have direct access to governance. Unlike civil society organizations, political parties field candidates for office and, once in office, are in charge of initiating and approving public policies. Second, they compete among themselves for power and are directly accountable to their constituencies, who keep them in power. As a result, parties have to answer for the policy goods they provide. As a result, compared to civil society organizations, political parties are both far more powerful and far more responsible for policy outcomes, including democratic consolidation. As such, their behavior must be both transpar-

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ent and accountable, in light of the potential for conflicts of interest and their capacity to influence government decisions. The chief challenge for democratic political parties is to navigate the demands of representation, responsiveness, and responsibility. It is not surprising that overcoming the weakness of political parties is a fundamental challenge facing new democracies, especially those in the last wave of democratic transition.20 Adam Przeworski has noted that, as crucial as political parties are to a functioning democracy, in many new democracies “representative organizations are weak” (1995, 62), often failing to fulfill their numerous roles. Thus, democratizers should focus on strengthening political parties. The policy measures should be tailored to avoid three main problems that can plague democratic party systems: (1) fragmentation, (2) polarization, and (3) “delegative democracy.” First, an excess of parties in parliament can derail effective policy making—fragmentation and volatility can make building policy coalitions difficult and can also affect policy consistency and continuity. Moreover, although a multitude of parties may represent a greater spectrum of constituencies and secure broader representation, the resulting policy deadlock means that ultimately any one of them is less likely to be responsive to the needs of its constituency. Responsiveness is further threatened when international financial organizations or alliances make demands that constrain the spectrum of policy alternatives. Second, ideological polarization, and the rise of “antisystem” parties, which question democracy itself, can rapidly derail both representation and responsibility.21 Parties originating in the authoritarian ancien régime may be a source of antidemocratic backlash—although, given the right elites, they may also transform themselves into powerful supporters of the new democratic order (Grzymala-Busse 2002). When parties fail to cooperate or communicate, both policies and constituencies suffer. Appeals to “throw the bums out,” populist promises, extremism, or xenophobia can result from excessive fragmentation or the perception that one set of incumbents controls the political process. This effect may be exacerbated in deeply divided societies, because they offer a ready-made set of cleavages for political entrepreneurs to mobilize and turn against each other. Third, parties that are neither responsive nor responsible can lead to “delegative democracy”—a situation in which the electorate chooses policy makers, who then proceed to act largely autonomously (O’Donnell 1994). Similarly, policy making by a dominant single party does little to represent the diverse interests of modern constituencies or enhance administrative effectiveness—without a capable opposition, the authority of a single party can easily translate into widespread rent seeking, lack of representation and responsiveness, and political stagnation.

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It is possible to minimize some of the problems afflicting emerging party systems by institutional design and crafting. At the same time, engineering party systems is difficult. Historical legacies are not easily overcome: the stakes (direct access to power and the resources of the state) are high, and political parties compete in a zero-sum game for a limited pool of voters. Nascent political parties are often loath to agree to mutual limits on power or to institutional solutions that benefit all parties in the longer term. Nonetheless, in new democracies both domestic institutional crafting and international support based on conditionality can influence how political parties fulfill democratic standards, and how the competitive game is structured. The most basic institutional choice that emerging party systems encounter is between parliamentary and presidential constitutional systems. This will determine whether parliamentary parties perform both the executive and legislative functions or whether a president functions as the executive. A second fundamental choice is between proportional representation or plurality rules—the extent to which votes translate into the apportionment of party seats. Each party earns either a share of the seats proportional to the number of votes, or earns all of the seats in a given electoral district by winning the plurality of votes in that district. Among the available institutional choices, a parliamentary system with proportional representation tends to best combine flexibility, responsiveness, representation, and stability. As several scholars have found, presidential systems have tended to promote both lower accountability and lower consensus on policy, even if they can more quickly pass laws and implement policy.22 Moreover, they may not curb irresponsibility, as excesses of presidential regimes in Latin America, post-Soviet states, and in Africa show. Similarly, plurality rules tend to reduce the number of competing political parties, which may erode representation and responsiveness, depending on the number of significant political cleavages within society. A parliamentary system with proportional representation can promote more stable party identities that go beyond the political lives of individual leaders or patronage programs. By separating the identities of individual representatives from the offices they occupy, parliamentary systems may thus solidify democratic norms, commitments, and values throughout the political system. This is not to say that only parliamentary systems can succeed in building functioning party systems—but where a presidential system already exists for historical reasons, policy makers should work to increase accountability and to balance presidential power with that of political parties by enhancing the role of parliaments and by weakening the decree and veto powers of the executive. Given these trade-offs, institutional crafting must pay close attention to the domestic context of the transition. In the early stages of transition, it is better to err

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on the side of representation and inclusion. Initial standards for political responsibility should be lower, so that even a superficial commitment by a new party to democratic competition and to pluralist norms should suffice for initial inclusion. Low (2–3 percent) electoral thresholds will allow more parties to enter parliament, promoting representation of diverse groups and political views, while preventing excessive parliamentary fragmentation. Increasing the number of representatives from a given district or constituency has a similar effect. Other institutional devices that can strengthen political parties include granting parties a monopoly over candidate nomination in national elections and registration requirements that separate political parties from civil society organizations. Although mandatory voting is a controversial proposal, increasing voter turnout is essential for new democracies. Simplifying voter registration, and scheduling and organizing elections in such a way as to assure all voters have unrestricted access to the process, are of paramount importance. Other institutional tools that can strengthen parties include party control of candidate lists and the ranking of candidates on the ballot (closed party lists) (Przeworski 1995, 55). For new democracies, flexibility and openness to change should be among the most important principles guiding institutional choices. Thus, institutional changes may be necessary as democracy begins to consolidate. For example, electoral thresholds may have to be increased to limit party fragmentation, or the share of public funding to civil society organizations and political parties may need to be increased. Similarly, in divided societies, higher thresholds may be appropriate. National and closed party lists tend to force parties to represent broader constituencies with programmatic appeals, rather than regional interests or popular personalities. Over time, raising electoral thresholds may promote greater responsiveness and responsibility in both divided and unitary societies by lowering the likelihood of “sofa” parties, which are founded on a whim and elected with minimal support. Both international support that is based on conditionality and domestic institutional crafting should provide incentives for the formation of party organizations that are characterized by transparent and democratic internal governance and decision making. Party statutes should be public, and registration requirements should include democratic selection and accountability of party leaders. The political parties must commit their codes of conduct to the rule of law, disavowing violence and antisystem appeals. This is especially important in the early stages of the transition, when lower thresholds and democratic inexperience may make extremist or antidemocratic appeals more likely. Above all, party financing should be public and transparent. Party funding sources may be less important than their transparency, because voters are more likely

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to remove their support from a party that operates with questionable, illegitimate financial backing. Public financing of political parties and electoral campaigns, following the Scandinavian model, should be nonetheless seriously considered, especially given the inroads that business interests can easily make into political parties (Mair 1997, 9). Here, independent and diverse media are especially important in holding parties accountable. As the uncovering of party malfeasance in France, Germany, and other countries shows, the media has both the incentive and the capacity to expose the rent seeking and corruption that parties may try to hide. Technical assistance and expertise can be a valuable source of indirect international conditionality. The direct funding of political parties by foreign states should be prohibited, although political parties can receive technical assistance and expertise from parties and foundations in other countries. However, such international aid is useful only if it does not delegitimize local democrats, discredit the sovereignty of new democracies, or preclude local responses to specific challenges. Otherwise, political parties may become less responsive to domestic needs, or delegitimized as foreign agents. Direct international conditionality—where aid programs or acceptance into international organizations is contingent on democratic achievements and policy changes—is more suitable at the level of governments than of political parties per se. In short, strengthening parties is as important as it is difficult. Unlike civil society organizations, political parties bear direct responsibility for policy. Thus, their responsiveness, representativeness, and responsibility are paramount for democratic consolidation, in ways that civil society organizations are rarely. Although both forms of public participation strengthen democratic consolidation, strong political parties are the sine qua non. The argument put forth in this chapter has been that the consolidation of new democracies requires building a specific type of civil society, political parties, and party systems. To buttress the survival and success of democratic institutions, such organizations of public choice and participation need to be not only strong but also representative, responsive, and responsible. Three factors are critical in determining whether public participation can meet these standards—the domestic context (and the potential challenges it presents to democracy), institutional crafting (setting the rules of the democratic game), and international conditionality. Democracies, both old and new, are delicate institutional systems that intricately balance and reconcile exceedingly complex and often contradictory pressures, interests, and passions. To survive, consolidate, and function effectively as systems of government, they need constant vigilance to deter threats, improve institutional performance, and secure public commitment, support, and trust. Particular forms of political contestation

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and action—political violence, terrorism and insurgency—present a deadly threat to democracy. Similarly, lack of consensus on the fundamental rules of the democratic game and the presence of a disloyal, antisystemic opposition can easily lead to its breakdown. It is essential, therefore, that violent actors be neutralized through the enforcement of existing laws, through public condemnation by elected officials and through the concerted political inclusion of the groups that the extremists purport to represent. It is especially important to encourage democratic participation by groups that might otherwise defect from democracy. In the transition period, inclusive pacts should be employed to introduce restraint, a sense of civility, and curb violence and aggression. In the consolidation period, swift and decisive judicial action combined with public condemnation can work to the same ends. In short, whether through the constructive measures outlined in this chapter or the punitive actions that extreme situations may require, the goal of encouraging responsible, responsive, and representative public participation is fundamental for the survival of democracy and ought to be shared by domestic and international actors alike.  1. The working group on Strengthening Political and Social Pluralism and Political Parties included Cesar Gaviria, Eva Bellin, Nancy Bermeo, Maurizio Cotta, Kenneth Erickson, Steven Fish, Hyug Baeg Im, Herbert Kitschelt, Claus Offe, Minxin Pei, and Andrzej Rychard. 2. In moving toward the “crafting” argument, Dankwart Rustow (1970) argues that only one precondition exists: a coherent national identity. See also Lipset (1959) and Huntington (1984). 3. Similar worries are echoed in contemporary thinking about regime rebuilding efforts in Iraq and Afghanistan and the broader issue of democracy building in Islamic countries. For analyses of democracy’s prospects in the Middle East, see Bellin (2002) and Fish (2002). 4. See O’Donnell, Schmitter, and Whitehead (1986); Karl (1990); Linz and Stepan (1996). See also Shin (1994). 5. See, for example, Diamond (1996) and O’Donnell (1996). 6. See, for example, Keane (1988, 1–31); Hall (1995); Seligman (1992); Gellner (1994); Schmitter (1997); Diamond (1999, 218–60); Arato (2000); Putnam (1993, 2000); Pharr and Putnam (2000); and Edwards, Foley, and Diani (2001). 7. An important distinction must be made between popular electoral mobilization, which ended the Polish and Hungarian communist regimes, and the waves of popular protest that undermined the regime and led to its collapse in the other cases. 8. See, for example, Offe (1991) and Armijo, Biersteker, and Lowenthal (1994). On the role of international factors, see Whitehead (1996), Zielonka and Pravda (2001), and Plattner and Smolar (2000). 9. Jowitt (1992, 220). See also Levitsky and Way (2002), and Carothers (2002). 10. See, for example, Przeworski (1992), Cotta (1994), Rychard (1993), Armijo, Bierstecker,

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and Lowenthal (1994), and Haggard and Kaufman (1995) on the impact on economic reform, and Schmitter (1997, 248; 1996, 87) and Diamond (1999, 251) on the impact on democracy. 11. Diamond (1999, 251). See also Schmitter (1997, 248). 12. See, for example, Berman (1997). See also Bermeo (2003). 13. See, for example, Donald Horowitz’s analysis (1985, 598–613) of five conflict-reducing mechanisms in ethnically divided societies: proliferating the points of power, generating intraethnic competition, generating interethnic cooperation, encouraging alignments on nonethnic issues, and reducing disparities between regions through redistribution. See also Horowitz (1987, chap. 7) and Lijphart (1969, 1977). 14. For the overview, see Diamond (1997), Smith (2001), and Carothers (1999). 15. See, for example, Mitlin (1998). See also Mendelson and Glenn (2002). 16. Post and Rosenblum (2002, 19). See also Shils (1991). 17. Diamond (1997, 341). See also Diamond (1999, 239–50). 18. Schmitter (1997, 251). See also Sartori (2001). 19. Linz (1992a, 184); Levitsky and Cameron (2003). 20. Mainwaring (2001). See also Kitschelt et al. (1999). 21. Sartori (1976). See also Linz (1978). 22. Linz (1993, 1992b). A defense of presidentialism can be found in Shugart and Carey (1992, 28–54). See also Mainwaring and Shugart (1997).

 Alexander, Gerard. 2002. The Sources of Democratic Consolidation. Ithaca, N.Y.: Cornell University Press. Arato, Andrew. 2000. Civil Society, Constitution, and Legitimacy. Lanham, Md. Rowman and Littlefield. Armijo, Leslie, Thomas Biersteker, and Abraham Lowenthal.1994. “The Problems of Simultaneous Transitions.” Journal of Democracy (October): 161–75. Bellin, Eva. 2002. Stalled Democracy. Ithaca, N.Y.: Cornell University Press. Berman, Sheri. 1997. “Civil Society and the Collapse of the Weimar Republic.” World Politics 49, 3:401–29. Bermeo, Nancy. 2003. Ordinary People in Extraordinary Times. Princeton, N.J.: Princeton University Press. Carothers, Thomas. 1999. Assisting Democracy Abroad: The Learning Curve. Washington, D.C.: Carnegie Endowment for International Peace. ———. 2002. “The End of the Transition Paradigm.” Journal of Democracy 13, 1:5–21. Coleman, James. 1992. “Democracy in Permanently Divided Systems.” In Reexamining Democracy, ed. Gary Marks and Larry Diamond, 17–26. Newbury Park, Calif. Sage. Cotta, Maurizio. 1994. “Building Party System after the Dictatorship: The East European Cases in a Comparative Perspective.” In Democratization in Eastern Europe: Domestic and International Perspectives, ed. Geoffrey Pridham and Tatu Vanhanen. London: Routledge.

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Dahrendorf, Ralf. 1990. Reflections on the Revolution in Europe: In a Letter Intended to Have Been Sent to a Gentleman in Warsaw. New York: Times Books. ———. 1997. After 1989: Morals, Revolution and Civil Society. London: Palgrave Macmillan. Diamond, Larry. 1996. “Is the Third Wave Over?” Journal of Democracy 7, 3:20–37. ———. 1997. “Promoting Democracy in the 1990s: Actors, Instruments, and Issues.” In Democracy’s Victory and Crisis, ed. Axel Hadenius. Cambridge: Cambridge University Press. ———. 1999. Developing Democracy: Toward Consolidation. Baltimore: Johns Hopkins University Press. Di Palma, Giuseppe. 1990. To Craft Democracies. Berkeley: University of California Press. Djankov, Simeon, Caralee McLiesh, Tatiana Nenova, and Andrei Shleifer. 2001. “Who Owns the Media?” Policy Research Working Paper, World Bank, Washington, D.C.. Edwards, Bob, Michael Foley, and Mario Diani, eds. 2001. Beyond Tocqueville: Civil Society and the Social Capital Debate in Comparative Perspective. Hanover, N.H.: University Press of New England. Ekiert, Grzegorz, and Jan Kubik. 1999. Rebellious Civil Society. Ann Arbor: University of Michigan Press. Fish, M. Steven. 1995. Democracy from Scratch. Princeton, N.J.: Princeton University Press. ———. 1996. “Russia’s Fourth Transition.” In The Global Resurgence of Democracy, ed. Larry Diamond and Marc F. Plattner. Baltimore: Johns Hopkins University Press. ———. 2002. “Islam and Authoritarianism.” World Politics 55, 1:4–37. Gellner, Ernest. 1994. Conditions of Liberty: Civil Society and Its Rivals. Allen Lane: Penguin Press. Grzymala-Busse, Anna. 2002. Redeeming the Communist Past: The Regeneration of Communist Successor Parties in East Central Europe. Cambridge: Cambridge University Press. Gunther, Richard, and John Higley, eds. 1992. Elites and Democratic Consolidation in Latin America and Southern Europe. Cambridge: Cambridge University Press. Gunther, Richard, and Anthony Mughan, eds. 2000. Democracy and the Media: A Comparative Perspective. Cambridge: Cambridge University Press. Haggard, Stephan, and Robert Kaufman. 1995. Political Economy of Democratic Transitions. Princeton, N.J.: Princeton University Press. Hall, John, ed. 1995. Civil Society: Theory, History, and Comparison. Cambridge: Polity Press. Horowitz, Donald. 1985. Ethnic Groups in Conflict. Berkeley: University of California Press. ———. 1987. A Democratic South Africa: Constitutional Engineering in a Divided Society. Berkeley: University of California Press. Howard, Marc Morjé. 2002. “The Weakness of Postcommunist Civil Society.” Journal of Democracy 13, 1:157–69. Huntington, Samuel P. 1968. Political Order in Changing Societies. New Haven, Conn.: Yale University Press. ———. 1984. “Will Countries Become More Democratic?” Political Science Quarterly 99, 2:193–218. Jowitt, Ken. 1992. “The Leninist Legacy.” In Eastern Europe in Revolution, ed. Ivo Banac. Ithaca, N.Y.: Cornell University Press.

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Karl, Terry Lynn. 1990. “Dilemmas of Democratization in Latin America.” Comparative Politics 23, 1:1–21. Keane, John. 1988. Civil Society and the State: New European Perspectives. London: Verso. Kitschelt, Herbert. 2000. “Linkages between Citizens and Politicians in Democratic Polities.” Comparative Political Studies 33, 6/7:845–79. Kitschelt, Herbert, Zdenka Mansfeldova, Radoslaw Markowski, and Gábor Tóka. 1999. Postcommunist Party Systems. Cambridge: Cambridge University Press. Levitsky, Steven, and Maxwell Cameron. 2003. “Democracy without Parties? Political Parties and Regime Change in Fujimori’s Peru.” Latin American Politics and Society 45, 3:1–33. Levitsky, Steven, and Lucan Way. 2002. “The Rise of Competitive Authoritarianism.” Journal of Democracy 13, 2:51–65. Lijphart, Arend. 1969. “Consociational Democracy.” World Politics 21, 2:207–25. ———. 1977. Democracy in Plural Societies. New Haven, Conn.: Yale University Press. Linz, Juan. 1978. The Breakdown of Democratic Regimes: Crisis, Breakdown and Reequilibration. Baltimore: Johns Hopkins University Press. ———. 1992a. “Change and Continuity in the Nature of Contemporary Democracies.” In Reexamining Democracy, ed. Gary Marks and Larry Diamond. Newbury Park, Calif. Sage. ———. 1992b. “The Virtues of Parliamentarism.” In Parliamentary versus Presidential Government, ed. Arend Lijphart. Oxford: Oxford University Press. ———. 1993. “The Perils of Presidentialism.” In The Global Resurgence of Democracy, ed. Larry Diamond and Marc F. Plattner. Baltimore: Johns Hopkins University Press. Linz, Juan, and Alfred Stepan. 1996. Problems of Democratic Transition and Consolidation. Baltimore: Johns Hopkins University Press. Lipset, Seymour Martin. 1959. “Some Social Prerequisites of Democracy.” American Political Science Review 53, 1:69–105. ———. 1960. “Party Systems and Representation of Social Groups.” European Journal of Sociology 1:50–85. ———. 1981. Political Man. 2nd ed. Baltimore: Johns Hopkins University Press. Mainwaring, Scott. 2001. “Party Systems in the Third Wave.” In The Global Divergence of Democracies, ed. Larry Diamond and Marc F. Plattner. Baltimore: Johns Hopkins University Press. Mainwaring, Scott, and Timothy Scully, eds. 1995. Building Democratic Institutions: Party Systems in Latin America. Stanford, Calif.: Stanford University Press. Mainwaring, Scott, and Matthew Shugart, eds. 1997. Presidentialism and Democracy in Latin America. Cambridge: Cambridge University Press. Mair, Peter. 1997. Party System Change. Oxford: Oxford University Press. Mattes, Robert. 2002. “South Africa: Democracy without the People?” Journal of Democracy 13, 1:22–36. Mendelson, Sarah, and John Glenn, eds. 2002. The Power and Limits of NGOs. New York: Columbia University Press. Mitlin, Diana. 1998. “The NGO Sector and its Role in Strengthening Civil Society and Securing Good Governance.” In Civil Society and International Development, ed. Amanda Bernard, Henny Helmich, and Percy Lehning. Paris: Organisation for Economic Cooperation and Development.

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O’Donnell, Guillermo. 1994. “Delegative Democracy.” Journal of Democracy 5, 1:55–69. ———. 1996. “Delegative Democracy.” In The Global Resurgence of Democracy, ed. Larry Diamond and Marc F. Plattner. Baltimore: Johns Hopkins University Press. O’Donnell, Guillermo, Philippe C. Schmitter, and Laurence Whitehead, eds. 1986. Transitions from Authoritarian Rule: Southern Europe. Baltimore: Johns Hopkins University Press. Offe, Claus. 1991. “Capitalism by Democratic Design?” Social Research 58, 4:865–81. Pharr, Susan, and Robert D. Putnam, eds. 2000. Disaffected Democracies. Princeton, N.J.: Princeton University Press. Plattner, Marc F., and Aleksander Smolar, eds. 2000. Globalization, Power, and Democracy. Baltimore: Johns Hopkins University Press. Post, Robert C., and Nancy L. Rosenblum. 2002. “Introduction.” In Civil Society and Government, ed. Nancy L. Rosenblum and Robert C. Post. Princeton, N.J.: Princeton University Press. Przeworski, Adam. 1992. Democracy and the Market. Cambridge: Cambridge University Press. ———. ed. 1995. Sustainable Democracy. Cambridge: Cambridge University Press. Putnam, Robert D. 1993. Making Democracy Work. Princeton, N.J.: Princeton University Press. ———. 2000. Bowling Alone: Civic Disengagement in America and What to do About It. New York: Simon and Schuster. Rose, Richard. 1995. “Mobilizing Demobilized Voters in Post-Communist Societies.” Party Politics 1, 4:549–63. Rustow, Dankwart A. 1970. “Transitions to Democracy: Towards a Dynamic Model.” Comparative Politics 2, 3:337–63. Rychard, Andrzej. 1993. Reforms, Adaptation, and Breakthrough. Warsaw: IFIS. Sartori, Giovanni. 1976. Parties and Party Systems. Cambridge: Cambridge University Press. ———. 2001. “How Far Can Free Government Travel.” In The Global Divergence of Democracies, ed. Larry Diamond and Marc F. Plattner. Baltimore: Johns Hopkins University Press. Schmitter, Philippe C. 1992. “Interest Systems and Consolidation of Democracy.” In Reexamining Democracy, ed. Gary Marks and Larry Diamond. Newbury Park, Calif.: Sage. ———. 1996. “Dangers and Dilemmas of Democracy.” In The Global Resurgence of Democracy, ed. Larry Diamond and Marc F. Plattner. Baltimore: Johns Hopkins University Press. ———. 1997. “Civil Society East and West.” In Consolidating the Third Wave Democracies: Themes and Perspectives, ed. Larry Diamond, Marc F. Plattner, Yun-han Chu, and Hungmao Tien. Baltimore: Johns Hopkins University Press. Seligman, Adam. 1992. The Idea of Civil Society. New York: Free Press. Shils, Edward. 1991. “The Virtue of Civil Society.” Government and Opposition 26, 1:3–20. Shin, Doh Chull. 1994. “On the Third Wave of Democratization.” World Politics 47, 1:135–70. Shugart, Matthew Soberg, and John M. Carey. 1992. Presidents and Assemblies: Constitutional Design and Electoral Dynamics. Cambridge: Cambridge University Press. Smith, Karen. 2001. “Western Actors and the Promotion of Democracy.” In Democratic Consolidation in Eastern Europe: International and Transnational Factors, ed. Jan Zielonka and Alex Pravda. Oxford: Oxford University Press. Sussman, Leonard. 2003. “Press Freedom, the Past Quarter Century: The Vile and the Valiant.” In Freedom of the Press 2003, ed. Karin Deutch Karlekar. Lanham, Md. Rowman and Littlefield.

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Whitehead, Laurence, ed. 1996. The International Dimensions of Democratization: Europe and the Americas. Oxford: Oxford University Press. Zielonka, Jan, and Alex Pravda, eds. 2001. Democratic Consolidation in Eastern Europe: International and Transnational Factors. Oxford: Oxford University Press.

 

Economic Challenges for the New Democracies  

The relationship between levels of economic development and the emergence, and then survival, of democracy, is one of the most researched issues in political economy. For a long time during the postwar period, modernization theorists pinpointed economic development as key to the eventual global spread of democracy. In this largely functional interpretation of the relationship between economic development and political democracy (Maravall 1997, 3), it was assumed that there was “one general process of which democratization is but the final stage” (Przeworski and Limongi 1997, 157–58). In theoretical terms, however, the “causal mechanisms linking economic development and the presence of a democratic regime are still today very thinly articulated” (Boix 2001, 1), while empirically, the optimistic claims of modernization theory have long since been undermined. The most important empirical studies have shown that the relationship between economic development and the emergence of democracy is probabilistic, rather than deterministic. In terms of their political trajectory, societies enjoy considerable room for maneuvering within the “determinism of ‘structural conditions.’” In short, democratization has resulted from both economic development and economic crisis (Maravall 1997, 3–4; Alonso and Maravall 2001, 7–8). In the analysis that follows, the complexities of the transition from nondemocratic to democratic regimes are set aside, and we concentrate on the role played by economic development in sustaining democracy once it has been established. In the first part of this chapter, “The Economic and Social Conditions for Sustaining Democracy,” there is a brief overview of the principal arguments regarding the levels of economic development, economic growth, and economic and social equality in sustaining democracy. The second part, “The Economic and Social Dilemmas of New Democracies,” describes the acute economic and social dilemmas confronted by newly established democracies, and focuses on what economic reform usually entails: whether reform

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can and should be implemented rapidly or gradually and whether a continuing role for the state in the provision of welfare and the promotion of greater social equality impairs the ability of new democracies to maintain economic growth and competitiveness in an increasingly integrated international economy. The concluding section, “The Resilience of New Democracies,” discusses the relative importance of economic conditions in sustaining democracy in the contemporary period, given the remarkable resilience of new democracies (especially those in the postcommunist world) in the face of economic decline and crisis.

The Economic and Social Conditions for Sustaining Democracy: A Brief Overview       A substantial body of work has found that affluence and higher levels of economic development positively affect democracy.1 Indeed, by the 1980s “democracies were concentrated in countries with developed economies” (Maravall 1997, 21). In two well-known studies, Przeworski et al. (1996) and Przeworski and Limongi (1997) have shown, in startlingly precise terms, that once a country has a democratic regime its level of economic development has a very strong effect on the probability that democracy will survive. These authors demonstrated that the probability of democracy surviving increases monotonically with per capita income. Specifically, with a per capita income of more than $6,055, democracy is “impregnable” and can expect to last forever;2 indeed, the probability that a democracy will die during any particular year with a per capita income of more than $4,000 is “practically zero.” Once established in a developed country, therefore, democracy endures regardless of how it performs: “affluence is a sufficient condition for it to survive regardless of anything else” (Przeworski et al. 1996, 42; Przeworski and Limongi 1997). Conversely, democracies at lower levels of economic development are weaker and more vulnerable to being undermined by economic crises (Maravall 1997, 9, 28). Specifically, poor democracies—especially those with a per capita income below $1,000—are extremely fragile: “once established, democracies are likely to die in poor countries and certain to survive in wealthy ones” (Przeworski and Limongi 1997, 167). As highlighted in the next section, however, “even the current wealth of a country is not decisive” (1997, 177).     Key to the survival of an established democracy is its ability to generate economic growth (Maravall 1997, 28; Przeworski et al. 1996).3 Contrary to Lipset (1981), Prze-

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worski and Limongi (1997) found that rapid growth is not destabilizing for democracy. Democracies facing a decline in incomes die at a faster rate than those in which incomes are growing;4 those that grow slowly—at a rate of less than 5 percent per annum—also die at a faster rate than those growing at a rate of more than 5 percent per annum. In fact, democracies with a per capita income of less than $1,000 but with a growing economy are more likely to survive than those with a per capita income of between $1,000 and $2,000 but in economic decline. As such, “if they succeed in generating development, democracies can survive even in the poorest nations” (Przeworski and Limongi 1997, 177; see also Przeworski et al. 1996, 49). Such growth needs to be generated on the basis of no more than a moderate rate of inflation. Inflation represents a threat to democratic stability: Przeworski et al. (1996) found that those democracies with moderate rates of inflation (6–30 percent) were most likely to survive the longest, followed by those with low rates of inflation (less than 6 percent). In contrast, democracies with high rates of inflation (greater than 30 percent) had a much lower life expectancy.5 In sum, “economic performance . . . is crucially important for the survival of democracy in less-affluent countries. When the economy grows rapidly with a moderate rate of inflation, democracy is much more likely to last even in the poorest lands” (Przeworski et al. 1996, 42). By contrast, “economic crisis represents one of the most common threats to democratic stability” (Diamond and Linz 1989, 17).6 For the poorest democracies, the threat can be fatal. Indeed, the fragility of democracy at lower levels of economic development “flows largely from its vulnerability in the face of economic crisis” (Przeworski et al. 1996, 42; see also Maravall 1997, 9–10). In countries with per capita incomes at or below $2,000 and in which a decline of incomes occurred, the expected life span of democracy in such conditions was approximately nine years. For those countries with per capita incomes between $2,001 and $6,000, of the 120 years in which a decline of income occurred, six democracies fell. In these conditions, democracy could expect to survive twenty years.7 Thus, poor democracies are far more vulnerable to economic crisis than mid-level and wealthy democracies: “what destabilizes regimes are economic crises, and democracies, particularly poor democracies, are extremely vulnerable to bad economic performance” (Przeworski and Limongi 1997, 167–69).    In their attempt to explain the durability of democracies, Przeworski et al. (1996) uncovered an interesting relationship between income inequality and the survival of democracy, implying clearly that economic development, generated on an equitable basis, helps sustain democracy. They found that democracy is much more likely to

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survive in countries where income inequality is declining over time; the expected life of democracies in countries with declining inequality is approximately eighty-four years, compared to approximately twenty-two years for democracies in which income inequality is rising. As such, “these findings contradict any notion that distributional pressures threaten the survival of democracy: people expect democracy to reduce income inequality, and democracies are more likely to survive when they do” (1996, 43). These issues are discussed further in the second part of this chapter.  At least in terms of the economic prerequisites for democratic survival, the developed democracies of the world appear to be safe: democracies are more likely to survive at higher levels of development, regardless of their economic performance per se. For new democracies—invariably emerging at much lower levels of economic development—all, however, is not lost, though the economic challenges are stiff: “Democracies survive if they generate economic growth and if they control distributional pressures by allowing some inflation and reducing income inequality . . . the secret of democratic durability seems to lie in economic development” (Przeworski et al. 1996, 50). The task of creating and sustaining economic conditions conducive to democracy is difficult in any nation and is especially so in new democracies. We turn next to the dilemmas facing leaders in these countries.

The Economic and Social Dilemmas of New Democracies The Context for Economic Reform   Although the circumstances in which democracies have emerged (or reemerged) in Southern, Eastern and Central Europe, Latin America, and sub-Saharan Africa in the latter part of the twentieth century have differed considerably, a reasonable consensus now exists on the principal economic tasks that face incoming democratic regimes.8 Above all, the control of inflation and the establishment of stable macroeconomic conditions are seen as essential for the generation of long-term economic growth. It has also been “increasingly accepted that markets were efficient instruments for the allocation of economic resources and that open foreign trade would bring competition and new technologies” (Maravall 1997, 13). Within this framework, measures to reinvigorate (or, in the case of the postcommunist countries, establish) the market have consisted of a set of stabilization policies and structural economic reforms: tighter fiscal discipline; new priorities for public expenditure; tax

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reform; positive, market-determined interest rates; trade liberalization and the creation of an export-oriented economy; market-determined exchange rates; the removal of restrictions on direct foreign capital investment; the deregulation of economic activities; the establishment of competition policy; the guaranteeing of property rights and of contracts; and regulated forms of privatization and the shifting of factors of production to the most efficient use including, in the postcommunist context, the dismantling of inefficient state-owned enterprises (Maravall 1997, 13, 86–87, 104–105; Wyplosz 1999, 14, 25–26; Richards 2002, 2–3; De Melo et al. 1997, 3). Yet, in attempting to implement significant economic reforms, new democracies typically face several serious constraints. First, the economic context in which new democracies emerge is often extremely difficult. Of course, in terms of the economic conditions that new democracies have inherited, there has been significant cross-national variation. In Central and Eastern Europe, for example, per capita income in 1989 ranged from $1,400 in Albania and $3,470 in Romania to $8,600 in the Czech Republic and $9,200 in Slovenia. Average gross domestic product (GDP) growth rates for the period immediately preceding the transition to democracy (1985–1989) ranged from –0.8 percent in Romania and –0.4 percent in Slovenia to 2.7 percent in Bulgaria and 2.8 percent in Poland (De Melo et al. 1997, Table 1; see also Alonso and Maravall 2001, 13–14). Other new democratic administrations have inherited particularly acute problems of social and economic deprivation as the result of severely regressive policies pursued by the ousted authoritarian regime. For example, while Fujimori in Peru stabilized the economy and presided over a return to economic growth, poverty in this traditionally highly unequal society had nonetheless reached record levels by the time of his downfall in September 2001, whereas per capita income was below that for 1980.9 By the time of his overthrow in 1989, Ceausescu’s brutal policies of Stalinist deflation and foreign debt repayment had caused a massive increase in levels of poverty in Romania during the 1980s.10 In general, an adverse economic situation appears to be the rule rather than the exception for new democracies—those that emerged in the early 1970s, and then in the 1980s, did so in the midst of economic crises. New democratic regimes in Southern Europe inherited heavily protected, backward economies, while in Eastern Europe and Latin America, states faced major fiscal crises: “authoritarian regimes were often also bankrupt regimes” (Maravall 1997). Most new democracies in Central and Eastern Europe started out with massive, destabilizing rates of inflation (Wyplosz 1999, 3). Some authors have argued that such adverse initial conditions constrain and delay the process of economic reform (De Melo et al. 1997, 26, 32–40; Stallings 2001).11

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  The second constraint faced by new democracies essentially compounds the first. Regardless (or perhaps because) of the economic situation, new democracies are not only welcomed in terms of newfound political rights, but are also engulfed invariably by widespread societal demands for increased welfare provision and greater social equality. In postcommunist Eastern Europe, it is notable that large majorities in Czechoslovakia, Romania, and Bulgaria associated democracy with improved economic conditions, job creation, reduced unemployment, and greater equality, and attributed to the state widespread social responsibilities in the promotion of full employment and welfare provision for the unemployed, sick, and elderly.12 A similar phenomenon was evident in Southern Europe in the 1980s, where, in the context of the underdeveloped welfare systems inherited by the democratic regimes, much stronger demands were made on the state compared to Northern Europe. (The promise, and subsequent ability, by the governments of the Spanish Socialist Workers Party, PSOE [Partido Socialista Obrero Español], and of the Pan-Hellenic Socialist Movement, PASOK [Panellinio Sosialistiko Kinima], to meet such popular demands is a critical factor in explaining their political success in the 1980s.) In Latin America, too, with the emergence of democracy came demands for better material conditions. In Chile, for example, following seventeen years of brutal and regressive dictatorship, overwhelming majorities believed democracy would promote more rapid economic development, control inflation better, and reduce inequalities and unemployment (Maravall 1997, 120). Indeed, with 38.6 percent of the population living in poverty in 1990, Eduardo Frei, president of Chile during 1994–2000, reflected on the enormous challenges of accommodating a huge range of economic and social demands that the first post-Pinochet democratic government had confronted.13     The third constraint confronted by new democracies is the heavy cost, at least in the short term, of implementing economic reform: “reforms are expected to make things worse before they get better” (Hellman 1998, 203). It is inevitable that reforms have harsh effects, argues Maravall (1997, 15), but even then the high cost of reform does not guarantee the success of a reform program and “may well prove difficult for a new democracy to assimilate.” Certainly, the severe and often appalling short-term costs associated with the implementation of economic reform programs have been well documented, nowhere more so than in postcommunist countries the economies of which contracted sharply as major reforms were initiated (De Melo et al. 1997, 3;

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Hellman 1998; Wyplosz 1999, 2, 11).14 Attempts to resolve the state’s fiscal crisis, dismantle state enterprises and move toward a market economy have caused rising social inequality, decreasing living standards, declining real wages (particularly in inherited situations of high inflation), and increasing poverty and unemployment (Dethier, Ghanem, and Zoli 1999, 4; Hellman 1998; Maravall 1997, 116, 120; Wyplosz 1999, 4–5). In these circumstances, “if this deterioration continues, the legitimacy of the new regime may be considerably weakened, unless the provision of political goods and social protection in case of need compensates for hardship. Moreover, these economic difficulties may erode the state’s capacity . . . and undermine both public order and the reform process itself. Indeed, these problems have been experienced by many of the recent democracies” (Maravall 1997, 12).

The Dilemmas of Economic Reform      If new democracies emerge in conditions of economic crisis, how can they be best sustained in the long run?15 Should further political liberalization and consolidation of newly established political institutions precede much-needed economic reforms, or should it be the reverse? Or can economic and political reforms be enacted simultaneously (Maravall 1997, 11, 15–16)?16 In theoretical and empirical terms, any of the three alternatives are possible. The new democracies of Southern, Central, and Eastern Europe, as well as the former Soviet Union, have been presented as prominent examples of political reform having generally preceded economic reform. In the transitions to democracy in Portugal, Spain, and Greece, “politics took precedence over the economy,” albeit in somewhat different ways. In Portugal, the new regime’s explicitly political goal of transforming capitalism as soon as possible had a direct and obvious impact on the economic strategy it adopted. In comparison, in both Greece and Spain, conservative parties won the first two democratic elections, and priority was given “to the task of building a viable democracy rather than economic reform.” This resulted in a “brilliant political transition” that was nonetheless “achieved at the cost of postponing essential economic decisions” (Maravall 1997, 77–79). It is interesting that, in their respective studies of the postcommunist countries of Central and Eastern Europe and the former Soviet Union, De Melo et al. (1997) and Dethier, Ghanem, and Zoli (1999) posit prior political reform as a virtual prerequisite for the successful enactment of economic reform.17 De Melo et al. argue that rapid and fundamental political change facilitates the enactment of decisive economic reforms (1997, 4; see also Dethier, Ghanem, and Zoli 1999, 5). In the early stages of a transition,

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political change “largely drives the policy choices”; the authors conclude that political reform “emerges as the most important single determinant of the speed and comprehensiveness of economic liberalization” (1997, 41). Dethier, Ghanem, and Zoli present arguments for why this may be the case. Only governments with some democratic legitimacy are able to implement and sustain policies bearing the high short-term costs of the transition (an especially powerful argument for the post-communist countries);18 political reform creates checks and balances and new norms that “help lock in economic reforms”; political reform limits rent seeking by penalizing self-interested leaders. In the absence of democratic institutional reforms, the personal interests of “red directors” (that is, directors of formerly state-owned enterprises) for example, drive the political agenda and block policies of economic liberalization (1999, 6). As such, the authors point to the critical role of freedom as a precondition for introducing economic reforms: countries that entered the transition process with more democratic institutions and greater civil liberties have been able to implement faster and more comprehensive reform policies . . . freedom facilitates, rather than hinders, the adoption of market-oriented reforms” (1999, 16, 23; see also Hellman 1998).19 Nonetheless, the direction of causality between political and economic liberalization certainly needs to be investigated further (Dethier, Ghanem, and Zoli 1999, 12);20 perhaps the most sensible conclusion is that the two processes in Central and Eastern Europe and the former Soviet Union have been “strongly complementary” and “selfreinforcing” (1999, 11, 23). “ ”   Even if fundamental political reform is secured, new democracies still face several acute dilemmas, above all with respect to the speed and scale at which measures of economic liberalization are introduced. As is well known, considerable debate exists over whether economic reforms can and should be implemented immediately and simultaneously, in the form of “shock therapy” or the so-called big bang, or introduced gradually and sequentially. The case for shock therapy rests on the argument that the move to the market “can only be done in one go” (Wyplosz 1999, 7) and that all reforms are “interrelated and urgent” (Maravall 1997, 105). To be fully effective, most measures need each other: macroeconomic stabilization cannot be established without structural reform (1999, 8), and price liberalization without concomitant progress in opening market entry or breaking up monopolies creates opportunities for some producers to earn monopoly rents (Hellman 1998, 219). Policy uncertainty, associated with a more gradual reform process, leads to perverse behavior, such as asset stripping prior to privatization. Moreover, and especially in the exceptional aftermath of the collapse of communism,

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new democratic leaders are endowed with an unusually large stock of political capital with which to introduce sweeping and potentially unpopular reforms (1999, 7–9).21 Shock therapy is a comprehensive and simultaneous program that consists of liberalizing prices, opening the market to international trade, creating a convertible currency, reducing subsidies, and privatizing the economy (1997, 105).22 In contrast, those arguing for a gradualist strategy claim that it is impossible to enact all measures quickly and simultaneously. Different reforms and policies have different “time horizons.” Some measures are rapid, such as price liberalization or changes in interest rates, whereas others require the accumulation of capital (e.g., changes to the tax system), physical capital (the emergence of new firms and commercial banks) and the adoption of complex legislation (such as commercial law). Privatization in the postcommunist countries had to be gradual, in light of the weaknesses of the banking and financial systems (Maravall 1997, 106–7). Meanwhile, adjustment costs are economically and socially painful. Forcibly enacting excessively rapid changes may destroy the credibility of the transformation itself: “in the presence of costs of adjustment, there exists an optimum speed of reform which is not a Big Bang” (Wyplosz 1999, 10). Overly rapid changes may lead to an inefficient rise in unemployment before an adequate welfare system has been established. finally, sequencing economic reforms helps mitigate their political costs by making possible the compensation of potential losers in the reform process (1999, 10–11). In accounting for the choice of strategy adopted by new democracies, the economic conditions they inherit certainly loom large, at least in the short term.23 Severe economic crisis may, in fact, increase the likelihood of drastic economic reforms. In his comparison of postcommunist Poland, Hungary, and Czechoslovakia, Maravall (1997, 111–13, 123) describes how a particularly serious economic crisis in Poland increased greatly the likelihood of shock therapy.24 In contrast, a legacy of market reforms under the previous communist regime in Hungary, and a more balanced macroeconomic situation in Czechoslovakia, gave greater freedom to their new governments with respect to deciding on the pace of reforms.25 But which strategy has worked best? Some authors have argued that the fundamental issue is not as much one of shock therapy versus gradualism as of achieving macroeconomic stability in the most feasible manner possible. With respect to the postcommunist countries, Wyplosz (1999, 12) argues that economic recovery speeds up after macroeconomic stabilization is introduced, regardless of whether this is done at the same time as, or after, initial and partial reforms (see also De Melo et al. 1997, 3).26 Nonetheless, the empirical evidence tends to highlight the longer-term benefits of earlier, and more comprehensive, economic reforms. Econometric studies of the effects of the “big bang” suggest a trade-off between early costs and anticipated

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benefits. Faster-moving countries did better than more gradualist ones. The latter were slower to recover and by 1998 had still not yet achieved positive growth (1999, 12–13). Hellman (1998, 209, 227) finds that within the postcommunist region, in a context of overall economic contraction (the average GDP growth rate fell from –4.5 percent in 1990 to –17.2 percent in 1992, before recovering thereafter), there were significant differences between countries according to the extent of their reforms: advanced reformers suffered the lowest overall output declines and enjoyed the most rapid recoveries. The average ratio of real GDP in 1994 to real GDP in 1989 was 83 percent for the advanced reformers and 72 percent for the slow reformers. With regard to the comparative economic performance of Poland, Czechoslovakia, and Hungary in the early 1990s, “economic recovery came first in those countries in which the reforms had been introduced earlier and were more comprehensive” (Maravall 1997, 116). Perhaps most surprising are the apparent effects of comprehensive early reforms on levels of inequality. The beginning of transitions in the postcommunist countries generated a rapid redistribution of income; the level of income inequality has since risen in every country (Hellman 1998).27 The extent of the redistribution, however, has differed across the reform groups. Although the average Gini coefficient (a standard measure of inequality) for the entire region jumped, incredibly, by one-third— from 24 in 1987–1988 to 32 in 1993–1994—it increased by only 18 percent among the advanced reformers, compared to 30 percent and 53 percent among the slow and low intermediate reformers, respectively. Transitional economies that have only introduced partial reforms have experienced a higher redistribution of income to a narrower constituency. In contrast, the most advanced reformers have maintained the lowest levels of inequality.28 In underscoring the benefits of rapid and radical economic reform for longerterm economic performance, however, it is also necessary to reiterate the severe social costs associated with such reforms. Between 1989 and 1992, for example, 2.5 million people lost their jobs in Poland,29 while wages fell by 27 percent in the three years following the introduction of economic reforms. During approximately the same period (1989–1991), a six-point increase in poverty, as a proportion of the total population, was recorded in Hungary (Maravall 1997, 116). In circumstances such as these, a continuing role for the state in mitigating the often-shattering social costs of economic adjustment is critical to sustaining democracy.

Market and State As is well known, the new democracies that emerged at the end of the 1980s—and, indeed, in the 1970s30—did so at a time when, in the advanced democracies, the role

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of the state in economic management was being challenged and redefined. The 1980s saw the undermining of the postwar “virtuous circle” (Maravall 1997, 136) of growth and redistribution, in which the state had played a key role. In the 1980s, for the most part, the political and intellectual initiative shifted to the neoliberal Right. Epitomized, above all, by the Thatcher government in Britain, “post-Keynesian” principles in which economic efficiency and competitiveness depended above all on deregulation, the unleashing of market forces, and declining state intervention were far less compatible—and less concerned—with traditional objectives of maintaining full employment and promoting social equality. For its part, the Left, even where it retained power, remained on the defensive. In France, the catastrophic failure of massive state intervention in the economy between 1981 and 1983 has been well documented. Thereafter, the French Left, as elsewhere, struggled to combine its traditional redistributive concerns with the exigencies of a much harsher economic environment. Nevertheless, the supposed triumph of the market in the developed democracies has hardly led to the disappearance of the state. Widespread privatization has led to a significant and (arguably) growing regulatory role for the state. In terms of policies to boost and maintain economic competitiveness, the state’s role (e.g., the formation of human capital and the development of infrastructure) remains robust and even indispensable.31 Above all, despite the neoliberal onslaught, the welfare state has remained remarkably resilient.      If, in these terms, the role of the state in the developed democracies has remained important, in the developing democracies—and especially the poorest developing democracies—it has become critical. As outlined in the first part of this chapter, if it is indeed the case that equitable economic growth is key to sustaining democracy, the remarks of Gyula Horn, prime minister of Hungary (1994–1998) are apposite. Pointing to sustainable economic growth, equal access to education, and the further development of public health and pensions systems as the key contemporary challenges for his country, he concluded that the responsibility of government is actually increasing rather than declining.32 Academic analysts and political leaders alike have underscored the importance of these various dimensions of state activity for the promotion of economic development in new democracies: “In market economies the state still has an important role to fulfill, supplying those things that the market cannot do well. . . . Investment in infrastructure . . . and active manpower policies are all tasks which correspond to democratic states with market economies” (Maravall 1997, 120). Thus, Eduardo Frei,

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reflecting on the first decade of post-Pinochet democracy in Chile, pointed to a fourfold increase in the level of investment in infrastructure, particularly in the form of housing development and programs of urban renewal. Moreover, the state still needed to assume a much greater role in promoting research and development; in the context of globalization and the need for sustained economic growth, investment levels remained minimal.33 Other political leaders have reiterated the crucial role of the state in creating the institutional context for the effective operation of the market. Reviewing the generally retarded pace of economic reform in Romania, Petre Roman lamented not only the fact that in 1990 there had been a complete absence of a legislative and institutional infrastructure for the operation of the market, but also that in the late 1990s massive “black holes” in the state economy were the result of the continuing absence of such institutional foundations.34 In this regard, Polish finance Minister Grzegorz Kolodko (2003b) has criticized the so-called Washington Consensus on reform programs for paying insufficient attention to the importance of institution building. Phenomena such as influential mafias in the Russian economy or the collapse of fraudulent pyramid savings schemes in Albania—all highly damaging to the legitimacy of new democratic regimes—were the result not of economic reform per se but of weak institutions: “What really matters are the institutions, the rules of the game, not private property and liberal deregulation” (Kolodko 2003a).35 Above all, and especially in the context of the serious social costs of economic adjustment, public expenditure on health, education, and welfare are crucial for promoting the social equity and maintaining the political stability necessary for the survival of democracy (Maravall 1997, 12, 124). When compared to authoritarian regimes, in general democracies are associated with greater levels of public expenditure and revenue, especially on social welfare and education (1997, 25–28, 36–37). New democracies, which typically inherit a deteriorating economic situation, as well as an underdeveloped system for welfare provision, are no exception when confronted with an explosion of societal demands. In the new democracies of Southern Europe and the postcommunist countries, the state assumed its most significant role in the development and expansion of social policies (1997, 118, 124).36 In Latin America also, a similar conception of the role of the state is evident. In Chile, Eduardo Frei has argued that it is important to sustain economic growth, but on a more equitable basis. Thus, in the first decade following the Pinochet dictatorship, the Aylwin and Frei administrations tripled investment in education between 1994 and 2000 and spent $1 billion on health care between 1990 and 2000. Though remaining high, levels of income inequality, unemployment, and poverty were reduced.37 In similar fashion, Valentin Paniagua, interim president of Peru following the collapse of the

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Fujimori regime, called for economic development on a competitive but equitable basis, especially in view of contemporary levels of poverty in Peru. This entailed the expansion of social policies on education, health, and social security (Paniagua 2002).   The ability of the state to fulfill these roles is dependent, in the long run, upon fiscal reform. After all, the “consumption politics”—characteristic of postwar social democracy in Western Europe, and later developed in the new democracies of Southern Europe, and associated with increased social expenditure on pensions, unemployment benefits, and health care—were largely financed through fiscal reform (Maravall 1997, 132, 179). In the newly developing democracies, fiscal reform is necessary not only for macroeconomic stability, but also for democratic legitimation and consolidation (Dresser 2001; Nelson 2001), yet the issue of fiscal reform has proved to be difficult. This is especially so in the case of the poorest developing democracies that lack the financial and managerial resources needed to build social safety nets (Li and Reuveny 2003, 53). Their short-term possibilities for constructing fiscal systems are also constrained by the fact that state expenditures have to be based largely on external aid (Richards 2002, 6). Democracies with low-and middle-level incomes inherited fiscal legacies characterized by corruption and low revenues (Nelson 2001). Under authoritarian conditions, revenues were generated by intervening state measures (e.g., tariffs and licensing fees) and exporting high-value resources As a result, in most new developing democracies, income tax represents less than 15 percent of public revenues (2002, 6). In the postcommunist countries, the need to reconstruct fiscal systems has been both urgent and contentious. In Hungary and Poland in the early 1990s, for example, public expenditure began to rise gradually, but at the same time fiscal revenues fell, leading to a rapid increase in the fiscal deficit by 1992 (Maravall 1997, 118). Wyplosz (1999, 24) also emphasizes the adverse effects of limited taxing capacity, noting that in the postcommunist countries the ratio of public consumption to a (declining) GDP fell “where taxes declined most.” Despite the pressing need to do so, governments have postponed fiscal reform for a long time (1997, 118) or, in the cases of Russia and Romania, indefinitely (1999, 15). There is no question that fiscal reform is politically difficult. This, in turn, may explain a new democratic government’s inability or unwillingness to implement reform measures. Entrenched interests, as the previous beneficiaries of privileges, will attempt to sabotage fiscal reforms. Taxpayers may reject taxes if they have little confidence in the capacity and fairness of the state, which may be the case in the early

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stages of a democratic transition. Furthermore, the successful implementation of fiscal reform implies the need for broader ongoing political reform—that is, a democratic government may only appeal, credibly, to the population against entrenched resistance if it provides greater political accountability and accepts monitoring in exchange for greater revenues (Richards 2002, 6–7). Regardless of the difficulties, the strong consensus is that there is an urgent need for fiscal reform to underpin a continuing role for the state in promoting equitable economic development and there must be sufficient fiscal resources for macroeconomic stability. To be an effective economic instrument, public revenues must be adequate for deficit control and for financing the social spending (on education and training, infrastructure, and labor market policies) that raises productivity and promotes social equality.38 Above all, most specialists concur that the principal criterion for taxation is that of fiscal sufficiency—that is, redistribution per se should be the task of public expenditures, through the state (Richards 2002, 7).39 That said, in providing the state with the means to perform such a redistributive role, it is clear that thoroughgoing fiscal reform remains both a critical and, in many new democracies, an unmet challenge.     This section considers whether a redistributive role for the state is compatible with the promotion of economic development, which is the other core element for a new democracy’s survival. The issue of whether new democracies face a supposed “cruel choice” between economic efficiency and social equality constitutes the fundamental dividing line between conservative and social-democratic prescriptions for economic development. On the one hand, conservatives argue that the social policies associated with the welfare state generate economic inefficiency; egalitarian policies inhibit economic competitiveness and growth. In this view, equality and efficiency are incompatible and antagonistic objectives; social democracy is accused of sacrificing efficiency for the sake of equality. As such, the role of the state is to provide a minimalist “social security net,” beyond which social policies will be counterproductive for market reforms (Maravall 1997, vi, 108, 134). In contrast, social democrats posit that there is no antagonism between economic development and the pursuit of greater social equality. Market reforms are compatible with a major role for the state in terms of both broad social policies and investment in human and physical capital. Greater income equality and higher expenditures on education and health favor economic growth, whereas a more equitable distribution of the social costs of reforms is essential for the consolidation of democracy in adverse economic conditions. To be sure, as described above, the chal-

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lenge for social democracy in the 1980s, in the much harsher context of increased international economic interdependence, was to reconcile its traditional concerns for redistribution with the new demands of promoting economic growth and maintaining economic competitiveness. Recognizing that economic efficiency was essential for the viability of egalitarian social policies, the new social-democratic blueprint entailed the combination of a sound macroeconomic framework with increased public spending on health, education, and welfare and supply-side policies of public investment in fixed capital and training (Maravall 1997, 88, 108, chap. 4). The empirical evidence suggests strongly that the alleged efficiency-equality tradeoff is exaggerated. In the 1980s, there was no clear relationship between public spending levels, or the rate at which they increased, and GDP growth. Comparatively high rates of growth were recorded in countries with high levels of expenditure and in countries where expenditures increased rapidly. Twelve of fourteen quantitative comparative studies examining the effects of social-democratic policies on economic growth have found that these policies proved economically efficient in relative terms (Maravall 1997, 135, appendix 4; see also Przeworski 1985).40 The new social-democratic regimes of Southern Europe (Spain, Portugal, Greece, Italy, and France) were indeed forced to maintain a balance between economic competitiveness, wages, employment, public expenditure, and fiscal revenue, yet this balance was achieved at the expense of neither social equity nor economic performance. Public expenditure in general expanded, while there were huge increases in spending on health, education, unemployment benefits, pensions, and active labor market policies.41 As a result, economic and income inequality declined.42 At the same time, between 1984 and 1993, the rate of GDP growth per capita for the five social-democratic governments of Southern Europe outstripped that for the European Union as a whole (Maravall 1997, 99–101, 166). The supposed exaggerated trade-off between greater economic efficiency and greater equality implies, at a minimum, that national governments retain significant room for maneuver with respect to the role and scope of activity that they assign to the state. In view of the alleged constraints of an increasingly globalized economy, this is a particularly pertinent finding, not least for the poorest emerging democracies.

Globalization and the State The effects of globalization, understood as the process by which more and more countries are becoming increasingly integrated into the world economy, are hotly debated. On the one hand, there are those who argue that globalization promotes economic development and reduces income inequality, thereby fostering democracy.43

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On the other, some scholars argue that globalization reduces the autonomy of national states and promotes public policies geared toward foreign investors rather than the domestic population,44 produces more domestic losers than winners, at least in the short run, diminishes the ability of the state to compensate the losers financially,45 and widens the economic gap between North and South.46 Increasing financial capital mobility across countries reduces the ability of states to implement domestically oriented economic policies (Li and Reuveny 2003, 36). In their recent analysis of the effects of globalization on democracy, they conclude, grimly, that “the growing capital mobility accompanying globalization produces a political dilemma for governments who want both economic competitiveness and democratic political accountability . . . the mobility of capital reduces democratic governments’ ability to respond to popular demands for social welfare and effective economic management”(53). It is certainly the case that for many developing democracies, the consequences of globalization have been almost entirely negative. The opening up of developing democracies’ markets to foreign competition has damaged their national production and balance of payments (especially given continuing high levels of protectionism in the developed world), whereas market reforms and economic adjustment measures implemented in line with the prescriptions of international financial institutions (IFIs) have had a negative effect on levels of poverty, unemployment, and support for democracy and have increased social inequality (Richards 2002, 1–2). Nonetheless, the precise constraining effects of globalization have yet to be clearly demonstrated.47 Even if globalization drives a general process of macroeconomic convergence, there are considerable grounds for arguing that the balance struck between maintaining economic competitiveness and promoting equitable economic growth still lies in the hands of national governments. For one thing, there is enormous crossnational variation in the initial prevailing economic conditions of new democracies in Africa, Latin America, East Asia, and Eastern Europe and consequently in the timing, effects, and nature of the reforms implemented (Biersteker 2001; Stallings 2001). Moreover, a margin for choice clearly exists if different policies are practiced in similar circumstances (Maravall 1997, 127).48 In this regard, Kolodko (2003a) argues that globalization, in fact, presents countries with more advantages than disadvantages. Whether countries seize the advantages is very much a function of their adopted policies: “We are neither bound to succeed nor doomed to fail just because . . . globalization is there. That still depends on the quality of the economic policy.” Only then, Kolodko adds, can we explain the sharp contrasts in economic performance between countries in otherwise similar contexts: Chile and Argentina; Costa Rica and Nicaragua; Malaysia and the Philippines; or the Dominican Republic and Haiti (where, during the 1990s, real GDP growth was 87 percent in the former but –11 percent in the latter).49

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Furthermore, others have argued that globalization does not necessarily render the welfare state powerless. On the contrary, the welfare and social roles of the state remain effective because they provide important collective goods (e.g., social stability, property rights, and infrastructure) that are undersupplied by markets (Frieden and Rogowski 1996; Garrett 1999).50 Here again, the extent to which the state fulfills such roles lies largely in the hands of national governments—levels of public revenues and expenditure, the proportion of the budget dedicated to social policies, and the balance between investment and consumption vary widely among countries (Richards 2002, 4–5). There is significant cross-national variation with respect to welfare provision and needs. Nelson (2001) argues that national governments still retain considerable room for maneuvering; only a very imprecise relationship exists between a government’s level of social expenditures and the efficiency, equity, and quality of its social programs. In fact, many specialists on, and political leaders from, democracies in the developing world have emphasized the critical role of the state in generating growth and economic redistribution and maintaining social cohesion through its public spending on education, health, food subsidies, job creation, and training. In short, “structural economic reforms should not constrain the capacity of the state as an instrument of growth” (Richards 2002, 5–6). In the poorest developing democracies, however, such a role for the state can be achieved only through a series of concrete reforms. In general, the poorest democracies do not attract foreign investment, have limited participation in international trade, and are not integrated into the world economy—the problems they face in generating the economic development necessary to sustain democracy do not, in fact, result from globalization per se (Richards 2002, 11; Li and Reuveny 2003, 38). Instead, certain domestic reforms—both economic and noneconomic—are required for the state to become an effective and autonomous instrument of equitable economic growth: rigorous and responsible macroeconomic policies, political accountability and administrative transparency, competent public agencies, and a legal framework that permits private firms and nonprofit organizations to deliver basic public services (2002, 11). Only when the state itself is a credible actor can the external aid, upon which the poorest democracies rely heavily, be used to help generate long-term economic development.51 Nonetheless, in the case of the poorest developing democracies, arguments emphasizing the resilience of national autonomy reach their limits. First, attempts by the poorest democracies to generate and sustain long-term economic development are constrained by their economic relationships with the developed countries. Stallings argues that economically developed countries often fail to follow the rules

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they advocate for others. They maintain significant levels of protection52 (whether “open” or “disguised”), allow their corporations to behave irresponsibly, and do not provide the resources with which to protect the poorest sectors of developing societies from the effects of reform (2001, 3). Furthermore, the allocation of economic resources to domestic development is hindered by the extreme indebtedness (to the developed world) of the poorest countries. Nevertheless, although direct and drastic redistribution from North to South appears unfeasible—not least because “the latter cannot effectively impose redistributive mechanisms on the former” (Boix 2001, 35)—the twin necessities of advanced democracies fulfilling their commitment to dedicate 0.7 percent of GDP to foreign aid and canceling foreign debt (contingent upon domestic reforms), are likely to remain firmly on the agenda of economic reform in the poorest democracies (Richards 2002, 12). In this context, the various inadequacies of the principal IFIs are receiving increasing attention. Kolodko (2001, 4) criticizes the IFIs for promoting universal reform packages without considering the potentially enormous social costs of economic adjustment in many developing countries, and for subordinating long-term development for short-term stabilization. Liberalization and privatization alone—with insufficient attention to the construction of adequate institutions (see above) and economic growth per se—did not work in Latin America and are not working in East Central Europe (Kolodko 2003a). Structural adjustments in Eastern Europe and Russia in the 1990s heavily shaped by IMF advice have caused serious problems. The views of political leaders in the developing democracies are no less critical—greater foreign investment is needed to finance economic growth. This implies a new round of WTO trade negotiations and restructuring both the agenda (to incorporate a sustained focus on economic growth) and the composition and organization of the IFIs (Richards 2002, 12–13).53

The Resilience of New Democracies The first part of this chapter discussed the role of economic factors in sustaining and consolidating new democracies. For their survival, new democracies need to promote economic growth and achieve high levels of economic development, on an equitable basis. The second part described the various economic and social dilemmas that new democracies have had to confront, invariably in adverse circumstances, as they attempt to achieve these difficult objectives. Yet just what is the impact of levels of economic growth and development on the survival chances of democracy once it has been established, especially given the supposed vulnerability of new democracies to severe economic crises that we noted at the beginning of the chapter?

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In general, the economic trajectory of the postcommunist countries since 1990 has been little short of catastrophic. In his study of fifteen postcommunist countries in Central and Eastern Europe and the former Soviet Union,54 Wyplosz (1999, 3) describes how the length and depth of the initial recession following the collapse of communism was not foreseen. Average growth for the fifteen countries did not turn positive until 1994, following a cumulated decline in GDP of 29 percent (see also Alonso and Maravall 2001, 38). In terms of the ratio of GDP in 1998 to that of GDP in 1989, only three countries had recovered; in many others, GDP stood at half the 1989 level. Despite significant cross-national variation, for all twenty-eight countries of Central and Eastern Europe and the former Soviet Union, GDP currently stands at 75–80 percent of its 1989 level (Kolodko 2003a).55 Gyula Horn has contrasted the contemporary economic fate of the countries of Central and Eastern Europe with those of the European Union: levels of production in the former stand at one-third of the latter; income per capita is six times less in the former than in the latter; and 73 percent of the population in the former live below the minimum standards established in the latter. Only 52 percent of the labor force has jobs in the former, compared to 64 percent in the latter.56 Long-term unemployment has, in fact, become a serious problem in the former communist countries. Despite significant crossnational variation, in most countries unemployment surged during the first years of democracy and has remained high ever since. Several countries (Albania, Bulgaria, Croatia, Macedonia, Poland, Hungary, Slovakia, and Slovenia) have suffered a continual double-digit unemployment rate (2001, 40).57 Finally, as noted earlier, levels of income inequality have increased dramatically across the former communist countries (Hellman 1998). Despite this abysmal economic record, the majority of the former communist countries have survived as liberal democracies. Democracy not only survived the initial economic crisis, but levels of democratization have remained high. In the first decade after the collapse of communism, thirteen of the nineteen countries analyzed by Alonso and Maravall (2001, 29, 35) became more democratic, according to Freedom House. Moreover, only half of the postcommunist democracies in 1999 had enjoyed positive average growth rates during the previous decade. Of the countries ranked highest in 1999 in terms of democratization, their inflation and growth rates had varied substantially in the previous decade. As such, the authors conclude that the effects of economic performance on democratization “were very small, both at the beginning and with the passage of time” (2001, 28, 10, 27).58 Similarly, Limongi and Przeworski (1994, 7–8, 24) have noted the resilience of democracy in Latin America in the 1980s despite the scale of the regional economic crisis. With several countries suffering hyperinflation, rising poverty, and sharply

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declining rates of economic growth, the authors label the crisis as unprecedented, yet only in Peru, from 1988 onwards, was democracy subverted. There are plausible noneconomic explanations for the survival of democracy amidst horrendous economic conditions. In the case of Latin America, Limongi and Przeworski (1994, 9, 11) note that regimes have come and gone in waves since World War II; as such, they argue that the influence of the international climate far outweighs economic conditions in determining political regimes. In the case of the postcommunist countries, the resilience of popular support for democracy despite the enormous social and economic costs of reform (Maravall 1997, 97) may simply be a function of a general repudiation of the authoritarian communist past.59 In Poland in 2001, health care and the social consequences of economic development were major political issues. Seventy-three percent felt there was not enough economic and social equality, but 75 percent were in favor of democracy, with 57 percent choosing freedom rather than equality, and only 35 percent choosing equality over freedom.60 Similarly, in Hungary in 2000, 82 percent felt more prosperous under communism, but the majority did not wish to return to the communist system.61 Should the role of economic development in the long-term survival of new democracies therefore be discarded? Hardly. Support for democratic values expressed in the shadow of a recent authoritarian past may not be an accurate indicator of diffuse support for democracy per se. It is worth remembering that in postwar Germany, the horrors of the Nazi regime did not lead, initially, to the embracing of democracy as a value in and of itself. The latter was a long-term, thirty-year process, in which the impressive postwar economic performance of the Federal Republic played no small part (Conradt 1989, chap. 3). In this sense, the need for democracy to “prove itself”62—in terms of providing for the economic and material well-being of the population—may be crucial to its longterm survival. The triumph of democracy in Southern Europe, whereby “citizens considered democracy to be a value in itself, and not just a means to an end,” was achieved in the context of a significant expansion of welfare provision and of measures to reduce inequality: “democracies are generally attributed an inherent value and not simply seen in instrumental terms; but that value also depends on the human face of these regimes, which constitutes an essential part of their legitimacy” (Maravall 1997, 101). The importance of equitable economic development, a key theme in this chapter, in underpinning the legitimacy of democracy is best seen, not surprisingly, in contexts of high inequality and widespread material deprivation. Reviewing postcommunist Romania, Petre Roman casts doubt on the notion of a triumph for democracy, at least when it is understood not just in minimalist terms as the survival

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of a system of free elections and party competition, but also as popular support for the system itself.63 The transition in Romania, he argues, has secured liberty for the very few and left the overwhelming majority of the population in poverty: “such a situation is incompatible with democracy.”64 Nor is this a question of the alleged “quality” of democracy. In several Latin American democracies in the 1980s and 1990s, high rates of inequality and of poverty (14.4 percent in Bolivia, 19.7 percent in Colombia, 20.2 percent in Ecuador, 15.5 percent in Peru, and 23.0 percent in Venezuela)65 have produced political instability, social divisions and confrontation, and a brand of political populism that has little to do with the quality of democracy but everything to do with its governability. Perhaps for the sake of its own long-term survival, in these countries, as elsewhere, democracy has yet to fulfill its most radical promise: the creation of a more equal society.

 I am grateful to Sonia Alonso and Belén Barreiro for providing me with several useful references and data sources. 1. See Lipset (1959); Dahl (1989); Huntington (1991); Burkhart and Lewis-Beck (1994); Muller (1995); Londregan and Poole (1996); Feng (1997); Feng and Zak (1999) (cited by Li and Reuveny 2003, 31n7); Barro (1997) (cited by Dethier, Ghanem, and Zoli 1999, 3); Przeworski et al. (2000). 2. Argentina, as the only country in which democracy fell at a per capita income level above $ 6,000, is a “distinct outlier” (Przeworski and Limongi 1997, 170). 3. In making this argument, a critical qualification is necessary. The issue of what is the direct impact of economic performance on the survival of democracy undoubtedly requires considerable further research. It is clear that during the last two decades of the twentieth century, democracies—above all in the post-communist countries and (with few exceptions) in Latin America—have withstood severe economic crises and downturns. Noneconomic factors—such as the support of, and/or membership in, international institutions, or a country’s position in the international system—may well mitigate, or compensate for, the debilitating effects of poor economic performance. Nonetheless, as I discuss further in the conclusions to this chapter, economic performance will be crucial to the strengthening of democratic legitimacy in the long run. 4. Those in decline could expect to last nineteen years, compared to sixty-four years for those generating growth (Przeworski and Limongi 1997). 5. Specifically, a democratic regime had an expected life of forty-four years when the inflation rate is under 6 percent, of seventy-one years with an inflation rate of between 6 and 30 percent, and of only sixteen years when the rate exceeded 30 percent (Przeworski et al. 1996). 6. Cited in Limongi and Przeworski (1994, 23) and Przeworski et al. (1996, 42). For the effects of economic crisis on democracy, see O’Donnell (1973); Haggard and Kaufman (1995); Helliwell

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(1994); Gasiorowski (1995) (all cited in Li and Reuveny 2003, 31n8). 7. In contrast, of the 252 years in which wealthy democracies experienced economic crises, none fell (Przeworski and Limongi 1997). 8. Thus the economic objectives of the victorious PSOE in Spain in 1982 were, in terms of the goal of fostering economic competitiveness to achieve stable long-term growth, broadly similar to the new democratic regimes’ acceptance of the need to establish an efficient market in Hungary, Poland and Czechoslovakia, even though the transitions to democracy in Southern, Central, and Eastern Europe took place in very different contexts (Maravall 1997, 86–87, 102, 194). 9. Paniagua (2002). 10. Roman (2002). 11. De Melo et al. (1997, 26) argue that “severe macroeconomic distortions tend to be associated with slower reforms.” Part Two discusses whether this is actually the case, and what is the longer-term impact of initially adverse economic conditions on the outcomes of reform. 12. Hanna Suchocka, Polish prime minister from 1992 to 1993, characterized the typical attitude in Poland as one of enjoying freedom, but looking to the state to organize one’s life (2002). 13. Frei (2002). 14. Though Wyplosz (1999, 12) notes that transitions to democracy were followed by a decline in GDP whether or not reforms were adopted. 15. In discussing the capacity of democratic regimes to confront and resolve severe economic difficulties, I set aside the longstanding debate on whether they are better equipped than authoritarian regimes to do so. For a long time during the postwar period, the notion of the “authoritarian advantage” in promoting economic development was based on the argument that democratic regimes (almost by definition) were unable to insulate themselves from the demands and constraints exerted by opponents of the reform process, and to implement reforms that, while promising long-term gains, produced short-term losses. This thesis is now largely discredited; authoritarian regimes have been found to be more vulnerable than democracies to economic crises, and no better at promoting economic development. See Przeworski et al. (1996); Przeworski and Limongi (1997); Dethier, Ghanem, and Zoli (1999, 4, 5, 23–24); Alonso and Maravall (2001, 23, 27); Maravall (1997, 15–21, 29–31); Przeworski (1991). For an interesting study of the post-communist countries, which argues that the greatest level of democratization produces the most profound (and, in fact, most equitable) reform outcomes, see Hellman (1998). 16. For a sustained analysis of this dilemma, and of the extreme difficulties of enacting political and economic reforms simultaneously, see Przeworski (1991). 17. Hellman (1998) also finds that the most radical reform programs in the post-communist countries have been introduced and sustained in the most competitive political systems. 18. In contrast, in many of the former Soviet countries in which democratization has been nonexistent or only partial, many of the previous elite have remained in power, thereby leading to a slow and haphazard reform process (Dethier, Ghanem, and Zoli 1999, 5; see also Hellman 1998). 19. Alonso and Maravall (2001, 23) also find that less democratized regimes were more reluctant to reform their economies, and that the reforms they eventually initiated were more limited than those implemented in more democratized regimes.

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20. Moreover, even in the context of a single empirical case, it is evidently difficult at times to delineate which process of liberalization came first. With respect to post-Gorbachev Russia, Mau (1994) argues that political liberalization led to institutional chaos and a lack of economic reform; Roland (1997), however, criticizes Yeltsin for his sequencing error in 1991, whereby economic issues were given priority instead of building consensus on new democratic institutions, which would have facilitated the implementation of economic reforms (both studies cited in Dethier, Ghanem, and Zoli 1999, 4, 5, 5n5). Furthermore, if the country in question experiences a particularly prolonged transition to democracy, there may well be no clearly identifiable sequence. Mexico in the 1980s, for example, has been cited as a case of simultaneous economic and political reforms. In fact, the former were very radical while the latter were relatively limited (Maravall 1997, 16). Significant political reform only came during the Zedillo administration, and this in the midst of a severe economic crisis (Zedillo 2001). 21. Dethier, Ghanem, and Zoli (1999, 12) also note that policy makers are more willing to introduce unpopular reforms immediately after taking office partly because short-term costs can be blamed on the preceding communist regime. Maravall (1997, 35) argues that reforms taken early on in the life of a government will have more chance of success, since the passing of time will tend to erode popular trust in the government and its initiatives. 22. As Maravall notes (1997, 105,105 n46), the principal academic proponent of shock therapy is Sachs (1993), while its program was supported by the IMF, World Bank, and politicians such as Balcerowicz in Poland and Klaus in the Czech Republic. 23. In the longer term, the impact of initial economic and structural conditions on the subsequent reform trajectory of new democracies appears to diminish over time. Alonso and Maravall (2001, 6) conclude that time and strategic decision making appear to influence liberal democratic outcomes more than initial structural conditions. In their analysis of the post-communist countries, together with China, Vietnam, and Mongolia, De Melo et al. (1997, 26, 32–37, 41) find that severe initial macroeconomic distortions slow the reform process, lead to consistently higher inflation throughout the subsequent transition period, and account for 19-30 percent of explained variance in subsequent economic growth. This, however, is less important than policies adopted (accounting for 35–40 percent of explained variance). In general, the authors conclude that adverse initial conditions have a negative, but diminishing, impact over time. 24. The author traces a similar dynamic in the 1980s with respect to Argentina, Peru, and Brazil, where lax monetary policy, the absence of fiscal reform, and acquiescence in the face of consumption demands generated an unsustainable economic situation: “paradoxically, as the crisis deepened, the governments’ capacity to initiate policies of macroeconomic austerity and structural transformation increased, since both politicians and society as a whole came to the conclusion that there was no alternative” (Maravall 1997). 25. Inherited economic conditions do not alone account for the decision to opt for shock therapy or gradualism—economic crisis is not usually a sufficient condition for the implementation of drastic economic reforms (Maravall 1997, 33). Other factors, such as electoral strength, ideological and policy coherence, and the strength of opponents, shape a new democratic government’s choice. In Czechoslovakia, for example, reforms were delayed by the provisional nature of, and disagreements within, the government. In Hungary, the government judged that shock therapy would provoke serious political and social resistance (1997, 112–13). This has

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important implications for the manner in which reforms are implemented. An economic crisis combined with a politically strong government may favor the influence of technocratic “change teams” and the implementation of drastic reforms with minimal negotiation. Such “decretist” political strategies have been associated with a preference for shock therapy (1997, 33, 107). Yet “the standard image of reform governments as strong, streamlined, and relatively autonomous, with the capacity to push through reforms despite bureaucratic and popular opposition (Hellman 1998, 213) is misleading. (The Klaus government in the Czech Republic is the only such case among the post-communist countries.) Instead, Hellman (1998, 234) shows that it is post-communist systems with greater political participation and competition, and governments that have expanded political participation to include the losers in the policy making process, that have adopted and maintained “more comprehensive economic reforms than states largely insulated from mass politics and electoral pressures.” In any case, the successful implementation of significant economic reform may be contingent upon an inclusive political strategy. Dresser’s (2001) description of democracy as an “effective containment policy” is apposite. Governments have to listen, negotiate, and persuade if reforms are to be viable and gain the cooperation of key social actors (Maraval 1997, 33). Przeworski (1991, chap. 4) argues that reforms must be rapid and radical, but must be debated democratically if they are to be accepted by society at large (cited in 1997, 35, 35 n58; see also Bresser et al. 1993, 199–220). Ernesto Zedillo, president of Mexico from 1994 to 2000, emphasized that despite the predominance of the PRI, economic reforms at the start of his mandate were negotiated with all political parties (Zedillo 2001). 26. In this regard, the authors question whether, in the end, “big bang” Poland has differed greatly from “gradualist” Hungary (1999, 11). 27. With the exception of the Slovak Republic (Hellman 1998, 224). 28. Interestingly, former Romanian Prime Minister Petre Roman complained of the regressive effects of delaying economic reform. He argued that serious economic reforms were fundamental for the general welfare, while the huge increase in poverty rates in Romania between 1996 and 2000 was “largely the result of delays in economic reforms” (Roman 2002). 29. In this regard, Hellman (1998, 210) acknowledges that the countries that have undertaken reform “do exhibit considerably higher unemployment than the slowest reformers.” (Although the relationship between the extensiveness of adopted reforms and the level of unemployment is not clear.) 30. After all, the transitions to democracy in Spain and Portugal took place at a time when the role of the state was being questioned in one of the bastions of the postwar consensus, epitomized, perhaps, by British Labour Prime Minister James Callaghan’s frequently quoted speech to his party conference in 1976: “We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting Government spending. I tell you in all candor that that option no longer exists” (Harmon 1997, 165). 31. Above all, the social-democratic Left has adopted such supply-side policies combined with redistributive social programs. In particular, heavy investment in human capital formation has been seen as a way of reconciling concerns for equality with those for employment (Maravall 1997, 138, 190; for a full discussion, see chap. 4) 32. Horn (2002). 33. Frei (2002).

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34. Roman (2002). 35. The importance of the state for institution building and rule making is implicit in Wyplosz’s (1999, 20–21) analysis of the inadequacies of the banking systems and stock markets in the post-communist countries. A sound microeconomic structure, especially in the form of an effective banking system, is important for economic development. Yet “transition banking,” he argues, tends to flow to inefficient but well-connected producers rather than the private sector. In Russia, for example, property rights are ill defined and loan repayments far from guaranteed. As a result, banking crises are frequent. For an analysis of the evolution of the banking system in post-Soviet Russia, see Johnson (2000). 36. This was particularly true of the longstanding social-democratic governments in Spain and Greece and of those that came to power in Poland in 1993 and Hungary in 1994 (Maravall 1997, 122, 124, 132, 138, 178–79). A somewhat more cynical explanation for the emergence of the welfare state in the post-communist countries is offered by Wyplosz (1999, 24): “within a few years all governments which had taken power from the communists have been voted out of office, a strong indication that the population was disoriented and generally upset with rising uncertainty. It may be that the transition countries have to retain, from the outset, a welfare state that richer countries have progressively built up over decades.” 37. Frei (2002). 38. In addition, fiscal reform involves changing the tax system: broadening the tax base; simplifying the tax system (to facilitate its administration and diminish the likelihood of evasion); establishing moderate tax rates; stabilizing tax rates and the fiscal structure in order to enhance predictability for economic decisions; balancing direct and indirect taxation; making customs collection more transparent; enforcing corporate taxes; avoiding “one-shot” revenues from privatizations as a substitute for fiscal revenue (Maravall 1997, 118–19); establishing fiscal federalism if a country is politically decentralized, and not just transferring public expenditure to regional and local authorities (which encourages fiscal irresponsibility); ensuring that in conditions of fiscal federalism, a system of territorial transfers is established to redistribute income from rich to poor regions (Richards 2002, 7). 39. This summary is based on the papers, and subsequent deliberations, of participants in the Working Group on Economic and Social Conditions at the “Conference on Democratic Transition and Consolidation,” FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27, 2001. 40. It is noteworthy that in Chile in the 1990s, for example, the significant increases in public spending on health, education, infrastructure, and significant reductions in poverty, unemployment, and income inequality, to which I referred earlier, were compatible with an average economic growth rate of 6.5–7.0 percent for the 1991–2000 period. Frei (2002). 41. Given the authoritarian legacy of social inequality, “modernization” was understood very much in terms of catching up with the developed democracies with respect to welfare provision (Maravall 1997, 98–99). 42. Przeworski (2001) notes that a vast body of research has demonstrated that a more equal distribution of income promotes higher growth rates. 43. See Schumpeter (1950); Held (1992); Platner (1993); Weitzman (1993); Bhagwati (1994); Lipset (1994); Muller (1995); Im (1996) (cited in Li and Reuveny 2003, 32n14, 33). 44. See Lindblom (1977); Held (1991); Gill (1995); Jones (1995); Gray (1996); Schmitter

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(1996); Cox (1996); Cammack (1998) (cited in Li and Reuveny 2003, 35). 45. See Drucker (1994); Muller (1995); Bryan and Farrel (1996); Cox (1996); Moran (1996); Rodrik (1997); Martin and Schumann (1997); Longworth (1998) (cited in Li and Reuveny 2003, 35). 46. See Wallerstein (1974); Bollen (1983); Tarkowski (1989); Przeworski (1991); Gill (1995); Amin (1996); Cox (1996); Im (1996); Kummell (1998) (cited in Li and Reuveny 2003, 35). 47. For example, the effects of supposed “rigidities” in domestic economies on levels of foreign investment are unclear. Wyplosz (1999, 22) argues that in many of the postcommunist countries, foreign direct investment has been discouraged by unclear property rights or regulations that keep foreigners out. However, the effects of taxation rates are, perhaps, more surprising. Available evidence for OECD countries shows that tax rates affect neither savings, investment, the supply of and demand for labor, nor economic growth. Investors are more concerned with political and macroeconomic stability, including the absence of fiscal deficits, and the predictability of tax rules, than with the level of fiscal pressure per se. Negative reactions to tax rates are, in fact, more likely among domestic investors than foreign ones (Richards 2002, 7). In this sense the effect of globalization on foreign investment is inconclusive. Przeworski (2001) is right to argue that the evidence on how globalization actually works is unclear. 48. Maravall (1997, 138, 93) argues that, despite general cross-national macroeconomic convergence, social-democratic governments retained their distinctiveness through the adoption of supply-side policies combined with redistributive social policies characterized by higher rates of total public expenditure, civil consumption, public investment, total taxation and more progressive income tax and social transfers. And even within the three new democracies under social-democratic rule in Southern Europe, there were enduring discrepancies in policy. 49. Kolodko (2003a); see also Kolodko (2003b); De Melo et al. (1997, 3n3, 34, 40). Ernesto Zedillo, president of Mexico, 1994–2000, reflecting on the fiscal crisis he had assumed upon taking office, argued that within the current context of fiscal globalization, politicians retained very little room for maneuver for committing errors in economic policy. Yet conversely, if the correct measures were adopted, recovery from crisis could be rapid (Zedillo 2001). Political factors may explain variation in economic performance between countries otherwise similarly situated in the international economy. It is notable that the pairs of countries cited above differed significantly in terms of state and political organization; only subsequently did some of them enact effective macroeconomic policies. I am grateful to Jorge Domínguez and Anthony Jones for suggesting this to me. 50. Cited by Li and Reuveny (2003, 38n29). 51. For example, in the context of extremely limited resources, minimalist programs financed largely by external aid, and in the form of carefully targeted interventions by region or sector, help to promote pro-poor economic development (Richards 2002, 12). 52. The value of protectionist measures for agricultural production in the industrialized world currently exceeds by 50 percent the value of total external aid to developing countries (Richards 2002, 4). 53. For a recent powerful critique of the IFIs, see Stiglitz (2002). 54. Albania, Bulgaria, Croatia, Czech Republic, Estonia, Macedonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovak Republic, Slovenia, and Ukraine.

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55. Kolodko contrasts the case of Poland, where GDP now stands at 130 percent of its 1989 level, with that of Ukraine, where GDP stands disastrously at one half of its 1989 level. 56. Horn (2002). 57. Such countries run a serious risk of hysteresis, whereby temporary unemployment turns into permanent long-term unemployment (Wyplosz 1999, 29). 58. In this regard, the cases of Ukraine and Moldova are the most notable: both countries advanced during the 1990s in terms of democratization, and expansion of political rights and civil liberties, despite an appalling economic performance. The average growth rate for the decade was –14.14 percent in Moldova and –13.85 percent in Ukraine (Alonso and Maravall 2001, 28, 35–37). 59. Potential entry into the European Union may represent another incentive, although public opinion across Central and Eastern Europe is divided on the possible benefits of European Union membership. 60. Jones (2002). 61. Horn (2002). 62. Interestingly, Ernesto Zedillo argues that in the context of Mexico’s current economic difficulties, there is a need for political forces to demonstrate that democracy is not just a legitimate ideal, but an instrument (Zedillo 2001). 63. Making such a distinction may help demonstrate how four of the nine countries in subSaharan Africa in the 1990s survived as democracies despite suffering staggering rates of poverty: Mali (73 percent); Central African Republic (67 percent); Zambia (64 percent); Madagascar (49.1 percent). (Development Data Group, World Bank, September 9, 2002). 64. Roman (2002). 65. Figures are for poverty rates in 2001 (1995 in the case of Ecuador). (Development Data Group, World Bank, September 9, 2002).

 Alonso, Sonia, and José María Maravall. 2001. “Democratizations in the European Periphery.” Estudio/Working Paper 2001/169, Instituto Juan March de Estudios e Investigaciones, Madrid. Amin, Samir. 1996. “The Challenge of Globalization.” Review of International Political Economy 2:24–46. Barro, Robert. 1997. Determinants of Economic Growth. A Cross-Country Empirical Study. Cambridge, Mass.: MIT Press. Bhagwati, J. 1994. “Globalization, Sovereignty and Democracy.” In Democracy’s Victory and Crisis: Nobel Symposium, ed. A. Hadenius. Cambridge: Cambridge University Press. Biersteker, Thomas. 2001. “Conference on Democratic Transition and Consolidation.” Paper prepared for Working Group on Economic and Social Conditions, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Boix, Carles. 2001. “Democracy and Inequality.” Estudio/Working Paper 2001/161, Instituto Juan March de Estudios e Investigaciones, Madrid.

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Bollen, Kenneth. 1983. “World System Position, Dependency, and Democracy: The CrossNational Evidence.” American Sociological Review 48:468–79. Bresser Pereira, Luis Carlos, José María Maravall, and Adam Przeworski. 1993. Economic Reforms in New Democracies: a Social-Democratic Approach. Cambridge: Cambridge University Press. Bryan, Lowell, and Diana Farrell. 1996. Market Unbound. New York: John Wiley. Burkhart, Ross E., and Michael Lewis-Beck. 1994. “Comparative Democracy: The Economic Development Thesis.” American Political Science Review 88:903–10. Cammack, Paul. 1998. “Globalization and the Death of Liberal Democracy.” European Review 6:249–63. Conradt, David P. 1989. The German Polity. 4th ed. New York: Longman. Cox, R. W. 1996. “Globalization, Multilateralism, and Democracy.” In Approaches to World Order, R. W. Cox, with T. J. Sinclair. New York: Cambridge University Press. Dahl, Robert A. 1989. Democracy and Its Critics. New Haven, Conn.: Yale University Press. De Melo, Martha, Cevdet Denizer, Alan Gelb, and Stoyan Tenev. 1997. “Circumstance and Choice: The Role of Initial Conditions and Policies in Transition Economies.” World Bank Policy Research Paper 1866, December. Dethier, Jean-Jacques, Hafez Ghanem, and Edda Zoli. 1999. “Does Democracy Facilitate the Economic Transition? An Empirical Study of Central and Eastern Europe and the Former Soviet Union.” Washington, D.C.: World Bank Policy Research Paper 2194, http://econ .worldbank.org/docs/ 917.pdf. Diamond, Larry, and Juan Linz. 1989. “Introduction: Politics, Democracy, and Society in Latin America.” In Democracy in Developing Countries: Latin America, ed. Larry Diamond, Juan Linz, and Seymour Martin Lipset. Boulder, Colo.: Lynne Rienner. Dresser, Denise. 2001. “Conference on Democratic Transition and Consolidation.” Paper prepared for Working Group on Economic and Social Conditions, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Drucker, Peter F. 1994. “The Age of Social Transformation.” Atlantic Monthly (November): 53–80. Feng, Yi. 1997. “Democracy, Political Stability and Economic Growth.” British Journal of Political Science 27:391–418. Feng, Yi, and Paul J. Zak. 1999. “The Determinants of Democratic Transitions.” Journal of Conflict Resolution 43:162–77. Frei, Eduardo. 2002. “La polémica herencia de la transición Chilena.” Paper presented at Seminario Permanente sobre Transición y Consolidación Democráticas, Fundación para las Relaciones Internacionales y el Diálogo Exterior (FRIDE), May 9. Frieden, J. A., and R. Rogowski. 1996. “The Impact of the International Economy on National Policies: An Analytical Overview.” In Internationalization and Domestic Politics, ed. R. O. Keohane and H.V. Milner. Cambridge: Cambridge University Press. Garrett, Geoffrey. 1999. “Global Markets and National Politics: Collision Course or Virtuous Circle?” International Organization 52:787–824. Gasiorowski, Mark J. 1995. “Economic Crisis and Political Regime Change: An Event History Analysis.” American Political Science Review 89:882–97. Gill, Stephen. 1995. “Globalization, Market Civilization, and Disciplinary Neoliberalism.” Journal of International Studies 24:399–423.

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York: Basic Books. Lipset, Seymour M. 1959. “Some Social Requisites of Democracy: Economic Development and Political Legitimacy.” American Political Science Review 53:69–105. ———. 1981. Political Man: The Social Bases of Politics. Baltimore: Johns Hopkins University Press. ———. 1994. “The Social Requisites of Democracy Revisited.” American Sociological Review 59:2–13. Londregan, J. B., and K. T. Poole. 1996. “Does High Income Promote Democracy?” World Politics 49:1–30. Longworth, Richard C. 1998. Global Squeeze: The Coming Crisis for First World Nations. Chicago: Contemporary Books. Maravall, José María. 1997. Regimes, Politics, and Markets. Oxford: Oxford University Press. Martin, Hans-Peter, and Harold Schumann. 1997. The Global Trap: Globalization and the Assault on Prosperity and Democracy. London: Zed Books. Mau, Vladimir. 1994. “Russia.” In The Political Economy of Policy Reform, ed. J. Williamson. Washington, D.C.: Institute for International Economics. Moran, J. 1996. “Contradictions between Economic Liberalization and Democratization: The Case of South Korea.” Democratization 3:459–90. Muller, Edward N. 1995. “Economic Determinants of Democracy.” American Sociological Review 60:966–82. Nelson, Joan. 2001. “Conference on Democratic Transition and Consolidation.” Paper prepared for Working Group on Economic and Social Conditions, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. O’Donnell, Guillermo. 1973. Modernization and Bureaucratic Authoritarianism: Studies in South American Politics. Berkeley: Institute of International Affairs, University of California. Paniagua, Valentin. 2002. “La nueva transición en Perú.” Paper presented at Seminario Permanente sobre Transición y Consolidación Democráticas, Fundación para las Relaciones Internacionales y el Diálogo Exterior (FRIDE), February 19. Platner, Marc. 1993. “The Democratic Moment.” In The Global Resurgence of Democracy, ed. Larry Diamond and Marc Platner. Baltimore: Johns Hopkins University Press. Przeworski, Adam. 1985. Capitalism and Social Democracy. Cambridge: Cambridge University Press. ———. 1991. Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America. Cambridge: Cambridge University Press. ———. 2001. “Equality and Efficiency: Is It a Tradeoff?” Paper prepared for Working Group on Economic and Social Conditions, Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Przeworski, Adam, and Fernando Limongi. 1997. “Modernization: Theories and Facts.” World Politics 49:155–83. Przeworski, Adam, Michael Alvarez, José Antonio Cheibub, and Fernando Limongi. 1996. “What Makes Democracies Endure?” Journal of Democracy 7, 1:39–55. ———. 2000. Democracy and Development: Political Institutions and Well-Being in the World. New York: Cambridge University Press. Richards, Andrew J. 2002. “Sustaining Democracy in the Developing World: The Economic and Social Conditions for Democratic Consolidation.” Economic Reform Feature Service,

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The construction of democracy requires attention to important details. Vision, ambition, decisiveness, and self-restraint, in general terms, are not by themselves sufficient for effective democratic design. The scholars whose chapters appear in Part II, therefore, identify some of the micro criteria for the elected institutions of the democratic state. Simeon and Turgeon identify key principles for constitutional design in the construction of democracy. There must be a clean break with the previous authoritarian regime, and a democratic constitution must establish a framework of rights that political leaders and the public will support. Democratic design must also permit the representation of salient differences (e.g., language, religion, ethnicity, culture, gender, and social class) and accommodate these divergent claims of expression of views, interests, and influence. A democratic state must be present throughout the pertinent territory and capable of granting and protecting rights and political access, and democratic design should institutionalize a “citizen regime” that attempts to give life and meaning to its constituent components: rights, access, and belonging. Such a constitution provides a framework for public debate among citizens about the burdens they consider reasonable to place upon each other and fosters the public dialogue that facilitates the peaceful resolution of disputes. Cintra and Lacombe explicitly recommend political arrangements that are more parliamentarian than presidential. Parliamentary systems are based on the unified control of the legislative and executive branches and rest on the hierarchical preeminence of the cabinet. The cabinet’s proposals are likely to be accepted, and democratic governance is likely to be efficient. In addition to provisions for representation, rights, access, and belonging, noted in chapter 4, democratic polities should also require accountability—that is, they should provide mechanisms for monitoring the performance of politicians. Parliamentary parties are cohesive

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and disciplined; the cabinet is answerable to parliament’s partisan majority. The electoral law is also a key feature of institutional design. For example, proportional representation guarantees the greatest access for minorities whose members live throughout the state’s territory, whereas single-member plurality (“first past the post”) systems provide better access to minorities whose members live in geographically concentrated spaces. Perhaps the least stable scheme is a presidential system that has midterm elections, multiple parties, and proportional representation, because it is most likely to ensure that the president will lack a legislative majority after the midterm, and often even from the start of the presidential term. The efficiency of presidentialist systems increases if presidents and legislatures are elected on the same day and serve coterminous terms—that is, legislators face no “midterm” elections. Similarly, presidentialist systems are likely to be more efficient if the executive branch lacks strong decree power prerogatives, whose existence risks abuse and a serious rift between executive and legislative branches.

 

Constitutional Design and the Construction of Democracy A Citizenship Regime Perspective     

The early 1990s witnessed an impressive return to the study of institutions and constitutions in the social sciences. The return to the forefront of institutions coincided with the need to (re)establish democratic institutional frameworks in countries facing the dual challenge of transition and consolidation to democracy. A plethora of constitutionalists, political scientists, and former heads of governments became selfdeclared specialists in the subtle arts of transitology and actively involved in constitutional engineering. A significant and voluminous body of literature has been produced, with major debates between proponents of parliamentary and presidential regimes, between proponents of proportional representation and those favoring plurality electoral systems or between those favoring the inclusion of social rights and those seeing such rights as a strain on new democracies with limited resources.1 After more than ten years of such debates on how constitutional engineering can best promote a stable, consolidated, democratic polis in former communist or dictatorial regimes, most analysts have come to the conclusion that a well-crafted constitution will not by itself guarantee democratic governance and practices, but a poorly crafted one will almost certainly undermine them. More important, we believe, a poorly designed constitution will become a hindrance to one of the most important challenge facing new democracies: building institutions that can sustain an inclusive and active democratic citizenship. This chapter explores how different dimensions of constitutional design—creating an institutional structure that establishes the fundamental rules of the political game, enshrining these rules in a written constitution, and the subsequently promoting the spirit of constitutionalism in the wider society—can play a valuable role in

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ensuring the construction of a democratic order. In the first section, we address the challenges to new democracies and how they relate to the need to build a democratic “citizenship regime” based on the notions of “rights,” “access,” and “belonging” that reflects the history and social context of a specific community and promotes a democratic political culture. The second section explores what is at stake in the process of constitutional design and how it can contribute to the development of a democratic citizenship. In the remainder of the chapter, we propose some ways in which the constitution can strengthen a democratic order based on rights, access, and belonging, drawing in part on the recent experience of South Africa. This chapter does not set out to explore the pros and cons of any particular constitutional design in terms of electoral systems, legislatures and executives, or unitary versus federal states. That is the task of other chapters in this volume. Rather, we hope to set the table for these debates by exploring some of the underlying questions that must be brought to bear when considering specific alternatives.

Constitutional Design and the Challenges to the Consolidation of Democracy: A Citizenship Regime Approach Challenges to Democratic Consolidation Paradoxically, the process of constitutional design has been presented either as “the hour of lawyers” or as an essentially political act. The academic literature on constitutional design has followed a similar division. Legal scholars tend to focus on bills of rights, the rule of law, and independent courts as essential elements of modern constitutionalism. Political scientists, by contrast, tend to focus on questions of representation and governance and on structures of authority and decision making.2 We argue that a focus on the citizenship regime allows us to integrate into a single conceptual apparatus the lessons draw from the writing of both legal scholars and political scientists on the impact of a modern democratic constitution in the process of democratic consolidation.3 Measuring the impact of constitutional design on the consolidation of democracy is not an easy task, because of the wide variety of challenges that face different countries starting such processes. During the past forty years, countries embarking on the road to democratization have done so from many starting points: the termination of colonialism in Africa, the turn or return to democracy in countries (such as in southern Europe and Latin America) that had been under authoritarian rule, or the abrupt end of the communist regimes in Central and Eastern Europe. As a result, the central issues that constitutions have had to resolve have also varied greatly, from the need to transform civil-military relations to the challenge of the double transition to cap-

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italism and to democracy in former communist regimes. Such variety of experiences limits the transferability of knowledge and experience from one setting to another. In fact, one of the great lessons learned in the course of the past decade has been the importance of being attentive to the historical and cultural specificity of a society in drafting and ensuring the legitimacy of a constitutional document. At both empirical and normative levels, there is a deep tension between universal and particularistic values in constitutional design. Despite the diversity of challenges to democratic consolidation in different settings, we can nonetheless point to four difficulties that tend to emerge as the process of transition and consolidation unfolds in new democracies. The first challenge is for the new democratic order to transcend some of the habits and practices of the previous nondemocratic regime rather than reproducing them in new guises. Too often, as Tocqueville noted in his analysis of postrevolutionary France, despite the transition to a democratic order, the relation between the state and the population is prone to instability because it remains one between authority and subject (rather than citizen). New democracies must therefore establish a framework of rights that political actors will endorse and that the population will accept as legitimate. The personal role of political leaders here is especially important. If they emphatically support democracy and the constitution, prioritize the establishment of democratic, constitutional processes, and adopt democratic practices in their own conduct, the chances of democracy surviving will be much greater. If, on the other hand, the leaders ignore the constitution, see it as a constraint to be manipulated, make policy decisions behind the scenes, exploit populist pressures, and in other ways disregard the rules of the democratic game established by the constitution, citizens will quickly lose their respect for the constitution. Once lost, belief in the value of democracy will be very hard to restore. A second challenge in the process of democratic consolidation has to do with the frequent demobilization and/or marginalization of civil society following the first election and the rise of political parties. Analyzing the demobilization of the civil society in post-transition Latin America, Philip Oxhorn observes, “[O]nce elections are called, there is a generalized demobilization of society as political activity is channeled through political parties. This helps explain why—in every case—the political influence of popular organizations declines once a democratic regime has been installed” (Oxhorn 1995, 270). In other cases, as also observed by Tocqueville, following an epic and difficult battle for democracy, citizens tend to withdraw into the private sphere, leaving the political space to self-interested elites with limited commitment to democracy (Tocqueville 1988).4 Too often such demobilization leads to a situation where these elites are able to turn the new institutional complex to their

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advantage. It may also lead to the electoralist fallacy problem, where democracy is limited to periodic elections, which legitimize a regime that otherwise does not respect the rules established by the constitution and does not encourage citizen participation or the vigorous defense of rights (Karl 1986). The result is what Diamond calls “illiberal democracy,” an all-too-common phenomenon in transitional regimes. A third challenge is that, to establish their legitimacy, newly democratic regimes must deliver public services—schools, clinics, clean water—to their citizens. A new democracy must provide some tangible results for the well-being of its citizens. It is likely that developing countries, or those recovering from devastating internal war, will lack the resources to meet all the newly expressed needs and expectations of the citizenry. There may be large parts of the country where the effective writ of a newly established regime is inoperable. External pressures and constraints—minimal foreign assistance combined with an insistence on “market-friendly” policies—may further inhibit effective performance. In such circumstances, populist leaders may claim the need for strongman rule and condemn the liberal-democratic constitution for restricting government actions. The last challenge is to transform a divided society into a political community that “can cope with its manifold kinds of disunity in a civilized manner” (Preuss 2001). A significant challenge in recent processes of democratization in Eastern and Central Europe and in Africa has been the need to find, in deeply divided societies, a proper balance between unity and diversity. Under nondemocratic rule, issues such as the definition of the nation and the protection of minorities and promotion of their culture were kept hidden by the forces of repression. Transitions to democracy often lead to violence, because they tend to open or reopen sensitive debates about the boundaries and the essence of the political community. For example, in the case of Spain, between 1960 and Franco’s death in 1975, the violence orchestrated by the national Basque organization ETA (Euskadi ta Askatasuna), caused forty-three deaths, whereas when the Spanish constitution was adopted in 1978 more than sixty-five people were killed in a single year (Linz and Stepan 1996, 99). Even this experience pales in comparison to the experience of the Balkans or Afghanistan. Avoiding the dual problem of an insecure majority that represses or dominates the minority, and an insecure minority that rebels or secedes, is a requirement for consolidation of democracy. This discussion demonstrates that constitutional design is not a single task; it is, rather, a complex combination of tasks, for which the achievement of some may come at the expense of others. These goals may be summarized as follows:

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Institutionalize a democratic regime. This goal features two sometimes competing dimensions: on the one hand, protecting citizens’ rights and the rule of law, and on the other creating responsive, open, transparent, and accountable

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governing institutions that provide citizens with opportunities to mobilize and to participate in politics. The tension between majority rule and minority rights is also critical. Institutionalize an effective regime. Citizens expect government to provide a wide array of collective goods that are unobtainable through private action or economic markets. Governments, therefore, must have the capacity to make and implement decisions, as well as the ability to mobilize the resources necessary to achieve public purposes. Constitutional designers of a liberal polity must empower the government to perform for its constituencies and recognize that observance of citizens’ rights will at times limit these powers Institutionalize a representative and accommodative regime. Ethnic, religious, linguistic, gender, and other forms of diversity are ubiquitous. Both democracy and stability require institutional designs that reflect and represent this diversity, and that provide mechanisms enabling the constituent groups to live together peaceably and achieve their common purposes. This fundamental design issue is between those strategies that aim to integrate and bridge these differences and those strategies, like federalism or consociationalism, that accommodate differences and the empowerment of constituent units through institutionalization. Institutionalize a workable and feasible regime. Institutions should be comprehensible to citizens and political leaders alike and should not work at crosspurposes. The institutional framework should reflect the underlying cultures and traditions of its society.

In addition, constitutional designers do not work in a vacuum. They must come to grips with, and offer some solutions to, conditions that are endemic in many countries. Summarizing the context facing the Constitution of Kenya Review Commission, its chair, Yash Ghai, notes in particular “ethnicised politics,” poverty, corruption and the “breakdown of state institutions.”5 In the long run, strengthening support for democracy rather than undermining it requires the implementation of a democratic order that builds a citizenship regime with rights, rules of access to the state, and definitions of the political community. The instruments that constitutional designers have at their disposal include institutions and laws that reward good behavior and deter bad behavior. To create effective polities designers must allocate power and authority, whereas to promote democracy they must cloak that authority by limiting its reach. To achieve all this is a tall order, in both conceptual terms and political practice. The citizenship regime approach integrates the competing and complementary elements of constitutional design.

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Building Citizenship Regimes: Rights, Access, and Belonging Transitions to democracy, to use Guy Hermet’s fruitful expression, consist essentially of the “birth of citizens.” Citizenship is related to democracy in many ways.6 It is the status that allows members of a given political community to participate to the political life of that same community. Citizenship, however, is more than simply a juridical status. It refers to not only rights, but also a set of institutionalized practices. It is in that perspective that Margaret Somers has argued that citizenship, as a set of institutionally grounded social practices, “cannot be explained by looking for rights granted ‘ready-made’ by the state. Instead the focus must be on the presence of national universal laws and legal institutions, which under certain conditions of place, political culture and participation could be transformed into rights.” Referring to the historical development of citizenship, she adds, “English citizenship was not granted as a right—it was created by the activities of peoples in particular situations, who interacted with institutions/ideals and rules of legal powers” (Somers 1993, 611). In many ways, the overall challenge faced by any new democracy is to develop such a set of institutionalized practices in the relation between the state and citizens and between the different members of the political community that promotes a democratic political culture. To analyze this institutional nature of citizenship, the Canadian political scientist Jane Jenson has developed, first with Susan Phillips, the concept of citizenship regime (Jenson and Phillips 1996).7 The notion of regimes allows us to understand citizenship as more than a one-dimensional reality. It incorporates different dimensions of political life, such as issues of identity and the rules of the political game that affect the practice of citizenship by the members of the political community. It also presents citizenship as a political and historical institution that is always contested and subject to power struggles and structural pressures. Therefore, it is an institution that is not fixed in time. Jenson defines the concept of citizenship regime in the following way: By the concept of citizenship regime we mean the institutional arrangements, rules and understandings that guide and shape concurrent policy decisions and expenditures of states, problem definitions by states and citizens and claim making by citizens. A citizenship regime encodes within it paradigmatic representation of identities, of the “national” as well the model citizen, the second-class citizen and the non-citizen. It also encodes representations of the proper and legitimate social relations among and within these categories, as well as the borders of “public” and “private.” It makes, in other words, a major contribution to the definition of politics that organizes the boundaries of political debate and probes recognition in each jurisdiction (Jenson 2002).

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There are essentially three dimensions to a citizenship regime. They can be presented under the headings of rights, access, and belonging (Jenson and Papillon 2001; Jenson 2002).8 By recognizing particular rights, a citizenship regime identifies two important boundaries in the political community. First, it identifies essentially those who are entitled to full citizenship and those who have the status of second-class or noncitizens. By allowing certain rights (whether political or social), it also sets the division between what are seen as private or public matters, delimiting the terms of political debate. Second, a citizenship regime provides the rules of the game for a polity—the terms of access to the state institutions and participation in public life. Finally, a citizenship regime establishes the boundaries of belonging, in that the process of recognizing citizens also constitutes a process through which national identities are first imagined and formed. It also sets the conditions for the incorporation of minorities, specifically national minorities, in the broader political community. For new democracies, therefore, the challenge is essentially to develop a citizenship regime that promotes democracy and its central values of participation, moderation, toleration, and respect for the rule of law. The need may not be so much the development of a shared identity, but rather the sense of a “shared fate,” which in turn requires rules that will define how the interdependency that ties citizens together will be played out. Although citizenship regimes change according to the establishment of new boundaries (e.g., new legitimate claims, emerging identities, or changing socioeconomic contexts that limit or facilitate the practice of citizenship), constitutions represent essential elements of a contemporary citizenship regime for many reasons. First, because of the international development of a rights culture, or what some have referred to as a “rights revolution” (Ignatieff 2000), rights have increasingly been codified and entrenched within constitutions. Indeed, the celebration of constitutional documents in many countries is essentially a celebration of what is viewed, following the establishment of bills of rights, as “people’s constitution.”9 Second, by establishing the relation of duties between government and the different branches of the state, the constitution explicitly establishes the rules of the game and also the conditions of citizens’ participation in the political community and access to state institutions. Moreover, constitutions influence the nature of citizens’ participation by regulating the institutions of civil society. Constitutions are documents that often structure the aspirations or definitions of the political community, for example in constitutional preambles; they are also instruments of nation building and therefore tend to promote a specific “geography” of citizenship, setting the boundaries of inclusion and exclusion.

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This integrative framework for the study of constitutional design in the process of democratic consolidation has a number of merits: It helps bridge the gap between normative and empirical analysis, allowing each to more fully inform the other; it encourages the use of different disciplinary perspectives; and it unifies the differing viewpoints on rights. This integrative framework also extends the domain of constitutional engineering from formal processes of constitution making and formal institutions to include a range of other social and cultural processes that might bring us to a broader conception of constitutionalism in the life of a society. It lends itself to the study of the preconstitutional discourse and debate; to the processes of constitution making, formal and informal; and to the evolving relationship between state and society in the postconstitutional phase. It views constitutionalism not only as a defining contractual moment in the life of a nation, but also as part of an ongoing conversation, a work continually in progress (Chambers 1998; Tully 2001; Lenard and Turgeon 2003). Finally, Larry Diamond has noted, this perspective stresses the central importance for the study of democratic consolidation of looking beyond the formal structures of democracy, to their depth and their quality. It allows us to move beyond the study of elites and the institutional structure that can minimize self-interested behavior to the study of a central issue that has not been given enough attention in the literature: how to turn authoritarian subjects into democratic citizens? This perspective suggests a number of central elements in the construction of a democratic constitution. The first role of the constitution must be a framework of rights and mechanisms for effective governance. Constitutions include rights for citizens, rules and procedures governing the actions of public officials, and protocols for amending the constitution. From a citizenship perspective, the constitution ought to occupy a central place in the life of the political community—that is, it must be the focus of the dialogue among citizens, between citizens and the government, and between the government and the courts. The constitution can play a central role in public deliberation by establishing liberal rules of standing—permitting a wide range of public actors to challenge the constitutionality of public acts before a judge or a court (Sweet 2001). There has been much debate in political science about whether social and economic rights should be included in constitutional documents (Beetham 1999, 115–35). This debate has been particularly important in the case of new democracies, because some analysts have argued they may impose an unrealizable burden on new democracies with limited resources. It has also been argued that the legitimacy of the constitutional document may be in jeopardy if there is too wide a gap between constitutional ideas and the performance of the government. The case of South Africa nonetheless provides a good example of the ways social rights can be an effective way

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of enhancing the legitimacy and the social effectiveness of the constitution as long as clear limitations of these rights are included in the constitutional document. It must be recognized that many of the rights included within bills of rights will not be meaningful without creating social and institutional conditions, within which the constitution can take root. Moreover, challenges to democracy emerge in a number of arenas, not all of which are easily addressed through the judicial process. Significant efforts must be made, therefore, to develop institutions that can sustain the exercise of these rights, including: independent human rights commissions; organizations to ensure the freedom of the press; an ombudsman to which citizens harmed by governmental misconduct can appeal; and independent national election commissions that are responsible for ensuring that elections are conducted freely and fairly. Legal aid programs are also needed to allow citizens and organizations with limited resources to appeal to the courts for the settlement of disputes. Finally, the constitutional document, if it is to contribute to the promotion of a democratic dialogue, must not be seen as an iron cage. It must be recognized that a document that provides a successful framework for resolving a crisis may not in the long term produce a set of institutions that provides the framework for effective governance in the future. The first constitution should allow for a certain period of constitutional learning, allowing for flexibility in order to permit citizens and political leaders to adapt the constitution to unforeseen developments. It may therefore be necessary to include within the first constitution a revision clause allowing for its revisiting at a later time, and elements of flexibility and adaptation that will prevent the constitution from becoming a straitjacket that cannot respond to evolving values or policy agendas. Next there is the question of how to parcel out authority, both horizontally between legislative and executive institutions in national governments and vertically in terms of the degree of decentralization, devolution, or federalism between national and local, state, and provincial governments. For national institutions, a balance must be found between the principle of checks and balances—to limit abuse of power—and the ability to mobilize governmental authority to address pressing social and economic problems. Equally important is the balance between empowering majorities and ensuring the representation and participation of minorities in national decision making. In terms of devolving powers, the critical question is how to recognize and respond to territorially concentrated minorities by providing them with the capacity to escape majority domination and promote their own interests and identities while at the same time ensuring their continuing participation in the larger community. What should be the balance between “shared rule” at the center and “self-rule” in

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autonomous institutions? How should democratizing states avoid either the subordination of minorities or their choice to seek independence? Here, perhaps, the best guide for constitutional designers is that the choice is neither to “build out” to local governments nor to “build in” to representation at the center. It is to do both: “and/and” rather than “either/or.” It may also be necessary in certain circumstances (particularly when the transition to democracy was the result of a pact) to mark out certain core provisions as unalterable for the stability of the society, especially for a small number of fundamental rights. Yet, it is also critical that the document be flexible enough to “ease the constitutional burden of the will of one generation upon the next, and to make judicial review compatible with democracy” (Arato 1994, 92).

Constitution Making as a (Difficult) Political Process Accords over constitutional packages are often central moments in the life of a new democracy. As James Tully argues in his description of the contractual perspective on constitutionalism, “a constitution is presented as a written document which creates the foundations of government de novo by an act of the sovereign will and reason of the people” (1995, 85). The dates of ratification of the constitutional documents are often celebrated as national holidays, as the moment when the citizens of a nation, in a moment of unity, came together and affirmed collectively their willingness to live together peacefully by respecting the democratic principles established in the constitution. For example, the first of the Federalist Papers states, “It seems to have been reserved to the people of this country to decide . . . whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever forced to depend for their political constitutions on accident and force.” We should not overestimate the extent to which constitutional discussions are in reality detached from or different than day-to-day politics. “Just as war may be the continuation of diplomacy by other means, so constitution-making is a continuation of politics by other means; it involves not a radical break but an extension and often an intensification of normal processes (Banting and Simeon 1985, 17). Despite the stress on the unity of the people and the discourse about notions such as “foundation” or “will of the people,” constitutional design is essentially a political process, combining elements of “high” and “low” politics. High in the sense that constitutions embody (or claim to embody) the very foundations of the political order, in terms of community, citizenship, rights, and the proper ordering of political authority. These are questions of fundamental importance and should not be taken lightly. Expres-

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sions of naked self-interest are unlikely to have much legitimacy in a constitutional discussion. At the same time, however, constitution making embraces low politics because each of the participating groups will seek to entrench rules that they believe will protect or serve their interests in the long run. This distinction is also relevant to the study of constitutional design. Realist, or public choice, analyses focus on the low politics. Such approaches can provide powerful explanations about how political actors behave in constitutional debates, as well as convincing predictions about how constitutional rules, once enacted, shape the behavior of those same actors in the future. They can, however, provide little guidance in evaluating, weighing and judging constitutional alternatives or constitutional outcomes. These high politics are the realm of political theorists. Even the most selfinterested politician must pay lip service to the normative benchmarks explored by political theorists and against which their work must be tested if it is to have domestic or international legitimacy. Understanding constitutional design must embrace both approaches and explore the interplay between them. The realist needs the theorist to explore the normative foundations of a just polity, whereas the theorist needs the realist to suggest some of the techniques that might help institutionalize those foundations. The next section tries to answer some questions raised by the presence of high and low politics in the process of constitutional design. What is at stake in the process of constitutional design? Why is it so difficult to achieve constitutional settlements? What are the appropriate moments for constitution making? How to design the process such that self-interested behavior is minimized or controlled? Finally, how can the process of constitution making promote the construction of a democratic citizenship regime?

The Stakes of Constitutional Design In constitutional discussions, fundamental questions of principles and philosophy are entwined with considerations of competing interests and power and their expression in political institutions. This in turn is likely to give a special import to constitutional conflicts. Constitutional law is especially significant because it is “meta-law,” that is, the law that governs how all other laws will be judged. This is why constitutions are usually harder to change than are ordinary laws. What is first at stake in any process of constitutional design is the transformation of relations among contending groups and the terms of their association. On the one hand, rising groups wish to reorient existing institutions better to serve their interests, while, on the other, declining groups attempt either to constitutionally entrench

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some of their previous privileges or to obtain guarantees that they will not be prosecuted for actions that were committed in the previous system (Banting and Simeon 1985). It is essential that the new institutional setting provide the old elites, who can often derail the road to democracy, with incentives to obey the democratic rule. As Guiseppe DiPalma argues, genuine democrats need not precede democracy (DiPalma 1990). For rising groups, the importance is to move beyond their desire to settle scores with their past enemies so they may move on and construct a new ethos and a public discourse that presents the transition to democracy as a national or common achievement. Issues that may lead to a high level of confrontation include the establishment of a pact protecting the old elite from prosecution, the recognition of minority rights, and the structure of the state. The second issue at stake has to do with the mechanics of the new democratic state. Although this question is germane to the relation between competing groups, it often takes a more technical character. For example, the goal of discussions adopting a specific electoral system, examining the relationship between the executive and the legislature, and establishing the role of the judiciary should be to maximize the performance, both political and economic, of the new democratic state. Although international experts may play a role in advising emerging democracies, there is no guarantee that a combination of institutions that has been successful in a given country will produce the same outcome in a different setting. Indeed, the field of constitutional design is littered with failed projects and with unpredicted or unanticipated consequences. Constitutional engineers—whether political leaders or advisers—are basically making predictions of a political science nature: “if we establish these rules, then we will so structure the incentives and constraints that desirably democratic behavior will result.” The problem is that there are so many intervening variables between prediction and consequence that designers can seldom be confident of their work, even if the theory looks unassailable. To take just one example, in the Canadian debate about whether Quebec should have constitutional recognition as a “distinct society” within Canada, the contending views boiled down to two diametrically opposed empirical predictions. first, such recognition would reconcile Quebecers to membership in the Canadian federation, thus guaranteeing the future of the country. Second, such recognition would start the country down a slippery slope, the inevitable endpoint being secession. The sobering point for those confident of predicting the impact of constitutional design on results is that, after forty years of debate on this question, Canadians still do not know which prediction is correct. An almost identical debate accompanied devolution of power to a Scottish parliament—would it lead to a stronger British union or pave the way for its dissolution?

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Finally, recent developments in the recognition of pluralism and the importance of civil society have made the process of constitution making more difficult and complex. Simone Chambers argues that a new view of constitutionalism has emerged in the contemporary period that makes any new accord on constitutional principles more difficult, especially in deeply divided societies. Taking the example of South Africa, she argues that, if the modern constitution’s main objective (as in the case of the U.S. Constitution) was to “set out moral and institutional guidelines to organize reality into a civilized whole,” new constitutions are “to be mirrors of the multifaceted identities that populate a political order” (Chambers 2004, 159). Making sure that the constitutional text reflects the pluralism of a given society also entails inviting citizens to participate in the process of constitution making and constitutional change so that the constitution reflects the evolving reality of a given society. These new circumstances have made the process of constitution making a complicated task. Constitutional designers must now pay close attention to the ways in which citizens develop a sense of “ownership” in both the process and the result of constitution making; the contemporary norm is that both of these aspects must meet the test of democracy.

Constitutional Moments, Constitution Making, and Self-interest With these considerations in mind, we turn to the processes of constitutional design. It should be recognized at the outset that the choice of timing, arenas, participants, decision rules, and the like are themselves constitutional. Some fundamental issues must be addressed a priori. The rules and procedures for writing the constitution can be highly contentious because they will prejudge the outcome in crucial ways. Considering the political nature of constitution making, the stakes in such a process and the transformation of citizens’ views of the role of constitutions, constitutional discussions, and forums must be carefully planned and crafted to (1) limit self-interest and (2) maximize the legitimacy of the constitution among citizens. These two main objectives may, at first, appear to be opposed. After all, many scholars have long argued, following Rawls, that the constitutional design process should take place behind a veil of ignorance in order to limit self-interest. Moreover, constitutional discussions are often conducted in established political institutions or within the framework of an old constitutional order.10 In this context, it is next to impossible to reproduce Rawls’s original position to limit self-interest. It may also be argued that limiting self-interest and political gaming does not necessarily lead to a better democratic result. As Richard Bellamy and Dario Castiglione argue in their critique of Rawls, the “proposed insulation of the political sphere from

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people’s prime concerns is not only impossible but also undesirable. It prevents politics from performing its crucial function of reconciling differences through negotiation and debate, whilst risking excluding important minority issues from the political agenda and thereby de-legitimizing the public sphere” (Bellamy and Castiglione 1997, 604). In that perspective, the main objective of the constitution-making process should not be to limit “politics” or “self-interest,” but to develop an institutional framework that can promote dialogue and compromise between these different interests.

Timing: When Is the Right Constitutional Moment? There is a basic tension between writing a constitution that is itself part of the pact ending a conflict and writing a constitution as a blueprint for governance in the long run. A pacted constitution will often reflect the compromises necessary to end a conflict; it may be seen more as a resolution of past divisions, looking backward rather than forward. Born of crisis, there may be insufficient time for the careful reflection necessary to develop an enduring constitution. If the constitution is of the “pact” variety, it is going to be negotiated among the previously warring parties. The legitimate institutions to develop a final constitution do not yet exist. In South Africa, for example, constitutional negotiations had to occur before a democratic election could be held, but only a democratic institution validated by election would have the legitimacy to agree on a “final” constitution. The solution was agreement on an interim constitution that would establish a transitional regime. Then, after election, the newly elected Constitutional Assembly would draft the final constitution. As it turned out, the two constitutions (in 1993 and 1996) were very similar. Partly because in order to keep the white minority onside, the interim constitution was accompanied by a set of thirty-four “principles” that were to govern writing of the final document. The new constitutional court would have to “certify” that the final document was consistent with these principles before it could take effect. An alternative solution to this problem is not to attempt to solve all major constitutional issues in an initial document. Some questions can be left for the future. The problem here, as the South African experience also shows, is that those about to lose power will likely attempt to ensure that every “i” is dotted and “t” is crossed, to protect themselves from the perceived threat of a newly empowered majority.

Arenas: What Are the Appropriate Sites for Crafting a Constitution? Emerging from crisis, it may be necessary to create ad hoc institutions that can take the first steps toward framing a new constitutional settlement. As with

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Afghanistan’s constitutional Loya Jirga, these may be traditional bodies that are revived for the purpose of crafting a constitution. Following democratic elections, it is more common for newly elected legislatures to be cast as a constitutional assembly. Jon Elster (2001), however, makes a persuasive case for installing a onetime elected assembly that, before its dissolution, will be responsible for writing the new constitution. This may help ensure that the participants are not preoccupied with advancing their own political self-interest in the design process.

Participants The process of constitution making will often forge citizens’ opinions about the new democratic order. It is especially important, therefore, to find mechanisms for consulting with the citizenry about their constitutional aspirations. The South African example demonstrates that it is equally important, if not more so, to consult with citizens about the development of the constitutional document rather than later providing them the opportunity to rubber stamp a manifesto that is the fruit of the deliberations of a small elite. For the constitution to be considered a legitimate document, the citizens must view the constitution as having emerged from their involvement in the negotiations about the reformulation of their society. As Robert Elgie and Jan Zielonka (2001) argue in their discussion of citizens’ involvement in processes of constitution making, a participatory exercise can promote an active, democratic citizenship regime for a number of reasons. First, it constitutes a significant moment of civic education, increasing the knowledge of the population about their rights and responsibilities. Second, it helps develop a unified sense of common purpose despite the diversity of interests. Third, it expands the cast of sanctioned political actors beyond the existing political elite and promotes a more active perspective on citizenship. Fully participatory processes, however, are not without difficulties. Making a constitution, especially in divided societies, warrants careful statecraft; it is likely both to involve delicate compromises and trade-offs and require reviews of comparative theory and experience. These objectives are not necessarily best achieved in public negotiations. A populist majority in a constitutional assembly may discard minority concerns, or leaders with an eye to their support in different communities may use the occasion to exacerbate differences. In this sense, constitution making can be a two-dimensional game: on the one hand, participants seek agreement among themselves, and, on the other, they seek support in their own communities. Hence an effective system must include both elements: arenas where the process will be open, transparent, and consultative, and arenas where compromises can be hammered out behind closed doors.

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Decision Rules Who must agree to a new or amended constitution? A simple majority seems inadequate for such a foundational law. The need for consensus suggests that the norm should, indeed, approach unanimity, but this may place too much power in the hands of obstructive minorities. To achieve wide acceptance and reach a consensus, some form of super-majority is required. Where the bar should be set, however, is debatable, as evidenced by the Canadian debate about the rules that should govern any secession. In deeply divided societies, moreover, a strong case can be made for either mutual vetoes or multiple majorities that require each of the major constituent groups to signal their acceptance.

Implementation Far too often, the democratic values set out in bright, shiny, new constitutions are indeed worth little more than the paper they are written on. Without a foundation in “constitutionalism,” these blueprints for society mean little. Moreover, those who implement and abide by the new constitutions may be insufficiently skilled and experienced in the arts and crafts of democratic politics. This suggests that attention must be given to embedding both the principles and the detailed procedures of constitutional politics at every stage in the constitution-making process. Citizens must not only develop a sense of ownership in a new constitution, but also come to understand its meaning. In the South African case, extraordinary measures were taken to keep citizens informed and to engage them in the process. Tabloid newspapers in eleven languages were regularly published. Pamphlets in comic book format explained what a difference a bill of rights could make in their lives. Meetings were held in remote villages throughout the country to discuss the constitution. The result, even in a country as poor as South Africa, was a remarkable level of knowledge about the constitution and commitment to the values it represented. There must also be a sense among the elites that the adopted constitutional regime secures at least some of their political benefits and victories, and opens, not closes, spaces for debate, influence, and representation. Thus, the process of drafting a new constitution should be valued not only for the words on the page, but also for its intrinsic ability to produce compromise, enhance the legitimacy of a nation’s institutions, and focus a community’s attention on a debate about the public good. One of the benefits of a lengthy constitution-making

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process is that it may favor—though by no means guarantee—a broad social debate and exchange about values and procedures that will be included in the constitution.

Constitutional Design and the Promotion of a Democratic Citizenship Regime “To survive,” argues Barry Weingast, “a constitution must have philosophical or logical appeal; citizens must be willing to defend it” (Weingast 1997, 251). The participation of citizens in the framing of a constitution will certainly augment their attachment to the constitutional document and their willingness to defend it. How can the constitutional text, nonetheless, promote a feeling of belonging to a common political community, without which the motivation to act in concert and to make personal sacrifices for the common good would be absent (Miller 1995; Hadenius 2001)? How can this sense of belonging be developed in multinational and multicultural societies, and how can the constitution be promoted as an instrument of democratic deliberation between citizens? Finally, how should the constitutional text encourage the existence of a loyal opposition? First, the process of transition to democracy ought to be viewed as a national achievement. This means that establishing a new democratic political community takes priority over settling scores with the past. As Ian Shapiro (2001) points out, “One of the most difficult balances to strike is between remedying the injustices of the past and ‘moving on.’” In general, it is unwise to promote retrospective conceptions of justice more than is necessary, because it focuses attention both on problems that often cannot be solved and on animosities that would be best left alone. On the other hand, however, if the new order that is responsible for justice and order empowers holdovers from a rejected past, they will not be perceived as legitimate. Second, the constitutional document must stress the inclusion of all citizens. As obvious as this may seem, recent experiences in Eastern and Central Europe demonstrate that many countries have defined their political community in ways that exclude certain minorities and deny them full rights and citizenship. As Nenad Dimitrejevic (2001) argues, such clauses tend to deprive ethnic minorities “of the focal point of loyalty within the state in which they remain citizens: if the state belong to ‘them’, it cannot possibly belong to ‘us.’” Emphasizing inclusion means, among other things, that the fundamental principle of equal citizenship should pervade the entire constitutional document and that the bill of rights must reject all forms of discrimination against any minority groups defined by religious, cultural, linguistic, or other such attributes. The majority must also avoid any temptation to define the nation in ethnic terms in the constitutional text.11

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Ensuring the loyalty of minority groups may also, in certain cases, require the recognition of positive support, ranging from the right to education in the language of the minority, for example, to special political arrangements that ensure representation of minorities in major political institutions. The presence of a strong constitutional court exists may also mean a guaranteed representation of judges from a minority group. Such measures may be an important step in recognizing the distinct ways that minorities belong to the overall political community—as bearer of multiple identities and, therefore, ensuring their loyalty to the constitution. Where such arrangements are made, however, equal if not greater attention must be paid to building positive linkages and bridges among the different groups. The electoral system and other institutions should be designed so that they encourage political leaders to make appeals across group lines and build multigroup coalitions. In this way, distinct political communities can share a common, democratic framework. Third, contributing to the development of a loyal opposition is essential in new democracies. The opposition is often a government in waiting and is therefore integral to democracies, which should allow for and encourage alternations in power. The opposition can often give voice through legitimate political processes to minority groups that might otherwise be tempted into extraparliamentary political activities. The constitution should contain an affirmation of the necessity and legitimacy of opposition in the democratic order. Moreover, the opposition should play a role both in the formulation of policy (through a strong and effective legislature) and in the development of the democratic institutional framework (through appointments to the courts and other independent agencies, for example). Fourth, much effort must be put in the promotion of the constitutional document. Schools, voluntary organizations, and even churches should be encouraged to contribute to the promotion of the constitution and its underlying values. Again, in the case of South Africa, this was a crucial element that was designed to instill both a sense of ownership in the constitution, and a commitment to democracy itself. Fifth, it must be recognized that constitutional design is not a once and for all end result. Constitutions are “living trees,” and constitutional practice must be free to develop in an ongoing conversation. Similarly, there are no permanent solutions to the tensions between majority rule and minority rights; between unity and decentralization; between shared and diverse values. The goal of a constitution must be to provide the conditions for a peaceful dialogue among these values. If, as a result, constitutions are often “messy,” embodying redundancies, contradictions, uncertainties, and unfinished business, this may be no bad thing. Finally, it must be recognized that constitutional design cannot be separated from the circumstances that gave rise to the constitution—the processes by which it came

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about or the social, economic, cultural, and indeed geopolitical circumstances of the society in which it is embedded. None of this is easy. As Yash Ghai (2001) suggests, In many societies, which have not experienced the modern concept of constitution as the instrument of governance, loyalty to the constitution competes with other more powerful loyalties—to clan or tribe, religious orders, traditional notions of authority, and self-interest. The access of the apparatus of the state is still central to resources and accumulation, and, so dominant is the motive for accumulation, that the discipline of the constitution cannot easily be imposed on rulers. Corruption is the life-blood of politics and bureaucracy in numerous states, and in its presence good governance and accountability are almost impossible. Thus while a constitution is not unimportant, it cannot be sustained without great efforts in educating the people in its fundamentals and procedures, strong independent authorities for its enforcement, etc.

On the other hand, Víctor Pérez-Díaz (2001) notes that liberal democracies may live with faulty constitutional clauses provided there is an ever-renewed understanding about the basics of the constitution and a shared willingness to apply moderation and self-restraint when the time comes to consider or ignore these faulty clauses, if the alternative—changing the constitution—may be too difficult and too costly. All this suggests that constitutional engineers should approach their task with humility. There are few, if any, established empirical “laws” of constitutional design. At best we have suggestions, correlations, and associations, whose relevance, feasibility, and effects will vary across time, place, and circumstance. Inevitably, there will be unintended consequences. The workability of any new or revised constitution will depend as much or more on the economic, social, and cultural setting in which it is embedded as on the most carefully calibrated words in the text. No constitution can be separated from its underpinning political values and norms. As Donald Horowitz puts in a sternly worded critique of constitutional hubris, “The process of constitutional choice is fraught with the prospect of bias and distortion. . . . The pitfalls . . . are inappropriate comparison and misinterpreted history” (2002, 31). Such observations apply especially to the role of external advisers in constitution making in transitional democracies. Too often they have little understanding of the history and context of the country. Too often they announce, “Have I got a model for you!” and whip out of their pockets this or that favorite nostrum. Too often they seem like constitutional colonialists, insensitive to local values and traditions. There is much to be said for Andrew Reynolds’s (2002) medical analogy: the first rule for constitutional advisers should be to “do no harm.”

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Do Constitutions Matter? An Example from South Africa Despite such important cautionary notes, we believe that good constitutional design does matter, and we conclude with the following example. In July 2002, the Constitutional Court of South Africa delivered a landmark judgment concerning the applicability of the social rights enshrined in the 1996 Constitution of South Africa.12 The court ordered the minister of health to provide nevirapine, a drug that hinders the mother-to-child transmissions of HIV, at all state birthing institutions. Before the court decision, nevirapine was made available by the government only at a number of pilot sites, two per province. The government argued that it needed to limit the number of sites where the drug was available in order to carefully collect data and monitor the use of the drug.13 The result was that doctors who did not work in one of the designed sites were unable to prescribe the drug for their patients, though it had been offered to the government for free by the manufacturers of nevirapine. Setting a precedent, two provinces, Gauteng and the Western Cape, nonetheless decided to declare their whole area as pilot project zones. This resulted in highly unequal conditions of access to the drug across the provinces. The Constitutional Court found the state policy to be unconstitutional, a breach of sections 27 (1) and (2) of the constitution, which state that everyone “has the right to have access to health care services, including reproductive health care” and that “the state must take reasonable legislative and other measures, within its available resources, to the achieve the progressive realization of these rights.” The court argued that the nevirapine treatment was not an excessive burden on the resources of the state. It also rejected the argument that it was interfering with the policy role of the executive by contending that “if it finds that policy is inconsistent with the Constitution it is obliged in terms of section 172 (1) (a) to make a declaration to that effect” and that “Section 38 of the Constitution contemplates that where it is established that a right in the bill of rights has been infringed a court will grant ‘appropriate relief.’” The court decision was the result of an important mobilization of AIDS activists and a broad coalition of civil society organizations. The leading South Africa trade union, Congress of South African Trade Unions, presented the court decision as “an historic breakthrough for South Africa and all its people, especially the poor.” It “set a precedent which should make it impossible for any government to ignore the needs of the poor.” What was going on here? Several elements of the new South African constitutional design came together to make the successful mobilization of citizens and civil society organizations possible:

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It guarantees freedom of speech and association, therefore permitting the full mobilization and expression of opposition to government policy by nongovernmental organizations and the media. It includes the social right to health care, though with some limits as to the conditions under which it can apply. It includes strong, independent courts. It includes a strong element of decentralization facilitating both the mobilization of civil society and policy experimentation at the subnational level.

This example of a specific mobilization, in an emerging democracy, suggests a number of ways in which constitutional design can contribute to the emergence of an active, democratic, citizenship regime. So to the question “Does constitutional design matter?” those fighting the battle against HIV/AIDS in South Africa might well answer “Yes.” But it would be a muted yes: the government’s response has continued to be slow and reluctant.

 This text draws extensively from the stimulating work and comments of the participants at the constitutional design panel at the “Conference on Democratic Transition and Consolidation” in Madrid. We wish to acknowledge the support of Bruce Ackerman, Valerie Bunce, Gabriel Cisneros, Nenad Dimitrijevic, Jon Elster, Yash Ghai, Christiana Murray, Valentin Paniagua, Victor Perez-Diaz, Ulrich K. Preuss, Maria Teresa Sadek, Ian Shapiro and Alec Stone Sweet. We would also like to thank Martin Papillon for stimulating conversations over the last few years on the question of citizenship regime. 1. For an overview of some of the main debates in the field of constitutional and institutional design in relation to transition to democracy, see the edited collections of Diamond and Plattner (1996, 2001) and Reynolds (2002). 2. For example, in his famous essay on “Constitutional Choices for New Democracies,” Arend Lijphart (1991) stresses as fundamental choices that confront architects of new democratic constitutions the decision to adopt plurality elections or proportional representation, and parliamentary or presidential forms of government. 3. By a modern democratic constitution, we essentially mean a framework for stable and democratic governance in a setting where there is a minimum degree of correspondence between the “law in books”—the constitutional text—and the “law in action”—democratic processes, governance, conflict management—(Shapiro 2001; Dimitrijevic 2001). 4. Guy Hermet argues as well that “en réalité, la population aspire à la remise en cause radicale du passé tout en souhaitant aussi la préservation de l’ordre et de ses certitudes quotidiennes” (Hermet 1993, 199). 5. Ghai (2002).

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6. The concept of citizenship regime was first developed by Jenson and Phillips (1996), and then developed in different texts by Jenson (1997, 2002). The objective of Jenson, drawing on Esping-Anderson’s concept of welfare regime, was to make sense of the transformation of citizenship practices in Western societies in a way that would go beyond the usual legalistic perspective on citizenship. Our perspective draws on Jenson terminology since we believe the main challenge in any new democracy is to ensure that the three components of a citizenship regime are developed according to a democratic spirit. 7. There is a growing literature on citizenship regime emerging from Canada. Besides the original contribution of Jenson and Phillips, see also Jenson (1997), Jenson and Papillon (2001) and Papillon and Turgeon (2003). The concept has been so far used mainly in the study of the development of social policies and nationalism in multinational societies. 8. We want to stress that these are analytical categories, rather than normative ones. Rights, Access, and Belonging are not contemporary versions of Liberté, Égalité, and Fraternité. Following T. H. Marshall, the main argument here is that any democracy promotes a specific citizenship regime that represents the interaction of different and historically bounded definitions of rights, access, and belonging. 9. This as opposed to the “politician constitution”, which is essentially the sections of the constitutional documents dealing with the separation of power and the jurisdiction of the different order of governments (mainly in federal settings). On that issue, see Cairns (1992). 10. On the complex topic of constitutional continuity, see Arato (1994). 11. For example, the preamble of the Macedonian constitution states: “Taking as starting points the historical, cultural, spiritual and statehood heritage of the Macedonian people and their struggle over centuries for national and social freedom as well as the creation of their own state. . . Macedonia is established as a national state of the Macedonian people, in which full equality as citizens and permanent co-existence with the Macedonian people is provided . . .” 12. Treatment Action Campaign v. Minister of Health 2002 (4) BCLR 356 (T) 13. The World Health Organization had in January 2001 recommended the administration of nevirapine to mother and infant at the times of birth in order to combat HIV.

 Arato, Andrew. 1994. “Constitution and Continuity in the East European Transitions. Part 1. Continuity and its Crisis.” Constellations 1, 1: 92–112. Banting, Keith, and Richard Simeon. 1985. “Introduction: The Politics of Constitutional Change.” In Redesigning the State: The Politics of Constitutional Change in Industrial Nations, ed. Keith Banting and Richard Simeon. Toronto: University of Toronto Press. Beetham, David. 1999. Democracy and Human Rights. Cambridge: Cambridge University Press. Bellamy, Richard, and Dario Castiglione. 1997. “Constitutionalism and Democracy.” British Journal of Political Science 27, 4: 595–618. Cairns, Alan C. 1992. Charter versus Federalism: The Dilemmas of Constitutional Reform. Montreal: McGill-Queen’s University Press.

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Chambers, Simone. 2004. “Democracy, Popular Sovereignty and Constitutional Legitimacy.” Constellations 11, 2: 153–73. Chambers, Simone. 1998. “Contract or Conversation? Theoretical Lessons from the Canadian Constitutional Crisis.” Politics and Society 26:143–72. Diamond, Larry, and Marc F. Plattner, eds. 1996. The Global Resurgence of Democracy. Baltimore: Johns Hopkins University Press. ———, eds. 2001. The Global Divergence of Democracies. Baltimore: Johns Hopkins University Press. Di Palma, Guiseppe. 1990. To Craft Democracies: An Essay on Democratic Transitions. Berkeley: University of California Press. Dimitrijevic, Nenad. 2001. “Constitutional Design.” Prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Elgie, Robert, and Jan Zielonka. 2001. “Constitutions and Constitution-Building: A Comparative Perspective.” In Democratic Consolidation in Eastern Europe. Vol. 1: Institutional Engineering, ed. Jan Zielonka. Oxford: Oxford University Press. Elster, Jan. 2001. “Ideal and Reality in Constitution-Making.” Prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Ghai, Yash. 2001. “The Role of Constitutions in the Transition to and Consolidation of Democracies.” Prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. ———. 2002. “A Guide to the Kenya Constitution.” January 1, 2002. Available online at www.kenyaconstitution.org/docs/03ad002.htm. Hadenius, Axel. 2001. Institutions and Democratic Citizenship. Oxford: Oxford University Press. Hermet, Guy. 1993. Le désenchantement de la liberté: la sortie des dictatures dans les années 90. Paris: Fayrad. Horowitz, Donald. 2002. “Constitutional Design: Proposals versus Process.” In The Architecture of Democracy: Constitutional Design, Conflict Management, and Democracy, ed. Andrew Richards. Oxford: Oxford University Press. Ignatieff, Michael. 2000. The Rights Revolution. Toronto: Anansi Press. Jenson, Jane. 1997. “Fated to Live in Interesting Times: Canada’s Changing Citizenship Regimes.” Canadian Journal of Political Science 30, 4: 627–44. ———. 2002. “Social Policy and Citizenship Regimes: Redesigning to a Common Theme?” Prepared for the workshop Transforming the Democratic Balance among State and Society: Comparative Perspectives on France and the Developed Democracies, Center for European Studies, Harvard University, Cambridge, Mass., May 17–18. Jenson, Jane, and Susan Phillips. 1996. “Regime Shift: New Citizenship Practices in Canada.” International Journal of Canadian Studies 14:111–30. Jenson, Jane, and Martin Papillon. 2001. The Changing Boundaries of Citizenship: A Review and an Agenda. Ottawa: Canadian Policy Research Network. Karl, Terry Lynn. 1986. “Imposing Consent: Electoralism versus Democratization in El Sal-

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vador.” In Elections in Latin America, ed. Paul Drake and Eduardo Silva. San Diego: University of California. Lenard, Patti, and Luc Turgeon. 2003. “Contract or Conversation? Conceptualizing Constitutional Making and Constitutional Identity at the Transnational Level”. In Transnational Democracy in Comparative and Critical Perspective, ed. Bruce Morrison. Aldershot: Ashgate. Lijphart, Arend. 1991. “Constitutional Choices for New Democracies.”Journal of Democracy 2, 1: 72–84. Linz, Juan, and Alfred Stepan. 1996. Problems of Democratic Transition and Consolidation: Southern Europe, South America and Post-Communist Europe. Baltimore: John Hopkins University Press. Miller, David. 1995. On Nationality. Oxford: Oxford University Press. Oxhorn, Philip. 1995. “From Controlled Inclusion to Reactionary Exclusion: The Struggle for Civil Society in Latin America.” In Civil Society: Theory, History Comparison, ed. John Hall. Cambridge: Polity Press. Papillon, Martin, and Luc Turgeon. 2003. “Nationalism’s Third Way: Comparing the Emergence of Citizenship Regimes in Quebec and Scotland.” In The Conditions of Diversity in Multinational Democracies, ed. Alain-G. Gagnon, Montserrat Guiberneau, and François Rocher. Montreal: Institute for Research in Public Policy. Pérez-Díaz, Víctor. 2001. “The Constitutional Design of Democratic Politics: Liberal Interpretation of What We May Have Learned from Recent Experience.” Prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Preuss, Ulrich. 2001. “Constitutional Design.” Prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Reynolds, Andrew, ed. 2002. Architecture of Democracy: Constitutional Design, Conflict Management and Democracy. Oxford: Oxford University Press. Shapiro, Ian. 2001. “”Constitutional Design.” Prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Somers, Margaret. 1993. “Citizenship and the Place of the Public Sphere: Law, Community and the Political Culture in the Transition to Democracy.” American Sociological Review 58, 5:587–620. Sweet, Alec Stone. 2001. “Constitutional Design.” Prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Tocqueville, Alexis de. 1988. L’Ancien régime et la révolution. Paris: Flammarion. Tully, James. 1995. Strange Multiplicity: Constitutionalism in an Age of Diversity. Cambridge: Cambridge University Press. Tully, James. 2001. “Introduction.” In Multinational Democracies, ed. Alain-G. Gagnon and James Tully. Cambridge: Cambridge University Press. Weingast, Barry. 1997. “The Political Foundations of Democracy and the Rule of Law.” American Political Science Review 91:245–63. Wiener, Antje. 1998. European Citizenship Practice. Boulder, Colo.: Westview Press.

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Executive-Legislative Relations and Democratic Consolidation A Review and Some Questions       

Legislatures help shape political decisions. As horizontal and adversarial institutions, however, they lack the coordinative or command capacity of associative or hierarchical arrangements. Thus, legislatures either abdicate to the executive a more active role, or delegate their powers to party leaders. Even the institutionalization of legislative committees as a means to address efficiency and bargaining problems internal to legislative chambers presupposes a substantial transfer of power from the chamber floor to legislative committees or other hierarchical organs in the legislature. Moreover, empowerment of internal organs in the legislature certainly implies a changing relationship with other governmental branches. In sum, legislatures have demonstrated little capacity to solve governability problems by themselves. Either by internal delegation or by constitutional division of powers, legislatures share the tasks of governance with different institutions. A narrow focus on the internal organization of legislatures thus offers an insufficient explanation for their roles in the political system. A more complete understanding of the legislature is complemented instead by the consideration of the broader institutional framework in which it exists. For instance, committee powers tend to be more modest in parliamentary systems (Strøm 2000). Political incentives influencing the behavior of legislators may change depending on the relationship between the executive and legislative branches. The relationship between the two branches and their pattern of separation, by contrast, cannot be understood with-

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out reference to the political interests at stake. In fact, a good way to measure the effectiveness of institutions is to observe how they serve conflicting political interests during times of struggle and how they interact with the preferences of political actors. This chapter discusses the role of executive-legislative relations in democratic consolidation. It reviews the discussion that took place during the Madrid Conference on Democratic Transition and Consolidation by focusing on the debate about presidential and parliamentary systems. The strengths and weaknesses of these different democratic institutional arrangements, as well as their hybrids, were addressed by the contributors to the working group at the Constitutional Powers: Legislative Power and its Relation to Executive Power conference (Ames 2001; Cintra 2001; De la Quadra-Salcedo 2001; Du Toit 2001; Hartlyn 2001; Moon 2001; Ortiz de Zevallos and Segura-Ubiergo 2001; Özbudun 2001; Von Beyme 2001; Weldon 2001). This chapter surveys the recent research on different government systems chosen by contemporary democracies and touches on the main issues involved in the relations between branches of government, the role of legislatures in democratic consolidation, and the desirable balance between values and the conflicting requisites in democratic governance. As for policy recommendations, to improve democratic consolidation political institutions must work to solve conflicts flexibly, increase government accountability, expand the quality of the collective goods provided by the political system, and bolster the overall legitimacy of the public perception of representative bodies. As we shall demonstrate, these objectives cannot always be accomplished together. Further, in trying to strengthen the role of legislatures, we must take into account the following caveats: (1) legislative institutions, such as committees, perform differently depending on the constitutional system and (2) an empowered legislature does not necessarily increase democratic accountability or system efficiency. This chapter has four parts. First, we focus on the traditional theories of separation of powers and the predictions concerning executive-legislative relationships. Institutions, which are created in a political environment, are the product of political conflicts and compromises. Therefore, any normative prescription must take into account the consequences of different institutional arrangements for political actors. Second, we discuss the criteria to evaluate empirically executive and legislative arrangements. The third part of this chapter addresses the micro details of executive and legislative arrangements, specifically the role of committees and their impact on the political performance of the regimes. The conclusions of our survey are presented in the fourth and final section.

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Separation of Powers Political thinking is linked indissolubly to the discussion on the quality of institutions under which we live. For some, institutions are the product of broad social and historical developments (Putnam 1993). For others, especially economists, institutions are the product of rational calculations (Acemoglu 2003); the underlying assumption of this line of thought is that rational individuals will always choose the best institutions available, regardless of power distributions and political conflict. Following this same theoretical line, institutions can be viewed as both a product of a contractual agreement and a decentralized evolutionary process. In both cases, standard economic theory views institutions as a means to reduce transaction costs and improve overall efficiency. In this chapter, we take a third view: self-interested individuals create institutions to maximize their own payoffs. In many cases, however, they do not choose the best set of rules available, not because of a “rationality failure” but because of the distributive consequences of the allocation of political power (Acemoglu 2003). Institutions are endogenous, not necessarily because of cultural or other deterministic reasons but because social configurations affect the distribution of power within society and determine institutional choices. Institutions are chosen not according to their intrinsic and superior qualities, but in accordance with their impact on political actors across society. Thus, although majoritarian setups may be more efficient, minorities who feel threatened by the majority may prefer political arrangements that are more protective despite being less efficient. If, on the other hand, the majority has pledged to respect minority rights—either by creating institutions or by enacting political promises—the citizenry will choose majoritarian institutions (Moe 1990). We accept that the choice of institutions is constrained by the historical process. The future options for political actors may be significantly influenced by particular historical decisions. Moreover, these past decisions may reinforce mechanisms that make future reversions impossible (Pierson 2000). Because of either distributive conflicts or path-dependent structures, the choice of institutions occurs in a constrained world in which the best alternative may not be possible. In other words, if different political actors pick different institutions in different times, it is reasonable to assume that institutions have specific consequences for the polity with different results for its stability and quality. Democratic regimes have been commonly associated with constitutional control over political power. The rise of representative and majoritarian institutions was associated with a concern for reducing the arbitrary nature of existing political insti-

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tutions. Particularly important for modern democratic constitutionalism was the doctrine of separation of powers. Although established long before the rise of modern democracies, its basic theoretical underpinning (to prevent the concentration of legislative, executive, and judicial powers in one hand and prioritize the rules of the constitution over those of the executive) has been greatly influential in the writing of modern constitutions. The concept of separation of powers first gained political and intellectual prominence in England during the seventeenth century and the political struggles between the king and the parliament. In its original formulation, the theory meant that the government would be separated into three functions: the legislative, the executive, and the judicial. In its original manifestation, the legislative branch had the supremacy over the other two. Because the legislative branch was the democratic element of the government representing the people as a whole, it held the upper hand in public decisions. The theory of separation of powers, in this Lockean interpretation, enthroned the sovereignty of parliament (Goldsworthy 2001). Moreover, it became further entrenched after the Glorious Revolution in 1688, when parliament denounced the throne of King James II, offered it to the king’s son-in-law, William of Orange, and placed constitutionally significant limitations on the monarchy. This historic event deepened and accelerated the evolution of the British parliamentary system. A result of a long and linear evolution in which the legislative supremacy passed from the king to the parliamentary cabinet, the English system proved remarkably durable and adaptable to different political circumstances (from an elitist regime to the incorporation of the masses into the polity). Parliamentary systems, however, did not flourish elsewhere with the same vigor and did not follow the same linear evolutionary path. They worked well under the framework of constitutional monarchies in the Nordic countries as well as in Belgium and Luxembourg but failed in the interwar years under the framework of republican regimes in Austria, France, Germany, and Hungary. In reality, parliamentary systems recovered the favor of political engineers after World War II, as was the case in Germany and, more recently, in Spain. They were likewise adopted in Africa by former British colonies but were quickly toppled by dictators, whereas its Westminster form proved to be stable in the former British colonies in the Caribbean, but the doctrine of legislative supremacy was not completely accurate. In fact, the system consolidated not only legislative supremacy, but also political party rule through the cabinet. A second version of the theory of separation of powers did not endorse legislative preeminence. Instead, it defended absolute separation of the three branches as a way to provide the conditions for effective political control among different state organs.

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The intent of this “checks and balances” (Manin 1994) was to empower each branch to prevent the encroachment of one government entity over the other. The presidential system of government is widely accepted as having originated from the U.S. Constitution of 1787. Again, its ability to gain a foothold in other countries was rather limited. In Latin America and Africa, where it was most popular, presidential systems seemed prone to create unstable and Caesarist regimes (Linz 1994). In fact, separation of powers with checks and balances proved to be an insufficient condition for political control, especially over the executive. The founding fathers were extremely concerned with the rule of factions and the harmful consequences of unchecked legislatures, as exhibited in Madison’s Federalist “No. 10.” They were not as concerned with the necessity of checking the executive power in its own sphere. In the case of presidential regimes, even in the United States, legislatures proved to be unable or unwilling to control presidential encroachments and prevent power aggrandizement. finally, neither the presidential nor the parliamentary model offered a clear delineation of what role party politics would play. More recently, the discussion of comparative constitutional arrangements has included a third constitutional type: the semipresidentialist regime. Its most conspicuous example is the French regime inaugurated by Charles de Gaulle in 1958. The system, in its French form, has been described as an alternating presidential and parliamentary system. The powers of the presidency are not clearly defined, but the office gains prevalence when there is a parliamentary majority. When the president loses the majority, the system works as an ordinary parliamentary system, with the executive falling under the authority of the prime minister. Shugart and Carey (1992) pose an additional, fourth category: the presidentialparliamentary regime. In this fourth type, the president retains both proactive and cabinet-nominating powers. The prime minister’s actions are delegated by the president. Moreover, the president may dissolve the legislature. Even with dissolution powers, the basic characteristic of a presidential regime remains unchanged: the president appoints the cabinet. Hence, in this chapter we adopt a narrow definition of presidential systems: the president nominates the executive cabinet. In parliamentary systems, on the other hand, the cabinet is chosen by the prime minister and is accountable to the legislature. The next three sections will focus on the contrast between parliamentary and presidential regimes. Semipresidential systems will be treated as a residual category. Premier-presidential or semipresidential regimes share one important characteristic with parliamentary regimes: the power of the president or the prime minister depends on a parliamentary majority.

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Although presidential-parliamentary and parliamentary systems share the possibility of cabinet dissolution, in the former system the cabinet is accountable to the president and presidential powers are greater. Therefore, we can treat premier-presidential systems as a subspecies of parliamentary regimes and presidential-parliamentary setups as a subspecies of presidential regimes (Cheibub and Przeworski 1999).

Evaluation Criteria: Executive-Legislative Arrangements Political constitutional arrangements are by their nature multidimensional (Dahl 1998). They may be evaluated by fairness criteria, minority protection, policy considerations, and so on. The first criterion we will examine is efficiency. Assuming a normative preference for democratic systems, we explore the capacity of different constitutional arrangements in guaranteeing that democracy is the “only game in town” (Linz and Stepan 1996). Therefore, both the regime’s capacity to produce political goods for its own population and its efficacy in deliberating over political issues are important elements in building the superiority of democracies over its authoritarian alternatives. We also examine the importance of both accountability mechanisms and stability of constitutional arrangements for democratic life. Finally, we will assess the impact of both systems in terms of legitimacy and political support.

Efficiency The longevity of a political system may be linked to its agility and capacity to produce political decisions. In this sense, a political system can be evaluated by its decisiveness (Von Beyme 2001). Parliamentary systems are based on the unified control of the legislative and executive branches. On the one hand, they focus on the hierarchical preeminence of the cabinet over other institutional bodies, which is why cabinet governance is considered more oriented toward efficiency. On the other, because of the concentration of authority in the cabinet, parliamentary systems are considered to be less transparent. In contrast, presidential systems are based on separation of the executive and legislative branches. Because of that separation, presidential systems are considered less efficient and more prone to gridlock. The president may initiate policy unilaterally, without organized party support, but Congress may anticipate this possibility by legislating to prevent presidential discretion. As a result, the system is hampered by the potentially disruptive character of presidential leadership, the tendency toward policy incoherence, and the corresponding defensive strategy of the legislature, which

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may prefer reducing efficiency by preventing discretion through detailed legislation (Moe 1990). One approach in evaluating these theoretical claims is to examine the impact of different constitutional arrangements on the production of political goods or economic outcomes. According to recent research on this topic, parliamentary democracies tend to be concentrated in wealthy countries and tend to be more vulnerable than presidential systems to economic downturns. Conversely, presidential systems tend to be more unstable than parliamentary democracies, regardless of economic conditions. In fact, presidential systems tend to perform badly, even controlling for previous economic conditions (Przeworski et al. 2000). Presidential systems are also associated with greater economic inequality (Shugart 1999). For some, the association of presidential regimes with separation of powers and greater inequality is not casual (Finer 1971). Separation of powers would apparently prevent the distributive demands of the majority, though empirical evidence is not available on how this happens, or if it ever happens for this reason. Regarding presidential systems, in terms of economic efficiency the United States is clearly an outlier. For a full assessment of its exceptionality, we must examine the role of the military, independent agencies, and federalism. One must nevertheless not forget the mediocre performance of American presidentialism in terms of social policy as compared to similarly rich countries.

Accountability Representative democracy rests on the assumed capacity of the citizenry to monitor the performance of politicians. To work efficiently, the design of the government structure may have substantial impact on the capacity of its accountability mechanisms. The relationship between voters and rulers is always asymmetric. Rulers have better information on the general condition of the state and can use such information selectively to their own benefit. From the point of view of voters, a constitutional contract may enhance the incentives for politicians to act in the voters’ best interests. Parliamentary systems are based on an indirect chain of accountability mechanisms. The voters elect the legislature, and the cabinet is accountable to the legislature’s majority. This simple chain of delegation makes transparent responsibility for governmental decisions, although this clear line of responsibility may be somewhat blurred by multiparty governments in parliamentary systems. Moreover, since in parliamentary systems the risk of moral hazard is greater—because of the concentration of authority in the hands of the cabinet ministers—screening devices such as party discipline become important (Strøm 2000).

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In presidential systems, citizens can split their voting preferences, because they can cast different votes for different branches. The legislative and executive branches may counteract, compete, or collude with one another. In the first case, more information will be brought to the public. If the branches compete or collude (or there is a bit of both at the same time), instead of more revealed information, incoherence and fuzziness might result, depending on policy purposes (Ames 2001). How do these predictions perform in the light of empirical examination? Accountability is a retrospective mechanism; voters reward or punish politicians according to past performances. The empirical contrast between the two systems does not seem to point to a strong accountability relationship in either system (Cheibub and Przeworski 1999). In parliamentary systems, prime ministers seem to be somewhat accountable to the changing situations of the labor force: if employment grows, they are reelected; if not, they are thrown out. Moreover, 48 percent of prime ministers leave the government because they are toppled by their peers, not because they are voted out of office, so the indirect accountability mechanism of parliamentary democracies seems to be highly effective. We do not, however, know why party peers decide to remove their prime ministers from office. The majority of incumbent prime ministers who replace fallen party ministers do not get reelected (Cheibub and Przeworski 1999). Therefore, politicians who replace their prime ministers may not be acting as delegates for voters. In presidential systems, separation of powers and term limits work to weaken the presidential accountability for government outcomes. Presidents can always blame the opposition-dominated legislatures, or they can govern unilaterally, because no premium for their performance lies ahead, with the reelection prohibition so common in many presidential systems. According to Cheibub and Przeworski (1999) none of the variables such as rates of economic growth, inflation, or employment, seem to have an impact on the likelihood that presidents will be reelected. Hence, it may be reasonable to infer that incentives for good performance in presidential systems are less clear. Another important dimension of the representation relationship is how much rent the elected can obtain at the expense of the electorate. Corruption seems to vary across and even within government systems (Von Beyme 2001). Separation of powers, however, seems to offer more opportunities for interest groups to prevail, either because one branch can be played against the other or because cross-sector agreements become more common. The centralized character of parliamentary democracies seems to increase the difficulties of access of special groups (Bennedsen and Feldmann 2002). The tables produced by the nongovernmental organization Transparency International in its annual global corruption report show the prevalence of

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 . Perceived Transparency of Institutions in Selected Countries Country

Index

Country

Index

Finland

9.7

Chile

7.5

Denmark

9.5

Germany

7.3

New Zealand

9.5

Israel

7.3

Iceland

9.4

Belgium

7.1

Singapore

9.3

Japan

7.1

Sweden

9.3

Spain

7.1

Canada

9.0

Ireland

6.9

Luxembourg

9.0

Botswana

6.4

Netherlands

9.0

France

6.3

United Kingdom

8.7

Portugal

6.3

Australia

8.6

Slovenia

6.0

Norway

8.5

Namibia

5.7

Switzerland

8.5

Estonia

5.6

Hong Kong

8.2

Taiwan

5.6

Austria

7.8

Italy

5.2

United States

7.7

Uruguay

5.1

source: Transparency International, “Global Corruption Report.” Available at www.transparency.org/ publications/gcr. note: Index based on the perceived transparency of public institutions. Scores vary from 0 (least transparency) to 10 (highest transparency).

parliamentary systems among the less corrupt countries.1 Even the United States ranks somewhat lower in this respect. Further research on this topic is needed.

Stability The design of the executive-legislative relationship also has an impact on the longevity of democracies (Hartlyn 2001). The argument is that separation of powers makes the system liable to become gridlocked. Presidential systems are prone to placing opposing parties in the executive and legislative branches. This is likely to occur because the possibility of legislative dissolution is absent, which is a device characteristic of parliamentary systems. Hence, crises brought about by conflicting majorities in presidential systems tend to be solved by constitutional rupture and the breakdown of the democratic regime.

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Parliamentary systems outlive presidential democracies, though prime ministers have shorter tenures than presidents. According to recent quantitative studies, the probability of failure for a presidential democracy is three times greater than for a parliamentary democracy (.05 versus .14). The expected duration of a presidential democracy is twenty-one years, whereas it is seventy-three years for a parliamentary one. Moreover, presidential systems are more likely to fail at any level of development. Their chances of political survival are independent of income level (compare the discussion above). Religious heterogeneity seems to have a negative effect on the longevity of presidential systems. Furthermore, presidential systems are more unstable than parliamentary systems regardless of gridlock situations. Whether the president’s party holds the majority of seats in the legislature has no effect on the likelihood of regime survival (Cheibub and Przeworski 1999); both situations are equally likely to lead to constitutional crises. This finding could be explained by a supposed difficulty of presidential systems to form coalitions, but, again, this is not the case (Cheibub, Przeworski, and Saiegh 2001). Shugart and Carey (1992) advance the argument that presidentialism is not itself unstable if effective checks and balances prevail. When the executive has its constitutional proactive powers increased (especially when the president is granted decree powers), they argue, instability in the presidential system is more likely. The problem, therefore, is not so much that of having a separate executive but of how much constitutional power it is afforded. Even presidential systems with reduced proactive powers have not prevented executive aggrandizement. After all, the term “imperial presidency” was coined precisely to describe the increasing powers of the American presidency related to war decisions and the increasing role of executive orders in the normal operation of the American government (Rodrigues 2005). Parliamentary systems—in Italy, for example—also make great use of decree powers with no declining effect on regime stability. The abuse of decree powers may also impair the capacity of the political system to provide a dependable framework for economic activity; a strong executive with decree powers may be unable to commit to stable rules necessary for efficient economic transactions, but the decree powers do not seem to have a special effect on the survival of presidential regimes. Another explanation for the instability of presidential democracies may be found in their political origin. Presidential democracies tend to come from military dictatorships. Military dictators may prefer separation of powers because they find it easier to cast one branch against the other. Moreover, parliamentary democracies separate the authority of the head of government from the head of state, a fact that may inhibit Caesarist inclinations of elected leaders (Lacombe 2001).

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Legitimacy We examined different constitutional arrangements and their capacity to provide political goods and act with accountability, both of which are dimensions of a political system’s legitimacy (Weatherford 1992); however, little has been written about the government’s capacity to generate political support. On both theoretical and empirical levels, the literature seems underdeveloped. In his classic analysis, Bagehot (1867) advances some hypotheses on the subject, stating that separation of powers would increase fuzziness and indeterminacy of responsibility in the political process, thus generating political apathy. In a different vein, Madison stressed that separation of powers would prevent temporary majorities from usurping power and would lead to more consensual decisions. According to this reasoning, separation of powers would generate a better informed citizenry, with a greater capacity to discern the general lines of the political process. In a pioneer article, Norris (1997) tries to analyze the impact of government systems on mass public political support. Her hypothesis is a development of the Bagehot idea: political support is greater in parliamentary systems where parties have a stake in the policy process. Indeed, her findings vindicate the “Bagehot hypothesis”: even controlling for the level of economic development, political support is significantly positive in parliamentary regimes. However, we do not know whether this legitimacy is greatly enhanced by the political performance of the parliament or by some other variables such as rates of economic growth or efficiency.

The Role of Committees Also relevant to the executive-legislative relationship is the internal organization of legislatures. Legislatures may be more or less powerful, more or less transparent, and more or less efficient. Their character and influence has an impact on the functioning of the political system. Committees are a typical institution of parliamentary activity. They result from delegation inside the legislature, and they may be the product of legislative bargaining, efficiency concerns, or party control measures. In the first case, committees are the locus for efficient bargains among legislators with special interests. A norm of reciprocity implies a distribution of policy authority according to the interests they represent. Hence, the decisions of an agricultural committee are sovereign and, as such, supported by the floor. The same happens with other committees regarding the measures in their own jurisdictions.

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This “gains from trade” theory of committee formation, centered on the distributive aspects of legislative organizations, no longer prevails as the only possible explanation. Even if legislative committees enhance the efficiency of sectoral transactions, they do not prevent collective inefficiencies. Therefore, distributive theories of legislative organization fail to ask why the floor does not reverse committee decisions in cases where it has the power and the interest to do so (Shepsle and Weingast 1995). Informational theories of legislative organization emphasize the role of committees in improving the efficiency of the legislative work. Committees are assigned agenda-setting powers to motivate them to acquire expertise and become specialists. They are created by the legislature to produce better policy decisions as a whole (Krehbiel 2001). Finally, partisan theorists argue that to improve political goals parties create legislative committees that are accountable not to the whole chamber, but to the party majorities that create and control them. In this sense, legislative committees are expedient institutions to solve collective problems that parties face: they may be used to facilitate majority control in general or appease party members with particularistic preferences (Cox and McCubbins 2001). Empirical investigations show that committees tend to be powerful in multiparty settings or in loosely disciplined legislative environments. The extent to which they enhance the efficiency of the whole system—committees may be an instrument for harassing the executive, as the French Third Republic shows (Friedrich 1941)—is not clear, but they are certainly instrumental in empowering the legislative branch. Committees tend to be less powerful in environments with strong parties. Their power seems to be correlated with their role in coordinating positions around policy decisions when the coordinating capacity of parties or the executive seems deficient.

Conclusions The executive-legislative relationships are a crucial aspect of democratic governance because of the impact they have on its efficiency and survival. Parliamentary systems tend to be more stable and efficient with respect to policy decisions. Presidential systems are notoriously less stable and efficient. This stems not only from their different constitutional designs, but also from their political origins. The fusion of the legislative and executive branches produces in parliamentary systems a collective solidarity that facilitates the decision-making process by solving political conflicts inside the structure of government. Separation of powers in presidential systems creates opportunities for special interests and for the unilateral action of the presi-

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dent (Moe 1990). It is curious that the fusion of powers in parliamentary systems seems to enhance government legitimacy in public opinion (Norris 1997). The challenge of constitutional design, therefore, is to create rules that provide enough incentives for the collective coordination of political decisions. Separation of powers may be an obstacle to that goal, but fine-tuning on the micro level is possible. Parties and committees can build bridges between the executive and legislative branches, provided they do not act in a context of heightened party rivalry and political mistrust. The role of committees in providing consensual decisions depends on the government system, the style of party politics, and the degree of conflict over political issues. Another strain in democratic settings is the exaggerated power conferred on the executive by the so-called decree powers and emergency measures (Weldon 2001). The problem with decree powers is that the situations in which they are used are generally defined by the user: the executive. This problem is more acute in presidential democracies where decree powers are generally constitutionally defined and therefore more difficult to curtail. A good way to control the use of these measures, even in presidential regimes, would be to enhance collective responsibility by demanding that emergency measures be signed by the whole cabinet. Previous examination of its constitutionality by a multipartisan committee in the legislature would be a possible solution in some countries. What must be controlled is the temptation to overcome constitutional limitations and limit the life of democracy on the pretext of improving government efficiency. A final word on electoral systems must be added. They facilitate the coordination of government activity and represent voter preferences. Both goals are not entirely compatible, however. Although majoritarian electoral systems in parliamentary systems simplify the task of government formation, they tend to decrease the representativeness of government. In presidential systems, majoritarian electoral systems create strong incentives for political particularism, thus intensifying the consequences of the characteristic lack of solidarity between the executive and legislative branches (Mayhew 1974; Shugart 1999). Proportional representation seems to perform well in parliamentary setups by enhancing a consensual style of government formation and administration. The same cannot be said about proportional systems under presidential configurations. In fact, proportional representation seems to weaken the oversight capacity of the legislature because it makes partisan and congressional alliances more unstable. Proportional representation systems may facilitate a presidential strategy of dividing and conquering the Congress in order to gain approval for its policies.

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Electoral systems are a basic means to allow a democracy to come to grips with some of the challenges it confronts—namely, how to be accountable and representative without losing efficiency. To overcome these challenges, extant electoral systems may require changes in their design. At the Conference on Democratic Transition and Consolidation in Madrid, several of the discussants argued that changes in electoral systems were important measures for democratic consolidation. For example, the merits of systems such as “alternative voting” were extolled because they would provide representation of different political cleavages in divided societies without preventing the possibility of majoritarian parties. Preferential voting systems (e.g., alternative vote, second ballot, and single transferable vote) may encourage candidates to seek a “second-choice” ranking from the voters that are outside the candidates’ core constituencies. Because voters are allowed to mark ballots by ranking the candidates, this in turn promotes moderation and compromise over exclusivity and parochialism. This kind of electoral system could induce politicians to seek, find, and express their shared interests and common objectives (Du Toit 2001). Other ideas were considered at the conference in Madrid with respect to electoral systems, such as the creation of nationwide districts to offset the excessive legislative parochialism and regionalism, which is fostered by districts that are exclusively organized on the subnational level. Another proposal involved correcting the excessive centralism of some proportional representation systems, which deprives voters of a reasonable range of choices and puts a straitjacket on political representation (Ames 2001; Cintra 2001; De la Quadra-Salcedo 2001). In all cases, changes would attempt to strike a more favorable balance among the different and sometimes conflicting purposes that electoral systems aim to achieve. Institutional reform is not an easy task. Constitutions operate in a constrained world, and institutions are subject to a myriad of conflicting demands. The multidimensional political environment in which we live warrants paying attention to institutional details; however, this cannot blind us to the general picture: Only by considering and evaluating the systemic effects of piecemeal reforms can we meaningfully improve our institutions.

 1. For more information on these reports, visit the Web site of Transparency International at www.transparency.org/publications/gcr.

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 Acemoglu, Daron. 2003. “Why not a Political Case Theorem? Social Conflict, Commitment and Politics.” Journal of Comparative Economics 31 (December): 620–52. Ames, Barry. 2001. “Comments.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Bagehot, Walter.1867 The English Constitution. 7th. repr. Ithaca, N.Y.: Cornell Paperbacks. Bennedsen, Morten, and Sven E. Feldmann. 2002. “Lobbying Legislatures” Journal of Political Economy, 110, no. 4 (August): 919–46. Cheibub, José Antônio, and Adam Przeworski. 1999. “Democracy, Elections and Accountability for Economic Outcomes.” In Democracy, Accountability and Representation, ed. Adam Przeworski, Susan Stokes, and Bernard Manin. Cambridge: Cambridge University Press. Cheibub, José Antônio, Adam Przeworski, and Sebastian Saiegh. 2001. “Government Coalitions Under Presidentialism and Parliamentarism.” Unpublished manuscript, Yale University. Cintra, Antônio Octávio. 2001. “Increasing Co-responsibility in Countries with Strong Presidents and Parochially Oriented Legislatures.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Cox, Gary, and Mathew D. McCubbins. 2001. “The Institutional Determinants of Economic Policy Outcomes.” In Presidents, Parliaments and Policy, ed. Stephan Haggard and Mathew D. McCubbins. Cambridge: Cambridge University Press. Dahl, Robert A. 1998. On Democracy. New Haven, Conn.: Yale University Press. De la Quadra-Salcedo, Tomás. 2001. “Institutional Channels for Representation and Influence: How Are Legislatures Linked to the Societies They Serve.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Du Toit, Pierre. 2001. “Legislative Power and Democratic Consolidation.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Finer, Herman. 1971. The Theory and Practice of Modern Government. London: Greenwood Press. Friedrich, Carl. 1941. Constitutional Government and Democracy. Boston: Little, Brown. Goldsworthy, Jeffrey. 2001. The Sovereignty of the Parliament: History and Philosophy. London: Oxford University Press. Hartlyn, Jonathan. 2001. “Comments.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Krehbiel, Keith. 2001. Information and Legislative Organization. Ann Arbor: University of Michigan Press. Lacombe, Marcelo B. 2001. “Constitutional Choices.” Unpublished manuscript, New York University. Linz, Juan J. 1994. “Presidential or Parliamentary Democracy: Does It Make a Difference?” In The Failure of Presidential Democracy, ed. Juan J. Linz and Arturo Valenzuela. Vol. 1 of Comparative Perspectives. Baltimore: Johns Hopkins University Press.

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Linz, Juan J., and Alfred Stepan. 1996. Problems of Democratic Transition and Consolidation. Baltimore: Johns Hopkins University Press. Madison, J., A. Hamilton, and J. Jay. 1961. The Federalist Papers. New York: New American Library of World Literature. Manin, Bernard. 1994. “Checks, Balances and Boundaries: The Separation of Powers in the Constitutional Debate of 1787.” In The Invention of the Modern Republic, ed. B. Fontana. New York: Cambridge University Press. Mayhew, David. 1974. Congress: The Electoral Connection. New Haven, Conn.: Yale University Press. Moe, Terry. 1990. “Political Institutions. The Neglected Side of the Story.” Journal of Law, Economics and Organization 6:213–53. Moon, Chung-in. 2001. “Empowering the Legislative Branch: The Developmental State and Executive-Legislative Relationships.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Norris, Pippa. 1997. “Designing Democracies: Institutional Arrangements and System Support.” Paper presented at Workshop on Confidence in Democratic Institutions: America in a Comparative Perspective, John F. Kennedy School of Government, Washington, D.C., August 25–27. Ortiz de Zevallos, Gabriel, and Alex Segura-Ubiergo. 2001. “Rethinking Executive-Legislative Relations in Peru.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Özbudun, Ergun. 2001. “Constitutional Frameworks for the Repartition of Powers.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Pierson, Paul. 2000. “Path Dependence, Increasing Returns and the Study of Politics.” American Political Science Review 94, 2: 251–67. Putnam, Robert. 1993. Making Democracy Work. Princeton, N.J.: Princeton University Press. Przeworski, Adam, Michael Alvarez, José Antonio Cheibub, and Fernando Limongi. 2000. Democracy and Development: Political Institutions and Well-Being in the World. New York: Cambridge University Press. Rodrigues, Ricardo Jose Pereira. 2005. “Executive Orders and Presidential Policy Making from Eisenhower to Clinton.” Ph.D. diss., State University of New York at Albany. Shepsle, Kenneth, and Barry Weingast. 1995. Positive Theories of Congressional Institutions. Ann Arbor: University of Michigan Press. Shugart, Matthew Soberg. 1999. “Presidentialism, Parliamentarism and the Provision of Collective Goods in Less-Developed Countries.” Constitutional Political Economy 10:53–88. Shugart, Matthew Soberg, and John M. Carey. 1992. Presidents and Assemblies: Constitutional Design and Electoral Dynamics. New York: Cambridge University Press. Strøm, Kaare. 2000. “Delegation and Accountability in Parliamentary Democracies.” European Journal of Political Research 37, 3:261–89 Von Beyme, Klaus. 2001. “Legislative-Executive Group.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27.

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Weatherford, M. S. 1992. “Measuring Political Legitimacy.” American Political Science Review 86:149–66. Weldon, Jeffrey A. 2001. “The Evolution of Executive-Legislative Relations in Mexico.” Paper prepared for Conference on Democratic Transition and Consolidation, FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27.

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 

      

The democratic state must be competent. It must be capable of both deterring corruption and preventing threats to the democratic constitutional order from military officers sworn to its defense. The scholars whose work is featured in part III address these topics. Méndez argues that democracies must constrain state power to prevent authoritarian rule or abuses and simultaneously coordinate interactions between both government agencies and and all such agencies and civil society and market organizations to strengthen its capacity to accomplish valued goals. One option is privatization, which constrains the state through such policies as trade liberalization, deregulation, and the sale of state enterprises. Coordination in this case occurs mainly through the market or through the activities of civil society organizations. A second choice is some combination of delegation, deconcentration, and decentralization of the state’s tasks to subnational entities. Delegation authorizes voters to elect municipal and provincial authorities, whereas deconcentration empowers municipal and provincial authorities, no matter how chosen, to exercise substantial discretion over government expenditures. Decentralization requires that subnational authorities, regardless of the means of their election or authority over the budget, raise financial revenues for official expenditures that take place in their jurisdiction. Méndez also explores the choices for civil service reform. Diamint demonstrates the grave challenges that face Latin America’s new democratic states. She shows that military officers often prefer personal relationships and direct contact with civilian authorities rather than institutional relations more consistent with democratic constitutionalism. Moreover, the armed forces also often consider all of their actions to be state secrets. Military officers are often unprepared for the policy changes that follow democratic elections, and civilians in the executive and legislative branches are often ill-equipped to exercise their proper

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authority over a broad range of issues. Competent and professional police forces, detached from the armed forces and firmly placed under civilian authority, must be developed to cope with the crime pandemic of the past quarter century. Police competence in addressing this problem is often lacking, however, and the treatment of citizens by police officers is often arbitrary. Rose-Ackerman defines corruption in government as the illegal use of public power for private or political gain. She recommends early adoption of those corruption-fighting measures that are likely to elicit least resistance, such as a freedom of information act, facilitation of registration and operation for civil society organizations, implementation of rewards to business firms that adopt anticorruption codes of conduct, and the installation of transparency rules. Transparency rules regarding private financing of campaigns provide the most common essential defense against rampant corruption associated with elections. Mass media institutions should also be free to criticize public officials and their practices with little fear of running afoul of libel laws. Campaign finance regulations, in contrast, are more problematic in emerging democracies. Information on budgets, laws, regulations, and executive decrees should be routinely available to the public. Independent election commissions, legislative investigative commissions that represent and include the various political parties in parliament, and nonpartisan courts and public prosecutors may exert proper anticorruption powers. Transparency and competitive bidding are also essential rules in privatization and procurement decisions.

 

Toward More Balanced Approaches in the Reform of the State   

During the past several decades, many developing countries have undergone important processes of democratization, decentralization, privatization, and, in some instances, bureaucratic modernization. No doubt, such reforms have brought important benefits to societies. Although developing countries have sought to take power away from the top of the central state and empower the various actors around it (citizens, businesses, regions, and managers), they have not worried about preserving the state capacities and coordination mechanisms necessary to yield the public goods societies demand. The task of state leaders and reformers is not only to democratize, but also to build a “working democracy,” which involves simultaneously dividing and restricting power, on the one hand, and aggregating and concentrating it, on the other. This is a quite complex process of statecraft that is determined by many factors. Some of them are related to the nature of politics in general (e.g., party and electoral systems), whereas others are related to the nature of the bureaucratic and policy-making structures of the state. It is this latter issue that concerns us here. This chapter focuses on the debates around privatization, decentralization, and especially, given its recent relevance, bureaucratic modernization. The contention is that it is possible not only to find a balance among the various positions involved in such debates, but also to base any particular reform proposal on a contingency approach, where the particular features of any given country and of each policy area have to be taken into account. Because contingency arguments have thus far usually remained too general, I have tried to provide specific guides in this chapter that could help reformers decide when to privilege one state structure over others. The argument presented here draws from the research conducted for developing countries in general and from the papers presented at and discussions held during the

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Conference on Democratic Transition and Consolidation. It also draws from the experience of my own country, Mexico, a nation that just passed through a long but ultimately successful democratic transition. Mexico is presently struggling to reach the aforementioned working democracy,1 a process that, given our current “divided government,” has involved both achievements (e.g., in the financial sector and in laws advancing freedom of information and civil service ) and delays (e.g., in the fiscal sector and in the establishment of energy and labor laws).

The New Frontiers of State Reform in Transitional Societies The final quarter of the twentieth century witnessed an important wave of reforms in developing countries. Since then, at least four issues have been at the center of state reform in those nations: democratization, privatization, decentralization, and bureaucratic modernization. First, many developing nations made advances in establishing such democratic features as elections and a free press and thereby came to be referred to as the “third wave” of democracy (Huntington 1991). In a great number of developing nations, moreover, public enterprises were privatized and/or central functions and resources were transferred to regions or localities. Finally, during the 1990s many governments began to implement, or at least discuss, the principles of the so-called new public management (NPM), which advocates performance management and administrative flexibility. No doubt, liberalization and democratization have brought basic human rights, freedoms, and democratic principles to many developing nations. On the other hand, because decentralization brings politics, authority, and services closer to the people, it tends to promote democratic values and practices as well as administrative efficiency. All else being equal, subnational (regional, provincial, local) governments have informational advantages over a distant central government in knowing the problems and demands of localities. In addition, local governments have a greater incentive to respond to their residents because the latter can better monitor services and policies that are provided by local rather than national entities. There can in turn be a number of reasons to privatize, such as decreasing the financial demands made by public enterprises on strained public budgets, improving the efficiency of the firms, encouraging private sector investment, generating revenue, and reducing corruption. Privatization is also expected to promote democracy, through the development of a strong middle class and an independent civil society (Anwar 2002). Finally, management decentralization to agencies can also increase efficiency, as it cuts transaction costs and red tape. Furthermore, the latter three reforms enable central authorities to focus their efforts on key state functions as well as to set overall objectives and to monitor their fulfillment.

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Thus the expectation behind the aforementioned reforms has usually been that developing nations would become decentralized democracies with streamlined and efficient bureaucracies and well-functioning markets, just as one finds in a number of developed nations. Unfortunately, more than two decades after they were initiated, doubts have surfaced as to whether developing nations are following (or should follow) such reforms in the commonly prescribed ways. Carothers (2002), for instance, argues that in most cases “democratic transition” is a misnomer, or it has resulted instead in either “feckless pluralism” or “dominant power politics.” For him, the transition paradigm has tended to neglect the “state building challenge.” Such a paradigm considers that the state building challenge is naturally compatible with democratic transitions. Thus, it assumes that democratic regimes are being built within coherent, functioning states. In reality, however, most “transitional societies” involve rather weak states with disorganized and ineffective bureaucracies, which then are unable to produce the policy results societies expect. According to Grindle (2000), democratization has not solved what Evans (1997) calls a “crisis of capacity” in much of the world. The overall result is that in all cases of democratic transition we still see societies quite disaffected from politics. Norris (2000) makes the interesting point that, although democratization has extended over the world, the confidence in democratic institutions has suffered enormous erosion. By contrast, the assumptions behind decentralization are rarely met in practice (O’Neill 2002), for in reality the link between democracy and decentralization is not clear (Gil Villegas 1986). Political decentralization quite often facilitates the emergence or consolidation of regional strongmen, common in developing countries (Migdal 1988), whereas excessive financial decentralization can strongly damage a national economy, as has recently happened in Argentina. With regard to privatization, as Anwar (2002) and Malova (2002) note, although there are countries that have carried out this reform successfully, there are also important examples of poorly managed privatization where state monopolies have simply been replaced with private monopolies, thereby weakening the state vis-à-vis private actors without achieving efficiency. Many developing countries, moreover, lack the necessary elements for a successful privatization. Finally, with regard to the reforms inspired by the NPM credo, they involve the important risks of increasing corruption as well as creating a vacuum at the state level, especially in nations lacking strong legal and professional cultures (Peters 2002). In short, one of the main pitfalls of all these reforms is that they have stressed only one side of what I would call the “working democracy equation”—that is, they have aimed at taking power away from the top of the central state and empowering the various actors (citizens, businesses, regions, and managers) around it, without wor-

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rying about how these actors would work together to bring about public goods.2 Decentralization, privatization, and bureaucratic flexibility should not be viewed as a zero-sum game in which the powers of local authorities, private enterprises, or agencies are increased at the expense of the central government. Instead, they should be viewed as processes whereby the state as a whole is strengthened (considering that it is or should be the essence of the “public sphere”). If people value democracy for the freedoms and political participation it makes possible, they also expect it to produce the public goods communities require. If the latter occurs, the tendency for citizens to trust political processes and participate more actively in political life is greater. Otherwise, the citizenry may become more and more disappointed. In this way, reaching a working democracy is crucial to overcoming the growing schism between the individual and the community that has been at the heart of societal thought and deliberation since ancient times. Only this can reduce the growing social disaffection with politics and set us back in the path toward the old ideal of citizenship. Whereas stressing the need to weaken the central state was probably understandable twenty or thirty years ago, when it was too powerful and overextended, it is now time for reformers and leaders to work on the other side of the equation: state capacity. As Przeworski (1995, 161) argues, several of the dangers that face the new democratic regimes derive from the incapacity of state institutions to assure personal security, establish the conditions for the effective exercise of citizenship, provide ethical guidance, mobilize public savings, coordinate the distribution of resources, and correct income disparities. In short, “without an effective state, there cannot be democracy.” Furthermore, given the “structural heterogeneity” present in most developing countries (Méndez 1986), we must not forget the decisive role that the state plays in such nations—and in fact in any nation, as can be seen in the often underestimated role that the state played in the emergence of developed nations. Merely dividing up state power in transitional societies will inevitably lead to fragile democracies and fragmented and unstable nations with no overall direction at all. Because democracy involves some pressures for fragmentation among ministries as they develop links with their committees in Congress and with their particular special interest organizations, the fragmenting effects of democratization have usually been greater in countries such as those in Latin America with longstanding corporatist traditions (Oszlak 1980). In other words, democratic mechanisms are important for two reasons: they help communities to define their common goals and they empower states to legitimately and effectively promote these communal aspirations, but, without a central state powerful enough to coordinate the efforts of all actors, a community cannot reach such common ends.

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In reality, pointing out this two-faced nature of the public realm is not new at all. It has been noted by authors from the most varied times and circumstances. For instance, in his classic work, The Prince, Machiavelli advised statesmen to be both a lion and a fox, by which he meant that true leaders have to use both force and reason. Gramsci (1975) applied this metaphor to modern times, stating that effective power is composed of two ingredients: force and hegemony, the latter being akin to the concept of legitimacy. This idea was also behind Weber’s (1944) definition of the state as the “legitimate monopoly of force” or Easton’s (1953, 133–40) definition of the state’s function as the “authoritative distribution of values.” The importance of the state was also brought back by the new institutionalism of the 1980s (Skocpol, Evans, and Rueschmayer 1985), with some effect on international multilateral organizations, such as the World Bank (1997). In this way, a working democracy involves balancing the traits of “the lion and the fox”: it connects human freedoms to policy outcomes and accommodates both the fragmentation of power needed to provide legitimacy to the state (through a democratic, “right-sized,” and decentralized state) and the aggregation of power needed to provide the state with the necessary capacity to carry on its public functions. When these two elements are well balanced, they reinforce each other and produce the virtuous circles that bring about truly “strong” states as well as lasting democracies.

Statecraft Dilemmas In most democracies, state power is divided along various lines: (1) time (set terms for government and regular elections); (2) function (along and within branches of government); (3) territory (decentralization to either state or local entities),3 and (4) scope (in one way or the other, state power is also restricted to certain tasks). The purpose is to avoid ceding too much power to the control of the state. However, because dividing power involves the problems mentioned previously, most advanced democracies also provide mechanisms to promote political capacity and coordination. Regarding the first aspect (time), for instance, while establishing defined terms of government, many democracies also allow for reelection and/or establish stable and professional bureaucracies that go beyond one particular administration. Regarding the second, the division of state power, checks and balances between the executive and legislative branches of government provide both with executive and legislative functions (e.g., legislative veto and capacity to introduce bills to the executive, and policy oversight powers to the legislature). In addition, the executive and the legislature often create purpose-specific autonomous agencies and inter-institutional coordinating bodies. (The presence of professional bodies in both

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branches also helps depoliticize issues and promote agreements.) On the third aspect (territory), in most democracies central governments perform nationwide responsibilities (e.g., military, monetary) while decentralizing functions to state and localities. There exist checks and balances between the levels of government and “intergovernmental” coordinating bodies and each level of government (national, subnational, and local) develops stable and professional bureaucracies, thereby increasing their communication. Finally, as to scope, although state presence is often restricted in the private and even social realms, democracies usually make sure that overall state regulatory capacities in those fields are preserved. Of course, there is a wide array of ways and combinations in which democracies achieve all these goals. Thus, when dealing with the alternatives for the reform of the state, one ought to think in terms of continuums rather than dichotomies (Kim 2002). We turn next to a consideration of such alternatives and their trade-offs.

Privatization Alternatives and Trade-Offs In response to the social and economic challenges of the nineteenth and twentieth centuries, in many nations the state grew considerably. In the process, particularly in developing countries, the state bureaucracy began administering all kinds of companies and factories. By the end of the twentieth century, however, this “state-centered” development model had clearly reached its limits. In addition, the economic crisis of the 1980s aggravated the already weakened financial base of many governments. This, together with the clear pressures of international economic organisms such as the IMF and the World Bank, strongly pushed developing nations in the direction of privatization. This process has been considered an important part of the reform of the state, as it involves, first, reducing the state’s size and scope and, second, closing and selling tens or hundreds of state enterprises as well as firing thousands of bureaucrats. However, because the creation of state enterprises or the nationalization of privately owned businesses had been justified as a measure taken to benefit the population at large—or, when they were in foreign hands, benefit the nation—doing the opposite has been criticized as benefiting particular interests, specific groups, or even individuals. As a result, in many countries privatization has been a rather contested issue. Privatization can take on a wide range of characteristics. It can be fast or slow, lasting for a few years or for decades; it can be total or partial, involving all the shares of public enterprises or only the majority of them; it can be widespread or limited, privatizing all or most state enterprises or only a few; and it can be dispersed or concentrated, selling most enterprises and shares to a select group of individuals or

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corporate entities or dispersing them among several groups. Each of these alternatives has its advantages and disadvantages. Fast and total privatization may seem to be the best alternative in principle, but in their haste to attract private buyers governments may offer too much protection or merely transfer a monopoly to the new owners, thereby counteracting the goal of enhancing the efficiency of firms. In addition, the rush to privatize often leads to a giveaway of public property at extremely low prices, unduly benefiting the buyers at the expense of the public. This may facilitate control of important sectors of the economy by a few well-connected or already economically powerful individuals. The lack of transparency in the divestment process produced by opaque and unaccountable political systems can further benefit the cronies of the ruling elite with cheap credits and other awards. In some other instances, privatization has been a means to launder money (Anwar 2002). Rapid privatization also may not allow enough time to set up the regulatory frameworks that are necessary for its success. In light of these and other risks, fast and total privatization has usually become a quite politicized process in many developing countries. Although slower and partial privatization avoids some of these risks, in turn it may weaken political commitment and allow time for strongly entrenched political and bureaucratic actors to resist the reform process. If government or circumstances change, the importance of privatization can decrease, as the bureaucracies in charge of state enterprises have more time to hide figures and obfuscate the financial picture. Furthermore, dispersing the privatization process is not an easy task, as the number of entrepreneurs who can transform public enterprises into competitive entities may not be large; dispersing ownership too much can also complicate economic takeoff in the newly privatized firms.

Intergovernmental Relations’ Alternatives and Trade-Offs At the first stages of their history, developing countries tended to centralize political and administrative power. As the processes of liberalization, democratization, and globalization have advanced, however, the national and regional demands for decentralization have grown. Decentralizing intergovernmental relations can be accomplished in different ways, depending on how it is implemented in three main dimensions: political, administrative, and financial. We will call these dimensions, respectively, delegation, deconcentration, and decentralization (Rondinelli, Nellis, and Cheema 1984). Delegation occurs when regional authorities are elected instead of appointed; deconcentration happens when regions have significant autonomy to establish their administrative

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structures and formulate their own policies; and decentralization is present when there is a substantial regional capacity to raise their own taxes and substantial autonomy to decide how they spend their resources. Thus, on the basis of O’Neill’s (2002) fourfold classification, we can discern eight types of intergovernmental relations: (1) lack of delegation, deconcentration, and decentralization (appointed subnational officials without substantial adminitrative and financial capacities); (2) delegation without deconcentration and decentralization; (3) delegation with deconcentration but not decentralization; (4) decentralization without delegation and deconcentration; (5) decentralization with deconcentration but not delegation; (6) deconcentration without delegation and decentralization; (7) delegation with decentralization but not deconcentration; and (8) delegation with decentralization and deconcentration (elected subnational officials with significant financial and administrative capacities). The first type constitutes the most centralized intergovernmental system (e.g., close to Peru under Fujimori). It generally involves a degree of authoritarianism as well as significant risks of policy failure. In the second and third cases (close to Ecuador’s system), the local goods for which elected officials are nominally responsible are provided by a centralized budget. These options increase distrust within the subnational electorate, because officials are highly likely to renege on campaign promises or engage in corruption or administrative malpractices, which delegitimates the decentralization process in the longer term. In the fourth, fifth, and sixth options, (Chile under Pinochet closely resembled the fourth type), appointed subnational officials may increase efficiency by responding to their constituents to a point—but only to the extent that constituents’ desires do not conflict with the policy goals of the central government. Where resources are decentralized and there is no election of subnational officials, decentralization does not gain enough support of constituents, because they may see no incentives for political transparency and efficiency by appointed officials (O’Neill 2002). The seventh option would be highly unlikely to either occur or endure: once political and financial capacities are decentralized, it would be difficult or pointless for administrative capacities to remain at the center. Finally, the eighth combination—political, administrative, and financial decentralization (close to Argentina and Brazil)—is the option most likely to promote democracy and gains in policy efficiency at the local level. At the same time, it is also the most difficult to implement, because central governments would resist giving away so much power. Furthermore, in certain conditions, it can weaken the central state to the point of contributing to strong national macroeconomic crises (e.g.,

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Argentina), suddenly send an unbearable burden of responsibilities to regions, further strengthen regional inequalities and regional strongmen, or even lead to interregional fights and national disintegration (e.g., the former Yugoslavia).

Bureaucratic Alternatives and Trade-Offs Until the nineteenth century, most nations developed their public administrations through the so-called spoils system, in which rulers distributed bureaucratic positions among the people who helped them win an election. Different types of factors, however, led to gradually substituting this for a “merit system”—that is, a career civil service whereby positions are filled through competitive examinations. In the case of France the changes were instituted as a result of the Napoleonic administrative rationalization drive at the beginning of the nineteenth century, in the United Kingdom it was due to corruption scandals in the middle of that century, and in the United States it was the assassination of President James Garfield in 1881 by a disappointed job seeker. In general, a civil service helps the political class to keep political pressures at lower levels as well as assure stable transfers of government by creating an institutional memory. In addition, by allowing for greater job stability, career opportunities, and good wages, as well as legal and “social” sanctions for inappropriate conduct, it provides an effective incentive structure to fight corruption. A civil service provides technical expertise, fosters stability and professionalism, and even facilitates coordination among government entities, the state, and society (Méndez 1996a, 1996b), supporting a sense of permanency or “statehood.”4 Finally, it helps legitimize the state by involving a legal approach—equal treatment for all citizens and equal opportunity of access to public posts—often leading to greater government efficiency. It is worth noting that a civil service is closely associated with the concept of representative democracy, in the sense that it aims at implementing the overall mandates expressed in national elections rather than demands of particular groups. As Peters and Savoie (1995) argue, it also means a functioning arrangement between politicians and bureaucrats in which both play a role in further defining the specific meaning of such mandates. (In theory, politicians provide overall political direction and bureaucrats provide administrative and policy experience.) In a way, a career civil service also fragments power by limiting the discretionary capacity of politicians to freely appoint public servants. At the same time, however, it is an important instrument to counterbalance the effects of the fragmentation of power derived from the division of power in functional and territorial terms.

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Although many Latin American states have been formally integrated because of their authoritarian political systems, they have been informally quite fragmented in light of their lack of well-functioning civil services. In contrast, countries such as the United States or United Kingdom have had rather fragmented democratic systems but the presence of an integrated civil service (Méndez 1996c). Important economic crises, first in New Zealand and later in the United Kingdom, nevertheless, brought strong criticism against this model as well as important reforms in the 1980s and 1990s to the longstanding civil services of these and many other countries. To face such crises, those nations began to increase the flexibility of their public sectors by applying the principles of private administration, or what would later be labeled by Hood (1991) as the “new public management” (NPM). These and some other countries (e.g., Australia and the Netherlands) opted for timelimited contracts for the top civil servants, renewable only in the case of satisfactory performance. Policy implementation is entrusted to agencies that produce outputs as specified in contracts concluded with the minister. Ministers are not supposed to be involved in day-to-day management, and chief executives have the freedom to manage budgets and personnel according to the demands of the “clients” of their respective policy area. It has been argued that the traditional civil service was too costly, too rigid to adapt to the current, more complex and changing social, economic, and political environments, too inclined to favor bureaucrats over citizens, too complicated, and too resistant to change. Thus, the NPM model has involved the adoption of a more entrepreneurial, flexible, decentralized, and “performance-oriented” type of management that is more concerned with bringing about specific results demanded by individuals in their role as “clients” in each policy area (and to that extent more closely associated with the concept of “direct democracy”) than with implementing the overall interests of individuals as “citizens” or principles such as due process, uniformity, honesty, statehood, and “representative democracy.” Just as with privatization, it has been argued that efficiency and effectiveness would be best achieved if government focuses on policy and compliance issues, while operations are contracted within the standards of a high-performing government (Kastner 2002). Malova (2002) argues that contracts can lead to important savings. She mentions the case of the introduction of compulsory competitive tendering in many instances in the U.K. public sector. Moreover, contracts facilitate public procurement and the use of public finance for clearly specified goals, thus extending the space for public control. After its establishment in New Zealand and the United Kingdom, NPM principles influenced administrative reform in several countries, including the “government

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reinvention” agenda introduced by the Clinton administration in the United States. Although the NPM model has greatly weakened the job certainty that public administrators long enjoyed (Peters 2002), in most cases its impact has been rather rhetorical. This may be because “contracting out” and managerialism have important shortcomings. To some extent, they can enhance the capacity of the state, but in other respects they can weaken it. By contrast, because in most cases the only thing “contractors” have to lose is the contract there is a high turnover of providers, which negatively affects services. When that happens, the losses for a company or a manager with no particular commitment to public service may be slight, but the costs may be high for citizens and politicians. Nevertheless, as Peters (2002) notes, because contracts set terms that also bind ministers (e.g., time frames), they may lead to less, not more, ministerial control over executives. Moreover, the transaction costs involved in the administration of contracts may exceed the savings. In some cases NPM has led to better services, but in other instances, such as in the British health sector, it has not (Malova 2002). Contracting out neither provides the accumulation of experience, long-term commitment, and vision nor affords the somewhat shared responsibility usually present in civil service schemes. Also, in light of principal-agent complexities, it can complicate the operation of government. Although NPM emerged as an attempt to better control the bureaucracy, in practice the associated fragmentation may contribute to policy incoherence and result in a manifest failure to exercise effective control over the bureaucracy. Actually, many of the traditional levers for control are delegitimized by this ideological shift in public management. Moreover, because initiative and empowerment are bound to entail some mistakes, many reformers will be sharply criticized in the mass media. In fact, many analysts still advocate or defend the classic model of civil service, arguing that, after all, most countries that have introduced NPM have kept the essence of such a model and that NPM negatively affects motivation, governance, professionalism, legality, coordination, and even efficiency (Hood 1991; Peters 2002).

Overcoming the Dilemmas: Engaging in Statecraft It is apparent that state reform in transitional societies faces complex dilemmas that are difficult to overcome. Empowering the central state was instrumental for nation building in the industrial era, largely because it was necessary to ensure the basic structural conditions for the development of markets, build a welfare state in response to the strong social criticism of capitalism during the second half of the nineteenth century, and face the economically difficult times between the two world wars.

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It is quite true that—in the context of a service economy, an overextended welfare state, and a globalized world—more flexible state structures are now required. States nevertheless remain essential for well-functioning markets; the recent history of capitalism has confirmed the cyclical nature of the latter and thus the utility of certain forms of state action. Furthermore, different nations are at different stages of development and face different needs. So the questions remain: To what extent or when should we apply state-centered administrative and policy-making schemes, and when should we use the participatory, decentralized, or market-like models currently in fashion? In the words of Machiavelli, when should a state leader be either a lion or a fox? In response to this question, I will discuss two approaches, which I call “middle ground” and “contingency.” The first involves identifying a national middle ground between the extremes of the dilemmas mentioned previously. The second involves considering the best option according to the particularities of a policy area or a nation (Méndez 1996d, 1999a).5 Of course, these approaches do not offer a panacea. They can, however, be useful as general guides for reform.

Finding a National Middle Ground: Some General Recommendations Privatization The best option discussed above is to follow a fast, total,6 widespread, and dispersed approach to privatization. As mentioned previously, this option is both the most difficult and the most risky to implement. Some factors, however, can help to ease its implementation, such as a well-functioning legal framework, strong political commitment (Anwar 2002), public consensus and understanding, transparent processes, and the appropriate macroeconomic conditions. A well-functioning legal framework is especially important to successful privatization. Creating such a structure entails developing important aspects of business legislation (e.g., property law, competition law, corporate law, dispute settlement, and environmental legislation), defining property rights, modifying the legislation of public enterprises for divestiture, developing laws for organizing the privatization process, and establishing the proper agencies to make sure these processes are rightly followed. To prevent the rise of private monopolies and unfair trading practices, there must be effective legislation governing competition, such as an antitrust law and a fair trading act. When possible and convenient, splitting up the previous monopoly into various new competitive firms can also be helpful in this regard.

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Because privatization is still a contested issue in many countries, moves toward privatization must start with strong political support and commitment from the highest level of government. A significant number of political leaders in both the executive and legislative branches must be convinced from the outset that the privatization initiative is in the overall interest of their economies and societies. Governments must also state clearly the objectives of privatization and how they are to be achieved. The citizenry must also understand that privatization is in the public interest. In turn, public support for privatization depends to a great extent on the ability of the government to demonstrate its potential benefits. Divestment of public enterprises must be fair and transparent to avoid charges of favoritism or collusion between public officials and entrepreneurs. Of course, civil servants and political leaders must avoid awarding shares of privatized enterprises to relatives and friends. Enterprises must be sold through either open and competitive tender directly to strategic investors or the stock market. With respect to the conducive macroeconomic conditions, privatization has a higher probability of success if it takes place in countries that espouse a marketfriendly and open economic system. Privatization should be regarded as part of an overall strategy aimed at fostering efficient private enterprise as a whole. There must be a general commitment to good corporate governance, especially in publicly listed companies. In turn, an efficient stock market allows for transparency and a competitive market economy. Finally, a specific state agency must be responsible for formulating, implementing, and monitoring privatization.

Intergovernmental Relations Various options are available when organizing intergovernmental relations. The first (lack of delegation, deconcentration, and decentralization) is neither desirable nor durable because it represents an extremely centralized choice. Although the second through the seventh alternatives are incomplete solutions with important disadvantages, the second and the third offer “second-best” solutions because delegation naturally leads to deconcentration and decentralization. (It is important to note again that special mechanisms should be established to avoid corruption in these cases.) Therefore, the best option is to decentralize political, administrative, and financial functions. Such decentralization, however, should be balanced in at least two ways. On the one hand, all three aspects (political, administrative, and financial) do not need to be decentralized at exactly the same time; for instance, they can be implemented in close succession (O’Neill 2002). Decentralization should be a carefully phased and

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planned process in accordance with the capacities of the various institutions involved both at the local and national levels. Because the determination and development of capacities are key factors for a successful decentralization, not only the central government, but also local authorities and actors, should be responsible and involved in the process (Mendez 1999b). Decentralization should be driven by an analysis of what activities each sphere of government can effectively and efficiently accomplish. The central government should formulate a master plan of the phased implementation of the decentralization process. According to Brillantes (2002), decentralization should be neither driven by local authorities nor orchestrated by central authorities. In the case of the first, it would have negative effects on the integrity of a nation; in the case of the second, it could lead to the neglect of the central state’s most important objectives. On the other hand, decentralization should be accompanied by mechanisms for financial, institutional, and political policy coordination (Méndez 1999b; Kim 2002; O’Neill 2002). First, hard budget constraints for subnational governments, as well as mechanisms for avoiding national bailouts of regions or localities that have overextended themselves in debt markets, should be established. Subnational and local authorities must raise taxes to absorb the marginal costs of raising each additional unit of local finance (O’Neill 2002). It is also imperative to have a strong autonomous central bank whose monetary policy constrains subnational governments. On the spending side, “matching” programs can be of great help in facilitating coordinated policies between levels of government. Second, national oversight of the programs that require coordination across levels of government should be increased. That can be done both by the central state (through professional planning and financial state agencies) and by institutionalized intergovernmental bodies. These agencies and bodies can also facilitate coordination across jurisdictions by sharing information about what has been successful in some subnational units. Awards programs are good instruments for disseminating and encouraging best practices at the local level. Finally, on the political side, reelection of subnational governments should be allowed. Mayors and governors with term limits have diminished incentives to invest in long-term projects or coordinate policies with the central government; by lengthening planning horizons, reelection can improve incentives to coordinate. Party organizations can also play a major role in this regard. For example, this happens when gubernatorial candidates must run as members of national parties or where national party leaders strongly influence their subnational counterparts through ballot placement or campaign finance. If national party leaders have strong influence on the future careers of governors, this can facilitate coordination of poli-

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cies between the center and subnational units, break the tendency of subnational governments to overspend and seek bailouts, and reduce the need for politicians in subnational units to rely on patronage (O’Neill 2002).

Bureaucratic Organization Is it possible to develop a personnel system that “gets the best and avoids the worst” of both a career civil service and the NPM? And if it is, how can we reach such a well-balanced system? Kim (2002) and Mendez (1995, 1999a, 2002) have argued in favor of a hybrid model that balances institutional knowledge with external expertise, public service values with productivity, and political control with respect for merit and professionalism. Much has been discussed about the definition and value of the principle of bureaucratic neutrality (Aberbach, Rockman, and Putnam 1981; Peters and Savoie 1995; Asmeron and Reis 1996). It seems to be the case that in some instances this concept was taken too far and political control of the bureaucracy was lost, which is one of the factors behind the rise of the NPM model. This latter model seems to underestimate the professional capacities and advice as well as the greater legality and coordination that civil services bring about. Thus, after twenty years of experience with NPM, I can conclude that a “neutral” bureaucracy does not exist and that a politicized bureaucracy—reverting to the clientelistic spoils system and politicians’ administrative and policy arbitrariness—should be avoided. Rather, what I call a “responsive bureaucracy” (Peters and Savoie [1995] used the term “responsive competence”) is the preferred model. That is, a balanced civil service in which there are mechanisms to assure that civil servants implement in a timely manner the policies set by politicians, and in which the advice of civil servants is taken into account and their merits and careers are respected, even those of “whistle blowers.” Such a responsive bureaucracy is what would truly enhance the capacity of the state to carry on its public duties. I have argued elsewhere (Méndez 2002) that achieving such a civil service is possible and involves a correct balance between positive and negative “incentives.” There are several ways to create a responsive bureaucracy. First, access to all government positions is made dependent on exams rather than personal acquaintances with the boss or influential business leaders (Albats 2002). Access is also open for both internal and external candidates, but internal candidates’ efforts and merits in the public sector are taken into account. Second, all civil servants must complete ongoing rigorous training, performance evaluations, and fair but rigorous exams. The performance evaluation system should be, on the one hand, objective, fair and

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agreed upon by those evaluated, and, on the other, demanding and closely related to the strategic planning process. Evaluations should be presented at least annually; officers that fail should have a second chance (accompanied by adequate training support). In turn, the development of independent agencies and contract schemes can be balanced with the establishment of senior executive services (as in New Zealand, Australia, or the United States), which help to stabilize and depoliticize top executive servants. Also, if it is important to pay more attention to the demands of citizens and groups “as clients,” it is equally important to avoid excessive fragmentation by developing strong central planning and agencies that provide coordination and fiscal monitoring and controls (such as the Cabinet Secretariat in France, the Ministry of Finance in Japan, or the Office of Management and Budget in the United States). Third, a responsive bureaucracy is created through a system of incentives that is both economically viable for the agencies and attractive for the civil servants. With regard to the latter, I would include a long-term career system in which civil servants progress based on their merits (mainly the results of their professional and performance evaluations), annual incentives are based on similar criteria, and wages are attractive but carefully framed. Although a well-balanced civil service requires that all positions should be subject to open competition, taking into account the professional and performance evaluations of internal candidates may give them some advantage over external ones. In this way, provided that such advantage is not excessive, a balanced civil service privileges competition without discarding the importance of developing a career. Fourth, and finally, this is achieved through a sanction system that is fair but fast. For instance, a sanction system is more likely to be fair when different authorities are responsible for various stages of the legal process (e.g., conducting investigations, authorizing sentencing). By contrast, these authorities should efficiently operate within timeframes that allow them to finish their tasks. Job permanence in this system depends on the professional and performance evaluations as well as on compliance with the norms set by each organization. If well balanced, a civil service can be an effective institutional tool for achieving a professional and effective bureaucracy, for at least two reasons. First, it uses both positive incentives (e.g., stability, opportunity for career advancement, and attractive wages) and “negative” incentives (e.g., sanctions and evaluations). Second, it involves socialization processes that at some point make rewards and sanctions “moral”—that is, enforced by either a professional ethos or by the group itself, rather than by the formal authorities.7 Thus, any scheme to increase flexibility that excessively weakens the civil service would significantly affect the capacity of the state to

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fulfill its public duties (World Bank 1997). Finally, some comment is necessary regarding what has come to be called “the political economy” of state reform—the necessary strategy and prerequisites for successful reforms. In this regard, ownership by the different stakeholders, including the bureaucracy, is key. It is also very important for presidents and ministers to provide strong and sustained commitment to the reform process, employ an effective media strategy, include civil society and the private sector in the process, and clarify the reform goals, targets, criteria, performance indicators, and timetables. To increase winners and reduce losers it is necessary to provide the opportunity for all to access the new system, give voice to the often silent beneficiaries, open safety nets for those who may be displaced, provide training and other assistance to allow adjustment under the new system, and offer credible incentives to those who cooperate (World Bank 1997; Garilao 2002).

Adapting to Policy Areas Our second answer to the dilemmas described in the second section relates to the so-called contingency approaches: those that make reforms or policies depend on their specific contexts. Most analysts acknowledge the pivotal importance of matching policies or reforms to their specific circumstances. As Hibou (2002) states, there is no “best” model or practice; all questions about reforms are politically and historically embedded, though little has been advanced beyond these general, albeit true, statements. In light of the extreme difficulty of such a task, that is not surprising. The development of contingency approaches is still at a very early stage. Thus, we have to cultivate conceptual tools that help to classify the different types of situations and options and to connect the former with the latter.8 I developed one such tool by means of a three-dimensional matrix (Méndez 1996d, 1999a, 2002) that incorporates what I consider to be the three most important variables of any given policy area—ends, means, and actors—and distributes them along the axes of the matrix. Next, each variable is assigned dichotomous values (low-high) along the dimension of “clarity” for ends and means and along the dimension of “heterogeneity” for actors.9 In this way, we arrive at an eight-cell matrix with eight policy situations. Such a matrix can help us approach an extremely diverse reality better than a fourfold matrix and can do so without being too difficult to understand and manage. With this matrix, we can begin matching each situation with various other factors. For example, we can match policy situations with decision-making styles or with state structure types. I have matched them (1999a, 2002), first, with what I consider

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Figure 6.1. notes: BR, bounded rationality; CE, clarity of ends; CM, clarity of means; GC, garbage can; H, high; HA, heterogeneity of actors; L, low; LR, legal rationality.

to be the four main approaches to decision making—“legal-rational” (LR) (Weber 1944); “bounded rationality” (BR) (Simon 1976); “partisan adjustment” (PA) (Lindblom 1965); and “garbage can” (GC) (Cohen, March, and Olsen 1972)—and, second, with bureaucratic structure types. In this way, in cell number one at the front and top of the matrix, we find all three aspects with high grades and then we have a situation in which clarity of ends, clarity of means and the heterogeneity of actors is high (e.g., a patient-doctor situation). For this cell, I would suggest the Weberian “ideal type” of rational, technical, and rather top-down decision making. Although it is very difficult to exactly match a policy with any of the cells, policies tend to be closer to one cell than another. For example, health would be closer to cell one, as it implies comparatively clearer and more stable goals—although debatable, it is still easier to define a person as “healthy” than a social system as “just”—more precise means (one would expect less discussion when applying a vaccine to fight some diseases than when establishing a political system) and more heterogeneity among actors (both patients and doctors tend to acknowledge the latter’s technical superiority in making health-related decisions). Here it would be desirable to use either the

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rational or the bounded rationality model, not only for those in charge of policy, but also for its recipients, who, recognizing their lack of knowledge on the issue, tend to expect policymakers to identify and make decisions. For cell 8, where clarity of means and ends are low and all actors have (or are believed to have) similar capacities, I would recommend what Cohen, March, and Olsen (1972) call the “garbage can model” of policy making, where policy is developed in a gradual, decentralized, even fortuitous, manner. The policies of interior ministries would be an example of such a policy. Goals there tend to be more controversial and changeable (between options such as democratization versus governance, centralization versus decentralization, individual versus collective rights, etc.), because they tend to depend on a wide array of ideologies, parties, and specific circumstances. Furthermore, the means employed have a limited effectiveness and are imprecise or insufficient (political negotiations, informal arrangements, speeches) and heterogeneity is less clear. In this policy area, the garbage can model often would be preferable, because it allows authorities to share responsibility, better measure the correlation of forces and the intensity of beliefs, and make constant adjustments. Between these extreme situations, there are six intermediate cells, for which I argue that various combinations of the bounded rationality and partisan adjustment approaches are best. As for bureaucratic structures, civil service principles (e.g., technical entry exams, job stability, career development) are increasingly inadequate as we go from cell 1 to cell 8. When goals and means are clearer (health policy), a merit system is more appropriate even to high decision-making levels. When the means are precise but the goals are changeable, a civil service is appropriate basically for technical decisionmaking positions (e.g., those in charge of project validation for public works). Whenever goals and means are vague and unstable (as in the case of interior ministries policies), civil service structures are not appropriate at almost any level, as merit is not easily established, nor is there the same need to build a policy or institutional memory, and functions call for extensive flexibility to change the course of action and adjust means.10 We can also try to match these policy situations with types of organizational structures (state, private, or social) or types of intergovernmental relations. For instance, although overall decision making in health policy tends to be more top-down and meritocratic, hospital administration by private or social entities can significantly increase efficiency in this field.11 By contrast, although interior ministry policy should have greater room for flexibility and consultation in decision making, for the most part both policy formulation and administration in these areas should remain state functions (e.g., “intelligence” policy should not be administered by a private entity).

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Matches can also be made according to state functions. In that sense, I have proposed (2002, 1999a) the consideration of six main state functions (legislation, law enforcement, the administration of justice, strategic management, administration, and evaluation), ten main policy tools (coercion, compensation, market, evaluation, participation, specification, persuasion, acknowledgment, professionalization, and tradition), and the definition of links between them. For instance, matching professionalization (i.e., civil service) to law enforcement and the administration of justice, compensation and market to administration, and participation to constitution and evaluation. Finally, we can proceed by stage of development. For instance, some have argued that developing countries should maintain or implement the classic career civil service rather than the NPM model, especially when they lack the legal and professional culture of a career civil service (Polidano 2001; Peters 2002). Applying the NPM model to developing countries with widespread clientelistic practices may be counterproductive by aggravating fragmentation (Méndez 2002). For Malova (2002), the development of efficient coordination mechanisms and a culture of informal direct consultation between officials in the middle and lower ranks of the administration should be the priority in democratizing countries; only afterward can the move to bureaucratic flexibility be launched.12

Conclusions This chapter has argued that reforms such as privatization, decentralization, and bureaucratic modernization—while taking power away from the top of the central state and empowering the various actors around it (businesses, regions, and managers, respectively)—should also strengthen the state capacities and coordinating mechanisms necessary to yield the public goods societies demand. To that effect, after considering the debates surrounding each of these topics, two overall recommendations have been presented: first, to approach national reforms in more balanced ways and, second, to better match types of state structure to specific situations according to policy areas or national circumstances. As to the first recommendation, the main specific proposals include the following: 1. Privatization. This chapter argues that it is best to follow a fast, total (in the aforementioned sense), widespread, and dispersed approach to privatization. The factors of success here are appropriate legal and organizational frameworks including antitrust laws and adequate planning; strong political commitment from multiple political leaders to privatization; public consensus; transparency in the process through open and competitive tenders or stock market transac-

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tions that avoid favoritism or collusion; and market-oriented macroeconomic conditions with good corporate governance and well-functioning stock markets. 2. Decentralization. This chapter proposes that it is best to decentralize all possible political, administrative, and financial faculties The factors for a successful decentralization process are careful phasing and planning according to the capacities of institutions; incorporation in a central government’s master plan; mechanisms for coordination in financial, policy making, and political terms; and establishing hard budget constraints for subnational governments as well as mechanisms to avoid national bailouts of regions. 3. Bureaucratic Modernization. This chapter recommends that it is best to design a balanced civil service—that is, a responsive bureaucracy—in which there are mechanisms to assure that civil servants implement in a timely manner the policies set by politicians, and in which the advice of civil servants is taken into account and their merits and careers are respected. Several factors contribute to a successful responsive bureaucracy: First, entry to all positions is dependent on exams; access is available for both internal and external candidates, but internal candidates’ efforts and merits in the public sector are taken into account. Second, there are fair but periodic as well as rigorous professional and performance evaluations. Third, there is a system of incentives that is both economically viable for the agencies and attractive for the civil servants. Fourth, a sanction system that is fair but fast. In this system, permanence on the job depends on the performance evaluations as well as on compliance to the norms set by each organization. As to the second overall recommendation—to follow a contingency approach— a three-dimensional matrix was presented as an overall guide to better match state structures with policy situations. Of course, these “middle ground” and “contingency” answers to the dilemmas of state reform do not attempt to offer a panacea: adequately combining the characteristics of both the lion and the fox is still a statecraft challenge that each nation and state reformer has to face on its own. These recommendations, however, signal a direction toward building a working democracy that facilitates the urgently needed reconciliation of individuals with their state and with politics in general.  1. In Mexico we refer to it as “democratic governance” (gobernabilidad democrática) (Méndez 1996a; Woldenberg 2001), which has become one of the main mottos of the current federal government.

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2. Where citizens’ freedoms plus state capacity equals a working democracy, which in turn equals a consolidated and sustained democratic system. 3. Several of the oldest democracies, mainly those established in middle-sized nations such as the United Kingdom or France, have had unitary—not federal—types of intergovernmental systems, and so dividing power at the subnational level has not made much sense. However, they still have distributed power (i.e., political and administrative capacities and functions) between the national and the local spheres of government. 4. This is because it allows for a less politicized type of policy language and orientation, which in turn reduces transaction costs and facilitates the communication and dialogue necessary for coordination. In addition, such a civil service provides greater stability of actors, which has proven to be essential in building the so-called cooperative games and avoiding non-cooperative ones. (If people are highly likely to keep interacting with their counterparts in the future, they will think twice before choosing not to cooperate with them.) 5. To a great extent, both approaches come from Aristotle, who recommended looking for the “just mean” and empirically studying the particularities of each state. 6. Malova (2002) cites the U.S. and U.K. privatization experiences of the 1980s as supporting the case for a fast and total approach. Of course, as she also states, that does not mean privatizing everything; even the most market-oriented countries preserve substantial parts of public sectors and provide necessary public services. 7. Although rather close to the model of NPM, countries such as the United Kingdom, New Zealand, and to a lesser extent the United States are closer to this description than countries such as France or Spain, which still have rather rigid systems in place. Many of the biggest Latin American countries are slowly evolving toward more flexible models, but most of them still have quite rigid or malfunctioning systems. 8. These tools do not offer panaceas. Rather, they aim to help state leaders and reformers map their own terrain and find the solutions most suited to their circumstances. 9. This dimension of “heterogeneity” means the different capacity and knowledge that actors have regarding ends and means within their area. The degree of heterogeneity can be substituted for the degree of urgency whenever this factor is more relevant; the later can also be added as a fourth factor. 10. Of course, the differences among policy areas are not absolute. For example, although it may not substantially affect the medical methods to fight cancer, some important aspects of health policy (e.g., the quantity of assigned resources) can be affected by partisan or ideological positions, and so they could become less clear and stable. Also, depending on the regime, policies tend to move toward the more participative cells of the matrix (e.g., the United States) or the more vertical ones (e.g., Latin American countries). For example, health policies can be in cell one or two for the latter, but in cell three or four in the former. My point here is that, despite this fact, health policies are comparatively more subject to “knowledge accumulation” and thus policy continuity than interior ministry policies, which are comparatively more subject to ideological debates and turns. 11. Malova (2002) argues that contract relations are most likely to emerge in the sector of natural utilities and in the field of municipal services (where transaction costs are usually lower).

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12. All else equal, this “phased approach” may be right. It may, however, overlook the fact that, in the context of the often-clientelistic administrative traditions of many developing countries, civil services have become mere legitimizing facades, whereby bureaucrats are benefited in exchange for political support and the merit and professional principles are avoided in practice (World Bank 1997). For these and other reasons, organizations such as the Latin American Center for Development Administration rejects such an approach and recommends a more balanced approach.

 Aberbach, Joel, Bert Rockman, and Robert Putnam. 1981. Bureaucrats and Politicians in Western Democracies. Cambridge, Mass.: Harvard University Press. Albats, Yevgenia M. 2002. “Case of the Russian Federation.” In Conference on Democratic Transition and Consolidation. Madrid: Siddaharth Metha Ediciones. Anwar, Dewi Fortuna. 2002. “Do ‘Privatization,’ ‘Downsizing,’ ‘Deregulation’ and ‘Decentralization’ Do What They Claim to Do: Raise Efficiency, Cut Down Deficits, and Expand the Consumer’s Choice? Do They Further Democratic Consolidation?” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Metha Ediciones. Asmeron, Haile, and Elisa Reis, eds. 1996. Democratization and Bureaucratic Neutrality. New York: St. Martin. Brillantes, Alex. 2002. “The State: Reform of the State Bureaucracy and Building Capacities for Decentralization.” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Metha Ediciones. Carothers, Thomas. 2002. “The End of the Transition Paradigm.” Journal of Democracy 13, 1:5–21. Cohen, M. D., J. March, and J. Olsen. 1972. “A Garbage Can Model of Organizational Choice.” Administrative Science Quarterly 17, 1: 1–25. Easton, David. 1953. The Political System. New York: Alfred A. Knopf. Evans, Peter B. 1997. “The Eclipse of the State? Reflections on Stateness in an Era of Globalization.” World Politics 50, 1: 62–87. Garilao, Ernesto. 2002. “The Reform of the State Bureaucracy.” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Mehta Ediciones. Gil Villegas, Francisco. 1986. “Descentralización y democracia: Una perspectiva teórica.” In Descentralización y Democracia en México, ed. Blanca Torres. México, D.F.: El Colegio de México. Gramsci, Antonio. 1975. Notas sobre Maquiavelo, sobre política y sobre el Estado moderno. México: Juan Pablos. Grindle, Merilee. 2000. “Ready or Not: The Developing World and Globalization.” In Governance in a Globalizing World, ed. Joseph S. Nye and John D. Donahue. Washington, D.C.: Brookings Institution. Hibou, J. 2002. “The Reform of the State Bureaucracy.” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Mehta Ediciones.

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Hood, Christopher. 1991. “A Public Management for All Seasons.” Public Administration 69, 1: 3–19. Huntington, Samuel. 1991. The Third Wave: Democratization in the Late Twentieth Century. Norman: University of Oklahoma. Kastner, George. 2002. “The Limits of the Application of Management Techniques in the Public Sector: The High Performance Government Model.” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Mehta Ediciones. Kim, Kwang-Woong. 2002. “The Reform of State Bureaucracy.” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Mehta Ediciones. Lindblom, Charles. 1965. The Intelligence of Democracy. New York: Free Press. Malova, Darina. 2002. “What Are the Limits Which Management Techniques of the Private Sector Can Be Used in the Public Sector? Contractualizing and Public Procurement.” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Mehta Ediciones. Méndez, José Luis. 1986. Modelos de desarrollo en América Latina. México, D.F.: Universidad Iberoamericana. ———. 1995. “La profesionalización del estado mexicano: ¿Olvidando o esperando a Godot?” El cotidiano 11, 70: 13–25. ———. 1996a. “¿Del Estado propietario al Estado promotor? La política hacia la micro, pequeña y mediana industria en México, 1988–1994.” Foro Internacional 36, 1–2: 321–71. ———. 1996b. “Federalismo y redes intergubernamentales.” Este País 69:52–54. ———. 1996c. “Introduction.” International Journal of Public Administration 19, 9: 1403–18. ———. 1996d. “Reforma del Estado, democracia participativa y modelos de decisión.” Política y Cultura 7 (fall): 7–35. ———. 1999a. “Estudio introductorio.” In La política de la burocracia, ed. B. Guy Peters. México, D.F.: Colegio Nacional de Ciencias Políticas-Fondo de Cultura Económica. ———. 1999b. “Estudio introductorio.” In Para entender las relaciones intergubernamentales, ed. Deil S. Wright. México, D.F.: Fondo de Cultura Económica-Colegio Nacional de Ciencia Política y Administración Pública. ———. 2002. “Democratic Consolidation, Economic Globalization and Bureaucratic Structure.” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Mehta Ediciones. Migdal, Joel Samuel. 1988. Strong Societies and Weak States: State-Society Relations and State Capabilities in the Third World. Princeton, N.J.: Princeton University Press. Norris, Pippa. 2000. “The Impact on Domestic Governance: Global Governance and Cosmopolitan Citizens.” In Governance in a Globalizing World, ed. Joseph S. Nye and John D. Donahue. Washington, D.C.: Brookings Institution. O’Neill, Kathleen. 2002. “Coordinate or Decentralize?” In Conference on Democratic Transition and Consolidation. Madrid: Siddharth Mehta Ediciones. Oszlak, Oscar. 1980. Políticas públicas y regímenes políticos: Reflexiones a partir de algunas experiencias latinoamericanas. Buenos Aires: Centro de Estudios de Estado y Sociedad. Peters, B. Guy. 2002. “The Changing Nature of Public Administration: From Easy Answers to Hard Questions.” Paper prepared for seminar Twenty Years of the Public Administration Program of El Colegio de México, El Colegio de Mexico, Mexico City, November 14–15.

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Peters, B. Guy, and Donald Savoie, eds. 1995. Governance in a Changing Environment. Montreal: Canadian Centre for Management Development. Polidano, Charles. 2001. “Why Civil Service Reforms Fail.” Working Paper 2001/16, Institute for Development Policy and Management, University of Manchester. Przeworski, Adam. 1995. Sustainable Democracy. Cambridge: Cambridge University Press. Rondinelli, Dennis, John Nellis, and Shabbir Cheema. 1984. Decentralization in Developing Countries: A Review of Recent Experience. Washington, D.C.: World Bank. Simon, Herbet. 1976. Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization. New York: Free Press. Skocpol, T., P. Evans, and E. Rueschmayer, eds. 1985. Bringing the State Back In. Cambridge: Cambridge University Press. Weber, Max. 1944. Economía y Sociedad. México: Fondo de Cultura Económica. Woldenberg, José. 2001. La construcción de la democracia. Barcelona: Plaza y Janés. World Bank. 1997. World Development Report 1997: The State in a Changing World. Washington, D.C.: World Bank.

 

Military, Police, Politics, and Society Does Latin America Have a Democratic Model?  

A modern state’s institutions and laws serve, in theory, to manage public affairs more efficiently. Modern states contain institutions and regulations that specialize in different aspects of community life. The state’s monopoly of violence, a principle on which national states were organized, entails coercive tools to enforce the law and defend territory through security agencies that manage security and defense. The state concentrates military command and bureaucratic and economic instruments into a single unit that is responsible for political action. In the military field, a rational, streamlined organization originates from a command center and enables unit-based deployments (Heller 1955, 145–47). A core task in Latin America’s return to democracy has been to regain command of military institutions. Although to a certain extent these policies have been fairly successful, they have been less so in two important areas: defining national defense tasks and creating missions for the military that meet democratic standards for Latin American societies. The mission of the armed forces is to defend the territory and its inhabitants through specialized preparation and the exclusive use of certain equipment. Their role is to deter external aggression and ensure freedom of action to government and citizens. This essential activity ensures a nation’s survival and confers on the military the right to employ weaponry. As a result, the military must always be subordinate to the civilian government, and scholarship on military issues always reflects this conviction, emphasizing procedures that ensure democratic civilian control. The civil authorities must establish political guidelines for military conduct, eliminate military challenges to civilian power (Stepan 1988), enact laws through national legislatures to govern the military, and construct a defense establishment that comprises individuals and organizations with legitimate responsibilities to elaborate and implement defense policies (Diamint 2002).

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Joseph Fouché, a leader of the French Revolution and later Napoleon’s political intelligence chief, is said to have created the concept of the police as an instrument to manage public security within a state. The police are a state’s apparatus to regulate the daily acts of citizens, ensure order, and organize and implement procedures for law enforcement. They prevent crime against ordinary people and property and protect the public from violent attacks or aggressions. They are lawfully authorized to use force to guarantee order and respect for law. The shortcomings in the design of sound security policies—taking the term in its widest meaning1—undermine the democratic system. Such shortcomings are often associated with assigning growing or overlapping tasks to the military and the police, thereby reducing the civilian government’s capacity for social and political oversight. Studies of democracy do not always fully appreciate the deeply rooted tradition according to which security forces administer power themselves or become subordinate to incumbent political leaders rather than to the rule of law. In states where partisanship and political patronage subordinate the military and the police to charismatic leaders, neither institution can contribute to the rule of law (Zagorski 1992; Fitch 1998). Vertical structures and subordination are part of military training, yet they are also at odds with political decision making in democratic systems. Efforts to establish similar procedures for civilian and military sectors, despite their different inner logics, usually lead to confrontation and misunderstanding. Military leaders demand clear orders, whereas politicians change their decisions depending on the situation. Military leaders prefer personal relationships and direct contact, while civilian authorities should prefer institutional relationships. Finally, military leaders consider their actions to be state secrets, and civilians, by contrast, look for greater transparency. Police forces also have vertical and ranked structures, exacerbated at times by the subordination of the police to the armed forces or despotic leaders. Such situations are common in most Latin American countries, where leaders have prioritized internal obedience over compliance with the law. The reform of police institutions or, as in El Salvador, Honduras, and Nicaragua, the creation of a new civilian police force, has not overcome the long-standing absence of the rule of law. This chapter looks at the shortcomings of Latin American democracies in elaborating security policies for democratic states and argues that civilians must control the security apparatus to ensure democratic governance. I first study the missions of the Latin American armed forces and point out the difficulties that some governments find in implementing military policies. At the same time, I emphasize the opportunities that new regional cooperation and integration provide for rethinking military roles and the continuity of military autonomy, as demonstrated by military

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independence in making decisions to purchase war matériel. Next, I analyze peacekeeping missions and their effects on increasing civilian control over the military. Another part of the chapter refers to the overlap between defense functions and law enforcement missions—a growing confusion that arises from the nature of new security threats, the increase in citizen violence, and the authoritarian background of the police. Subsequent sections portray police characteristics and the shortcomings that prevent the police from becoming community organizations where law enforcement and human rights prevail. The conclusion discusses the need to strengthen security mechanisms based on high political and social legitimacy.

The Military Profession in Democracy The new domestic and international worth ascribed to democracy and the prospects for international cooperation create expectations regarding the elements that provide security to a nation. During the cold war, most observers agreed that a country’s military power and technological breakthroughs guaranteed stronger influence and a greater capacity for international negotiation. Today, other principles determine the place of a country among nations. These include the control of communications, technological advances, transportation, and manufacturing flexibility.2 According to Richard Holbrooke, a high-ranking State Department official in the Clinton administration, “The process of political and economic transformation is threatened by a set of challenges—organized crime, ethnic tensions, unemployment and other social disruptions, the return of historical injustices and a fire that continues to flame in the Balkans. Democratic institutions have indeed been established, but they remain fragile.”3 During the past several years, these institutions have not performed more effectively. The tension between democratic weaknesses and new threats requires a thoughtful analysis of world events. Military force is the last resort in relations with other nations. In peacetime, the military ensures the safety of a nation’s people and material resources. Traditionally justified to protect national sovereignty (García 1995), the military engages in armed defense of territory to preserve a nation’s constitutional authorities and way of life. Military personnel are trained to act in different scenarios and to adapt to changing circumstances, but they cannot respond to all affairs of the state. Frameworks must be established to limit the scope of their actions. Some political leaders argue that the military should support international integration processes and defend regional as well as national interests.4 Others believe that countries should maintain strategic competition by taking advantage of an opponent’s vulnerabilities, though they may use different means of aggression (Thauby G. 2000,

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331–34; see also Mathias 2001, 143–46). Although the armed forces certainly contribute to a state’s foreign policy objectives, by no means should the military become an obstacle to the national government’s decisions. The question of the military’s mission is complex in Latin America because the region is free from weapons of mass destruction, has made democracy a requirement for membership in hemispheric and subregional organizations, and has carried out several commercial integration mechanisms. Latin American countries have, nevertheless, also shown a stunning inability to impose democratic defense policies. First, it is important to underscore the renewed legitimacy of democratic values, such as human rights, that should affect military missions. Human rights are a clear international value that influences national policy decisions. For example, the arrest of former Chilean dictator General Augusto Pinochet shows an international capacity to punish misdeeds today that did not exist twenty years ago. This renewed dedication to human rights may impair a state’s discretionary power to adopt authoritarian policies (Facultad Latinoamericana de Ciencias Sociales [FLACSO] 1999). Stronger laws prevent soldiers from committing actions against citizens. Likewise, humanitarian assistance missions lead officers to share tasks with civil defense organizations (Byman 2001). This higher threshold of respect for individual rights has driven the spread of democracy in the hemisphere, though at different paces in different countries, yet it remains disturbing that some countries are moving toward democratic consolidation while still sustaining military prerogatives that create asymmetries between the decisions of military institutions and those of other government organizations. There are numerous examples of such asymmetries.5 An aristocratic constitution governs Chile’s politics. Mexican soldiers reject the democratic government’s involvement in what they consider their own affairs. Guatemala has failed to implement aspects of the peace accords. The Paraguayan government cannot control the corrosive relationship between the military and the country’s former coup d’état leader Lino Oviedo.6 Brazil leaves the management of state intelligence to its military. In conclusion, democracy has become one of the main values shared by countries in the hemisphere. As a result, countries in the region promote its protection everywhere and foster civil-military relations consistent with the full implementation of democratic representation. A new respect for human rights has grown apace with democratic reform and state modernization. Most Latin American nations became democratic amid crises that arose from both internal demands and international pressures. Thus, the game of democratization is concurrent with that of economic reform. There is a need to strengthen institutions that function within a framework that meets the new requirements of the international market.

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Civilian Policies for Military Acquisitions State reforms create constraints for replacing military equipment. For example, the World Bank and the Inter-American Development Bank provide resources to revamp ministries and reduce the huge numbers of public officials, but they exclude defense and security agencies from such loans. The conditions imposed by international financial institutions are coupled with indirect or informal pressures exerted by powerful countries in order for the Latin American militaries to adopt the international agenda. In spite of budgetary constraints, the arms race has not ended in the region. For example, plans to equip the Chilean Air Force generate modernization demands in neighboring countries. Those demands are aggravated by the fact that such equipment does not seem to respond to the objectives set by the Ricardo Lagos administration (Strategic Comments 2002). As an editorial in the Washington Post stated,7 “Almost nothing has sense in the sale. . . . The fact that Chilean democratic civilian administrations do not wish to spend money on advanced aircraft is an open secret. But President Ricardo Lagos is under pressure by the military leaders who ruled the country between 1973 and 1990, and are not as yet under complete civil control.” Cardoso’s government in Brazil went through several internal crises over expectations that it build a nuclearpowered submarine (Dreifuss 2002). Peru justified its rearmament as a response to its 1995 war with Ecuador—as well as a corrupt alliance between Fujimori’s government officials and military sectors (Rospigliosi 1998). Equipping Colombian armed forces to fight the guerrillas and drug traffickers created a regional imbalance with long-term consequences (Lumpe 2002). In the absence of express defense policies and effective regional agreements, these tendencies rebuild military power. Such tension between military desires and development models influences how countries define military roles. The idea that the market efficiently regulates a nation’s activities has gained ground. According to market logic, any defense policy is influenced by market dynamics. Because the market logic touches all state policies, every social good in the community of values is exchanged for another good. This calculus also determines the type of military missions, the kind of weaponry a country purchases, and the nature of military privatization. In areas with experience in public policy making, the intrusion of market laws is less risky. Where defense policies were not designed in this way, however, such market logic becomes dangerous, as in Ecuador, Nicaragua, Honduras, and other nations where the armed forces have become independent, businesslike enterprises (Diamint 2002). Police organizations, also, have become businesslike through two different mechanisms: their involvement in organized crime and corruption and the dis-

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proportionate increase of private security forces beyond the reach of proper regulations and rules that protect society and public property. The argument for market supremacy challenges the idea that the state is an impartial actor that pursues the community’s well-being. Although the state is the main international player, it is no longer the only one, and it is not always the most powerful. The defense of sovereignty, once one of Latin American militaries’ strongest arguments, has been reformulated on the basis of a new conception of state power and the international community (Lynch 2000; Joxe 2002). In a region of incipient democracy, government leaders must think of policies based on a new model for the state that promotes the same values: democracy, open markets, and respect for human rights. Government actions must adapt to a threepart logic: (1) the logic of markets influenced by world agents and business arguments; (2) the logic of state sovereignty enshrined in law, including property rights and the rights of domestic actors who compete over power; and (3) the new logics that emerged after the terrorist attacks of September 11, 2001, regarding the technological and military predominance of the United States that shapes competition over technology, satellites, and communications. In light of these factors, the mission of the military is not territorial defense but rather the defense of a community of national and global assets. Considering the proposals known as security sector reforms (SSR), democratic governments in Latin America have a major task ahead of them. In the first decade of the twenty-first century, experts have discussed the SSR concept as an element of governance programs, insisting on establishing better policy accountability mechanisms. Such reform involves all institutions with a mandate to guarantee national and individual security through expert civil control of defense, interior, justice, and foreign affairs ministries (Chanaa 2002; Mendelson Forman 2001). This comprehensive reform plan not only includes the military, but also seeks to reinforce the role of civil society and to ensure human security (Axworthy 1997; Mack 2000). Reform of the security sector need not lead to an overlap between defense and law enforcement functions. The involvement of the army in urban operations and increased police presence in the streets conveys only a feeling of crime containment. The military are not trained to be in the street and lack the appropriate weapons to control citizens. On the contrary, soldiers use weapons of war that are not suited for police patrols (Rospigliosi 1998; Quintana 1998). Soldiers are accustomed to a highly vertical command chain that does not prepare them properly to manage citizen infractions of the law. The police and the military have different purposes; for the sake of a proper institutional management of democracy, overlaps between them are contrary to the defense of human rights and should be avoided.

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Military Missions and Foreign Policy The post–cold war period has provided a window of opportunity for Latin American civilian governments to reformulate long-standing conflict scenarios with neighboring nations. Latin American militaries have intensified training with those from other countries, increased joint operations, and cooperated in United Nations–sponsored missions. When interacting with other forces, their decisions, doctrines, and organizational matters must be transparent. Defense ministries must reveal their weaponry, equipment, and performance levels to these other countries. Such transparency in a state’s own actions eliminates threat perceptions with neighbors; those assumed threats led to earlier defense plans. The difference between these joint actions—similar to those carried out for more than twenty years within the NATO framework—and the cooperation among Latin American forces under dictatorships is that civilian officials coordinate them now.8 Cooperative regional processes enhance security: a neighbor is no longer perceived as an enemy, but rather as a partner who faces common threats, such as those that lead to environmental or humanitarian missions. Confidence-building measures, defense ministerial meetings of the Americas, and joint operations between forces from different nations are part of the operating framework within which each nation organizes its military according to democratic criteria (IV Defense Ministerial of the Americas 2000). As a state’s military becomes involved in combined operations with forces from other countries, it must become more professionalized and deploy more frequently outside its national territory. Cooperation in disaster management in Central America and in peacekeeping between Ecuador and Peru, where the armed forces from various countries helped stop the conflict by imposing a peacekeeping force between the Ecuadorian and Peruvian armies, typify the new roles of the military. Peacekeeping missions have a democratizing effect. The military gains knowledge and experience through the exchange of officers and citizens from various countries, thus achieving a greater understanding of other cultures and beliefs. Diversity and openness contribute to greater tolerance, which is vital for democracy. These missions also promote an objective civilian control of the military (Palá 1998; Montgomery 2000). Uniformed personnel must conceive of defense in a multilateral way (Palá 1995). The concept of transmilitary interoperability has become an internal redesign tool, thanks to an external requirement and an impulse to review common logistics. Relationships with other institutions during peacekeeping missions lead military planners to think of defense according to modern organizational criteria.

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Peace-support missions strengthen the civil command of defense when they are carried out between civilian governments and the United Nations. Those responsible for managing peacekeeping missions include diplomats who are posted at the United Nations, receive Security Council requests, and transmit them to their respective governments. Foreign offices talk to defense ministries to learn about the feasibility of participating in such operations. Further, these officials receive technical advice from the various service chiefs and define the extent of their commitment for troop deployment. This fully civilian process ensures political command of the military, reinforces the institutional logic of democracies, and strengthens internal negotiation processes between agencies. The military performs its missions based on government-approved rules of engagement that are officially communicated to the UN mission commander, and military actions are governed by laws. Missions in combined operations become transparent and verifiable. In countries where the military formerly had had discretionary control, such procedures reinforce the rule of law. Ultimately, a state’s involvement in peacekeeping missions changes the power criteria by altering the lines of command (Norden 1995). Peacekeeping missions typically consist of forces from different countries and troops are commanded, on a rotating basis, by officers from foreign nations. Latin American soldiers must follow orders from officers with whom they hold professional bonds but not corporative loyalty. For example, the Argentine army in Cyprus shared the mission theater with British forces, although the two had been enemies during the 1982 South Atlantic war (Argentine Council for International Relations [CARI] 1999). Such an exercise obligated the Argentine forces to place international law over nationalistic ideals that were deeply rooted in their military tradition. Such democratizing effects of peacekeeping missions provide alternative ways to exert control over the military, promote democratic values, and increase professional training, thus contributing to the security of both society and the international community as a whole. This analysis is supported by the reluctance of several Latin American militaries to be assigned by their governments to peacekeeping missions. The greatest opposition is found in the Mexican armed forces that, finding refuge in the constitution, are reluctant to accept new rules whereby some autonomy could be lost (Benítez Manaut 2000). Such external roles for the military strengthen regional, subregional, and global agreements. In the same way that the European Union has security agreements for building a democratic consensus, Latin America should construct a democratic future where defense questions are not isolated phenomena unrelated to other state policies. Such responses can be coordinated through the Organization of American

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States or subregional mechanisms (Diamint 2001). The trend toward multilateralism enhances civil-military relations, opening up more alternatives to domestic issues through reciprocal commitments (Domínguez 1999). This process is accompanied by the creation of a community at the international, national, and regional levels (Tulchin and Spach 2001). Relationships with other countries generate discipline and rules. The conjunction of the prevalence of the rule of law and the involvement of different sectors of society should create a defense community that promotes a rationale for decision making regarding military missions. The preeminence of rules, rather than the traditional exchange of favors between the executive branch and the military, contributes to a better defense.

Military Missions and New Threats New threats are conflicts that on many occasions take place within a single country, although international agents may support them. Adding such risks to the scope of the armed forces is dangerous both for the consolidation of democracy as well as for professional reform of the armed forces. Problems such as drug trafficking and the fight against terrorism create a double negative effect: the security issue is militarized and the power of civilian authorities cannot be strengthened. Consider the case of Colombia. Failed peace talks (Arnson 1999), increased territorial power for the Revolutionary Armed Forces of Colombia (FARC), and U.S. military training have resulted in increased violence and a greater militarization of conflict. The new military strategy is unlikely to succeed but social unrest may be exacerbated (Strategic Comments 2000). Terrorism raises another dilemma: it is difficult to address legally or to respond to militarily. Compared with other risks, terrorism is inexpensive and, employing only a few people and limited resources, can efficiently affect the population. (Richmond 2003). Terror acts are unexpected, designed to generate immediate media coverage, and create panic in public spaces. Acts of terror are not easily controllable and demonstrate that even the most sophisticated military intelligence cannot prevent such attacks (Simon and Benjamin 2000). Terrorism in Latin America in the twenty-first century is less ideological than in years past. Its civil-political support groups are hard to detect, unlike the guerrilla groups of the 1970s (Manwaring 1996). Governments can install large radars, as at the Paraguayan, Brazilian, and Argentine borders, but these facilities do not prevent the movements and actions of specific individuals. Some manifestations of terrorism include a religious component that crosses borders. These types of terrorists seek to hit their enemies but do not seek to take over power (Simon and Benjamin 2000).

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Such terrorists may use weapons of mass destruction that they purchased on the black market from the remnants of the cold war. In sum, although governments need to take the necessary precautions and plan actions to respond to this menace, military establishments should not fight terrorism if doing so creates the risk of a civilian pursuit without legal supervision (Eguizábal and Diamint 2002). The best resources for combating terrorism available today are: controlling migration, operating an efficient legal system, combining civilian intelligence with agencies from other countries, and attending to sensitive material transfers related to chemical and pharmaceutical industries (International Institute for Strategic Studies 1999, 87–88). In the security arena, terrorism has given rise to new social and political players. Perceiving a more dangerous and hostile environment, both domestically and externally, these players struggle to improve the efficiency of security services. That they are facing such dilemmas does not imply that they are returning to the past and remilitarizing public security. The threat of international terrorism recalls the cold war confrontation between blocks of states and the national security doctrine of some regimes. Although it highlights the weakening of the state’s monopoly of force, terrorism is an atomized form of political violence, not a dispute between countries (Joxe 2002, 12). The state’s struggle with terrorists also weakens the notion of citizenship. The distinction between citizens, permanent residents, immigrants, refugees, and undocumented persons, as well as the fact that certain terrorist groups do not fit within ideas of state nationality, inspire new ways to address security and, hence, different functions for appropriate forces (Gomes 2000). Such a shift of functions and criteria requires that states respond with a highly transparent framework of rules of engagement that do away with biases and injustices. Massive migrations may also pose diffuse threats to security. Such migrations may pose a risk to the nation state by fragmenting identities, though society may feel a greater impact in competition for jobs and rising crime rates. Every country harbors resentments toward those who cross its borders. Argentina hypothesized that Brazil’s Landless Peasant Movement (MST) would launch a massive invasion from the north to compel the government of Brazil to act. According to the Agricultural Development Minister, Raúl Jungmann, the MST sought to blackmail the government with such acts.9 The Argentine Army went on alert and prepared a military response. In Mexico, Guatemalan migration has been viewed as a means of support for Zapatista guerrillas. The U.S. government has promoted the issue of migration as part of its security agenda; U.S. policies on migration have been a source of tension between the United States and Latin America (Serrano 1998). Nevertheless, conflicts with immigrants who challenge U.S. laws have provoked state and national legislation, not the deployment of troops.

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Subregional migrations are not new, yet their “disruptive” nature is viewed as more harmful today because of state vulnerabilities laid bare by globalization and the lack of jobs. In any case, counteracting the massive entry of people through military force is out of the question.

Military Missions and Development Natural resources appear today as assets that are threatened by commercial appetites. Such processes do not create a threat to the state but are sources of conflict or societal insecurity. Fishing, forestry, water pollution, and excessive ore extraction affect national and shared international regional interests. Competition over natural resources can lead to clear confrontations, such as those between Spain and Canada over fishing and the future of natural resources in the Arctic or over the destiny of Amazonian biodiversity.10 The armed forces are responsible for a country’s legitimate and necessary defense of its interests, and they are able to mobilize and respond more quickly and efficiently than civilian government agencies. If the military responds properly under civilian leadership, institutional mechanisms, and procedures under the rule of law, such responses will improve state capabilities. If such missions are taken over by the armed forces of their own volition to justify their existence or budget, however, democratic institutional order becomes weaker. Such environmental matters may also be a source of subregional cooperation. For example, the creation of a joint Argentine-Brazilian brigade to protect the environment would link the two militaries, safeguard environmental protection, and prevent bilateral conflicts. Such cooperation would not be a primarily military mission, but rather an effective contribution to the model of the armed forces in a democracy. The military has logistics capabilities, especially in disasters, but needs a civilian counterpart to set guidelines in accordance with the country’s resources and needs. Such international regional missions change the design of military roles, moderate traditional rivalries, and reduce defense spending. Another “nontraditional” competence is competitive technological development. One example occurred between Canada and Brazil when the Brazilian government subsidized Embraer so it could compete more effectively with Canada’s Bombardier aircraft.11 This led to a commercial conflict over the export of Brazilian beef.12 Disputes between Brazil and the United States over patents for AIDS medicines typify other nontraditional confrontations. In the former case, a direct relationship existed between the aircraft companies and military interests, but, in the case of AIDS, the military becomes involved because the disease kills soldiers and, during outbreaks, the military has traditionally performed logistics support duties.

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Are assistance missions during outbreaks and disasters military functions? In the event of a catastrophe such as a flood, no one has a better response capacity than the armed forces because they are organized, disciplined, and compliant. They have the necessary experience to respond quickly. This expertise, however, does not mean that the military should vaccinate people, teach them to read and write, build schools, and so forth. Other social institutions provide better and less expensive ways to address those needs. For example, medical students could carry out a vaccination campaign. Furthermore, it is unclear whether military involvement in such activities promotes or hinders the prospects for democratic consolidation (Goodman 1996). Some segments of society do not receive basic services from the government; as the state’s sole representative in faraway locations, the military fills the vacuum. Such social welfare functions lead, in sections of Paraguay and Ecuador for example, to the idea of a state within a state. In those communities the armed forces double as political authorities that offer services, provide jobs, and create basic infrastructure. Countries that suffer widespread inequities should not authorize the military to take over social duties, which divert the military from its proper function. Latin American governments respond slowly to these new challenges, leaving security matters in a secondary position. Such neglect is incomprehensible when one considers that global commercial exchanges create political, legal, and institutional requirements to participate under international rules that exclude military autonomy. Paradoxically, although the armed forces are hierarchical and bureaucratic— and hence presumed to be refractory to innovations—the military has demonstrated an unusual ability to adapt to new realities and organize resources to increase its presence in public affairs. Security policies result from opposing interests within a model of bureaucratic organization. Conflicting interests and visions from civilian, military, and singleservice sectors intertwine. The logic of these interests and the specificity of the defense issue require that military autonomy be limited; the state should take functions away from the armed forces and transfer them to other government organizations. This entails bolstering the policy-making role of the defense ministry and reassessing the duties of the foreign affairs ministry, congress, and other agencies to which duties may be assigned that previously belonged to the armed forces. The process thus expands the scope of security-related decision making by civilian institutions. In theory, congress should make decisions regarding security issues; however, a tradition of little transparency and secrecy in military matters, coupled with national legislatures that block presidential decisions, has often limited the exercise of civilian supremacy. Formal and explicit decision-making mechanisms are absent in many

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cases. One example was a dispute in Argentina between the Ministry of Foreign Affairs and the Ministry of Defense. Rather than strengthening institutional mechanisms for interagency mediation, the defense ministry chose a corporative defense of its own prerogatives. Another example comes from Mexico, where the Fox administration attempted without success to organize a national security office to take over security policy. The unforeseen consequence of such actions is often that, ultimately, power gravitates by default to the military.

Military Missions, Law, and Order Law and order is a key matter in Latin American democracies. States must respond to an international agenda where public and private players converge. In this global scene, most threats are “intrinsic.” That is, they cannot be addressed independently through a single nation’s capabilities because there is no clear distinction between international and domestic affairs (Domínguez 1998, 23). In the 1970s, citizens wanted more control over the military because it threatened those civilians’ very existence. Today many demand more control over the police because they fear for their own safety (Diamint 1999). Police forces are also under close scrutiny because the public sees them as a source of crime rather than guarantors of civil rights. Many consider police organizations unreliable and corrupt, and associated them with drug trafficking, contraband, and extortion. Police also become involved in politics by supporting presidents and governors or, as in Paraguay, by supporting political dissidents. During the events that led to a state of emergency in that country, the Paraguayan police reacted only modestly to the toppling of Alto Paraná and Itapúa department heads (Noticias 2002). Moreover, according to Hurrel (1998, 30), “many recent papers link social conflict primarily to the state’s inability to enforce its authority, the loss of its monopoly of legitimate use of force, and growing privatization of violence” Increased individual security measures, however, do not prevent the rise in crime rates. Rather, they further fragment the social fabric and thus create more conflict. During authoritarian times, police organizations commonly reported to the army in terms of doctrine and function, whereas under a democratic system military and police functions overlap, confusing institutional controls and failing to address public insecurities. Argentina attempted to create a constitutional separation between domestic security and national defense in an effort to eliminate military persecution of citizens. As a result of increased drug trafficking, organized crime, and the need to stop unhappy protesters opposed to new social exclusions, many governments have again begun to resort to military forces when police are overwhelmed. Deficiencies in

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the civilian decision making over, and management of, defense policies, as well as government demands on the military to carry out activities involving the civilian population, have recreated old traditions of military control through individual leaders, practices that should have been removed altogether from a democracy. Military involvement in domestic affairs implies a change in the type of equipment required for the security forces. Armed forces that support the fight against drug trafficking require equipment for such operations. U.S. companies have diversified their offerings to include weaponry for preventing drug trafficking. In some cases, providing modern equipment to police organizations or gendarmeries creates competition between police forces and the military—a struggle for budgetary resources that permeates the executive branch. In addition, weaponry defines force profiles, causing strategic planning to break down; de facto adjustments take place in the absence of planning. Careful planning could, instead, eliminate or regroup forces, close training schools, consolidate regiments, and unify commands. Reforms have been driven thus far by cases such as the proposed sale of state-of-the-art helicopters or excess articles at very low prices. Such measures proceed, however, without drafting any plan to improve armed forces and police operations or the use of public resources.13 There is insufficient debate concerning law-enforcement duties and regulations in a democracy—even less debate than on defense policies. SSR should define lawenforcement missions, limit the scope of police action, and specify in detail how the policy-making process works. This requires determining institutional channels and authority levels within the force and discussing police methods and the regulations that govern police practices. In several countries, civil society groups have been established to combat and report police abuses, seeking to improve police practices and promote rules and regulations to correct police behavior (Peruzzotti 2002). Few Congresses have security committees, however, and, in general, states have not carried out reforms in this field or created external oversight mechanisms to guarantee the proper exercise of such roles in a democratic context. The proposals coming from society and political actors seek to make police organizations enforce law and order and, at the same time, obey the law themselves.

Police Forces and Democratic Rules Concerns about a new wave of military governments have decreased, but Latin American societies face new forms of violence through the interconnection of common and organized crime and illegal police behaviors, one legacy of authoritarian governments. The first major effect of the authoritarian regimes was the militarization of

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domestic security. Military officers on active duty commanded police forces directly and relied on military doctrine to enforce law and order. The military’s focus on the supervision of citizens, rather than external defense, led to domestic control aimed at reducing crime. Once transitions to democracy took place, an institutional and legal vacuum led to greater crime levels (Morrison, Buvinic, and Shifter 1999). By demilitarizing the police, countries sought to develop a civil force that was faithful to democratic values. Nevertheless, the legacy of arbitrary powers remains.14 For example, in the report presented by the national commissioner of human rights in Honduras, Dr. Leo Valladares Lanza stated, “It is obvious that we are still affected by the remains of a militarized police that prevailed for more than thirty years and the heritage of a society hegemonized by the armed forces.”15 According to José María Rico (1997b, 176–77), “In Latin America, countries such as Brazil, Chile, Honduras and Mexico are examples of a strong militarization of their police services. . . . In the rest of Latin American countries, police services have been—or are being—transferred to civil authorities, although they generally keep a military structure.” Second, the failure to try the military for abuses committed under authoritarian governments created a sense of impunity for the armed forces that was broadly perceived in society and among other security agencies. Neither police organizations nor citizens have internalized the idea of the rule of law or the supremacy and impartiality of the courts. The system of punishment is biased; ethical and moral rules that support law and order do not prevail. In spite of the contribution of human rights organizations, subjectivity and suspicion of the system of justice remain common among citizens. People do not report crimes because they fear a police force that runs on bribery and seizes weapons for use by police officers themselves. The police do not respond to citizens’ calls and have become involved in organized crime. In Chile, 45.1 percent of crime victims did not file police reports.16 In Brazil, Paulo de Mesquita Neto (2000) argues that community-policing programs did not improve society’s trust in the police; in 1995, the percentage of people who feared the police was 51 percent, a number that rose to 77 percent in 1997 and remained very high at 66 percent in 1999. Similar figures are found in the rest of Latin America, where fewer than 40 percent of the crimes suffered by individuals each year are reported (Policía y Sociedad Democrática 1998). In light of the virtual absence of an internal affairs office to screen and sanction personnel, these concerns lack near-term solutions. Third, the culture of arbitrary procedures inherited from authoritarian governments has led to the indiscriminate use of weapons. Under the old regimes, officers and citizens became accustomed to bearing arms. Guerrillas and paramilitaries spread the use of weapons in society.17 In Central America, “the Contras” placed a very large number of weapons brought from the United States in the hands of com-

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mon people. Weapons-recovery programs that the United Nations and other international organizations implemented in El Salvador and Nicaragua—and attempted to apply in Guatemala and Ecuador—were insufficient and thus discontinued. The issue of weapons illustrates, therefore, how the outcome of civil wars at times creates armed societies with no political objectives. Citizens possess weapons for various reasons, including gunrunning, an international clandestine business. Moreover, the end of the cold war and the refocusing of threats around the so-called new security agenda changed the criteria for weapon production and sale. Weapons registries—in countries where they existed—did not work properly and therefore a large number of arms remain beyond the reach of the public authority. In other countries, such as Honduras, arms stores receive items from the military itself, which acts as a monopoly for the legal import of weaponry and reaps economic rewards from selling them. The culture of arms has become an inherent part of Latin American societies; the fact that citizens bear arms or that heavily armed private security details guard houses and businesses is not viewed as unusual. The fourth legacy of authoritarian governments relates to social conditions. An increasingly polarized society, high unemployment, and low social mobility greatly restrict opportunities for social and economic participation. Such conditions have an adverse effect on family life and lead to broken homes; family violence tops the crime rate statistics (Ayres 1998). Such social disruption creates a predisposition among citizens not to abide by the rules. Lack of openness, an inclination to transgression, and resentment of impunity rule the day. Leaders who seek to strengthen democracy aim at demilitarizing society. Implementing such changes, however, causes unexpected problems: a new, unconsolidated police and disputes between agencies, including the armed forces, detract from credibility in security responses and impede planning in the face of violence. The growth of public insecurity does not stem from the absence of institutions or from understaffing but rather from deviations in the appropriate duties of such security institutions and the improper behavior and corruption of their members. According to Andersen’s 2002 study on Argentine police, “From its early times, Argentine police proved more sensitive to signals from the authorities than to the rule of law. Its main assigned mission was to protect the State, rather than guarantee people’s full rights and duties.” This analysis applies to most Latin American police organizations. Human security criteria introduce a citizen-centered perspective, which will force a deep change in the political culture of society and the institutions that safeguard people’s rights. As Gabriel Aguilera Peralta (2002) states, “In the case of societies torn by war, with past authoritarian experiences and the persistence of

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profound divisions and mistrust even between civilians and the military, the proposal of processes to foster a defense culture may be positive, fostering reconciliation and helping society to ‘look’ forward and unite.” The first phase requires states to build new security institutions and emphasize the prevalence of the rule of law, because violence still flows from existing security organizations that taint everyday life.

Community Police and Democracy Public security seeks to optimize the role of the police by providing more information and greater transparency to findings of police actions and improve the quality of communication between the police and the community. Community policing is more than merely controlling law and order and fighting crime. It responds to new management criteria in public administration (economy, efficiency, and effectiveness) and legitimizes the presence of the police in the urban arena (Marteau 2001). According to this approach, reducing insecurity and violence depends on preventive measures as well as crime control and repression. This is both a philosophy and an organizational strategy to unite people and the police to identify problems and jointly provide solutions, reinforcing local jurisdictions (Trojanowicz et al. 1998, 1–23; Trojanowicz and Bucqueroux 1999, 1–38). Security is seen as a structure sustained in the community and not based on the police institution. As Laura Chinchilla Miranda (1999) states, “Neighborhood police concerns focus not just on variables traditionally associated with its tasks, such as fighting crime and enforcing law and order, but also on other variables such as the feeling of insecurity, people’s quality of life, and social cohesion and solidarity.” The purpose of community-based security measures is to create an overall condition where people enjoy fundamental rights that are consecrated in state laws. Several countries have implemented community-policing practices with uneven results. For example, the Peruvian peasant patrols created during the first years of Fujimori’s rule to fight against Shining Path led to a buildup of paramilitary squadrons. Similar events unfolded during the Guatemalan civil war, which killed and displaced millions of people before the peace accords of December 29, 1996. Efforts to change repressive police standards likewise failed in El Salvador, despite support from international organizations such as the United Nations or the InterAmerican Development Bank and assistance from the Spanish government. As Sánchez (1998, 49) notes regarding Colombia, “In regions such as Antioquia, and in spite of public rejection and warning by human rights organizations, [community policing] has been given legal status by means of the so-called CONVIVIR (Rural Surveillance Community Associations), very close in their operation to the

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Peasant Patrols in Peru, which contributed to dismantle Shining Path, and to the ‘civil patrols’ in Guatemala, which seeded terror in the past decade. Colombia’s current self-defense forces are half way between the old death squads and counterinsurgency massification.” The United Self-Defense Forces of Colombia (AUC; Autodefensas Unidas de Colombia) became powerful paramilitary groups that got their resources from the same sources as the guerrillas, according to Aronson:18 “The paramilitaries are arguably the fastest-growing political-military force in the country, and AUC supporters scored impressive victories in recent congressional and municipal elections.” The members of these groups, as well as neighbors who perform surveillance duties, carry out armed patrols but without the training that law-enforcement agents have. This paramilitary mechanism is, therefore, a source of violence that tends to allow citizens to meter justice with their own hands—self-appointed security enforcement that does not rely on the law. In contrast, community policing seeks not to convert regular citizens into police officers outside the law, but rather to match society’s security requirements with police whose behavior complies fully with the law and the defense of human rights. The aim is to convert an authoritarian police into an institution that serves the people. Nevertheless, such efforts must recognize that this passage requires the contribution of a society whose history of authoritarian practices may thus aggravate the problem. Scholars have pointed to a number of formulas that communities can use to generate greater security on their own. These include preparing an inventory of dwellings; keeping a telephone network of neighbors; reporting broken windows, loose doors, unknown vehicles, or suspicious activities; and driving around the block before entering the house. These steps require cooperation between neighbors without negative consequences (Chinchilla Miranda and Rico 1997, 15–28; Trojanowicz and Bucqueroux 1999). Such measures, however, are insufficient if they are not framed within a clear understanding of the law. David Held (2001), in the context of the terrorist attacks of September 11, 2001, summarized this idea clearly: “Not only must we be tough with crime, but also with the causes of crime. . . . We know there will always be volunteers for suicidal missions, for suicidal attacks, and for terrorist groups if we do not take care of the wider aspects of peace and social justice in the world community.” Regular citizens do not trust the police because of (1) the repression during authoritarian governments; (2) the taint of corruption and participation in organized crime activities; and (3) the ineffectiveness of police efforts to stem rising crime levels. Public insecurity is directly related to popular perceptions of increasing police corruption (Dammert and Malone 2001). As Linz and Stepan (1996) state, corruption reduces the system’s legitimacy and weakens the democratic system’s credibility with the people.

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With the passage from authoritarian rule to democracy, several governments purged officers who had committed acts of corruption and abused citizens’ rights. The results, however, have been unsatisfactory. Because police forces are institutions with high internal shortcomings and a very limited adherence to the law, security forces believe society has cast them aside without legal protection or the means to defend their rights, in a profession with high costs and low salaries. Police officers have also been victims of the armed forces, compelled to perform activities outside the law and enforce order under military rule. Such practices regrettably became deeply rooted in the police establishment. Overall, the police continue to live in a cold war environment. Studies show that obligating off-duty police officers to bear arms increases the number of police officers killed (Soso 2000). Further, new governments have not defined criteria for purchasing equipment; they buy whatever is available on the market, without planning or transparency. They have not developed a code to regulate the distance at which one should fire a weapon—a fundamental criterion in new police doctrines (Waddington 1999, 70, 93). They respond in the same way to thwart a criminal caught red-handed as to detain a young person acting suspiciously. Using modern weapons that can be fired from a great distance, police are more prone to misinterpret a situation. Police are not instructed to hold their fire during a noncriminal social upheaval. The police have little training in dealing with citizens; what education they do have leads them to consider any person as a potential criminal. Likewise, they are not trained in other safety measures such as personal defense techniques or stressful situation management. Their authority rests only on their use of weapons. Changing police-society relations and perceptions of the police establishment will require countries to implement a credible and well-structured system of sanctions. Although internal affairs offices currently exist, police officers involved in criminal situations are typically discharged from service without investigation or summary proceedings. This lack of internal discipline violates the principle of legitimate defense and contradicts efforts to foster respect for the law and the importance of the rights of individuals among citizens. Further, the police receive no incentives to improve their behavior. There is no organized police career path to stimulate individual progress and retain trained officers, many of whom leave the force to join private security businesses (Chinchilla Miranda 1998). The internal police culture, cemented in authoritarian times, must develop a culture of respect for citizens and community inclusion. Personnel laws that govern police activities, enacted under military rule, “widen the significant gap between officers and non-commissioned officers and mainly result in a segmented police cul-

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ture, highly elitist and not very dynamic, which impedes professional advance” (Tholke, Marteau, and Montbrun 2001). A police reform program must focus on providing a sound institutional organization, professional respect, and law-based procedures. Otherwise, the door is open to abuse and discretionary actions; public trust in the police would not improve. (Pásara 1997, 157–63; CELS 1998, chap. 4). Professionalism and technical enhancements do not suffice to subordinate the police to civilian power and the law (Elbert 1997; Rico 1997a, 327–28). Innovations must be based on confidence-building measures. Police should perform their proper functions and also promote society’s responsibility in preventing crime and violence at the individual and collective levels (Rico 2001). Police planning and concrete actions to fight crime must involve society at three levels: (1) diagnosis of security issues, (2) elaboration of proposals to solve problems, and (3) control of implemented policies. Efforts to overcome the stigma of dictatorship and foster a civilian police profile, respectful of human rights and committed to the community, requires a systematic investment by civilian authorities, the will of civil society, and time.

Final Comments Latin American governments did not bring to trial those in the military who seized power or supported dictatorships. By choosing to avoid confronting the security forces that remain powerful, new administrations thus impaired democratic stability. The democratic state was reluctant to reveal the truth; it maintained strongholds of discretionary power and impunity. These decisions have torn the social fabric and strained the credibility of the rule of law. Increases in public violence, economic violence overlooked by the state, and business corruption protected by governments have caused profound crises of political and legal credibility. The legal submission of citizens to some institution’s authority is incomplete when authorities carry out acts or omissions that do not allow for the consolidation of democracy (O’Donnell 1992). As Guillermo O’Donnell (1997, 324– 25) states, “Formally institutionalized polyarchies have several agencies invested with legally defined authority to oversee and eventually penalize (or instruct other agencies to penalize) illegal actions carried out by other state agents. . . . [T]hose who perform roles in the last (public) sphere are presumably obliged to follow universal and publicly oriented rules, rather than their own particular interests.” For that reason, security sector reform requires enhancing the judicial system, as expressed by Burki and Perry (1998, 121): “No political system can work properly if it does not have a judicial system to keep social order, promote voluntary exchanges, address complaints made

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against the government, and contribute to the legislative process.” Partisan or corrupt twisting of the law and courts has fostered a high level of citizen mistrust of the legal systems in Latin America (Popkin 2001; Smulovitz 2002, 265–71). Fair application of justice to citizens and police and military officers would restore confidence in the means of representation and governance. Second, after the terrorist attacks of September 11, 2001, the United States has tended to curtail civil rights in the name of homeland security, notwithstanding the protests by several civil organizations.19 In Latin America, the same trend has led to the reconstruction of power privileges. U.S. civilian intelligence agencies and security organizations increasingly partake in the provisions for homeland security, raising serious concerns regarding abuses of power. The U.S. Northern Command, created in the wake of the attacks does not have internal intelligence duties, nor does it pursue drug traffickers in U.S. territory, investigate large financial transfers, or monitor Islamic immigrants.20 In Latin America, the terrorist attacks on the United States have led to a greater overlap between domestic and external security and intensified competition over functions, stimulating the military to perform internal order duties. The growth of various threats—networks of terrorists, other organized crime activities, and guerrilla groups financed by the drug and kidnapping business—as well as the poor use of natural resources, require state responses that rest on high levels of legitimacy. Such legitimacy depends in turn on express consent for state actions based on civilian supremacy in accordance with the set of instituted rules. This guarantee reinforces the rule of law and strengthens the state’s role in the international arena. Such oversight—whether parliamentary, administrative, judicial, or from ombudsman offices or civil organizations—requires a comprehensive redesign of security institutions. In the military sphere, one governance requirement is civilian control over security establishments, yet the lack of transparency and accountability in each military service’s budget is highly problematic. In the police arena, the very nature of police activity limits accountability. As Reiner (1995) reports, “A major problem in constructing adequate institutions of police accountability is that decisions which ultimately have the greatest effect on ordinary people are those with lower visibility, made day-by-day by constables on the street and in the backstage areas of police station.” Two contradictory trends emerge. On the one hand, experts have noted a multilateral trend toward the global politicization of societies, which Mary Kaldor (2001, 93–98) calls cosmopolitan, whereby states yield sovereign power to international and regional organizations. The core values of this trend are democratic consolidation, respect for human rights, protection of global assets, and agreements on arms con-

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trol and defense cooperation. Experts hold a positive view of the contribution of countries to such global governance. Such global efforts efficiently reduce violence and improve democratic control of the military. The integration and revaluation of democracy create expectations regarding international law and provide security for states. Controlling communications and transport, providing for flexible production systems, and maintaining political legitimacy are as significant as having a welltrained army. Projects such as the UN Action Program to prevent, combat, and eliminate illicit trafficking in small and light weapons exemplify a global strategy that involves the approval of rules and regulations as well as law-enforcement measures, tracking and marking weapons, managing arsenals, and securing and destroying recovered small and light arms (Fukuda-Parr 2002). On the other hand, experts note another trend heir to previous patterns and reinforced after the terrorist attacks of September 11, 2001. The United States relied on military responses that employed high technology and advanced information and communications management. As gaps widen between the United States and other countries everywhere, the international agenda has remilitarized, which consequently challenges multilateral instruments and weakens cooperation mechanisms. Military power and technological breakthroughs ensure more influence and trump international negotiation. Despite slow and difficult progress, the irreversible trend leads to a higher density of multilateral mechanisms that affect both external policies and domestic management. Held (2001) puts it this way: “But globalization history does not involve only market growth, neo-liberal deregulation and resignation of political action; it is also a history of increasingly higher aspirations to international law and justice. From the UN system to the European Union, from changes of the law of armed conflict to the consolidation of human rights, from the emergence of international rules on environmental protection to the creation of the International Criminal Court, everything tells another story, one that attempts to reframe human activity and align it with the law, rights and responsibilities.” State and public security depends directly on constitutionalism—respect for constitutional order, law, and agreed upon practices. Institutions that do not abide by the law cannot comply properly with public duties nor be legitimate. Fragile democratic processes, irresponsible public officials, and inconsistent mechanisms for transparency and accountability remain in Latin America. The respect for law continues to pose a challenge to democracy in times of failing partisan legitimacy, growing public violence, and deepening inequalities and in the absence of great ideological frameworks, yet respect for the law is democracy’s defining quality.

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 I am grateful for the support of the Woodrow Wilson International Center for Scholars and the Ford Foundation. 1. For a debate on the differences between security and defense in Latin America and the convenience of using the term “security” to refer to the set of such policies, see Diamint (2000). 2. Johansen (1995, 274) argues that one key issue is to change the military power balance into a balance of legally established political powers. 3. Richard C. Holbrooke, statement before the Subcommittee on Airland, Senate Committee on Armed Services, Washington, D.C., April 5, 1995 in U.S. Department of State Dispatch, April 17, 1995. 4. See Chile’s former Navy Secretary, Pablo Cabrera (1999), or Guatemala’s former vice minister of foreign affairs, Gabriel Aguilera Peralta (1999). 5. For examples of how some countries are moving toward democratic consolidation while still sustaining military prerogatives, see Fuentes (2000); Piñeyro (2001); Aguilera Peralta (1999); Noticias (2002); Zaverucha (2000); and Martins and Zirker (2000). 6. Noticias (2002). 7. Faiola (2001). 8. “Operation Condor” is an agreement between the governments of Argentina, Peru, Chile, Bolivia, Paraguay, Uruguay, and Brazil to chase guerrillas across neighboring countries. 9. “Brasil: US$1.000 millones para los sin tierra,” BBC Mundo, July 4, 2000. 10. The relationship between natural resources and security can be seen in greater detail in Homer-Dixon (1994). For conflicts over oil and gas resources, see Klare (2001). 11. See Folha de São Paulo (2005). 12. See Pulite (2001). 13. See, for example, the case in Mexico and the donation of UH-1H helicopters, in Domínguez and Fernández de Castro (2001, 99–100). See also Larrinaga (2000) and Bitencourt (2000). 14. See similar cases in South Africa, Northern Ireland, and Hong Kong (Waddington 1999, 87–95). 15. See El Defensor del Pueblo (2002) and Muente (2002). Honduran President Ricardo Maduro said, “I will do away with the last vestige of police militarization.” 16. La Tercera (2001). 17. For a comparative analysis of peace processes in Latin America, see Arnson (1999). 18. See Aronson (2002). 19. The Center of Strategic and International Studies (CSIS) pointed out that the creation of the Office of Homeland Security to protect U.S. domestic security must follow an explicit institutional strategy that clearly states the roles, responsibilities, and coordination processes for greater accountability and better government performance, ensuring the prevalence of law (CSIS Task Force on Homeland Security 2002). 20. See Dao (2002).

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Controlling Corruption Government Accountability, Business Ethics, and Sectoral Reform  -

Government corruption involves the illegal use of public power for private or political gain. Public officials with the power to dispense benefits or impose costs may use their positions corruptly aggressively to seek private advantage or accept covert payments offered by private actors. Corruption may be an occasional exception to the rule of law or a routine aspect of the way officials, politicians, and the private sector deal with each other. The problem is most serious when payoffs and self-dealing are an integral part of the way a system works. In such cases, the occasional “big case” designed to punish a “bad apple” is not sufficient; more fundamental reforms are needed to restructure the relationships between the public and private sectors. Widespread corruption imposes substantial costs on countries making a transition to democracy. For example, corruption deters and distorts investment choices and limits economic growth (Mauro 1995; Tanzi and Davoodi 1997) as it discourages foreign direct investment and limits the success of industrial development policies (Ades and Di Tella 1997; Wei 2000). Further, it encourages the growth of illegal businesses and shadow economies, undermining the state’s capacity by limiting its ability to collect taxes and enforce regulatory and spending programs fairly (Friedman et al. 2000; Chand and Moene 1999). Corruption also threatens the legitimacy of the democratic experiment by reducing public trust in government. Citizens may begin to view all political participants as tainted and hence may limit their involvement in the project of state building by turning to purely private concerns. Indeed, such disillusioned citizens may even become corrupt themselves out of cynicism and despair. The worst case is when corruption is extensive and the public is too indifferent or too intimidated to complain. At the least, widespread public condemnation of corruption means that people are beginning to expect the state to act in their interest by

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demanding accountability from political, bureaucratic, and judicial actors in return for their political support. Democratic regimes need to respond to these concerns in a way that produces real reforms and does not turn anticorruption campaigns into devices to silence and discredit political opponents. What steps can new democracies take to limit corruption and help institutionalize democracy within the political and resource constraints under which they operate? Because the nature of the problem varies from state to state, no single blueprint will apply everywhere. Nevertheless, some general considerations ought to be broadly applicable to many emerging democracies. Corruption cannot be controlled effectively by state actions alone. Because corruption is a product of the interaction between public officials and private individuals and firms, both the public and the private sector must take responsibility for limiting payoffs and self-dealing (Rose-Ackerman 2002b). Thus, the business community and “civil society” must be part of the reform process. In the following discussion, four main aspects of corruption are addressed: its economic causes and consequences; the role of democratic and bureaucratic accountability in exposing and deterring corruption; the obligations of business firms, especially multinationals; and strategies to limit corruption in public programs where corruption is particularly harmful to the consolidation of democratic market states. The chapter concludes with some observations on the political costs and benefits of alternative strategies.

The Economic Causes and Consequences of Corruption Corruption arises out of the search for private economic gain by officials and private individuals and firms. The demand for corrupt services depends upon the size and structure of the state. Bribes are paid for two basic reasons: to obtain government benefits and to avoid costs. On the other side of the deal, public officials will be tempted to supply corrupt benefits whenever accepting payoffs is profitable and poses few risks.1

Paying to Get a Government Benefit Governments buy goods and services (including large-scale public works), distribute subsidies, organize the privatization of state firms, and provide concessions, all of which provide opportunities for corruption. Scarce, valuable benefits may be allocated at the discretion of officials who may use the level of bribes offered as an allocation criterion. Some subsidy programs are open-ended and available to all who

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qualify. In such cases, the unqualified may pay to be judged worthy and gatekeeping officials may demand that the qualified pay as well. One needs to understand not only the incentive to pay bribes and solicit kickbacks, but also the costs that a corrupt system imposes. To see how corrupt incentives can arise, consider a few examples. If the government contracts for services, a firm may have several reasons to pay off officials. A firm may seek to be included in the list of qualified bidders, or it may want officials to structure the bidding specifications so that it is the only qualified supplier. A firm may pay to be selected as the winning contractor, or, once a firm has been selected as the contractor, it may dole out funds to get additional ongoing benefits. In all these cases, corruption is facilitated by vague, complex, and inconsistent rules that increase the power of officials (Della Porta and Vannucci 1999). State control of key aspects of the business environment also can lead to payoffs. For example, if the supply of credit and interest rates are both controlled by the state, people seeking access to credit may tender bribes. Exchange rates sometimes do not reflect underlying economic fundamentals and thus produce incentives for firms to offer kickbacks for scarce foreign exchange at good rates. The allocation of import and export licenses is a frequent source of payoffs and patronage, as well as an excellent example of a program where the state itself creates the scarcity that leads to payoffs. Privatization of state-owned enterprises can both improve the performance of the economy and reduce corruption, but, as with contracting, the process of privatization itself can encourage illegality. For example, a firm may pay officials to be included in the list of qualified bidders or to restrict the number of competitors. It may pay to obtain a low assessment of the public property being leased or sold or to be favored in the selection process.2 Much low-level corruption involves households that seek to qualify for government benefits such as subsidized housing, welfare payments, medical care, or university admissions. Corruption can occur either when the level of subsidies and benefits is too low to satisfy all of those who qualify or when officials must use their judgment to allocate entitlements, even if the overall supply is not restricted. People may pay either to be judged qualified for an open-ended public benefit or to be one of those selected to get a scarce benefit. The important normative issue raised by these examples is the social harm of bribery. Are the payments just transfers from one pocket to another, or do they undermine programmatic goals and create inefficiencies? If payoffs in the allocation of contracts and privatized firms are commonplace, one might argue that the most efficient firm will offer the highest bribe. This is not so, however, if that firm happens to be scrupulous. If the need to proffer bribes is a barrier to entry, corruption favors

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those with connections and no scruples over those who are the most productively efficient. Furthermore, the firm that wins the illicit auction will expect to make payoffs not only to win the contract or the privatization auction, but also to obtain inefficient subsidies, monopoly benefits, and regulatory laxness in the future. Corruption introduces further inefficiencies into government contracting if officials design government projects to maximize illicit rents. If bribe revenues increase with the dollar volume of procurement, projects may be too large and too numerous. They may also be too technically complex, because corrupt payments are easier to hide if projects are one-of-a-kind. Quality may suffer if contractors make payoffs to be allowed to skimp on quality or avoid safety standards. Corruption in awarding government benefits can have undesirable consequences for distributive justice. In the case of contracting, inequalities in wealth are exacerbated when a share of the country’s wealth is distributed to insiders and corrupt bidders. The state must then make up for high contract prices and disappointing privatization revenues by raising taxes or reducing spending. Corruption in social programs that are designed to aid the needy or the worthy will undermine the purpose of these programs because those who are willing to pay the most are seldom the object of social policy; hence, subsidized housing, old-age pensions, and other benefits will not flow to the intended beneficiaries.

Paying to Avoid Costs Governments impose regulations, levy taxes, and enforce criminal laws. Officials can delay and harass citizens and businesses and can impose costs selectively in a way that affects the competitive position of firms within an industry. All of these activities create incentives for households and firms to limit costs through payoffs. Under public regulatory programs, firms may pay to get a favorable interpretation of the rules or ensure a discretionary judgment in their favor. These incentives are especially high when the regulatory requirements are unclear so that officials have considerable discretion. Corrupt incentives may well apply with special force to newly privatized state enterprises that are overseen by fledgling regulatory agencies without well-developed track records. People may collude with tax collectors to lower the sums collected and divide the savings between them. Customs officials are particularly likely to be corrupt because they have discretion over something that firms value—access to the outside world. Surveys of businesspeople in both developing and transitional economies suggest that corruption in customs is common and leads to widespread inequities and inefficiencies (See, e.g., Kaufmann and Kaliberda 1996). As tariff rates rise, the amount col-

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lected falls as a share of nominal tariffs, and the variance of rates paid increases (Pritchett and Sethi 1994). Illegal businesses are especially vulnerable to extortionary demands. Law enforcement authorities from the police to prosecutors and judges can demand kickbacks to overlook criminal law violations or to limit penalties. Of course, illegal business people are hardly innocent victims, and they may actively try to corrupt the police, seeking not only immunity from prosecution, but also assurance of monopoly power in the illegal market. For example, in the United States and Latin America, gamblers and drug dealers have paid officials to raid their competitors or restrict entry to their business activities.3 Alternatively, illegal businesspeople may intimidate potential rivals, often paying off the police not to intervene (Handelman 1995). Firms and individuals everywhere proffer bribes to avoid delays. In many countries, informal payoffs are required to obtain such routine benefits as home telephone service, passports, or drivers’ licenses. Those unwilling to pay face long waits or even the denial of service. Firms that face extensive corrupt demands may try to escape them by operating in the informal sector, avoiding both taxes and bribes as well as limiting their growth prospects (Kaufmann 1997). Some states have many inefficient regulations and levy burdensome taxes on businesses. In countries where legal institutions are inefficient, business people may argue that payoffs to avoid regulations and taxes, in fact, increase efficiency. This defense of kickbacks is a pragmatic justification that grows out of frustration with the existing legal order; it attempts to justify corruption designed to avoid legally imposed costs. The basic question, of course, is whether individuals and firms are obligated to obey only those laws that they believe are efficient and just. In industrialized countries individuals and firms clearly are not entitled to decide on their own what laws to respect. Instead, firms work to change the laws in the legislature, make campaign contributions, lobby public agencies, and bring lawsuits that challenge laws and regulations. One can complain about the importance of wealth and large corporations in the political life of industrial countries, but well-documented lobbying activities and campaign contributions are superior to secret bribes in terms of maintaining democratic institutions. Widespread tolerance of business corruption in the name of avoiding costs leads to obvious difficulties. One cannot rely on investors to pay bribes only to avoid inefficient rules and taxes; they will clearly want to reduce the impact of all state-imposed burdens, justified or not. The cost of uncollected taxes and lapsed regulations then falls on ordinary citizens and honest businesses. Corrupt firms will also make underthe-table payments to politicians to change the laws in their favor. It seems strange indeed to tolerate firms’ judgments that a well-placed payoff is justified because it

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increases profits. Such an attitude can do serious harm in nations struggling to build a viable state. These states need to develop mechanisms that translate popular demands into law, show a credible commitment to the enforcement of these laws, and provide legal recourse to those who think they have been wronged. If, instead, investors and ordinary citizens make individual judgments about which laws are legitimate, attempts to create state institutions will founder. All states—even those that have most successfully curbed the power of special interests—enact inefficient laws, but no state can operate effectively if individuals justify taking the law into their own hands by referring to cost-benefit criteria.

Conclusions The incidence and impact of corruption depend upon the structure of state-society interactions. Some public programs create corrupt incentives and unscrupulous officials may administer public policies and redesign government institutions in order to increase the incentives for under-the-table payments. The distortions produced by endemic corruption can be large and are likely to be poorly measured by the overall level of illicit payments. Even a small bribe can produce large distortions in the efficiency or fairness of a public program. Of course, the background level of criminal enforcement and internal monitoring will affect the risks of giving and accepting payoffs (Rose-Ackerman 1999, 52–59; 2002a), but enforcement strategies need to be supplemented both with structural reforms that limit corrupt opportunities and with changes in public and business norms. Corruption can be controlled indirectly by permitting citizens to challenge the exercise of government power, by changing private sector attitudes and norms, and by fostering international cooperation. Finally, states can reform particularly dysfunctional sectors by lowering the benefits and raising the costs of illicit transactions.

Government Accountability Democracies need strong mechanisms of external and internal accountability to limit graft. On the one hand, external accountability requires state openness to scrutiny by the public and by outsiders, such as international organizations and nonprofits. On the other hand, internal accountability involves the use of state institutions to limit incentives for corruption. Within states, decentralization may make citizen monitoring more effective, but devolution to lower-level governments is not a general solution; it can either increase or decrease corruption, depending upon the circumstances.

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External Accountability Elections are the fundamental means of achieving external accountability in democracies, but they are not sufficient to ensure the day-to-day integrity of government. This is the case even in political systems with credible opposition parties that can use accusations of corruption as part of a strategy to gain power. Following a discussion of electoral accountability, we turn to other forms of external accountability that require the disclosure of information and routes for public participation and complaints.

Elections The transition from an authoritarian to a democratic regime can increase the opportunities for some kinds of corruption—in particular, those associated with elections (Kang 2002; Rose-Ackerman 1999, 113–42). Some commentators have stressed the interaction between political party organization and political corruption. For example, Donatella Della Porta and Alberto Vannucci (1999), argue that graft can transform parties into personalistic alliances, and David Kang (2002) argues on the basis of his study of emerging Asian democracies that reform should begin with party organization and structure. Political party organization may, however, interact with the electoral system to create more or less incentives for fraud, and in some cases electoral rules themselves may encourage political corruption.4 The transparency of electoral campaigns is a basic constraint on malfeasance. Candidates and parties should disclose the sources of campaign funds in a timely manner, and individuals should also disclose their families’ personal financial interests in companies that could benefit from government policies. Private watchdog groups and the media can then monitor and publicize this information. The state needs to establish a small number of transparent and easily interpreted rules, about both conflicts of interest for high officials and legislators and the sources of campaign funds. The rules need to be clear to candidates before the campaign so that they can realistically comply with them. The media should be free to criticize public officials with little fear of running afoul of libel laws. Some countries have anti-insult laws that punish the media for being outspoken, but, no matter how unfair the media may sometimes be, such laws can dampen criticism and seriously hamper anticorruption efforts. The legitimate search for campaign funds and votes can easily cross the line into corruption if quid pro quo deals proliferate. At the very least, therefore, candidates

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and parties must be required to disclose their financial sources. Without clear rules against conflicts of interest, though, politicians may be able to share in the gains of the laws they pass without actually breaking the rules. Many emerging democracies need to reexamine their weak restraints on conflicts of interest as applied to politicians and top ministers.5 Such countries also need to review their systems of campaign finance, including rules for the disclosure of funding sources. Campaign finance regulations that are too restrictive will simply encourage contributors to make illegal donations. One solution is increased public funding, combined with limits on private gifts. Emerging democracies with low fiscal capacities, however, may have difficulty increasing the existing level of support. Nevertheless, as more political campaigns enter the modern age of electronic media and extensive polling, governments will need to face these issues directly. One way to operate a public funding system is through vouchers under which voters themselves decide how to allocate their share of the public campaign funding budget. If public funds are generous enough, private donations can be legally limited without a high risk of graft.6

Executive and Legislative Accountability The activities of bureaucrats and legislators also need to be scrutinized by outsiders if the goal is to make corrupt arrangements difficult to hide from a vigilant public. Such a strategy has four parts.7 First, the government needs to make routinely available information on budgets and the contents of laws, regulations, and executive decrees. The Internet now makes it possible to reduce the costs of such strategies drastically by making it easy for governments to supply information to a broad audience. Government officials need to make clear to the public not only what they have done, but also what they are planning to do. That way, those with a stake in the outcome can organize to protest or provide information to decision makers. Second, a freedom of information act is a key part of the structure. Such acts permit citizens to access government information that is on file but unpublished. Those who request information need not declare a personal interest; they can demand disclosure simply in their capacity as citizens. Exceptions can be added to the law to protect privacy and security interests.8 Third, the state must make it easy to organize nonprofit, issue-oriented groups, as well as business, labor, and professional associations. Private-sector monitoring of the public sector cannot be solely the province of individual citizens; groups are needed because they can provide expertise, resources, and continuity. The state should not impose substantive requirements on registered groups but should,

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instead, limit itself to assuring that the groups are not acting as fronts for the personal financial interests of their founders. Watchdog groups such as Transparency International are beginning to play such a monitoring role in a number of countries, but the registration process is often cumbersome (Pope 2000). Of course, free media are also a key aspect of accountability. Even media that are not controlled by the state, however, may be owned and operated by private interests with narrow agendas. In addition, some outlets may be co-opted by powerful politicians at election time. Even when the media are nominally independent, they may depend on advertising revenue from public agencies and powerful businesses or, alternatively, they may so lack funds and so must rely on the self-serving press releases of government ministries and private firms. Thus, although a free press is a necessary condition for accountability, it is not sufficient. Fourth, once private groups, individuals, and the media have access to information, the public must have an effective means to seek redress or register complaints. For individuals, an ombudsman can help resolve problems. For larger policy concerns, such as corruption in major contracts or police malfeasance, whistleblowers and concerned citizens need access to the courts or to an independent oversight commission. The issue of accountability for past wrongs, especially human rights abuses, has been confused in the popular discussion with present-day accountability and transparency. These issues should be kept separate. In whatever way a new administration decides to deal with past offenses, these concerns ought not interfere with a move to greater openness in the present. True, such openness might embarrass the current administration, but that is exactly what should be expected if some officials are corrupt and incompetent. Providing access to government information and creating an ombudsman or complaint process are only part of the solution. Countries with a large, dispersed, low-income population need more than a system that facilitates elite access and monitoring. The state needs to consider policies that both encourage organizational activity at the local level and provide people with information and protection so they can participate in a meaningful way.

Internal Accountability One way to achieve internal accountability is to enable parts of the government to check other entities. The best recent examples of this, outside the corruption area, are the federal election commissions that have played a positive role in a number of countries, especially in Latin America. These commissions have mostly focused on

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avoiding fraud in the casting and counting of ballots, but they can also oppose corruption by monitoring the system of campaign finance and supervising the collection of candidates’ financial disclosure forms. Independent financial control agencies can also serve an important monitoring function, but they must operate under clear, simple, and transparent procedures so they do not become overly bureaucratic and corrupt themselves. The anticorruption commissions that have been established in a number of countries provide more problematic examples. The difficulty these commissions face is not only assuring their independence—often a difficult task—but also ensuring that they focus on important issues. Too many of them have a mandate that mostly involves law enforcement, but graft cannot be addressed only through the criminal law—it requires rethinking the way government is organized. This reassessment should be one key focus of an independent commission. The judiciary and the public prosecutors are key institutions in the fight against corruption. Claims of extortion and self-dealing by public officials ought to be resolved in the courts is a way that makes it difficult to use false corruption allegations as a tool of political control. The courts can also monitor second-order allegations concerning government attempts to conceal information. To perform these functions, however, courts need to be independent of partisan influence and open to suits by citizens or public interest groups seeking to challenge government action or inaction.

Decentralization It has recently become fashionable to support decentralization of political power to regions, states, or municipalities as a way of making government more accountable. Although supporters of decentralization claim that monitoring officials will be easier at lower levels of government, this argument poses a number of problems. First, it may not be true (Treisman 2000): national-level media and nonprofit watchdogs may function better than local ones. Second, even if citizens can easily observe the malfeasance of local leaders, there may be nothing that they can do to control their behavior. Corrupt local leaders may have a monopoly on political power. In such a case, they may simply give their supporters clientelistic benefits and continue their own illicit wealth accumulation. Sometimes the lack of public participation at the grassroots level is exacerbated by fear of intimidation. If this is the case, it needs to be a high priority for reform. Emerging democracies need to be confident that the routes for public participation are open to the financially and politically disenfranchised and that fears of intimida-

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tion are addressed openly and forthrightly. Long-standing patron-client relationships between politicians and local elites, on the one hand, and ordinary citizens, on the other, can make independent participation difficult. Nevertheless, recent experiences in some municipalities and villages in Nepal, Uganda, India, and Brazil are promising and suggest that well-designed systems of citizen participation can overcome entrenched patterns of corruption and favoritism in the provision of public goods and services. These examples all involve broadly participatory procedures, either to allocate public funds or to monitor grants provided by aid agencies or higher levels of government. In a number of situations, higher levels of government or nonprofit organizations with expertise supply technical assistance that helps the participatory processes to operate. In Nepal, an experiment in service delivery involved local people through information diffusion and a workable monitoring structure. The result was a dramatic increase in the cost-effectiveness of aid programs and a large increase in client satisfaction. Unfortunately, an attempt to extend this program to a large area of the country foundered as those who benefited from the status quo asserted their power and vitiated the reforms (Meagher, Upadhyaya, and Wilkinson 2000). Another study documents how resources in Indonesia were wasted through corruption and selfdealing in village-level aid projects. This study further suggests ways to involve the beneficiaries in monitoring the programs using existing local institutions such as Muslim prayer groups (Woodhouse 2002). In Uganda, aid to local schools from the central government was largely siphoned off by midlevel officials. In response, the central government used the media to inform local parent-teacher associations what funds had been allocated to each school so that they could play a monitoring role (Reinikka and Svensson 2002). India provides a rich array of cases that illustrate when and where local control can limit corruption. Pranab Bardhan and Dilip Mookherjee (2006) point out that redistributive policies such as land reform give local people a stake in the system and a greater reason to participate in local political life, thereby increasing the honesty of village government. They show that, in Indian states such as Kerala and West Bengal, where local democracy is relatively effective, people express more trust in local government than they do in states where land reform and local institutions are weak. Latin American countries have made numerous attempts to involve rural people in the design and monitoring of agricultural development programs, as well as increase the participation of city dwellers in government decision making. The rural development programs were designed to better target programs to farmers’ needs and increase accountability to beneficiaries (Das Gupta, Grandvoinnet, and Romani 2004; Parker 1995). The urban cases, of which the most famous is Porto Alegre,

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Brazil, explicitly aimed to increase democratic participation in opposition to existing clientelistic structures (Abers 1998; de Sousa Santos 1998). In the successful cases, citizens had better information about what to expect from government and developed the capacity to hold public officials accountable. As a result of these arrangements, corruption and self-dealing were reduced. These case studies suggest that successful grassroots participation requires a longterm commitment from established governments along with technical and organizational assistance. People who have not exercised political power in the past need time to learn to use it responsibly. The rich variety of experiences at the rural and urban level is both encouraging and humbling. The cases suggest that a number of factors must come together before productive partnerships between government reformers and low-income citizens can succeed in limiting corruption and self-dealing (Das Gupta, Grandvoinnet, and Romani 2004). In a worst-case scenario, such policies just enhance the power of local patrons and entrenched interests. Nevertheless, these examples do suggest how to address this problem and produce successful decentralized processes.

Business Accountability Corruption in the form of bribes and kickbacks is a two-sided phenomenon that involves both a buyer and a seller, and their cooperation can make a serious reduction in corruption possible. Frequently, the offenders are local firms with no international commitments, though multinational firms are often involved as well, and they may be particularly important in efforts to reduce the incidence and harm of corruption.9

The Corporation as a Moral Actor Although corporations have legal “personalities,” they are not real people, and some commentators insist that this implies that firms cannot have moral obligations. I accept the basic point that organizations should not be anthropomorphized when discussing rights and responsibilities, but corporations can still have moral responsibilities that stem from “the practices of the organization . . . that persist even as the identities of the individuals who participate in them change” (Thompson 1987, 76; see also Donaldson 1989; De George 1993). The modern corporation is a creation of law, and it operates with the permission of governments. Its creation can only be justified insofar as, on balance, it furthers desirable social goals, both economic and political. To understand how this applies to corruption, consider a situation that firms often claim to face. Suppose that a politician insists on a kickback from a firm as a

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condition for awarding a contract and that the firm’s management believes that, in an honest competition, the lowest-cost provider would win the contract. What are the firm’s obligations? Thomas Donaldson’s (1989, 44–64) notion of a hypothetical “social contract” between business and society provides a useful way of framing the issue. Under this view, it is plausible to ask firms to accept moral obligations as a condition of their right to exist. Two types are important: obligations to enhance the efficiency of the market system and obligations to refrain from undermining legitimate government institutions.10 Even if a corrupt deal is efficient, actions that contribute to the acceptability of corruption in the marketplace undermine efficiency. Widespread unscrupulous behavior can erode public confidence in the market and can seriously affect the ability of honest entrepreneurs to carry out their activities. If bribery is rampant, those who are honest may refuse to invest. Under this view, the firm has a duty not only to refuse corrupt demands, but also to make them public.11 Firms depend for their success on the existence of both a functioning market system and a state that facilitates market activity. Firms are obliged to act consistently with the preservation of both markets and a “market-friendly” state. The nature of a firm’s citizenship obligation is less straightforward than its actions that enhance market performance. Although the outlines of a competitive market system are fairly broadly accepted and the nature of market failures is well understood, the same cannot be said for the relationship between political and economic systems (Przeworski and Limongi 1993). Nevertheless, there are some easy cases. Given firms’ dependence on the state for their ability to operate, they have an obligation not to undermine the constitution of legitimate democratic states.12 New opportunities for malfeasance are among the growing pains of economic and political transformation and can undermine otherwise promising reforms by reducing their legitimacy and fairness.

Role and Responsibility Top management cannot rely on the firm’s human resources division to limit corruption by hiring “good” people. Management must also lead by example and set clear and well-enforced guidelines and codes of conduct.13 Without moral commitments from corporate insiders, wide-ranging changes in the behavior of other employees are unlikely. In some cases, morality may not be central; instead, top management and boards of directors may support international anticorruption efforts in the name of maximizing profits. They will do so when the global situation can be described as a “coordination game.” In this case, individual kickbacks are profit maximizing in the

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existing business context, but if corruption were eliminated all firms would benefit and none would have an incentive to defect unilaterally. The fundamental problem in inducing firms to move to such an equilibrium outcome is that being the only honest firm in a sea of corruption is costly. Unfortunately, for those who believe that corruption can be fought on the basis of business self-interest alone, many real-world situations are not coordination games but are, instead, “prisoners’ dilemmas” where the cooperative solution is unstable. Maintaining the honest equilibrium, thus, requires moral commitments.

Collective Action to Limit Corruption in International Business Voluntary efforts by individual multinationals can produce overall shifts in attitudes and behavior, but collective action may still be superior to a slow process of coalition building. This realization has ignited recent attempts to limit corruption in global business. These initiatives have focused on reducing the willingness of multinational businesses to tender bribes and on enlisting them to help the developing world carry out reforms. This effort appears to be bearing fruit both by changing the rhetoric of the global business community and by producing concrete steps to control corruption. Multinational initiatives are being taken to control corruption—most notably at the Organization for Economic Cooperation and Development (OECD), the Organization of American States, the Council of Europe, and the United Nations. The most important is the OECD’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which entered into force in February 1999. Thirty-six countries have ratified this convention, which was designed to control foreign bribery by businesses based in signatory countries. The treaty extends the principles of the United States Foreign Corrupt Practices Act to the international business community. Other international efforts are at earlier stages in terms of ratification and operational effect, and monitoring and enforcement activity is weak. Nevertheless, the international organizations behind these treaties try to exert moral force on both countries and international investors. Some business and professional organizations have voluntarily taken steps in favor of a more proactive approach to fighting corruption, and the International Chamber of Commerce claims that a change in attitude is occurring in the international business community (Vinicke and Heimann 2003). The anticorruption effort is an example of how international norms can be created and internalized, though the process is still ongoing and fraught with risks. There are many parallels between this effort and that in the realms of human rights and environmental norms (Koh 1998).

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Sectoral Strategies In some democracies, corruption is concentrated in particular sectors. These sectors then perform poorly, and their weakness may overflow into other sectors, thereby contributing to a general delegitimation of democracy. The sectors at risk differ widely from each other, but three areas have posed particular problems: tax collection, health care (especially in Eastern Europe), and privatization and large-scale procurement.14 Because of space limitations, a number of other vulnerable sectors— such as law enforcement and the control of organized crime and corruption in dayto-day service provision and licensing—will not be dealt with here.

Taxes and Customs Duties Corruption in tax and customs collection can produce a vicious cycle. Widespread evasion through payoffs or fraud means that a given tax rate produces too little revenue. States and municipalities then raise tax rates to collect more revenue. At higher rates, however, even fewer taxes are collected as more taxpayers evade payment (Chand and Moene 1999). Successful reform of a country’s internal revenue system should permit a reduction in nominal rates of tariffs and taxation. India provides a classic example of the problem (Das-Gupta and Mookherjee 1998, 101–2). There, an increase in rates led to a decline in total revenue because graft and off-thebooks activities increased. Such cases require a thoroughgoing reform of the structure and administration of the tax system. Simply raising the wages of tax collectors and increasing surveillance are unlikely to be sufficient. One reform option is to simplify tax rates and levy them on bases that are difficult to hide or underestimate. In the case of businesses, the state can levy presumptive taxes that are fixed independently of a firm’s actual profitability. The reduction in corruption and tax evasion is traded off against the reduction in fairness. For example, Mexico introduced an alternative minimum tax of 2 percent on the real value of firms’ assets. This reform raised additional revenue through reductions in tax evasion and corruption, and, although some companies complained of unfair treatment, the tax was upheld in the courts (Das-Gupta and Mookherjee 1998, 311–12). Such reforms, however, are unlikely to be sufficient if officials have no incentive to work effectively and if underpaying taxes is not punished. For example, tax simplification in the Philippines apparently provided few benefits because the state did not take steps to improve the incentives facing tax collectors and taxpayers (Das-Gupta and Mookherjee 1998, 410).

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A second complementary strategy is to reward tax collectors for good performance. Most of the reform efforts studied by Arindam Das-Gupta and Dilip Mookherjee (1998, 257) combined the creation of a relatively autonomous bureaucracy with a budget linked in part to its success at collecting revenue. In light of that connection, Sheetal Chand and Karl Moene (1999) suggest that tax collectors could be paid a bonus for any illegal rents they identify and report. Reforms of revenue collection services in several African countries have used similar incentive features. For example, in the 1980s Ghana tried an enclave approach to tax and customs reform by creating the National Revenue Service (NRS). The most corrupt officials were dismissed or retired, and pay and working conditions improved. Increased salaries were accompanied by incentive systems to reward strong performances by individuals and the agency as a whole. Revenue targets were established and the NRS received a bonus of 3.5 percent of tax revenue and 2.5 percent of customs revenue. Between 1984 and 1988, tax and customs revenue rose from 6.6 percent to 12.3 percent of GDP; it reached 17 percent by 1994. The program was a relative success, but the rest of the civil service chafed at the special treatment afforded tax collectors and the Ministry of Finance objected to its loss of authority. In 1991, Ghana again placed revenue collection under the authority of the Ministry of Finance, though the NRS retained some independence (Dia 1996, 86–90; Chand and Moene 1999, 1134–38).

Health Care in Former Socialist Countries Countries in transition from socialism appear to face a particular problem with under-the-table payments in the health care system. Although illegal, the practice is both widespread and customary, so much so that it is hardly regarded as corrupt. A World Bank–sponsored survey of ten countries between 1996 and 1999 found that “informal payments” to obtain health care were increasingly common (World Bank 2000, 47, 262–66). William Miller, Åse B. Grødeland, and Tatyana Y. Koshechkina (2001) compiled survey evidence from households and health care workers in four countries in the region that confirms this result. Kornai (2000) outlines the social costs of this type of corruption. Even though most doctors consider the receipt of gratitude money to be demeaning, few find it to be morally troubling. Instead, they justify such salary supplements by claiming that society views them as underpaid. For a number of reasons, however, the present pricing system is not one that can be decribed as efficient, albeit illegal. First, secret payments are a poor substitute for a transparent pricing system. Second, patients make payments once they are already ill, though many people would prefer to purchase insurance before becoming sick. Third, payoffs impose hardships on the poor.

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Fourth, the system institutionalizes falsehood. And fifth, it permits doctors to obtain free services from hospitals. A doctor with both a private practice and a government position in a hospital can often manage to use hospital services free of charge to treat his or her private patients. The system is becoming privatized along one dimension but in a very imperfect and morally questionable way. The answer to this problem is not a law enforcement crackdown. Instead, the transition states should face up to the pathologies of the existing system. This means deciding when to legalize disbursements through privatization and when to retain public funding while increasing the state’s financial commitment to reduce incentives for extra payments. The response might be de jure privatization, but because issues of distributive justice, market failure, and fairness are involved the state will not be able to exit the health care sector entirely. It will have to organize the delivery of services to provide social safety nets and assure broad access.

Privatization and Procurement The first wave of privatization is largely complete in the postsocialist countries, and elsewhere many states have completed widespread, large-scale privatizations. Some privatizations, however, involved so much corruption and insider dealing that they have little legitimacy in the eyes of ordinary people, and they may have led to corrupt linkages with government regulators or subsidy providers (Manzetti 1999). The lack of transparent processes and decision criteria opened the door to both favoritism and outright corruption, and sometimes both. These cases need to be reexamined to see whether more competitive pressures can be introduced, and some enterprises may need to be renationalized and resold. For remaining privatization deals, and for all large-scale procurement and concessionary deals, many governments need to introduce more competitive and transparent procurement procedures. Further, governments need to establish a framework that creates competitive pressures instead of giving monopoly power to insiders. They need to publish procurement rules and procedures ahead of time and open bidding processes widely. Using the state as a guarantor of corrupt or ill-advised contracts with private firms undermines the original justifications for private sector involvement. As an alternative, states can empower individuals and groups who are harmed by nontransparent insider deals to seek redress in the courts. In countries with independent, honest, and competent judiciaries, such legal redress can provide a means to hold the government accountable and reformers might seek to make such challenges possible. This will not be feasible, however, unless courts are a respected counterweight to the rest of government.

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Unfortunately, although citizens bear a disproportionate share of the costs, in many situations they may not even know about the problem, much less have the resources and skills to challenge these choices. Here the role of watchdogs, such as Transparency International (Pope 2000), is particularly important. These groups can only play such a role, however, if states routinely provide information to the public and create a forum for lodging complaints and obtaining a hearing. In short, the proposals for external accountability discussed above are intimately involved with prospects for reform in the substantive areas touched on here.

Conclusions: The Importance of a Political Coalition for Reform Corruption is often deeply entrenched and difficult to control solely through direct prohibitions or criminal penalties. General strategies aimed at increasing internal and external accountability, combined with specific reforms targeted at the areas of greatest concern, stand the best chance of reducing corruption. Improved government accountability, however, leaves officials and politicians more vulnerable to popular discontent, and thus even nominally democratic regimes may view such policies with suspicion. Such policies are, nevertheless, an essential check on corruption and other forms of dishonest self-dealing. Organized demands for accountability from skeptical but well-informed citizens can help improve the performance of the state. Whatever other policies they implement, emerging democracies can make progress against corruption and self-dealing by developing improved and more effective routes for public participation and public accountability. This means not only better access for elites, but also, most particularly, more effective paths for citizens to have a voice and to monitor public officials’ behavior without fearing reprisals. The goal is to develop a more honest government, whose policies are more responsive to public demands. Anticorruption reform is not easy, nor will it always show immediate results. In many cases, longstanding practices have to be changed and those who benefit from corruption will want to block reforms. The lack of immediately visible benefits will weaken public support and give opponents an opportunity to challenge policies. Nonetheless, states can adopt many of the reforms suggested above without paying a very high political price. Some reforms will attract allies or generate immediate results. Others do not require high budgetary costs, so they can be adopted without threatening other government projects. First, consider reforms that do not immediately threaten powerful interests, such as using the Internet to make available more information about the content of laws, decrees, and regulations at relatively low cost. A freedom of information act is an

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important way to provide access to government information, but its impact will only develop gradually as organized groups begin to understand how to use it. Second, some reforms will attract allies who can provide political support. Nongovernmental organizations will support policies that enable them to organize, register, and raise funds more readily. Corporations may benefit from good publicity if they adopt anticorruption codes of conduct. Local government officials may not welcome requirements for public hearings or public participation in decisions, but they may accept these requirements if accompanied by more local authority over public programs. A third group of reforms can be adopted without major new expenditures. Although corruption will not decline immediately, small, concrete steps toward greater openness and accountability can lay the foundation for long-term changes in expectations and behavior that may eventually reduce levels of corruption. Such steps include streamlining and simplifying tax and customs duties, clarifying regulations, and creating an ombudsman or other offices to accept and process complaints. Of course, some reforms, such as a reconstituted judiciary, a reformed civil service, and a transformed police force, are likely to be both expensive and politically controversial. Because the benefits are potentially so large, however, political leaders can gain legitimacy and respect by taking on such challenges. Corruption will never be entirely eliminated. The costs of elimination are simply too high, and a single-minded focus on preventing corruption can negatively affect personal freedoms and human rights. Such a focus could produce a rigid and unresponsive government. Thus, the aim is not to achieve complete rectitude. Rather, it is to increase fundamentally the honesty—and thus the efficiency, fairness, and political legitimacy—of government.

 1. For a fuller discussion, see Rose-Ackerman (1999, 9–38). See also Bardhan (1997), for a review of the economic arguments, and Della Porta and Vannucci (1999), on the Italian case. 2. For examples, see Celarier (1996). Kaufmann and Siegelbaum (1997) and Sajó (2002) discuss the postcommunist experience. On Argentina, see Manzetti and Blake (1996) and, on Thailand, see Pasuk and Piriyarangsan (1994, 10). 3. Kornblum (1976); Dillon (1996); Farhah (1996); and Golden (1996). 4. This is an issue that is too complex to be dealt with here. Rose-Ackerman (2001) and Kunicová and Rose-Ackerman (2005) provide theoretical and empirical insights on the relationship between corruption and constitutional structure, including electoral systems and political parties.

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5. For a more extended discussion with particular attention to the case of Argentina, see de Michele (2001). 6. See Ackerman and Ayres (2002) for one such proposal that combines a voucher program with anonymous private gifts, a solution that should limit special-interest money. Della Porta and Vannucci (1999) argue for outlawing contributions from economic corporations. 7. For a fuller discussion, see Rose-Ackerman (1999, 143–74). 8. See Ackerman and Sandoval-Ballestros (2006). 9. This section is derived in part from Rose-Ackerman (2002b). 10. According to the International Chamber of Commerce, “The highest priority should be directed to ending large-scale extortion and bribery involving politicians and senior officials. These represent the greatest threat to democratic institutions and cause the gravest economic distortions” (Vincke, Heimann, and Katz 1999, 103–4). 11. Some proposed corporate codes of conduct for transnationals include provisions designed to maintain the integrity of the market by restricting political payments and bribes. See, for example, the model code developed by the OECD and the draft United Nations Code of Conduct on Transnational Corporations. For an overview, see Frederick (1991). 12. The restrictions on bribes and political payments in proposed codes of conduct for transnational firms are sometimes justified as attempts to avoid behavior that interferes with national sovereignty and the internal politics of host countries (Frederick 1991). 13. Badaracco and Webb (1995); Newstrom and Ruch (1975); Brenner and Molander (1977); Cooper and Frank (1992); Vincke and Heimann (2003, 13–22). The United States branch of the nongovernmental organization Transparency International has sponsored an effort to compile existing codes and also to develop new codes for multinational companies that lack them (Transparency International–USA 1996). 14. For more discussion of these and other issues, see Rose-Ackerman (1999, 39–68). See also Bardhan (1997) and Di Tella (2002).

 Abers, Rebecca. 1998. “From Clientalism to Cooperation: Local Government, Participatory Policy, and Civic Organizing in Porto Alegre, Brazil.” Politics and Society (December) 26, 4:511–37. Ackerman, Bruce, and Ian Ayres. 2002. Voting with Dollars. New Haven, Conn.: Yale University Press. Ackerman, John, and Sandoval-Ballestros. 2006. “The Global Explosion of Freedom of Information Laws.” Administrative Law Review 58, 1 (winter): 85–130. Ades, Albert, and Rafael Di Tella. 1997. “National Champions and Corruption: Some Unpleasant Interventionist Arithmetic.” Economic Journal 107, 443 (July):1023–42. Badaracco, Joseph L. Jr., and Allen Webb. 1995. “Business Ethics: A View from the Trenches.” California Management Review 37, 2 (winter): 8–28. Bardhan, Pranab. 1997. “Corruption and Development: A Review of the Issues.” Journal of Economic Literature 35, 3 (September): 1320–46.

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Bardhan, Pranab, and Dilip Mookherjee. 2006. “Accountability and Decentralization of Infrastructure Delivery in Developing Countries.” Economic Journal 116:101–27. Brenner, Steven N., and Earl A. Molander. 1977. “Is the Ethics of Business Changing?” Harvard Business Review 55, 1 (January/February): 57–71. Celarier, Michelle. 1996. “Stealing the Family Silver.” Euromoney 322 (February): 62–66. Chand, Sheetal K., and Karl O. Moene. 1999. “Controlling Fiscal Corruption.” World Development 27, 7: 1129–40. Cooper, Robert W., and Gary L. Frank. 1992. “Professionals in Business: Where Do They Look for Help Dealing with Ethical Issues?” Business & Professional Ethics Journal 11, 2 (summer): 41–56. Das-Gupta, Arindam, and Dilip Mookherjee. 1998. Incentive and Institutional Reform in Tax Enforcement: An Analysis of Developing Country Experience. New Delhi: Oxford University Press. Das Gupta, Monica, Helene Grandvoinnet, and Mattia Romani. 2004. “State-Community Synergies in Community-Driven Development.” Journal of Development Studies 40, 3: 27–58. De George, R.T. 1993. Competing with Integrity in International Business. New York: Oxford University Press. Della Porta, Donatella, and Alberto Vannucci. 1999. Corrupt Exchanges: Actors, Resources, and Mechanisms of Political Corruption. New York: Aldine de Gruyter. De Michele, Roberto. 2001. “Conflicts of Interest and Transparency.” Paper prepared for Conference on Democratic Transition and Consolidation. FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. De Sousa Santos, A. Boaventura. 1998. “Participatory Budgeting in Porto Alegre: Toward a Redistributive Democracy.” Politics and Society 26, 4 (December): 461–510. Dia, Mamadou. 1996. Africa’s Management in the 1990s and Beyond: Reconciling Indigenous and Transplanted Institutions. Washington, D.C.: World Bank. Dillon, Sam. 1996. “Bribes and Publicity Mark Fall of Mexican Drug Lord.” New York Times, May 12. Di Tella, Rafael. 2002. “The Honest Reformer’s Guide to Fighting Corruption. In Conference on Democratic Transition and Consolidation: Papers of the Experts. Madrid: Siddarth Mehta Ediciones. Donaldson, Thomas. 1989. The Ethics of International Business. New York: Oxford University Press. Farah, Douglas. 1996. “Popular Revulsion is New Factor in Chronic Colombian Drug Scandal.” Washington Post, January 28. Frederick, W. C. 1991. “The Moral Authority of Transnational Corporate Codes” Journal of Business Ethics 10, 3 (March): 165–77. Friedman, Eric, Simon Johnson, Daniel Kaufmann, and Pablo Zoido-Lobaton. 2000. “Dodging the Grabbing Hand: The Determinants of Unofficial Activity in 69 Countries.” Journal of Public Economics 76, 3 (June): 459–93. Golden, Tim. 1996. “Mexican Connection Grows As Cocaine Supplier to U.S.” New York Times, July 30. Handelman, Stephen. 1995. Comrade Criminal. New Haven, Conn.: Yale University Press. Kang, David. 2002. “Anti-Corruption Measures: Political Incentives.” In Conference on Democratic Transition and Consolidation: Papers of the Experts. Madrid: Siddarth Mehta Ediciones.

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Kaufmann, Daniel. 1997. “The Missing Pillar of a Growth Strategy for Ukraine: Institutional and Policy Reforms for Private Sector Development.” In Ukraine: Accelerating the Transition to Market, ed. Peter K. Cornelius and Patrick Lenain. Washington, D.C.: International Monetary Fund. Kaufmann, Daniel, and Aleksander Kaliberda. 1996. “Integrating the Unofficial Economy into the Dynamics of Post-Socialist Economies: A Framework of Analysis and Evidence.” In Economic Transition in Russia and the New States of Eurasia, ed. Bartlomej Kaminski. Armonk, N.Y.: M. E. Sharpe. Kaufmann, Daniel, and Paul Siegelbaum. 1997. “Privatization and Corruption in Transition Economies.” Journal of International Affairs 50, 2 (winter): 419–59. Koh, Harold Hongju. 1998. “The 1998 Frankel Lecture: Bringing International Law Home.” Houston Law Review 35, 3 (fall): 623–81. Kornai, János. 2000. “Hidden in the Envelope: Gratitude Payments to Medical Doctors in Hungary.” In The Paradoxes of Unintended Consequences, ed. Lord Ralf Dahrendorf and Yehuda Elkana. Budapest: Central European University Press Kornblum, Allan. 1976. The Moral Hazards. Lexington, Mass.: D. C. Heath. Kunicová, Jana, and Susan Rose-Ackerman. 2005. “Electoral Rules and Constitutional Structures as Constraints on Corruption.” British Journal of Political Science 35, 4 (October): 573–606. Manzetti, Luigi. 1999. Privatization South American Style. Oxford: Oxford University Press. Manzetti, Luigi, and Charles Blake. 1996. “Market Reforms and Corruption in Latin America: New Means for Old Ways.” Review of International Political Economy 3, 4 (winter): 662–97. Mauro, Pablo. 1995. “Corruption and Growth.” Quarterly Journal of Economics 110, 3 (August): 681–712. Meagher, Patrick, Kumar Upadhyaya, and Betty Wilkinson. 2000. Combating Rural Public Works Corruption: Food-for-Work Programs in Nepal. IRIS Center Working Paper No. 239. College Park, Md.: University of Maryland, February 2000. Available at http://papers.ssrn. com/sol3/paperscfm?abstract_id=260044. Miller, William L., Åse B. Grødeland, and Tatyana Y. Koshechkina. 2001. A Culture of Corruption: Coping with Government in Post-Communist Europe. Budapest: Central European University Press. Newstrom, John W., and William A. Ruch. 1975. “The Ethics of Management and the Management of Ethics.” MSU Business Topics 23, 1 (winter): 29–37. Parker, A. N. 1995. “Decentralization: The Way Forward for Rural Development?” Policy Research Paper, 1475, World Bank, Agriculture and Natural Resources Department, Washington, D.C., June. Pasuk, Phongpaicht, and Sungsidh Piriyarangsan. 1994. Corruption and Democracy in Thailand. Bankok: Political Economy Centre, Faculty of Economics, Chulalongkorn University. Pope, Jeremy. 2000. Confronting Corruption: The Elements of a National Integrity System. Transparency International Source Book. Berlin: Transparency International. Available at www.transparency.org/publications/sourcebook. Pritchett, Lant, and Geeta Sethi. 1994. “Tariff Revenue, and Tariff Reform: Some New Facts.” World Bank Economic Review 8, 1 (January): 1–16. Przeworski, Adam, and Fernando Limongi. 1993. “Political Regimes and Economic Growth.” Journal of Economic Perspectives 7, 3 (summer): 51–69.

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Reinikka, Ritva, and Jakob Svensson. 2002. “Measuring and Understanding Corruption at the Micro Level.” In Corrupt Exchanges: Empirical Themes in the Politics and Political Economy of Corruption, ed. Donatella della Porta and Susan Rose-Ackerman. Frankfurt: Nomos. Rose-Ackerman, Susan. 1999. Corruption and Government: Causes, Consequences, and Reform. Cambridge: Cambridge University Press. ———. 2001. “Political Corruption and Democratic Structures.” In The Political Economy of Corruption, ed. Arvind K. Jain. London: Routledge. ———. 2002a. “Corruption and the Criminal Law.” Forum on Crime and Society 4 (February): 1. ———. 2002b. “‘Grand’ Corruption and the Ethics of Global Business.” Journal of Banking and Finance 29, 9 (September): 187–216. Sajó, András. 2002. “Economic Incentives for High-Level Corruption in Post-Communist States.” Paper prepared for Conference on Democratic Transition and Consolidation. FRIDE/Gorbachev Foundation of North America, Madrid, October 19–27. Tanzi, Vito, and Hamid Davoodi. 1997. “Corruption, Public Investment, and Growth.” IMF Working Paper WP/97/139. Washington, D.C.: International Monetary Fund. Thompson, Dennis. 1987. Political Ethics and Public Office. Cambridge, Mass.: Harvard University Press. Transparency International–USA. 1996. Corporate Anti-Corruption Programs: A Survey of Best Practices. Washington, D.C.: Transparency International–USA. Treisman, Daniel. 2000. “The Causes of Corruption: A Cross-National Study.” Journal of Public Economics 76, 3 (June): 399–457. Vincke, François, and Fritz Heimann, eds. 2003. Fighting Bribery: A Corporate Practices Manual. Paris: International Chamber of Commerce. Vincke, Francois, Fritz Heimann, and Ron Katz. 1999. Fighting Bribery: A Corporate Practices Manual. Paris: International Chamber of Commerce. Wei, Shang-Jin. 2000. “How Taxing Is Corruption on International Investors?” Review of Economics and Statistics 82, 1 (February): 1–11. Woodhouse, Andrea. 2002. “Village Corruption in Indonesia: Fighting Corruption in the World Bank’s Kecamatan Development Program.” Paper prepared for the World Bank, Washington, D.C., June. World Bank. 2000. Making Transition Work for Everyone: Poverty and Inequality in Europe and Central Asia. Washington, D.C.: World Bank.

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    

The construction of democracy requires not only thinkers, but also politicians who actually build the institutions and practices that make such regimes possible. In part IV, we feature the reflections of leading practitioners of democratic politics who have served their countries with distinction in Brazil, Colombia, India, Portugal, and Venezuela. In the fall of 2001, Fernando Henrique Cardoso attended the “Conference on Democratic Transition and Consolidation,” which gave birth to the Club of Madrid, as the then-incumbent president of Brazil. Upon leaving office soon thereafter, he became the founding president of the Club of Madrid. He had been, of course, a distinguished social scientist before he entered politics, and this enables him to bridge the reflections of the scholars and of the practitioners in chapter 9. In his analysis, Cardoso considers the relationship between the exercise of political leadership and the national interest, and highlights the important of having an “ethics of responsibility.” At the time of the conference in Madrid, César Gaviria was the former president of Colombia, Inder K. Gujral was the former prime minister of India, and Aníbal Cavaco Silva was the former prime minister of Portugal (and in January 2006 became its president). All three served as moderators during the conference and were thus responsible for structuring the dialogue between experts and practitioners. For this book, we asked each to address one of the chapters prepared by the academics for parts I, II, or III. We subsequently invited Carlos Blanco, a former minister for the reform of the state in Venezuela, to provide the concluding chapter by assessing Diamint’s work in chapter 7. All four contributors comment on specific chapters and contribute their own thinking, drawing on their personal experience regarding major theoretical and practical questions of democratic governance.

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Gaviria addresses chapter 2, “Strengthening Pluralism and Public Participation in New Democracies.” He sheds light on similarities and differences between distinct political settings on two continents by drawing on his own knowledge and experience concerning Latin America, which complements the expertise on Eastern Europe of the authors of chapter 2. Gaviria describes the new international instruments that governments in the Americas adopted to safeguard democracy’s future existence and improve the quality of participation in the region, drawing on his decade of service as secretary general of the Organization of American States following his term as Colombian president. He also discusses the impact of globalization on the current state of democracy and examines the roles of political parties and civil society in strengthening both democratic participation and democratic consolidation in Latin America. Gujral comments on chapter 4, “Constitutional Design and the Construction of Democracy: A Citizenship Regime Perspective.” He emphasizes the limitations of legal-constitutional perspectives as the lens through which to examine the issue of democratic transformation. He reminds us that the “spirit of the laws” is an important aspect to sustaining constitutional democracy, citing examples from British constitutionalism, the Shari’a, India’s experience since independence, and broader comparative perspectives. Cavaco Silva discusses chapter 5, “The Role of Executive-Legislative Relations in the Democratic Consolidation: A Review and Some Questions.” He complements both chapter 5 and Prime Minister Gujral’s commentary by emphasizing the salience of economic growth for the success of the processes of democratic transition and consolidation. Democracies must deliver if they are to survive and become stronger in the areas of macroeconomic stabilization, structural reform, and the provision of social goods and services. He supplements the discussion of parliamentary and presidential governments through an exploration of Portugal’s semipresidential system in contrast to that of France. Finally, Carlos Blanco focuses on chapter 7, “Military, Police, Politics, and Society: Does Latin America Have a Democratic Model?” He considers the serious limitations for civilian control of the armed forces and the police, how military organizations at times abuse their otherwise proper professional autonomy, the problems of transparency and accountability in governing military and police institutions, and the urgent need to demilitarize police forces. He draws on his extensive experience as a scholar of and practitioner in Venezuelan politics.

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The practitioners in this book remind us of the important elements that democratic designers forget only at their peril, and which if overlooked threaten democracy itself. These are:

· · ·

The ethics, sentiments, habits, and values of citizenry and politicians; The disadvantages and advantages from international contexts and influences; and Democracies should also deliver prosperity and security.

The final section in this book highlights the salience of the virtù of politicians, as thinkers and actors in the world of politics, and as mentors for all of us through their reflections about the timeless topics of free politics everywhere.

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Brazil The Ethics of Responsibility   

The purpose of this chapter is to share some thoughts on the question of exercising political leadership in the national interest. I will explore several points related to a debate with which I have long been familiar as someone who moved from the academic to the political life. I refer to the tension between facts and values, practice and theory, technical knowledge and political decision-making. What balance between those poles should be struck for a head of state or government to succeed? Some may argue that there is no need for accommodation or for compromise; politicians should simply abide by an “ethics of responsibility” and follow what they believe to be the most sensible and politically rewarding stance, regardless of any technical consideration. Today’s world does not allow for such a facile solution. Be it in Brazil, Canada, Spain, or Serbia and Montenegro, once in office politicians are supposed to respond to an increasingly wide range of societal interests. Demands from such a complex social network can hardly be accommodated into a zero-sum equation, especially as some of them are of a symbolic or institutional nature, such as requests for legal entitlements or affirmative action. Moreover, social identities are no longer defined by class lines, but by various criteria, including religion, race, profession, nationality, sexual preference, and consumption habits. Nor should we underestimate the fact that, with the development of mass media and the advent of information technology, political constituencies now bypass political parties that were once the traditional means of mediation and convey their demands directly to power holders. As a result, not only are the existing systems of representation pressured to update their methods of communication with society, but governments are also asked to deliver services at an accelerated pace. An increasing number of social demands are generated by emulation. In this information technology age, consumption patterns travel quickly, affecting tastes and expectations,

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regardless of cultural or national differences. In groups where basic needs are still to be met, it is likely that expectations change at a particularly fast rhythm. Let me recall what I learned from the implementation of agrarian reform in Brazil, which distributed to farmers nearly 20 million hectares of land, an area larger than many European states. Despite the unprecedented scope of the program, the claims on more land increased as the land settlements progressed. Understandably, once provided with a plot, farmers and their families pursued other means that would make their new assets more productive, such as credit lines, technical assistance, and transportation, to mention a few. There is no doubt that, from a historical perspective, both the land distribution program and the demand of farmers for land, credit, technical assistance, and so forth were positive because they might lead to greater equality of opportunities and proliferation of democracy. Farmers empowered by a democratic state would be more likely to support democracy. There were also some considerable risks involved in this process of change. Perhaps the most important risk was the possible delegitimization of the elected governments. Sustaining the “right cause” or launching the “good fight” is no longer enough for governments to be politically viable; they must deliver what their constituencies expect of them. Today’s guiding principle is not what to do, but how to do it in the most efficient and cost-effective manner. This is not to suggest that ethical considerations or values cease to matter in public agency; politics has not yet been confined to a technical optimization of defined interests. Values continue to be as important as ever to politics, but in a different way. To define the common good, political agents are now supposed to engage in deliberative exercises with a multitude of actors. Rather than a predetermined, Rousseauvian variable, the general will is the outcome of extensive and open-ended deliberation. Hence, it is important that the Modern Prince bears a republican mindset and has a clear view of the ultimate values his political decisions should promise. Otherwise, he risks being held hostage by corporatist interests. As ever before, expectations are that virtues prevail over vices in the conduct of public office. But again, the Prince is definitely supposed to be more “enlightened” today than in the past. The task of fitting many conflicting demands into policies of common interest can be achieved only if the necessary expertise is available to evaluate and fine-tune the various inputs. To be meaningful, republicanism has to be effective. Public virtues cannot be cultivated in the abstract; they are to be couched in technical competence. The good news is that the same trends that restrict the Modern Prince also introduce new grounds and possibilities for his or her action. Because of advances in technology, the state now has extraordinary resources at its disposal to better meet social demands. As far as public policies are concerned, the Internet serves not only the

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demand side, but also the supply side as a conveyor of requests. It provides governments with an important means of delivering a wide range of services, from teaching to facilitate distance learning to postal services. Electronic government has indeed benefited the state as a provider of public goods by bringing it closer to the citizenry at large, and the Internet has improved transparency and democratic accountability by enhancing social control of public policies. Here again, the end result is expected to be a more selective and cost-effective use of public funds. Public agency has improved because of the spread of technical knowledge, be it the expression of the number and variety of social demands, the deliberative nature of decision making, or the impact of new technologies on state and society alike. Let me then come back to my original question: What balance should be struck between values and facts for a national leader to be successful? Although there does not seem to be a definitive answer, I have several observations. First, ethics and objective knowledge do not always coexist; the relationship between values and facts changes over time. What appears to be the state of the art today might not be so tomorrow, as new data and assumptions filter into the equation. For example, contrasting views about the market and its effects upon the social fabric have changed over the centuries. Montesquieu, in a concept echoed by the Scottish Enlightenment, coined the term doux commerce: The market, if freed of constraints, would help temper passions and contain the arbitrary exercise of authority. As the social cost of the Industrial Revolution became evident later, the market was portrayed as being a locus of violence and oppression. Conditions deteriorated with the emergence of imperialism because not only individuals, but also entire nations, could be argued to be under the severe yoke of capital. At this time, the state was lauded as the countervailing force to market excesses. The welfare state was then established to provide a safety net for those unattended by the market’s invisible hand. The financial collapse of welfare systems in the 1980s led to the rediscovery of market virtues. Multilateral institutions took the lead in spreading the news through recipes like the Washington Consensus.1 The International Monetary Fund cautions its members about the need for sound public policies. There is nothing worrisome about this change over time of perceptions about market rules. Changing realities require a constant updating of theories and concepts, if they are to bear any hermeneutical or practical value. What may be of concern is to approach contingent notions as eternal truths; ideas are to be understood in context. Only then can ideas help us explain circumstances and chart a course of action. How best can a social-democratic program be set up in Latin American countries, for instance? Would it suffice to prescribe, out of theory and other national experiences, a set of rules that established a balanced division of labor between the market and the state? Or should other variables that are specific to local circumstances—like

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historical formation, power structure, and social expectations—also be taken into account? How much of a tradeoff should exist between universal principles and national characteristics? Some analysts argue that there is no need for concern with local specificities. As long as the deliberative exercise for the formulation of the program is wide enough to encompass views from all across the nation, the outcome would bear the nation’s unique characteristics. The method would provide for the result. Be that as it may, a representative platform is not enough to ensure that the expectations of the majority will be met. Important though they are, updated knowledge, republican values, and a good platform might not prove sufficient to produce a statesman. For leaders to perform their duties and serve their nations’ interests, there might be one additional requirement. The missing quality is what Isaiah Berlin defined as capacity for good “political judgment,” which entails discerning when to avoid the opposing risks of impractical idealism and uninspiring realism. Sound political judgment requires the practical wisdom to appreciate the context of a particular situation or moment in history; it requires the capacity to determine, out of the chaotic flow of experience, what matters most, what fits, what follows and what leads to what. Good political judgment means having a sense for what is qualitative rather than quantitative and having a proven capacity for synthesis rather than analysis. Berlin equates that gift with the talent displayed by some novelists, like Proust or Tolstoy, who eloquently conveyed a sense of personal familiarity with the texture of life. Those who lack such a quality, no matter how clever, learned, imaginative, and noble they may be, do not have the sense of what will make a difference in history, and what will not. Political judgment is relevant to any historical circumstance, but it is particularly so in moments of democratic transition. It is true that, for democracies, all moments are in a way transitional, as the political body is constantly reinventing itself, but perhaps no moment is as distinctive as that of democratic consolidation, when progressive trends are in constant struggle with regressive ones. A true statesman knows how to foster the former and inhibit the latter. It may be that statesmen can best serve their nations by making them more reliant on institutions and not on the political acumen of individuals.

 1. John Williamson coined this term to call attention to the scope and common content of free market reforms adopted in the 1990s.

 

Latin America National and Global Factors in Democratization and Democratic Consolidation  

Grzegorz Ekiert and Anna Grzymala-Busse’s chapter is a systematic, rigorous and timely analysis of the issues surrounding the debate on democracy, pluralism and public participation. This response to chapter 2 explores many of its ideas and places it within a Latin American context. The comments here are informed both by my experience as president of Colombia from 1990 to 1994 and later as secretary general of the Organization of American States (OAS) between 1994 and 2004. In essence, I will seek to inject into this valuable study the perspective of a practitioner. Many of the problems and issues pointed out by the authors can be identified in the current efforts to strengthen and consolidate democracy in the region. Latin America is particularly fecund ground for analysis because it has a long tradition of swinging between democracy and other forms of governance. In particular, the author’s analysis of the quality of democracy is one that is essential for Latin America today. This chapter first explores the current state of democracy in the region and the new international instruments that have been adopted by the hemispheric community to safeguard its existence in the future. I then examine the roles of political parties and civil society in strengthening of democratic participation in Latin America and how they in turn affect democratic consolidation. Later, I posit that globalization has had a significant influence on the current state of democracy in the Latin American region. Finally, the chapter concludes with a few observations on the role of the international community in improving the quality of participation in the region.

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New Democracies and New Instruments At the outset, it is important to clarify that in this region new democracies have only recently embraced the shared goal of democracy. In 1991 the OAS, which brings together thirty-four nations of the Americas, for the first time established publicly and unanimously that it would not tolerate undemocratic regimes. It did so by agreeing to the Santiago Commitment to Democracy and Strengthening of the Inter-American System, as well as Resolution 1080, its enabling act. Put another way, it was not until much after the dust of the cold war settled that it was possible to imagine the Americas making this collective statement. Ten years later, in 2001, the OAS adopted the Inter-American Democratic Charter (IADC), which is the most significant and progressive instrument today in the promotion, preservation and defense of democracy in the region and possibly in the world. The IADC buttresses both the OAS Charter and the Santiago Commitment for the active defense of representative democracy. The IADC, however, is more than just a tool to promote and defend democracy. It defines democracy holistically: free and transparent elections; a system of checks and balances; and respect for human rights and citizen participation. The charter also underlines the grave social and economic inequalities that exist in the region, and makes clear that these inequalities must be addressed in order to advance viable and stable democracies. The charter, in effect, provides a blueprint for the type of democracy that we wish to construct in the hemisphere: representative, inclusive, and equitable.

Democracy and Discontent in Latin America Today There is much to question regarding the quality of democracy being delivered in this region. Still, with almost complete unanimity, as a region the Americas today stand committed to democratic ideals. Although in the post–World War II era, regime changes via military coups have occurred more often in Bolivia than governments have changed in Italy, since the fall of the Berlin Wall in 1989 new authoritarian regimes have not come to power in the hemisphere. This is undeniable progress. Despite the progress since the end of the cold war, democracy is now increasingly at risk in the region; discontent is widespread even as the hemisphere boasts democratically elected governments in every country save one. Citizens expect more from democracy than has been delivered: better social services, improved economic performance, a more equitable distribution of income, lower crime rates, and improved educational systems. Citizens now perceive the failure of government institutions to

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provide these services to be a failure of the democratic system. The speed with which the people of the region have embraced democracy further exacerbates the problem because political systems struggle to keep pace and public institutions are weak. The electorate is also firmly convinced that their political system is rife with corruption. The 2004 United Nations Development Program report on democratic development in Latin America reveals an alarming statistic: 64.6 percent of Latin Americans believe that politicians lie to get elected. Unrealized expectations, poorly performing governments and the perception that politics is corrupt and that politicians are liars helps to explain why so many people in the region are beginning to lose faith in democracy. This loss of faith and disillusion has more recently mutated into outright protest and anger. Fifteen years ago, the region was known for democratic change; today, it is pockmarked with all-too-frequent popular uprisings against democratically elected presidents. It is noteworthy, however, that this discontent has not evolved into a series of unconstitutional presidential successions. Pressure from the OAS and the international community can take some credit for that. It has by no means been an easy journey. As disenchantment with the performances of governments spreads, so too will challenges to democracy. These challenges underscore the inherent weakness that exists in the presidential systems of some countries and illustrate that rapid mass mobilization coupled with weak institutional channels of participation can have destabilizing effects. This is one of the more insightful assertions made by Ekiert and Grzymala-Busse in chapter 2. Another point worth exploring is the enormous pressure placed on the hemisphere’s democracies by the forces of globalization. Our increasingly interconnected world brings to Latin American nations a new and healthy demand for political justice and the defense of democratic principles and human rights. Latin Americans can now watch CNN, BBC, MTV and almost any other channel available to citizens in the developed world. Most of the citizens of this region that watch television compare the quality of their lives to the images on the screen in front of them. The resulting pressure on the region’s political systems bears analysis, as President Cardoso also points out in chapter 9. Globalization has forced governments in Latin America to modernize to participate in the increasingly competitive world financial market. In the past, most countries in Latin America isolated themselves from the world economy, relying on import-substitution-industrialization (ISI) policies. These policies gave government greater autonomy in economic decision making but did not provide satisfactory levels of growth. Today, the only real option is to accept globalization and all of its challenges. Globalization, however, has not significantly improved the levels of GDP growth that the region experienced during the period that ISI policies were in place. Indeed, one of

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the greatest challenges to democracy and continued and effective public participation in Latin America is the region’s dismal record of economic growth at the end of the 1990s and the start of the current decade. Ineffective economic management and inadequate performance of public institutions are partly to blame. Capital volatility flows—the longest, darkest shadow cast by globalization—has fostered poor or even negative growth figures in the region. Countries find themselves increasingly vulnerable to the behavior of international investors and are forced to expend much effort to face a new challenge: implementing effective policies, timely adjustments, and macroeconomic stability efforts to mitigate the danger posed by surges of short-term capital flows. The need for international solidarity for these governments cannot be overstated. That is, countries must act both individually and collectively to contribute to the general stabilization of capital flows. In turn, the international community—including donors and the relevant multilateral institutions—may contribute significantly to calming a restive citizenry by providing respite for governments under pressure from these particular vicissitudes of globalization.

Participation, Minorities, and Exclusion It may be useful in this context to draw a distinction between the presence of an active civil society and the strengthening of political participation. The traditional adversarial relationship between government and civil society has meant that in many Latin American countries, government efforts to increase political participation in the region have had less to do with the inclusion of civil society in the decision-making process and more to do with gaining access to the political process through constitutional mechanisms. Instead of recourse to “advisory councils and consultative channels,” as described by Ekiert and Grzymala-Busse in this volume, in Latin America we have relied more on appealing directly to the people, to some extent bypassing civil society. Coupled with Latin America’s historical tendency toward delegable forms of government—if not outright authoritarianism—achieving broad-based political participation has been an uphill battle. Ekiert and Grzymala-Busse highlight a danger to democratic consensus that is particularly apt for this region: excluding groups from the political system. The problem takes many forms. One is how to deal with movements, whose members have suffered real and grave injustices, which appear to be veering toward what the authors call an “absence of civility.” The rise of indigenous movements that demand a greater say in government is a fairly new phenomenon, for example, but it is one that increasingly pressures the

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region’s governments. These groups’ undeniable historic marginalization from the political system has moved from discontent to protest in a series of countries—primarily in the Andean region. Less obvious, however, is that the protests are increasingly challenging democratically elected governments—and democracy itself. There is little doubt that some of the indigenous political movements have run afoul of Ekiert and Grzymala-Busse’s desired qualities of participation: responsible, responsive, and representative. In particular, chapter 2 underscores the need to encourage responsible participation, which the authors claim “does not call into question either democracy or the rule of law.” This was highlighted by OAS member states in article 2 of the IADC: “Representative democracy is strengthened and deepened by permanent, ethical, and responsible participation of the citizenry within a legal framework conforming to the respective constitutional order.” And yet, the rallying discourse of some of the leaders of these groups appears to reject the political system outright or demonstrate significant discomfort with the rules of a democratic system. In the immediate term, therefore, a pressing challenge is to find ways to channel the legitimate and real concerns of these groups into forms of protest that are less threatening to their democratic systems. Alternatively, in the short- to medium-term it will be necessary, as Ekiert and Grzymala-Busse prescribe, to enter into pacts or agreements with such indigenous groups and leaders to integrate them into the democratic decision-making system. The challenge of incorporating indigenous peoples into the political system is of particular importance. In some countries where indigenous people represent a small minority, it is not difficult to create mechanisms whereby they are amply or even overrepresented in congress. In countries where indigenous peoples represent the largest minority, however, this solution will present significant challenges. Nevertheless, it is of utmost importance that all of the governments of the region respect the cultures, languages, justice systems, and, most important, ancestral property rights, of indigenous groups.

Civil Society In chapter 2, the authors cite Ralf Dahrendorf’s contention that in the postcommunist countries of Eastern Europe the establishment of a healthy civil society could take decades to achieve in contrast with the relatively rapid economic and political transformations that occurred there. In my experience, this resonates in Latin America. In maintaining the democracy-enhancing functions of participation, certain dangers, warn the authors, should be avoided: the privatization of groups’ efforts, which devolve into exclusive, rent-seeking practices. Historically, fair or not, this is a charge

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that has been leveled against traditional, homegrown NGOs (e.g., business associations, labor unions). On this issue, however, chapter 2 falls short: how to distinguish a malevolent narrowing of interests from a more benevolent and natural specialization by NGOs and how to encourage the latter and discourage the former. That analysis might benefit from delving into the idea of citizens as stakeholders in both society and government, which may in turn further increase the quality of their participation in a democratic system. Indeed, the story of civil society in this region has generally been adversarial and sometimes even combative. The ability of an overly robust and undemocratic civil society to overwhelm weak democracies is particularly interesting in the case of Latin America. In the region, before the end of the cold war it was easy to discard democracy when faced with an overactive, rent-seeking civil society. Today it is not. The strength of democracy as a shared ideal makes that proposition much less likely. It also places very strong pressure on government institutions, still relatively weak, to absorb and channel those forces. In the current decade in Ecuador and Bolivia, the mobilization of opposition movements, which represent a specific minority group, has been so strong that they toppled democratically elected rulers—albeit in a process of presidential succession that remained constitutional. Building a pluralist democracy is a desirable objective in and of itself, but it does not come without a cost for government institutions in Latin America. As Ekiert and Grzymala-Busse note, a strong civil society can either bolster democracy or build a dictatorship. In the region, we have examples of both. In the context of the bipolar world, corporatist systems in Latin America mobilized large sectors of civil society all in the service of a fascist state—a mobilization that used for its justification the battle against communism. In other countries, in contrast, a mobilized civil society led to the downfall of authoritarian rulers and the establishment of democracy. The authors also assert that, whereas some forms of participation should be encouraged, others should be constrained or even prohibited. This idea is particularly important in the defense of democracy and the maintenance of the rule of law. At least as viewed through the prism of Latin Americans, the authors may be underestimating the difficulty faced by government institutions to channel that participation or effect change. One disturbing manifestation of that difficulty is the all-too-frequent use of violence. In chapter 2, the authors state that groups that are violent and openly antidemocratic “should be prohibited and legally excluded from the political process.” Agreed. This is, however, a particularly intractable problem because governments in Latin America repeatedly have reacted to violence with more violence. The use of force as a means of pacification and coercion is too widespread. An urgent goal for this region, therefore, is to encourage the resolution of violent protest through the use of

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peaceful strategies. Political parties have a role here, too. They must reject calls to violence and extremism and should act under clear and well-defined procedures that ensure accountability, transparency, and respect for the law. This cannot be overstated: to defend democratic principles, Latin America must embrace the rule of law and reject other mechanisms of dispute resolution.

Political Parties Political parties are the cornerstones of representative democracy. Juan Linz’s claim, cited by the authors in chapter 2, that democracy in large urbanized societies such as those found in Latin America would not be possible without political parties is unchallengeable. Despite the clear importance of parties for the health of democracy, Latin American political parties now find themselves in a state of crisis. Latinobarómetro polls regularly show that Latin Americans have the least amount of confidence in political parties compared to any other institution. It is difficult to overemphasize the danger for a democratic system when its citizens believe that their governments are run by small elites operating exclusively in national capitals with little input from the provinces or marginalized groups. Unfortunately, this feeling is widespread with respect to political parties, and it has gained momentum over the past decade. There are several reasons why the citizenry in Latin America discredits its political parties. First, they have not responded well enough to the needs of their constituencies. Second, political parties in Latin America have suffered from a significant level of neglect. Over the past decade, reform and modernization efforts have been directed at civil society, improving transparency and accountability, and reducing corruption. All of these are laudable goals. Unfortunately, much of the discussion surrounding this modernization blames political parties for many of the region’s problems. Ekiert and Grzymala-Busse assert that both political parties and civil society play a crucial role in the consolidation of democracy. In chapter 2, however, they contend that “[political] parties may matter more for democratic consolidation than civil society organizations.” This is entirely true and increasingly significant in Latin America today, because arguably the most critical and urgent task facing the region is the consolidation and strengthening of democracy. We must abandon the tendency to believe that only civil society should be strengthened and that this alone is an effective strategy to consolidate democracy. The international donor community in particular must heed this message. The rise of globalization has been another factor undermining the influence and viability of the region’s political parties. As mentioned previously, globalization has

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led to disenchantment with democracy, bringing with it a concomitant adverse effect on political parties. Parties now operate in a diminished political space and find it increasingly difficult to differentiate themselves from one another. It seems that the only parties that now stand out in Latin America are those that actively reject the status quo, be it globalization, the political class, or representative democracy itself. Many of these parties are relatively new and often more closely resemble pressure groups. The weakening of political parties has also led to excessive political fragmentation, as presidents are faced with factionalized congresses boasting myriad parties. Promoting legislation or initiating reforms becomes a difficult task under these circumstances. The days of traditional parties with historical legacies and disciplined members are now a thing of the past in Latin America.

The International Community The international community has a significant role to play in the consolidation of democracy and the encouragement of “quality” forms of political participation. Multilateral organizations such as the OAS contribute significantly to this goal by setting standards and serving as a forum to explore, promote, and distill cutting-edge ideas. Their unrelenting stress on freedom of the press and freedom of expression, for example, is a critically important input into our national discussions on democratic consolidation. It is worth noting, too, the beginnings of an international movement to strengthen and codify rights to public participation and access to information in government decision making. Since 1999, the member states signatory to the Aarhus Convention,1 for example, recognize rights to information, participation, and justice on behalf of both the public and civil society organizations dealing with environmental regulation. The Aarhus Convention also provides the public with access to review procedures when their rights to information and participation have been breached.2 It is worth repeating that this region is accustomed to a donor community that supports civil society. A useful new role for that community, admittedly tricky because Latin Americans hold dear the concepts of national sovereignty and nonintervention, is not to focus exclusively on civil society but to help bolster political parties that are accountable and representative and promote and improve electoral systems and the exchange of best practices with technical assistance.

Conclusion Ekiert and Grzymala-Busse have written a useful and thought-provoking chapter on how to reconcile active and effective political participation and still ensure the

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consolidation of new democracies. Theirs is a prescriptive vision and one that, applied to this region, holds up well. The caveats and particularities that I have identified are pertinent to apply such an analysis to a particular region, but this in no way detracts from the usefulness of their analysis. The challenge is to recast the government-civil society relationship in a way that satisfies needs for inclusivity, transparency, and accountability.

 1. The formal name is the United Nations Economic Commission for Europe Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters. 2. The Aarhus Convention built on the Rio Declaration on Environment and Development, which was an outcome of the United Nations Conference on Environment and Development, Rio de Janeiro, June 3–14, 1992. The Rio Declaration on Environment and Development, principle 10, highlights the importance—in environmental issues—of citizen participation and “appropriate access to information concerning the environment that is held by public authorities.”

 

Democracy A View from India  . 

Approaching the issue of democratic transformation from a legal-constitutional perspective gives rise to certain serious limitations. One may recall that the British Parliament, the mother of modern-day parliamentary democracy, revoked the arbitrary powers of the British monarchy without ever possessing formally defined constitutional powers and went on to establish the rule of law as the governing principle. Britain’s Glorious Revolution of 1688 marks the historical watershed between tyranny and the beginning of contemporary democratic ideals. This revolution brought with it an age of technology, empire, and world domination. The noted British constitutional expert A. V. Dicey observed at the turn of the nineteenth century that “nor have any people so well reconciled the discordant elements of wealth, order and liberty. These advantages are [due] to the spirit of the laws from which the characteristic independence and industriousness of the nation have been derived.” A similar transformation had occurred some one thousand years earlier in the desert sands of Arabia. Islam unleashed a social revolution, reflected among other things in a new legal code. The Shari’a was seen originally as a foundation of common law on which an evolving legal system for a growing civilization would be based. The great poet of undivided India, Allama Muhammad Iqbal, observed of the spirit of inquiry an innovation in early Islam that “the teachings of Quran, that life is a process of progressive creation, necessitates that each generation is guided, but unhampered, by the work of its predecessors, should be permitted to solve its own problems.” Considering the prevailing social situation in those early years, the Quran actually sanctioned polygamy in an attempt to discourage this practice. Later, a literal interpretation of the text of the Shari’a, as opposed to its underlying spirit, has caused the complaint of discrimination from some persons today.

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India is cited as a successful democracy, as indeed it is. Few of us who witnessed the birth of independent India could have imagined that a desperately poor and illiterate population, mired in medievalism, could transform itself into a modern, technocratic nation. That this has been achieved, through the free consent and equal participation of a diverse, heterodox people is a huge tribute to the regenerative powers of democracy. But was this transformation due only to the laws inscribed in the constitution of India, or was there something more deep-rooted and fundamental? In my experience, constitutions and laws in themselves cannot protect democracy. For one thing, our constitution has been amended no less than eighty-seven times in the past fifty years. Even in the mid-1990s there were debates over whether parliamentary democracy rather than a presidential form of governance was best suited to India. One has to look just across the border to Pakistan to see how constitutional laws can be manipulated and bent to support even the most cynical of autocracies. In India, during the emergency years of 1975 to 1977, the government of the day used a technical provision contained in the constitution to overturn the very spirit of this body of laws and the civil rights that it guaranteed. That this infraction was transitory and limited in scope was in large part due to India’s autonomous judiciary, which held that “the basic structure” of the Indian constitution is inviolable and unassailable by a parliamentary majority. No lawyer has ever been able to define what this “basic structure” is, yet it can be drawn upon and applied in any specific context. In sum and in substance, what do these examples illustrate? In my estimation they establish that democracy rests on something more profound than a mere collection of laws, because neither laws nor rules can be correctly interpreted without reference to a moral context. The written letter of the law can either protect or demean individuals, depending on the context. Rather, it is the spirit of the law—the basic features of the constitution, or what Islamic scholars would term the requirements of iftihad (judgment), istihsan (inquiry), and istidal (legal reasoning)—that give meaning to law. These concepts are indefinable in themselves, but real enough to make all the difference. A democracy is essentially a society with a conscience; it seeks to govern itself by the demands of a natural justice. This ability to discriminate between right and wrong will never be found in a self-contained legal text. As Cicero, the philosopher of the Roman republic, observed, “Law is not the product of human thought, nor is it an enactment of some peoples, but something universal which rules the whole world by its wisdom in command and prohibition.” We could look at this problem from another angle as well. During the past half century, from the heyday of decolonization to the break up of the Soviet Union, well over a hundred countries have won a nominal freedom, yet in only a handful of these

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nations has power genuinely devolved to the people. Instead, we have seen the establishment of corrupt neoelites who are for the most part manipulating carefully crafted constitutional procedures to preserve their political power rather than abiding by the rule of law. South Africa and India are two of the blessed exceptions to this new “strong-arm” democracy. The process that led India to freedom was not ordinary. In both cases the liberation ethic was framed in terms of a moral struggle between oppressors and oppressed. Gandhi and Mandela were not bellicose heroes but individuals whose struggles and self-sacrifices elevated their causes to a higher moral plane. They effectively “resurrected” the conscience of their societies by appealing to the better side of human nature. They spoke a new language of social reform, nonviolence, and reconciliation. They were more than leaders of the people—they were spiritual guides who spoke of freedom and justice and the inviolate bond between the two. Where do we find such spiritual guides today? We live in an age that exalts unilateralism and its adjunct, that “might is right.” In contrast, nations that abide by democratic principles respect the equal dignity of all mankind rather than uphold and accommodate the vainglory of the strong. Today’s political leaders argue for spreading democracy militarily, whereas true democrats strive to resolve disputes peacefully. The political authority of democracy asks that we subordinate personal agendas and vest the supreme power in the people, but which leader in the Western democracies, or elsewhere, can even conceive of humankind’s welfare in defense of the common good?

Reference Iqbal, Allama Muhammad. 1930. The Reconstruction of Religious Thought in Islam. Available at http://www.allamaiqbal.com/.

 

Portugal Executive-Legislative Relations   

Economic outcomes are crucial for the success of democratic transition and consolidation processes, in particular because high growth rates facilitate reductions in unemployment, improvements in the well-being of the population, and achievement of socially fair income distributions. To achieve these objectives, new democracies are normally required to pursue efficient policies in three main areas: macroeconomic stabilization, structural reforms, and provision of social goods and services. Macroeconomic stability—including low inflation rates and control over public deficits and external imbalances—is an important necessary condition for sustainable economic growth. Second, democratic consolidation also requires far-reaching economic reforms aimed at increasing economic efficiency and productivity, reinforcing the growth potential, improving competitiveness in external markets, and inserting the national economy in the increasingly globalized world economic and financial system. In general, changes in the financial, tax, and social security systems are needed, as well as privatization of public enterprises and market liberalization. Third, equitable development requires governments to ensure an adequate provision of social goods and services—mainly in the areas of education and health—and adopt policies to prevent an increase in income and consumption inequalities. The debate regarding the quality of executive and legislative relations should consider the political incentives that promote these aforementioned goals, and it should take into account, in particular, the urgency of implementing the necessary reforms. It is essential, however, to maintain the democratic nature of the regime and the rule of law, respect minority rights, and preserve social cohesion. From this perspective, the design of the government should favor political stability, efficient decision making, coordinated decisions between the executive and the legislative branches, and sound fiscal policies, as well as institutions that foster social

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partnership. The design of the government should also address the relationship between the expected alternation in government office holders and the continuing adherence to the economic system’s basic rules. Establishing transparent public institutions and monitoring politicians’ performance for accountability, effectiveness, and nimbleness in solving political crises are also important for the quality of economic outcomes. It is not possible to firmly assert which system of government provides the best incentives to achieve good economic results. It is likely that in transitional democracies the risk of less-positive results will be higher in the case of a pure presidential system. Conflicts between the executive and legislative branches may emerge because of eventual party fragmentation, which leads to policy incoherence, delayed structural reforms, and difficulties in the approval of appropriate tax and public expenditure policies. In chapter 5, Cintra and Lacombe emphasize that “presidential systems are prone to placing opposing parties in the executive and legislative branches.” A presidential system, by contrast, tends to be less attentive to distributive equity and less open to promoting dialogue with the social actors. According to Cintra and Lacombe, “In presidential systems, separation of powers and term limits work to weaken the presidential accountability for government outcomes.” A semipresidential system, in which the government trusts and depends not only on a parliamentary vote of confidence but also on the expressed confidence of a directly elected head of state, may be more helpful in establishing democratic consolidation. Contrary to the French system, however, it is important that the hybrid nature of the system does not involve executive power sharing between the president and prime minister. The executive authority of the president should be limited. Taking into account the electoral results, in Portugal the president appoints the prime minister and, after consulting the State Council, may dismiss the government to ensure the normal functioning of democratic institutions. The ministers are appointed by the president following a proposal by the prime minister. The government is fully in power only if its program is not rejected by parliament. The government may be thrown out on the approval of a motion of censorship. The power to dissolve parliament belongs to the president. That voters elect the president directly gives him a special legitimacy and an increased capacity of political intervention and influence, despite a lack of executive authority. The risk that eventual conflicts between the president and the government may affect policy efficiency and coherence is not high. The government enjoys significant decree powers, but these powers are checked by three factors: parliament has the authority to vote to ratify or overturn these decrees; the president may exercise a veto; or the president may exercise his

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right to request a decision from the Constitutional Court. Thus, a semipresidential system, through the action and influence of the head of state, may induce more efficient governance and political transparency, stimulate more consensual decisions, and prevent the temptation of a majoritarian government to ignore the voice of the opposition parties and the interests of minority groups. The president tends to favor a more balanced government system and to play a role of moderation, which helps solve political crises, thereby reducing social tensions and preventing opposition groups from expressing dissatisfaction unlawfully. The electoral system is a key factor behind political stability. In transitional democracies, the balance between representing diverse political preferences and governmental effectiveness should not make the task of forming a majoritarian government too difficult. For the same reason—and to guarantee coherent decisions—the existence of highly cohesive parties is desirable. A majoritarian system does not seem appropriate for democratic consolidation, because it prevents the representation of significant segments of political opinion in society and weakens party discipline. Instead, a mitigated proportional system that does not favor party fragmentation may be preferable because it simplifies the formation of majoritarian governments and ensures a reasonable level of representation. The Social Democratic Party in Portugal obtained a parliamentary majority in the 1987 elections—the first time such an electoral outcome had occurred since democracy was restored in 1974—thereby enabling it to implement the structural reforms required by economic modernization. In Portugal, the Hondt method of translating votes into seats following the parliamentary elections requires that a party secures about 44 percent of the votes to achieve a majority in parliament. In my view, a parliamentary majority should be obtainable at a lower percentage of votes—say, 40–41 percent—as in Spain. In conclusion, the best solution to achieve economic outcomes that are essential to improve democratic consolidation is a semipresidential system in which the head of state does not have executive authority, combined with a proportional electoral method that facilitates the formation of parliamentary majorities.

 

The Latin American Military Enigma  

Cuando despertó, el dinosaurio todavía estaba allí. Augusto Monterroso

The armed forces in Latin America continue to be an enigma with various and ambiguous solutions. The role of the military is neither clear nor definitive; its ties with the civil authorities are full of unresolved tensions, which impede the formation of a pattern of stable civil-military relations. The latent and privileged political power of the military generates uncertainty in various countries in the region and, at times, threatens civilian authority, in both instances undermining governability. In chapter 7, Rut Diamint appraises the role of the military and police forces in Latin America within the framework of democracy. She addresses the present weaknesses in the national and domestic security policies of Latin American states, which, according to Diamint, debilitate democracy. The author makes clear that despite the establishment of civilian control of the military in various countries, some armed forces in the region continue to exercise political power, either informally or clearly illegally. This weighs heavily on the structure of civil-military relations and presents a particularly risky situation for young and fragile democracies. The United Nations Development Program’s report on democracy (UNDP 2005) and the opinion polls of Latinobarómetro1 show that Latin American democracies are affected by severe limitations. Democracy in the region has eroded because citizens appreciate, increasingly, that the political system and the state lack the capacity or disposition to solve the region’s accumulated social ills. Despite the efforts and successes of a substantial number of political leaders to achieve, maintain, and develop democracies, in reality their performance has in some cases fallen short of society’s expectations, unrealistic as at times these may be. These

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shortcomings are a result of failures by both society and government; the latter often combines ineffectiveness with a search for omnipotence. For example, governments alone are expected to eradicate poverty, even though such a task involves input from all sectors of society, including the organized and massive participation of the most vulnerable segments of the population. Between 1985 and 2004, thirteen presidents left office before concluding their terms (Valenzuela 2004); Gonzalo Sánchez de Lozada and Carlos Mesa in Bolivia, and Lucio Gutiérrez in Ecuador have more recently been added to this list. Fragile democracies and demanding citizenries, in light of failed and insufficient economic reforms, have pushed diverse Latin American countries to substitute their traditional political and party preferences. The region is trending toward new formulas for leadership and politics that are perceived as having greater sensitivity for equity and social justice and greater commitment to the fight against corruption. Although this trend seems to question the already defunct Washington Consensus, it does not yet represent a new consensus. The political exploration includes different formulas—progressive or of the left, advanced or revolutionary— according to orientations, tastes, and perceptions. In some cases, experience points to a democratic left; in others, radical proposals have opened the door to neoauthoritarian systems. In almost all cases, there is evidence that political parties have deteriorated, having lost their social profile and many of their traditional supporters. The traditional party militancy appears to be replaced by a more lax and circumstantial form of allegiance. Moreover, democracy is eroding; even when it does not directly lead to a coup d’état, it threatens the civil control of the government (Pion-Berlin 2001, 11; Trinkunas 2002, 163).

Limits of Civil Control In the midst of eroded democracies, it is important to evaluate the situation of the armed forces, beginning with the premise that militaries are a not monolithic institutions (Pion-Berlin 1998, 99) and that they are affected by internal contradictions, currents, and tendencies. When the state deteriorates, so do its armed forces, though the relative place of the military can vary advantageously, even when affected by the integral erosion of the state. Because of their role in supporting dictatorships and the corresponding massive human rights violations, the armed forces suffered a loss of legitimacy, both in terms of their exercise of political power and as an institution within the state. Civil authorities have thus been able to constrain the armed forces within the framework of democratic development. Such delegitimation of the armed forces as political arbiters—and the

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development of a democratic political conscience among numerous military officers—led to their subordination to civil power. This subordination is at times formal because in various countries the militaries claim the right to oversee the functioning of all state institutions, whereas in other countries the armed forces aspire to return to their traditional role as a source of all powers, thereby violating democratic norms. The armed forces have a complex presence in Latin America. According to Diamint, they are never totally comfortable in their role as defenders of democracy, and they are always suspicious about their loyalty to civilian governments: “This higher threshold of respect for individual rights has driven the spread of democracy in the hemisphere, though at different paces in different countries. Yet it remains disturbing that some countries are moving toward democratic consolidation while still sustaining military prerogatives that create asymmetries between the decisions of military institutions and those of other government organizations.” In the framework of a democratic society, civil control of the government expresses a relation to power (Pion-Berlin and Arceneaux 2000, 415; Pion-Berlin 2001, 30) that requires the military to place itself in a subordinate position of power. In the region, however, there are instances in which civil power orchestrates and facilitates some level of military participation in governance. Although placing civilians at the head of defense ministries is an important step in subordinating the military (Rospigliosi 2000), it does not guarantee the desired outcome. Experience demonstrates that civilians in preeminent government positions occasionally open the gates to military power (Desch 1999, 111). It is particularly difficult to achieve military subordination in the midst of grave political crises—that is, when the armed forces do not share fully the democratic values of the society and military leaders are ready to act outside the parameters established by constitutions and laws. When the supremacy of civil power is not in question, the civil-military regulatory framework overcomes disagreements that could arise from the military’s fear about the performance of the state; however, when civilian control depends on the military’s loyalty to certain values or interests— habitually incarnated in groups, parties, tendencies, or personalities—the uncertainty that arises in critical periods can compromise the loyalty of the military toward democracy because the military becomes identified with some of the political actors that may be ousted in political conflicts (López 2001, 101). There is an important distinction between the kind of civil control that at times opens the way for military intervention and democratic civil control, which establishes a definitive military subordination to democratic institutions and does not allow for the option of military interference—instigated or not by civilians.

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Abused Autonomy Military autonomy, as an expression of civilian control over the armed forces, limits the parameters of military intervention and reduces their temptation to control political power. Such autonomy, however, also excludes civil power from the essential aspects of the military. As Diamint suggests, when countries purchase military equipment to combat either guerillas or drug trafficking, as in the case of Colombia, this creates regional instabilities and restores powers to the military. In this case, military growth is not the result of deliberate defense and security policies, but rather of processes that tend to be self-perpetuating. The purchase of equipment, for example, if left exclusively in the hands of autonomous militaries, can establish patterns that affect conceptions of national security and the types of missions that the armed forces can engage in successfully. Ambiguous policies for purchasing military equipment that are not subject to civil democratic authorization tend to have undesirable collateral effects. To illustrate, the armed forces might become dependent on their relationships with particular companies or specific technologies. As a result, updating, maintaining, and replacing military equipment tends to reinforce this dependence in those countries that do not produce their own matériel. The acquisitions that, in principle, conform to defense policies can end up determining the contents of those policies; in this way, the relationships with supply companies determine strategic designs, shape military education and training, and form the criterion for military intervention (Pion-Berlin 1998, 102). In this case, formal military autonomy, designed to prevent military involvement “outside” of the military realm, reshapes the policies of the armed forces. This can create instabilities adverse to civilian authority and peace within the region. In this case, military autonomy only serves to create a sense of imprisonment that can generate an incontrollable and potentially antidemocratic dynamic. In the context of weak democracies, autonomy allows the military to evade state institutions that have oversight responsibilities. Under the guise of the need for secrecy, military subterfuge eludes civilian control, obscures the purchases of equipment, and hoards material and human resources for military use contrary to the express democratic will of the state. In the perspective of an abused autonomy, relations with military providers—as well as strategic conceptualizations and defense policies—interfere with the institutional dynamics between the armed forces and civilian authority. The recent threats from terrorism have been decisive in influencing new military missions and producing a substantial alteration in the military institution and its

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relationship with society in general. According to Diamint, the effect of combating terrorism with armed forces that enjoy heightened levels of autonomy can weaken respect for citizen rights, degrading citizens who become victims of emergency state security policies, as well as degrading the military and police forces that carry out such policies. The forces that combat terrorism tend to make autonomous decisions. Thus, ambiguous definitions of the enemy, which include the noncombatants in whose name terrorists claim to act, can turn specialized antiterrorist forces into cancers within military and police institutions. The war against drug traffickers presents similar risks to state stability. The magnitude of the problem has led various countries in Latin America to combat drug trafficking by involving their armed forces. In some cases, however, the collateral damages have been greater than the benefits, especially when military officers and soldiers become involved in complex webs of corruption (Sierra Guzmán 2003). In addition, when the war on drug trafficking develops into a military conflict, this leads to frequent and grave human rights violations.

Governability and Security Sector Reforms In chapter 7, Diamint points out that a fundamental aspect of governability programs includes the transformation of security sector reforms. The idea for such reforms is to design the missions of the armed forces and the police to make them compatible with democratic governability. It is surprising that democracies with relatively stable political, economic, and administrative institutions overlook reforming the armed forces. In this way, the armed forces escape civil control, which reinforces the military’s perverse autonomy. The change from the current conceptualization of civil-military relations for one that permits the engagement of the national defense topic in the framework of necessary reforms to assure democratic governability requires, as well, the reform of the armed forces themselves. Depending on the particular case, this means promoting or strengthening civil democratic control of the armed forces and infusing society with a fresh vision of national security that would strengthen democratic governability and ward off authoritarian rule. There are two ways to strengthen the role of the armed forces within the framework of democratic governability. The first strategy involves civil society pressuring the military to conform to laws and the constitution. The second strategy is to deploy the armed forces to missions abroad that expose them nationally and internationally to public scrutiny. These can have democratizing effects because they can be a source of civilian social recognition for the military.

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In terms of the demands on the military from outside the military institution, how the state and civil society monitor military institutions and police forces is of particular importance. If the relevant laws clearly subordinate military power to civilian control, and if new social values reflect an understanding of the armed forces as just another democratic state institution subordinate to citizens and their elected officials, then there is a reduced possibility that the military will deviate from its mandated function. Transforming the military and the police into accountable institutions has repercussions that go far beyond functional transparency. Civil-military relations promote a better understanding between these two spheres, leading to greater military obedience to the civilian power, and helps reinforce citizen security through better and broader protection of human rights. Pressures from the international community can also help to subdue military power. In the information era of rapid communication, militaries that take part in joint operations in other countries are subjected to global public scrutiny. Participation in international peacekeeping and humanitarian disaster relief missions can therefore reinforce democratic values in military institutions. Substituting national lines of command for international lines of command and transforming the armed forces into foreign policy instruments for their countries reinforce civilian control of the armed forces and promote military professionalism. In summary, domestic and international monitoring of the armed forces obligates militaries to abide by their legal and constitutional functions; consequently, the armed forces gain a more respectful attitude toward civilian power and the citizenry. Nevertheless, civil society exerts another type of pressure on the military that produces effects contrary to its subordination. When civil society demands greater military intervention in police affairs because of increased crime, this is counterproductive to the overall desire to diminish the military’s presence (Bobea 2004).

“Civilizing” the Military: Decentralization The idea of both “civilizing” the military and “militarizing” the civilians leads to a convergence of values that promotes respect and mutual collaboration between the two sectors (Cohn 1999). In some circumstances under this design, the armed forces assume responsibility for social services to secure a state presence in remote or frontier areas. Representing the lone state presence, in these situations the armed forces provide public safety, sanitation, and other forms of social assistance. These social activities, which are not a clear part of the mission of national defense, should be temporary rather than permanent. As Diamint suggests, such an

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attempt to make them permanent distracts the armed forces from their more specific roles. There are occasions in which the military presence is a mechanism for substituting civilian power.2 This happens in weak democracies, when the authorities of the various state, provincial, or regional departments and municipalities are politically opposed to the national government. The territorial deployment of the military with the objective of supporting or substituting civilian power can be due to various reasons. In each case, though, the military endeavors to create automatic rules to demand their permanent deployment for these tasks: (1) providing a state presence in unpopulated or abandoned areas; (2) managing emergency situations brought on by natural or other catastrophes; and (3) displacing the existing civilian presence due to changing political objectives. In the cases in which the military controls social services for a considerable amount of time, social networks develop between officers and the inhabitants of the villages where the military is based. Routine procedures are established to supply local resources and autonomous local military fiefdoms are established; this permits the existence of relatively independent paralegal systems, which partly suspend the rule of law. To prevent, impede, or moderate the military’s temptation of autonomy, Diamint posits that other state institutions should control the armed forces; however, when the territorial deployment is very extensive, the possibilities for control by the national government are limited. In addition, if the parliament or the courts try to impose civilian control on the armed forces against the wishes of the president, the result can be even greater military autonomy if the president and the military join forces politically. An important mechanism to prevent the military falling for the temptation of autonomy is the political, administrative, and territorial decentralization of the nation. The armed forces rarely face counterbalancing institutions in areas territorially or politically distant from the center of civilian power; decentralization allows for the expanded presence of both the state, through elected local officials, and civil society, which provides a powerful antidote to unconstrained military power. When neither civilian power nor civil society is deployed through the national territory, the armed forces occupy space and perform functions that are more difficult to reconfigure later (Blanco 2004).

Militarized Police Forces Military control of the police is the norm in military regimes; however, similar situations also arise in democracies. Military supervision of the police tends to be justified socially by police corruption; such corruption often helps civilian factions whose

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members, in many cases, are implicated in criminal activities. Military involvement in police matters does not solve the incapacity of police forces; instead, it aggregates power to the armed forces, which contributes to the dissolution of civilian power. The military coordination of policing activities is invoked in critical situations of public disorder, or during an emergency due to a rise in crime. When the police are overwhelmed, various sectors of public opinion support involving the armed forces. Thus, the military acquires social legitimacy even when it abuses the parameters of its mission. In other cases, collaboration between the armed forces and the police obscures the heightened military role and confuses the respective roles of each institution, which leads to a continuation of the policing and security crises that prompted the collaboration in the first place (Bobea 2004).3 This double role has led, in some countries, to the creation of militarized police forces or armed forces with police functions, inspired by the French gendarmerie, the Spanish civil guard, and the Italian carabinieri. When the armed forces assume police functions, there tends to be an undesirable “convergence” between the civilian and military spheres of control in criminal activity, which translates into various forms of illegal cooperation that strengthens criminal organizations, such as arms trafficking, for which officials are, in many opportunities, accused. These conditions threaten cooperative civil-military control of security matters, because they risk producing results that are contrary to their objectives. These require separating police functions from military forces to promote police cooperation and creating police forces that are more closely tied to the community that they serve.

Lack of Civilian Control of the Military: Problems and Alternatives The lack of civilian control over the military emerges in weak democracies, generates a severe institutional conflict, and further weakens those democracies. The risk of such control being either tenuous or nonexistent is political instability, and one of its principal manifestations is a corrupt military. Among the factors that strengthen civilian control of the military are (1) establishing a modern, efficient, and appropriate judicial system, (2) adhering to a strong code of ethics in both military command and civilian authority, (3) implementing territorial decentralization, and (4) participating in international military missions. The creation of a judicial system with a high degree of social legitimacy, a modern and democratic legal framework, and a penal-penitentiary system respectful of human rights can achieve the needed strength to subordinate military courts to civilian rule of law and impede the special privileges that are usually enjoyed by the members of

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the armed forces. In addition, the judicial system should ensure that military personnel who commit common crimes are judged in civilian courts. Civilian rule of law should apply to everyone. The control of military courts by civilian judicial power builds a society on the premise that there are neither first-class nor second-class citizens; it also obligates members of the armed forces to follow more strictly current laws and the constitution. The nation’s civil and military leaders must abide by a strong code of ethics and the rule of law, based on broadly shared values, especially in critical periods when ideological, political, and even judicial frameworks can be easily challenged; their actions should be irreproachable. Military insubordination in the name of upholding public decency, which discredits the civilian government officials, also leads to massive human rights violations and multiple corruption proceedings against military coup makers. Nevertheless, it is always too late that this becomes evident to society. Decentralization implies a territorial deployment of state power that allows citizens to have more points of contact with the state, and it creates a space for citizens to organize and exercise their demands and effective control. The armed forces cannot escape the organized monitoring by civil society; civil society can be especially effective in its vigilance toward human rights violations, especially in those frontier areas distant from the center of civilian power. Globalization improves the cooperation between the armed forces of different countries. Such cooperation allows them to exchange experiences, expose officers to the institutions of countries with older democratic traditions, and submits the armed forces to greater international oversight. In the face of these pressures and tensions that may strengthen the armed forces commitment to democracy, Diamint points to some aspects that can have a negative influence. In the aftermath of September 11, 2001, the United States has initiated a military response to global terrorist threats. The character of this new kind of danger provides a fertile environment for militarization, debilitates diplomatic mechanisms and respect for human rights, and enfeebles civilian governments.

The Venezuelan Case Weak democracies prompt new explorations for different political, economic, and social models, including authoritarianism, given that democracy permits the participation even of those who are its adversaries. Former President Alberto Fujimori of Peru is emblematic of this latter trend (Levitsky and Cameron 2001). Although the case of Venezuela is peculiar, it illustrates how democratic institutions can make military authoritarianism possible (Trinkunas 2001, 2002; Blanco 2002).

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The Venezuelan armed forces had developed for many years within a highly stable “rational model” (Norden 2002, 116–17). Under the leadership of President Hugo Chávez, the National Armed Forces (FAN) have increasingly assumed control of the various state spheres by naming numerous active and retired officers to multiple public administration positions. Chávez has used his significant popularity, in addition to fraudulent and unfair practices, to help elect military officers to positions of popular representation: Nine of twenty-two governors elected on October 31, 2004, are retired officers of the FAN. Similarly, the Venezuelan government has deployed the military to manage social services4 in the states whose governors oppose Chávez; these military officers based in various Venezuelan states have established a new and direct line of communication with the national government. In addition, a program of incorporating thousands of reservists—many of whom have received ideological indoctrination on the “Bolivarian revolution”—has negatively affected the values of military discipline, hierarchy, and due obedience to democratic civilian institutions. Transforming FAN into a revolutionary institution has changed the armed forces, as well as their mission and the concept of national defense. A profound division within the military ranks developed as a result. The Chávez administration rewards those officers aligned with the government with promotions, remunerations, select positions, and other diverse benefits. In this way, military discipline and adherence to institutional hierarchy and norms have profoundly deteriorated.5 In Venezuela, the Chávez government has empowered the military to instate a revolutionary regime that has become neoauthoritarian and can be catalogued as a pseudo-democracy (Diamond 1999, 15). As Venezuela’s strong presidential leader, Chávez promotes the development of military power, yet subordinate to a peculiar civilian power that is incarnated in him. The FAN has been assigned a new mission within a concept of defense that identifies an enemy defined ideologically (the opposition, the United States), instead of the traditional means of identifying potential military conflict in terms of border control issues with regard to Colombia and Guyana, drug trafficking and, in the case of Colombia, guerilla and paramilitary issues. In September 2005, the Chávez majority in Venezuela’s National Assembly approved a new Organic Law of the National Armed Forces (LOFAN), which enhances the military role to include broader functions such as “resisting the occupation of the country”6and “[taking] part in alliances or coalitions with the Armed Forces of the Latin-American and Caribbean countries for integration purposes.”7 In the Venezuelan political discussions, the dominant vision is that these functions are necessary for the possibility of an “asymmetric war” with the United States—as is frequently declared by high-ranking military officers—and a more structured military alliance with Cuba.

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Regarding the integration of the FAN, two new active units have been created: the National Reserve and the Territorial Guard. The first one includes all citizens,8 and the second one is a unit of volunteers whose mission is to participate “in functions of local resistance against any external aggression or invasion by foreign forces.”9 The role of the military in Venezuela involves a new wide-open political and ideological approach, upon which recent missions have been created that bluntly contradict the traditions of Venezuelan armed forces. The FAN’s new political and ideological role, however, has been very divisive within the military ranks. Such divisiveness creates another publicly unacknowledged new mission, namely, domestic intelligence against the “enemies” of the revolution. In many cases, these so-called enemies merely belong to the democratic opposition or they are military officers who do not agree with the path of the FAN. The military is a key element in Venezuela’s current political crisis. How far can neoauthoritarianism in Latin America go? Whatever the outcome, the political process in Venezuela will greatly affect Latin America. Venezuela illustrates important differences in the conceptualizations of national defense and the missions of the armed forces. For example, in September 2004 at the meeting of ministers of the expanded Mercosur, the Argentinean minister of defense, José Pampuro, declared, “The vision of the north, that is, United States and Canada, with respect to the armed forces, is more about the police actions or domestic control with regard to security, terrorism, and drug trafficking. Our vision is diametrically opposed. We have a more traditional idea of the armed forces, in particular, territorial defense. The countries here present want to maintain the armed forces away from domestic security problems.”10 In the midst of these evident discrepancies, the defined role of national defense tasks is both ambiguous and imprecise. On the one hand, the United States broadly interprets terrorism to include drug trafficking, kidnapping, arms trafficking, and other crimes, which dilates the range of action for military intervention (Olson, Chillier, and Freeman 2004). On the other hand, in addition to being contrary to Washington’s vision, various Latin American governments emphasize eradicating poverty and social inequality as elements of national security, which likewise increases the mandate for military intervention (OAS 2003). Both perspectives extend and render ambiguous the scope of military missions and expand the military presence, which contradicts the core principles that are essential for Latin American democracies. The instability of various countries in the region, especially along the Andean mountain chair, places once again the question of the armed forces at the forefront. The absence in Latin America of a permanent, reliable military that is subordinate to its civilian democratic authority might be linked to an unresolved structural limita-

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tion of the armed forces; judging by the saber rattling at times heard in the region, it is a problem not likely to be resolved in the near future.  1. The Latinobarómetro evaluation insists that authoritarianism has no support. It does, however, raise a concern about democratic performance: “In spite of the fact that Latin America once again boasts of democracy in all of its countries for over a decade and in spite of the significant evidence that this data presents suggesting that authoritarianism does not have enough support in the masses to return to power, there persists in the mass communications agenda the news that it continues to be a real threat to the region. The support for democracy oscillates between 61% in 1996 and 53% in 2004, while the support for authoritarianism oscillates between 18% in 1996 and 15% in 2004. Much more worrying than authoritarianism, are those who are indifferent to any regime, which increase from 16% to 21% in the same period.” Available at http://www.latinobarometro.org/uploads/media/2004_01.pdf. 2. An extreme example that clearly illustrates this problem is Venezuela, in which the military sells food items in local markets. 3. “Thus, the work of supporting police institutions remains as one of the explicit functions of Dominican, Jamaican, Guyanese, Cuban, Barbadian, and Trinidadian military bodies—to mention some of the countries that have armed forces separate from police forces—without this having led to the overcoming of the institutional crises of the police forces in question, or the promotion of preventative citizen initiatives by the government” (Bobea 2004). 4. This includes a series of actions: selling basic food products in popular markets and managing sanitation, education, and emergency relief services. 5. A fundamental element in redefining FAN is its relationship with Cuba. Some suspect that the recent attempt to obtain Mig-29 aircraft and helicopters Mil-17, MI-26, and MI-35 from Russia will imply training on the part of Cuban instructors skilled in these equipments. 6. Ley Orgánica de la Fuerza Armada Nacional (LOFAN) Article 3, Paragraph 3, available at http://www.asambleanacional.gov.ve/ns2/leyes.asp?id=497. Author’s translation. 7. LOFAN, article 3, paragraph 4. 8. LOFAN, article 10. 9. LOFAN, article 11. 10. Author’s translation of Braslavsky (2004).

 Blanco, Carlos. 2002. Revolución y Desilusión: La Venezuela de Hugo Chávez. Spain: Ediciones de La Catarata. ———. 2004. “La COPRE (Comisión para la Reforma del Estado) y el proceso de reformas.” Ph.D. diss., Universidad Central de Venezuela.

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Bobea, Lilian. 2004. “¿Juntos pero no revueltos? De la militarización policial al policiamiento militar: Implicaciones para las políticas de seguridad ciudadana en el Caribe.” Nueva Sociedad 191:90–102. Braslavsky, Guido. 2004. “Definen el rol en temas de seguridad y terrorismo: Los ministros del cono sur quieren FF.AA. clásicas.” Defesanet, September 14. Available at www.defesanet .com.br/md/clarin14sep04/. Cohn, Lindsay. 1999. “The Evolution of the Civil-Military ‘Gap’ Debate.” Paper prepared for “Project on the Gap between the Military and Civilian Society,” Triangle Institute for Security Studies, Duke University, Durham, N.C. Available at http://www.poli.duke.edu/civmil/ cohn_literature_review.pdf. Desch, Michael C. 1999. Civilian Control of the Military. Baltimore: Johns Hopkins University Press. Diamond, Larry. 1999. Developing Democracy: Toward Consolidation. Baltimore: Johns Hopkins University Press. Latinobarómetro. 2004. Latinobarómetro Summary Report 2004: A Decade of Measurements. Santiago, Chile: Corporación Latinobarómetro. Available at http://www.latinobarometro .org/uploads/media/2004_01.pdf. Ley Orgánica de la Fuerza Armada Nacional (LOFAN). 2002. Asamblea Nacional de la República Bolivariana de Venezuela. Available at http://www.asambleanacional.gov.ve/ ns2/leyes.asp?id=497. Levitsky, Steve, and Maxwell A. Cameron. 2001. “Democracy without Parties? Political Parties and Regime Collapse in Fujimori’s Peru.” Paper prepared for International Congress of the Latin American Studies Association, Washington, D.C., September 6–8. López, Ernesto. 2001. “Latin America: Objective and Subjective Control Revisited.” In CivilMilitary Relations in Latin America, ed. David Pion-Berlin. Chapel Hill: University of North Carolina Press. Norden, Deborah L. 2001. “The Organizational Dynamics of Militaries and Military Movements: Paths to Power in Venezuela.” In Civil-Military Relations in Latin America, ed. David Pion-Berlin. Chapel Hill: University of North Carolina Press. Olson, Joy, Gastón Chillier, and Laurie Freeman. 2004. Memo elaborado a propósito de la VI Conferencia de Ministros de Defensa. Washington, D.C.: Washington Office on Latin America (WOLA). Available at http://www.wola.org/security/def_min_memo_esp_2004.pdf. Organization of American States (OAS). 2003. Declaración Sobre Seguridad en las Américas. OEA/Ser.K/XXXVIII, CES/dec. 1/03 rev. 1, October 28. Pion-Berlin, David. 1998. “The Limits to Military Power.” Studies in Comparative International Development 33, 1: 94–115. ———. 2001. “Introduction.” In Civil-Military Relations in Latin America, ed. David PionBerlin. Chapel Hill: University of North Carolina Press. Pion-Berlin, David, and Craig Arceneaux. 2000. “Decision-Makers or Decision-Takers? Military Missions and Civilian Control in Democratic South America.” Armed Forces and Society 26, 3: 413–36.

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Rospigliosi, Fernando. 2000. “Las Fuerzas Armadas y la Democracia, la Necesidad del Control Civil de las Instituciones Castrenses.” Paper prepared for seminar “Las relaciones cívicomilitares en la transición,” Instituto de Estudios Peruanos, Lima, Peru, December 4–5. Sierra Guzmán, Jorge Luis. 2003. “Las Fuerzas Armadas Mexicanas en La Guerra Antinarcóticos.” WOLA Drug War Monitor (April): 1–18. Available at http://www.wola.org/Mexico/ hr/ddhr_mexico_brief_esp.pdf. Trinkunas, Harold A. 2001. “Crafting Civilian Control in Argentina and Venezuela.” In CivilMilitary Relations in Latin America, ed. David Pion-Berlin. Chapel Hill: University of North Carolina Press. ———. 2002. “The Crisis in Venezuelan Civil-Military Relations: From ‘Punto Fijo’ to the Fifth Republic.” Latin American Research Review 37, 1: 41–76. United Nations Development Program (UNDP). 2005. “Democracy in Latin America: Towards a Citizen’s Democracy.” Available at http://democracyreport.undp.org/Downloads/Report_Democracy_in_Latin_America_New.zip. Valenzuela, Arturo. 2004. “Latin American Presidencies Interrupted.” Journal of Democracy 15, 4: 5–19.

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Epilogue  . 

The Argentine epic poem Martín Fierro, first published in 1872, gives a good account of a common experience in many countries of the world even today. Early in Martín Fierro’s life, he was gang pressed into military service. He was physically beaten and exploited and was forced to work for the private gain of the commanding officer, not for public purposes. To make matters still worse, he was not paid. Although he was promised a release in six months, he was not released for more than a year. The quality of the training was poor, and the instructors were ignorant. Soldiers were not issued weapons; ammunition was sold off illegally. No wonder Martín Fierro concluded, “If that is government service, I don’t like its ways” (Hernández 1961, verses 52–78, quotation from verse 72). Citizens of most countries on most continents could make similar comments about their encounters with the state. The construction of democracy requires vision, ambition, and decisiveness because democrats must not only construct the constitution of liberty for their homelands, but also build a democracy that delivers a competent state, respectful of its citizens, that fosters prosperity—a state capable of eliciting the consent of the governed, even today’s Martín Fierro. Democratic designers must construct a regime that rests on a workable balance between the hopes and constraints of their societies and a constitution and institutions that would render the state not just democratic, but also effective. Democratic designers, therefore, counsel self-restraint for political actors by acting within the rule of law as well as ensuring that the interests of minorities and the poor are represented. They advise government officials to respond to public participation at election time as well as during the course of normal political contestation. For democracies to deliver, the institutional foundations for property rights must be secured for comprehensive, market-reliant reforms to generate sustained economic growth. Such rights should be respected not just for their contributions to long-term economic growth but because they should be, above all, an entitlement for all citizens. Democratic states should deliver education and public health, and they

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should endeavor to reduce poverty so that all citizens can participate fully in the life of the society. Political leaders and the public should support democratic constitutions, which establish a framework of rights that permit the representation of ascribed, acquired, or constructed social differences and accommodate divergent claims for the expression of views, interests, and influence. These democratic constitutions help to build a state that is capable of protecting openness and providing political access throughout its entire territory. Scholars and policy makers in this book strongly recommend parliamentarian, rather than presidentialist, constitutions because the former are more likely to provide effective democratic governance and mechanisms for accountability. Similarly, the authors of this book recommend proportional representation electoral laws as most likely to be suitable for most societies. The democratic state must be competent. It must prevent military coups d’état or overcome them if they are attempted. Civilians must constantly resist the temptation to stage or support military coups or mutinies and train themselves to exercise broad, informed authority over the armed forces and the police; setting the scope, mission, and means for the state’s defense posture and policies is not solely the responsibility of the military. Democratic politics must constrain state power to prevent authoritarian rule or abuses and design the means to coordinate relations between government agencies, civil society, and business. Competent states curb the illegal use of public power for private or political gain. Various chapters in this book provide specific suggestions of measures to such an end, above all through adopting means for transparency in governmental and partisan activities. The chapters by practitioners emphasize the importance of the ethics, sentiments, habits, and values of citizens and politicians. They also point to the importance of the international context, which influences the design and function of democratic politics in some countries. They highlight the need for democracies to deliver prosperity and security. The chapters by scholars appropriately highlight the salience of the virtù of politicians—as thinkers and actors in the world of politics and as the stewards of free and effective politics—that would permit and motivate the Martín Fierro of tomorrow to lead and to build better lives for all.

Reference Hernández, José. 1961. El gaucho Martín Fierro. 8th. ed. Buenos Aires: Editorial Sopena.



  is a professor in the Department of International Relations at Boston University and at the Universidad Central de Venezuela. His research focuses on democratic reforms and neo-authoritarianism in Latin America and the new roles of the military in the region. He is the author of Revolución y Desilusión: La Venezuela de Hugo Chávez. He was minister for the reform of the state in Venezuela from 1989 to 1992.    was president of Brazil between 1995 and 2003. He is the founding president of the Club of Madrid, serving between 2003 and 2006. He also served as senator from the State of São Paulo between 1983 and 1992 and was one of the founders of Brazil’s Social Democratic Party (PSDB). In 1993–1994, while serving as Brazil’s finance minister, he is credited with the successful longterm stabilization of Brazil’s economy, setting the basis for renewed economic growth and social progress. Cardoso received his Ph.D. and did additional postgraduate training at the Universities of São Paulo and Paris. He is the author of numerous articles and books.    is the president of Portugal. He has also served as prime minister of Portugal from 1985 until 1995, the longest term of any democratically elected prime minister in Portugal’s history. His education is in finance and economics, including a Ph.D. in economics in 1973. In 1980, he became minister of finance and quickly established a reputation as an economic liberalizer. During his tenure as prime minister, Portugal experienced several years of uninterrupted economic growth and political stability. He was also a director of the Bank of Portugal, and a professor of economics at the Nova University of Lisbon and Portuguese Catholic University. He is a founding member of the Club of Madrid.    is a senior policy analyst at the Research Service of the Brazilian Chamber of Deputies. He has taught at the Federal Universities of Minas Gerais and Brasilia, worked at the National School of Administration of Brazil’s Ministry of Education, and served as coordinator of the Higher Education

242

Contributors

Program of the Organization of American States. He received his Ph.D. in political science from MIT.   is a professor at the Universidad Torcuato Di Tella in Buenos Aires. She is an adviser to the Club of Madrid and researcher of the “Program Creating Communities in the Americas,” coordinated by the Woodrow Wilson Center for International Scholars in Washington, D.C. Her many publications include Control civil y fuerzas armadas en las nuevas democracias latinoamericanas (edited and coauthored, 1999); NATO and MERCOSUR Challenges: Security Communities and Democratic Stability (2001); El rompecabezas. Conformando la seguridad hemisférica en el siglo XXI (coedited, 2006); and Democracy and Security in Latin America (2002). She was chief of advisors of the Argentinean Department of Defense from 2003 to 2005.  .  is the Antonio Madero Professor of Mexican and Latin American Politics and Economics at Harvard University and an adviser to the Club of Madrid. He has published, among other works, Constructing Democratic Governance in Latin America (with Michael Shifter, 2003), Mexico’s Pivotal Democratic Election: Candidates, Voters, and the Presidential Campaign of 2000 (with Chappell Lawson, 2003), and Democratic Politics in Latin America and the Caribbean (1998). He is a former president of the Latin American Studies Association.   is professor of government and chair of the Committee on Degrees in Social Studies at Harvard University. He is the author of The State against Society: Political Crises and Their Aftermath in East Central Europe (1996), Rebellious Civil Society: Popular Protest and Democratic Consolidation in Poland (with Jan Kubik, 1999), and Capitalism and Democracy in Central and Eastern Europe: Assessing the Legacy of Communist Rule (coedited with S. Hanson, 2003). He is a Faculty Fellow at the Center for European Studies (CES) at Harvard, an adviser to the Club of Madrid, a senior fellow of the Gorbachev Foundation of North America, and a senior scholar at the Harvard Academy for International and Area Studies. At CES, he chairs the Workshop on East European Politics and is the editor of the Working Paper Series on Central and Eastern Europe.   served as president of Colombia from 1990 to 1994, was elected as secretary general of the Organization of American States in 1994, and was reelected unanimously to a second term in 1999. He entered political life at the age of twenty-three and held elected office at several levels in Colombia before becoming president. An economist by training, he has also been a professor of economics and has published widely on a variety of topics. A staunch defender of democracy and the democratic rights of citizens, he received the W. Averell Harriman Democracy Award in 2002, in addition to the National Democratic Institute Award, and the Washington Times International Courage in Leadership Award, in the same year. He is a founding member of the Club of Madrid.

Contributors

243

 - is associate professor of political science at the University of Michigan. The author of Redeeming the Communist Past (2002), she has also published in the journals East European Politics and Societies, Comparative Politics, Communist and Post-Communist Studies. She is currently writing a book entitled Political Competition and State Politicization, in which she examines the expansion of the postcommunist state and its takeover by political parties. She received her Ph.D. in government from Harvard University in 2000 and from 2001 to 2002 was an Academy Scholar at the Harvard Academy for International and Area Studies.    served as prime minister of India from 1997 to 1998. He was India’s minister of external affairs in 1989–1990 and again in 1996–1997. Mr. Gujral participated in India’s struggle for independence from Great Britain and was jailed in 1942 during the Quit India Movement. Leader of the Indian delegation to the UNESCO sessions in 1970, 1972, and 1974, and a member of the Indian delegation to the UN session on the environment in Stockholm in 1974, he served as a special envoy to several nations in Africa and Bulgaria, and was union minister of state in Indira Gandhi’s cabinet. He is a founding member of the Club of Madrid, a member of the board of trustees of International Crisis Group Brussels, and a founding member of the Gorbachev-led World Political Forum and the Global Leadership Foundation in London.   is an associate professor of sociology at Northeastern University. He is the executive director of the Gorbachev Foundation of North America, a member of the board of directors of the Club of Madrid, and an affiliate of the Center for European Studies at Harvard University. Jones received his Ph.D. from Princeton University and has published, among other works, KO-OPS: The Rebirth of Entrepreneurship in the Soviet Union (with W. Moskoff, 1991); Education and Society in the New Russia (editor, 1994); Professions and the State (editor, 1991); In Search of Pluralism (coedited with C. Saivetz, 1994); Perestroika and the Economy (coedited with W. Moskoff, 1989); Soviet Update (coedited with D. Powell, 1991); Soviet Social Problems (coedited with W. Connor and D. Powell, 1991); and The Great Market Debate in Soviet Economics (coedited with W. Moskoff, 1991).    is a member of the Research Service of the Brazilian Chamber of Deputies. He is a Ph.D. candidate in the Department of Politics at New York University.    is a research professor at El Colegio de México. He has held several positions in the Mexican federal government, including chief of the Federal Civil Service and chief of the Department of Analysis of the Office of the Presidency. He has taught in several Mexican and Latin American universities since 1984 and published extensively in Spanish, English, and Portuguese. He holds a Ph.D. in political science from the University of Pittsburgh.

244

Contributors

  is a professor of politics at the Centro de Estudios Avanzados en Ciencias Sociales, Instituto Juan March, Madrid. He has a Ph.D. from Princeton University, where he also taught European and Soviet/Russian politics. He has been a visiting professor in the Department of Government at Dartmouth College teaching courses on comparative and European politics, and a visiting lecturer at the Institute for Political Studies, Heidelberg University. He is the author of Miners on Strike: Class Solidarity and Division in Britain (1996).  - is Henry R. Luce Professor of Jurisprudence (Law and Political Science), Yale University, and codirector of the law school’s Center for Law, Economics, and Public Policy. She received a Ph.D. in economics from Yale University. She has held fellowships from the Guggenheim Foundation and the Fulbright Commission and was a visiting research fellow at the World Bank. She is the author of From Elections to Democracy: Building Accountable Government in Hungary and Poland (2005); Corruption and Government: Causes, Consequences and Reform (1999); Controlling Environmental Policy: The Limits of Public Law in Germany and the United States (1995); Rethinking the Progressive Agenda (1992); and Corruption: A Study in Political Economy (1978). She is the editor of International Handbook of Economic Corruption (2006); Creating Social Trust in PostSocialist Transition (coedited with J. Kornai and B. Rothstein, 2004); and Building a Trustworthy State in Post-Socialist Transition (coedited. with J. Kornai, 2004).   is a professor of Political Science at the University of Toronto, and an adviser to the Club of Madrid. He received his Ph.D. from Yale University in 1968. He has also been vice-chair of the Ontario Law Reform Commission (1989–1995), research coordinator (institutions) for the Royal Commission on the Economic Union and Canada’s Development Prospects (1983–1985), a member of the Ontario Advisory Committee on Confederation (1977–1982), and a member of an advisory group to the premier on the constitution (1990). His publications include: Small Worlds: Provinces and Parties in Canadian Political Life (1982); State, Society and the Development of Canadian Federalism (with Ian Robinson, 1990); Towards a Social Contract: Can We Make Hard Decisions as if Democracy Matters? (1994); Rethinking Federalism: Citizens, Markets and Governments in a Changing World (edited with Karen Knop, Sylvia Ostry, and Katherine Swinton, 1995); Degrees of Difference: Canada and the United States in a Changing World (with Keith Banting and George Hoberg, 1997); and Canadian Federalism: Seven Decades of Scholarly Engagement (2002).   is a Ph.D. candidate in political science at the University of Toronto. The author of articles on constitution building and nationalist movements, his research is on urban governance and the welfare state.



Page numbers followed by f denote figures; those followed by t denote tables.

Aarhus Convention, , nn& accountability, , , –, – advisory councils, ,  Afghanistan, ,  African National Congress (ANC),  agrarian reform, –,  Albania,  Alonso, Sonia, , n, n, n Alwin, Patricio, – Andersen, Martín Edwin,  Anwar, Dewi Fortuna,  Argentina, , n, n, –; security issues and policies, , , , , ,  Australia, ,  authoritarianism, , n, , , , n Balkans, ,  Bardhan, Pranab,  Basque secessionism,  Bellamy, Richard, – Berlin, Isaiah, ,  bill of rights, , –,  Blanco, Carlos, ,  Bolivia, ,  “bounded rationality” decision making, , 

Brazil, n, ; agrarian reform in, –, ; Cardoso administration, ; intergovernmental relations in, –; Landless Peasant Movement, ; security issues and policies, , , ,  Brillantes, Alex,  Bulgaria,  bureaucracy, , , –, –; accountability of, , , ; politicized, ; responsible bureaucracy model, –, ,  Burki, Shahid J., – Callaghan, James, n campaign finance, , – Canada,  capital accumulation, ; flows, , ; foreign investment, , , , n,  Cardoso, Fernando Henrique, , –, , ,  Carothers, Thomas, ,  Castiglione, Dario, – Cavaco Silva, Aníbal, , , ,  Ceausescu, Nicolae,  Chambers, Simone,  Chand, Sheetal K., 

246

Chávez, Hugo,  Chile, , , ; economic factors, , –,  Cintra, António Octávio, , , , ,  citizens, , , ; citizenship regime, , , –, nn&; as government clients, , , , ; status of,  civil liberties. See rights and freedoms civil service: benefits of, –, , –, n; career system, , ; entry exams, , , , ; reform of, , , ,  civil society: antidemocratic organizations in, , –; antiterrorist tactics, , ; dangers to, –, –; demilitarizing, –; in marginalized sectors, , ; nongovernmental organizations, , , –, ; pillarization of, , ; political co-optation of, –, ; registration of organizations, , –; role in new democracies, , , ,  clientelism, , – Clinton, William J.,  Club of Madrid, ,  cold war, , ,  Coleman, James,  Colombia, , , –,  communications technology, , ,  Conference on Democratic Transition and Consolidation, , , ,  conflict: in civil society, , ; political, , ; war,  Congress of South African Trade Unions,  constitutional design, –, , , –, n, ; citizen regime approach to, , –, –; elements of, –, –, – constitutionalism, –,  constitutionality, ; constitutional court, , , ; rules of standing, 

Index

constitutional review, , ,  constitution-making process, ; citizen involvement in, –, , , –; negotiation and ratification process, , ,  contingency approach, , –, t,  Convention on Combating Bribery of Foreign Public Officials, OECD,  corporations: business ethics and, , , ; multinational, –, , n corporatist traditions, , ,  corruption/anticorruption: anticorruption reform, –; bribery, –, n; corruption, –, –, –; of customs duties, ‒, –; extortion, , n; in fiscal sector, –; money laundering, ; organizations and conventions, , –; in privatization and procurement processes, – Costa Rica,  Council of Europe,  crime, , ; drug trafficking, , , –, , ; gunrunning, ; violent organizations, , – Cuba,  Cyprus,  Czechoslovakia, , n Czech Republic, , n Dahrendorf, Ralf, ,  Das-Gupta, Arindam,  decentralization, –, , , , , , ; government accountability and, –; types of, –, – Della Porta, Donatella,  De Melo, Martha,  democracy, , –, –; antidemocratic groups, , , –; “spirit of,” , , – democratic consolidation, ; building a “working democracy,”

Index

, , n; constitutional design and, –; economic performance and, , –, , , n democratic institutions, –, ; disenchantment with, , ; formal vs. actual, , , –; institutional weakness, , n, , , ; transparency of, , , – democratic transition, , n, ; structural reform, , ; thresholds and stages of, , ; types of democratizing societies, ; varieties of, –; violent transitions,  deregulation, , ,  “designer democracies,” , , – Dethier, Jean-Jacques,  developed countries, – developing countries, , ; poorest democracies, , , – Diamint, Rut, , –, , , , , ,  Diamond, Larry, , , , ,  Dicey, A. V.,  Dimitrejevic, Nenad,  discrimination, ,  distributive justice. See redistribution of wealth diversity. See pluralism divestment process, ,  divided societies, , ,  domestic context, , n; crossnational variation in, , – Domínguez, Jorge I., , , n, ,  Dominican Republic,  Donaldson, Thomas,  Dresser, Denise, n drug trafficking, , , –, ,  Eastern Europe, , . See also postcommunist countries economic contraction, –, ,  economic crisis, , , , –n economic oligarchy, 

247

economic performance, –, ; exporting, ; redistribution of wealth and, , –, –; sustaining new democracies and, –, –, , , n, , , – economic reform, –, , – Ecuador, , ,  egalitarianism, , ,  Ekiert, Gregorz, , –, , , , , – elections, , –, – electoral system, , –; influencing democratic transition, nn& electronic government,  Elgie, Robert,  elites, , , , ,  El Salvador,  ethnic boundaries, ,  European Union (EU), , n,  Eusskadi ta Askatasuna (ETA),  Evans, Peter B.,  exchange rates, , ,  executive-legislative relations, –, , –, , ; conflicts, . See also parliamentary systems; presidential system; separation of powers executive power, , , , , ,  external actors, ,  external aid, , , , , , , n; international conditionality, , ,  federal election commissions, – Federalist Papers,  fiscal reform, –, –, n, n; controlling corruption, –; monetary policy, n. See also public finance and taxation foreign aid. See external aid foreign capital investment, , , , n, 

248

Fouché, Joseph,  fragmentation, , , ,  France, , , , n, ,  Freedom House report, ,  Frei, Eduardo, , – Fujimori, Alberto, , ,  Gaviria, César, , , ,  Germany,  Ghai, Yash, ,  Ghana,  globalization, , ; new democratic states and, –, nn&, –; problematic aspects of, , –, – government contracting: bidding, ; contract enforcement, ; corruption in, , ; transaction costs,  gradualism, – Greece,  Grindle, Merilee,  gross national product (GNP), , – Grzymala-Busse, Anna, –, , , , , – Guatemala, , ,  Gujral, Inder K., , , ,  gunrunning,  Haiti,  health policy, , – Held, David,  Hellman, Joel S., nn&, n heterogeneity, , n Hibou, J.,  Holbrooke, Richard,  Honduras,  Hood, Christopher,  Horn, Gyula, ,  Horowitz, Donald,  Hungary, , , –n Huntington, Samuel P., n,  Hurrel, Andrew,  illegal businesses, , –

Index

inclusion, . See also political participation income inequality, , ; instability and, –,  India, ,  indigenous peoples, – Indonesia,  Industrial Revolution, ,  inequality. See discrimination; poverty; wealth disparities inflation: instability and, , ; market transitions and, , , , – information flow, , . See also media information technology,  infrastructure investment, – instability of new democracies, , , , –; electoral systems and, ; inflation and, ,  institutional crafting, , , –, ; to ensure economic performance, , , n institutional weakness, , n, , , . See also corruption Inter-American Democratic Charter (IADC), ,  Inter-American Development Bank, ,  interest rates, , ,  intergovernmental relations, , –; contingency approach, , –, t, . See also executivelegislative relations; subnational levels of government internal revenue system reform, – international actors, , , –,  international conditionality, , ,  International Criminal Court,  international financial institutions, , , , , ,  international integration, ,  international investment. See foreign capital investment International Monetary Fund, , ,  Internet, –, ,  intimidation, –

Index

Iqbal, Allama Muhammad,  Jensen, Jane, – Jones, Anthony, , , n judiciary, , , , , ; constitutional court, , , ; retrospective justice,  Jungmann, Raúl,  Kaldor, Mary,  Kang, David,  Kenya,  Kitschelt, Herbert,  Klaus, Václav, n Kolodko, Grzegorz W., ,  Kornai, János, – labor, employment policy,  Lacombe, Marcello B., , , ,  Lagos, Ricardo,  Lanza, Leo Valladares,  Latin American Center for Development Administration,  Latin American countries, , –, , ; agrarian reform in, –, ; combative civil society traditional in, , ; efforts at civilian control of the military, –; impact of globalization on, –, ; military force issues, , –, –, –, –, –; police force issues, –, –. See also by country Latinobarómetro evaluation, n law and order, –, – leadership, , ,  legal framework, , , , , , . See also constitutionalism; judiciary “legal-rational” decision making,  legislative committees, –; investigative, , ,  legitimacy of state institutions, –, , ,  Lijphart, Arend, n

249

Limongi, F., –, – Linz, Juan, , ,  Lipset, Seymour Martin, , ,  Macedonia, n Machiavelli, Niccolò, The Prince,  macroeconomic stability, , , . See also stability of new democracies majority rule, , , , , ,  Malaysia,  Malova, Darina, , nn& Mandela, Nelson,  Maravall, José María, –, , n, nn&, n market reforms: “big bang” market reforms, , –; corporate responsibility and, ; economic contraction accompanying, –, ; losers in, ; pace of, –, –, , –n; political reforms preceding (cases of), –; social costs, , –, , ; structural reforms may be required,  market supremacy concept, ,  Marshall, T. H., n Mattes, Robert,  media, –; free to criticize government, , , , , ; state ownership of,  Méndez, José Luis, , , , ; contingency matrix, –, f Mercosur,  Mesquita Neto, Paulo de,  Mexico, n; internal revenue system reform, ; security issues and policies, , , ,  migration, subregional, – military: asymmetries with civilian institutions, , , , ; civilian control of, –, , ; in a democracy, –, , –, ; division within ranks of, , ; having personal or ideological allegiances, , ; overlapping with police tasks, , , –,

250

military (continued): ; participating in transnational operations, –, –; performing social services, , ,nn&; vertical command system, , ; wielding autonomous power, , , –, , , –, . See also security policy military coups and interventions, , ,  Miller, William L.,  minorities, , ; indigenous peoples, – minority representation, , – Miranda, Laura Chinchilla,  modernization theory, , n Moene, Karl O.,  Moldova, n monetary policy, n. See also fiscal reform Montesquieu, Baron de,  Mookherjee, Dilip, ,  multilateral defense arrangements, , n; combined military missions, –, – multilateral organizations, , –, ,  multinational corporations, –, , n municipal government, , , –,  National Armed Forces (FAN), Venezuela, –, n national government, ; federalism, n; oversight function,  national identity,  National Revenue Service, Ghana,  national sovereignty, ,  Nelson, Joan,  neoauthoritarianism,  neoliberal right, , – Nepal,  Netherlands,  new democracies. See democratic

Index

consolidation; democratic transition new institutionalism,  new public management (NPM) approach, , , –,  New Zealand, ,  Nicaragua, ,  nongovernmental organizations (NGOs), , , –,  North Atlantic Treaty Organization (NATO),  OAS, , ,  O’Donnell, Guillermo,  OECD,  old regime: remnants and legacies of, , , –; retrospective justice, ; those benefiting from, , , , ,  ombudsman, in public institutions,  O’Neill, Kathleen,  Organic Law of the National Armed Forces (LOFAN), Venezuela,  Organization for Economic Cooperation and Development (OECD),  Organization of American States (OAS), , ,  Oviedo, Lino,  Pampuro, José,  Pan-Hellenic Socialist Movement, PASOK (Panellinio Sosialistiko Kinima),  Paraguay, , ,  paramilitary groups, – parliamentary systems, , – Peralta, Gabriel Aguilera,  per capita income, ,  Pérez-Díaz, Víctor,  Perry, Guillermo, – Peru, , , n; civil society in, ; Fujimori government, , , ; security issues and policies, ,  Peters, B. Guy, ,  Philippines, , –

Index

Phillips, Susan, – pillarization of civil society, ,  Pinochet, Augusto, , ,  pluralism, , , ; democracy and, , , ,  Poland, , , , ,  polarization, , ,  police, , , , , n; militarization of, –, –; reform of, , –, –. See also security policy; security sector shortcomings policy making, –, –, f,  political crises,  political culture,  political education, – political exclusion, , – political integration, – political leadership, , ,  political participation: representative, –, , , ; responsible, , , ; responsiveness of political organizations to, , ,  political parties, –, –; avoiding extremism, ; campaign finance, , –; multiple, , ; opposition, , , ; weakening of, , ,  political polarization, , ,  political responsiveness, ,  poorest democracies, , , – popular demands, ,  popular mobilization, , ,  Porto Alegre, – Portugal, n, , – postcommunist countries, , –, , –; economic interactions with democratic transition in, –, , ,  poverty, , , ; poorest democracies, , , –; taking measures to reduce, , , , ,  presidential system, –, , ,  price liberalization, ,  privacy, , 

251

privatization, , , , ; controlling corruption in, –; divestment process, , ; as state reform, , –, –, – property rights: democratic transition and, , , ; lack of clarity in, n, n proportional representation (PR),  Przeworski, Adam, –, n, n; et. al., – public discourse: civility in important, ; constitutional process requiring, –, , , – public expenditures, –, – public finance and taxation, , n, , , ; controlling corruption in tax collection, –, –; revenue losses due to corruption, , –; tax evasion, ; tax reform,  public goods, , , , ,  public health, , – public insecurity, , , , – public opinion, , –, ,  public participation, , –, , –; international efforts to enhance, ; types and standards of facilitating democracy, –, – Quebec,  Rawls, John,  redistribution of wealth, , , –, –,  reform: sectoral, , ; of security sector, –, , –, , –, –, ; structural, , ; tax reform, . See also accountability; anticorruption reform; economic reform; fiscal reform; transparency regime change, , n regional boundaries, ,  Reiner, R.,  “reinvention of government,” – religion, , ,  rent seeking, , , , –

252

representative political participation, , ,  responsible bureaucracy model, – responsible political participation, ,  Revolutionary Armed forces of Colombia (FARC),  Reynolds, Andrew,  Richards, Andrew, , , –,  Rico, José María,  rights and freedoms, n, , ; antiterrorist tactics and, , ; bill of rights, , –,  Roman, Petre, , –, n Romania, , – Rose-Ackerman, Susan, , –, ,  rule of law, , , , , –,  Rural Surveillance Community Associations, Colombia, – Russia, n Sánchez G., Gonzalo, – Santiago Commitment to Democracy, OAS,  Savoie, Donald, ,  Schmitter, Philippe C., ,  Scotland,  sectoral reform, , ; security sector, –, , –, , –, –,  security policy, –; civilian control of the military, –, , ; combined military operations, –; and Fox administration, ; reform of security sector, , –, , –, –, , ; weaponsrecovery programs, . See also military; police security sector reforms (SSR), , –, , –, –,  security sector shortcomings, , –; existence of paramilitary groups, –; military allegiance to specific leader or ideology, , ; military wielding autonomous power, , , –, , ,

Index

–, ; overlapping of military and police tasks, , , –,  security threats: drug trafficking, , , –, , ; fight against terrorism, , –; mass migrations, – self-interest, ; constitutional process and, , , , –, ,  “self rule,” – semipresidential system, , – Sen, Amartya,  separation of powers, –,  September  attacks, , ,  Shapiro, Ian,  “shared rule,”  Shining Path, Peru,  “shock therapy” market reforms, , – Simeon, Richard, , , ,  social democrats, –, , n social policies, , . See also poverty; welfare system Solidarity movement, . See also Poland Somers, Margaret,  South Africa, , –, , , ; impact of constitution in, – Southern Europe, economic interactions with democratic transition in, , ,  Soviet bloc, collapse of, , –,  Spain, , n, ,  Spanish Socialist Workers Party (Partido Socialista Obrero Español), , n stability of new democracies: economic factors and, , , –; income inequality adversely affecting, –; macroeconomic stability, , ,  standard of living, , , n state, , ; legitimacy of institutions, –, , ; regulatory role of, , , , ,  state building, , –, –, ;

Index

elements of, –. See also government bureaucracy; intergovernmental relations; privatization state power: balance of power, , ; capacity to rule, , , , , ; separation of powers, –, . See also constitutionalism Stepan, Alfred,  structural reform, ,  subnational levels of government, , , , ; election of, –; financial capacities and restraints,  Sussman, Leonard,  technological development, , –; in communications, , ,  terrorism: antiterrorist tactics, , , –; attacks of September , , ,  Thatcher, Margaret,  “third wave” of democracy,  Tocqueville, Alexis de,  trade, , , ; protectionism, n trade liberalization, , , ,  transitional economies, . See also economic reform; market reform transnational corporations, –, , n transnational military missions, –, – transparency: of campaign fundraising, ; in divestment process, ; of military budgets, ; of public finance, , ; of public institutions, , , – Transparency International, ,  Tully, James,  Turgeon, Luc, , , 

253

Uganda,  Ukraine, n unemployment, , , n United Kingdom, , , n,  United Nations (UN), –,  United Nations Development Program (UNDP), ,  United Self-Defense Forces, Colombia,  United States, , , ; bureaucratic reforms, –, ; constitution, ; Foreign Corrupt Practices Act, ; Office of Homeland Security, n; “Washington Consensus,” , , n values, , ; and knowledge, – Vannucci, Alberto,  Venezuela, , ; security policies, , –, nn& voluntary association. See civil society “Washington Consensus,” , , n watchdog groups, , ,  Weber, Max, ,  Weingast, Barry,  welfare system, , , , , n,  Williamson, John, n “working democracy,” , , , n World Bank, , , ,  Wyplosz, Charles, , , , n, n, n Zapatista guerrillas, Mexico,  Zedillo, Ernesto, n Zielonka, Jan, 