The Dilemmas of Democracy in the Open Economy: Lessons from Latin America

Scholars have usually understood the problem of democratic consolidation in terms of the creation of mechanisms that make possible the avoidance of populist excesses, polarized conflicts, or authoritarian corporatist inclusion that undermined free politics in much of postwar Latin America. This article makes the case that, under contemporary liberal economic conditions, the nature of the challenge for democratization has changed in important ways. Earlier problems of polarization had their roots in the long-present statist patterns of economic organization. By contrast, under free-market conditions, democratic consolidation faces a largely distinct set of challenges: the underarticulation of societal interests, pervasive social atomization, and socially uneven political quiescence founded in collective action problems. These can combine to undermine the efficacy of democratic representation and, consequently, regime legitimacy. The article utilizes data from the Latin American region since the 1970s on development, economic reform, and individual and collective political participation to show the effects of a changing state-economy relationship on the consolidation of democratic politics.