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Contributions from
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Tribune
Addiction blocks development
Escalation of ethnic politics
Europe must speak with one voice
Systemic inability
7/2004
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[ Politics in Latin America ]
Systemic inability
A recent study by the UN Development Programme has confirmed yet again that many people in Latin America are dissatisfied with democracy. One of the reasons for this is that democratic processes and the transition to a world market economy have failed to defuse existing social problems. Politics in Latin America are still very much characterised by corruption and clientelism. Political institutions urgently need to become more transparent and effective. The concept of systemic competitiveness, redrafted for politics, can show the way.
[ By Christian von Haldenwang ]
During the 1990s most Latin American economies farewelled the centralised model of development and embraced a path of growth based on the global marketplace. However, the political and social institutions in those economies are showing an apparent reluctance to introduce the adjustments which are necessary for success. The Washington Consensus reform plan largely disregarded certain features such as modernising administration systems, establishing the rule of law, building state regulatory authorities and consolidating democracy. The result has been that global market integration has proved to be costlier than expected and the advantages less than hoped. Latin America is now faced with the challenge of reappraising these weaknesses, posing the questions: how can the existing institutions contribute to reform, and what are the stumbling-blocks?
The fundamental point of reference for this discussion is the concept of good governance which was introduced by the World Bank in 1989. This concept focuses on democratically-elected political institutions, an efficient and transparent public administration, rule of law and an effective state-regulated market. However, many political elites are resisting wide-ranging intervention in the traditional political order. That’s why only isolated reforms are occurring in individual institutions, which have little effect on the overall ability of the authorities to carry out governmental functions. The debate on development policy often tacitly assumes that any state which is supposed to introduce good governance already has the capacities to implement the necessary reforms. Such premise relegates reform concepts to wish-lists, often dooming the country to failure.
This is why a thorough analysis of the political system is first necessary, from which proposals for practical reform can be derived. The concept of systemic competitiveness developed at the German Development Institute (DIE) in the 1990s offers an ideal starting-point. It suggests a basis for economic policy and business reforms, with the aim of positioning national economies to better cope with the challenges of globalisation. The concept is aimed at four levels of intervention – from the meta level of basic development strategies, down to the micro-level of individual businesses and business networks. The reform agenda foresees a system which encourages competition, and in which the state guarantees the functioning of the markets. This concept, however, gives little indication of how the capability of the state can be boosted, enabling it to put the suggested policies into practice. To do this, the systemic governance of a country must be carefully examined and the approach modified accordingly.
The four levels
of systemic governability
The meta level describes the large political projects and strategic guidelines of a particular society. Examples are the transition from a dictatorial to a democratic form of government, admission to a political union such as the EU or a goal-oriented programme of economic development. If the general public welcomes such projects, then the state is empowered to mobilise resources and to overcome any particularistic resistance to reforms .
Introducing democracy was an important political project in Latin America in the 1980s. But to date many regimes have had difficulty in sustaining improvements in government performance, meaning that democracy had only limited application as a legitimate basis for reforms. Corruption, a lack of legal guarantees, untransparent decisions and a deficient public administration poison the faith of the population in democratic order. The introduction of the market economy too was not considered to be a success, because of its disappointing results with regard to growth, income distribution and social justice. A new political discourse, which focuses on the social, economic and cultural rights of citizens, is only slowly developing.
Important institutions at macro level are a country’s parliament, government and political parties, but also its constitution. These form the framework for practical policy. In Latin America the centralised state model has meant that the constitutional institutions and processes of appointing elite groups, legislation and implementation of law, control and participation are riddled with clientelism, patronage and corruption. Even today the public administration in many places continues to primarily serve the interests of minority groups. Parliaments are dominated by status quo powers, which systematically block reforms. Where political decisions are dictated by clientele structures, political parties lose their function of mediating between state and citizens.
The institutions at the meso level are necessary to correctly focus political measures. Examples of these are regulatory authorities, business development agencies, government commissions, parliamentary committees and sector-specific business associations and trade unions. In the first place meso-institutions regulate individual sectors (such as the energy sector) or policy fields (such as promotion of trade). Secondly, when problem situations arise which overlap policy fields or levels, or which require public-private cooperation, meso institutions coordinate the efforts of the political actors concerned.
The Washington Consensus concentrated too much on the macro-economic dimension and underestimated the meaning of the meso level. Latin American governments are now making increased efforts to close this gap. Their main focus is on decentralisation, boosting the state’s ability to govern and making more efficient use of knowledge, through closer discourse between research facilities and businesses, for instance.
The micro level includes staff, management, the organisation and also the work ethic of the public administration and political institutions. Centralised development has produced an apparatus bloated with staff whose professional competency and access to resources is inadequate. Political interference and a lack of career opportunities result in frequent changes of personnel and weaken the institutional memory. Even when the administrations of Latin American countries produce innovations which draw worldwide attention, such as the participative budget in Porto Alegre, the public sector tends to act as a stumbling block to competitiveness and effective political governance.
Above all Latin America’s administrations need to become more responsive to the needs of its citizens and customers. Target groups must be able to take a more active part in decision processes. Measures which directly appeal to the general public, such as establishing citizens’ centres, are an important means of gaining social support for modernising the administration.
There is no hegemonic reform model
It did prove possible to implement the macro-economic reforms of the Washington Consensus in Latin America, even under the political conditions described – but only because certain prerequisites were given. After the system of import substitution had failed there was no convincing alternative at meta level to world market integration. In addition, centralised measures such as currency reforms were introduced as shock therapy. But today, institutional modernisation and capacity building are what is needed. There is no hegemonic model for the current reform programme, shock therapy is no longer an option. What is required therefore is an approach which looks not only at the goals of the reforms themselves, but also on how to achieve them, i.e. the politics.
In practice – in development cooperation too – this means fostering state capacities, improving decision-making structures and boosting the ability of disadvantaged social groups to mobilise, so that more public scrutiny of state shortcomings towards these groups is possible. The predominant aim of all these measures must be to consolidate the legitimacy of the political order. Any approach which concentrates merely on modernising individual institutions will be unable to achieve this, no matter how widespread the list of reforms. This is a major drawback of the goodgovernance concept, as it has been considered up to now.
Further reading:
UNDP: Democracy in Latin America. Towards a Citizens’ Democracy. http://www.undp.org/democracy_report_latin_america/
Dr. Christian von Haldenwang
is the programme co-ordinator for German Technical cooperation (GTZ) at the UN Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile, and is currently on leave from the German Development Institute (DIE) in Bonn. This contribution reflects the author’s personal opinion and not necessarily that of the institutions mentioned.
christian.haldenwang@gtz.de
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