NCPA - National Center for Policy Analysis

Naive View of Democracy in Latin America?

November 16, 2001

Some observers of the Latin American political scene are warning that democracies there are operating under constitutions that grant government nearly unlimited power in the economic sphere. They say this creates destructive incentives and has made reform and development in the region nearly impossible.

Here is a look at their reasoning:

  • As Latin America has converted from rule by military dictatorships to democracies, the new governments were assumed to be benign and were granted enormous control over economic resources -- and to act as slayers of all inequalities in life.
  • This means, first, that whenever the government deems it good, it can rescind individual liberties for the "public good" -- thereby trampling on private property rights.
  • This unchecked power leads to corruption and crony capitalism -- creating more inequality.
  • Healthy institutions, which might allow government by checks and balances, cannot develop under such conditions because elected leaders have no interest in limiting their own power.

Thus, each "reform" of the constitution expands the power of politicians who have their own incentives to retain their power to transfer wealth. What develops is a "now-it's-our-turn" attitude -- and a cynical and disillusioned populace.

Political experts advise Latin American countries to limit their constitutions and their governments.

Source: Mary Anastasia O'Grady, "In Latin America, Too Many Constitutional Promises Thwart Democracy," Wall Street Journal, November 16, 2001.


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