UNIVERSITY OF CALIFORNIA Los Angeles Patronage Games…unpan1.un.org/intradoc/groups/public/documents/un-dpadm/unpan044551.pdf · UNIVERSITY OF CALIFORNIA Los Angeles Patronage Games:

UNIVERSITY OF CALIFORNIA

Los Angeles

Patronage Games:

Economic Reform, Political Institutions,

and the

Decline of Party Stability in Latin America

A dissertation submitted in partial satisfaction of the

requirements for the degree Doctor of Philosophy

in Political Science

by

Allyson Lucinda Benton

2001

© Copyright by

Allyson Lucinda Benton

2001

ii

The dissertation of Allyson Lucinda Benton is approved.

Miriam Golden

George Tsebelis

William R. Summerhill

Barbara Geddes, Committee Chair

University of California, Los Angeles

2001

iii

To my distractions,

Kali, Moses, and Rosie;

to my parents, Marilyn and Eugene Benton;

and

to my husband, Michael Johannes Sauter.

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TABLE OF CONTENTS

List of Tables ..................................................................................................................... vi List of Figures .................................................................................................................... xi List of Abbreviations ....................................................................................................... xiii Acknowledgements......................................................................................................... xvii Vita ……….................................................................................................................... xxiii Abstract of the Dissertation ............................................................................................ xxv Chapter 1. Introduction: The Decline of Traditional Parties in Latin America ................ 1 Chapter 2. Neoclassical Economics Confronts Machine Politics: Economic Reform,

Political Institutions, and the Decline of Traditional Parties in Latin America....................................................................................................................... 36

Chapter 3. The Strategic Struggle for Patronage: Political Careers, State Largesse, and

Factionalism in Latin American Parties ........................................................ 81 Chapter 4. Political Institutions, Economic Policy, and Party Building in Latin America:

The Rise of Stable, Two-Party Systems in Colombia and Venezuela......... 133 Chapter 5. The Critical Role of Economic Crisis and Reform in Recent Party Instability:

The Colombian and Venezuelan Experiences Compared ........................... 226 Chapter 6. The Critical Contribution of Political Institutional Arrangements to Recent

Party Instability in Latin America: The Argentine, Costa Rican and Mexican Experiences Compared ................................................................................ 301

Chapter 7. Economic Reform in Decentralized Systems: The Persistence of Provincial

Party Machines Amidst National Party System Instability ......................... 382 Chapter 8. The Stability of Provincial Party Systems in Argentina: Regional Economies,

Revenue Sharing, and Provincial Politics During Economic Adjustment .. 440 Chapter 9. Conclusion: The Political Economy of Party Building and Party Instability in

Latin America .............................................................................................. 526

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Appendix 1. Calulating the Pure Strategy Equilibria..................................................... 550 Appendix 2. Ranking the Relative Values of iq .......................................................... 552 Appendix 3. Conditions Supporting (Z,X) > (X,Z) > (Z,Z) > (X,X) ................... 553 Appendix 4. Calculating Mixed Strategy Equilibria...................................................... 554 Appendix 5. Federal Tax Revenue Sharing Transfers to Argentine Provincial

Governments (Pesos Per Capita), 1983-1995 ........................................... 556 Appendix 6. Argentine Provincial Public Sector Employment per 1,000 Habitants, 1983-

1995........................................................................................................... 558 References....................................................................................................................... 560

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LIST OF TABLES

Table 1.1: National Political Institutional Reform in Selected Latin American Countries in the 1990s ..................................................................................................... 15

Table 1.2: Economic Reform, Barriers to Entry, and Vote Shifts to New Parties............ 22

Table 4.1: Venezuelan Presidential Elections (Percent Votes), 1958-2000 ................... 148

Table 4.2: Venezuelan Legislative Elections (Percent Votes), 1958-1999 .................... 149

Table 4.3: Colombian Chamber of Deputies Elections (Percent Votes), 1935-1998 ..... 157

Table 4.4: Colombian Senate Elections (Percent Votes), 1947-1998............................. 160

Table 4.5: The Distribution of Seats in the Colombian National Congress, 1931-1998 (Percent)........................................................................................................ 161

Table 4.6: Colombian Presidential Elections (Percent Votes), 1930-1998 .................... 163

Table 4.7: Governmental Income During Selected Venezuelan Governments, 1936-1978 (Millions of Current Bolívares) .................................................................... 183

Table 4.8: Investment During Selected Venezuelan Governments, 1950-1999............. 186

Table 4.9: The Growth of the Venezuelan Decentralized Public Sector, 1958-1983..... 187

Table 4.10: Public and Private Sector Employment in Venezuela, 1950-1998.............. 190

Table 4.11: Growth in Public Sector Employment During Selected Venezuelan Governments, 1950-1999.............................................................................. 191

Table 4.12: Economic Indicators for Selected Venezuelan Governments, 1953-1999 (Average for Term) ....................................................................................... 194

Table 4.13: National, Departmental, and Municipal Public Sector Employment in Colombia, 1964-1982 ................................................................................... 217

Table 5.1: The Colombian Electoral System, Pre- and Post-Electoral Reform.............. 232

Table 5.2: The Number of Candidates in Colombian Presidential Elections, 1974-1998....................................................................................................................... 241

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Table 5.3: Number of Party Lists Competing for Seats in the Colombian Congress, 1974-1998............................................................................................................... 242

Table 5.4: Percent Seats won by Hare Quota and Largest Remainders in the Colombian Congress, 1974-1994 .................................................................................... 244

Table 5.5: The Venezuelan Electoral System, Pre- and Post-Electoral Reform............. 249

Table 5.6: State Level Electoral Support for AD and COPEI, Pre- and Post-Electoral Reform .......................................................................................................... 255

Table 5.7: The Relative Size of the Colombian and Venezuelan Public Sectors, 1985-1999............................................................................................................... 260

Table 5.8: Public Sector Deficits in Selected Latin American Countries, 1970-1981 (Percent Gross Domestic Product)................................................................ 262

Table 5.9: Total External Debt as a Percent of Gross National Product in Selected Latin American Countries, 1970-1998................................................................... 263

Table 5.10: Inflation in Selected Latin American Countries, 1970-1998 (Percent Change in Consumer Price Index) ............................................................................. 265

Table 5.11: Percent Growth in Gross Domestic Product Output in Selected Latin American Countries, 1970-1998................................................................... 266

Table 5.12: Economic Indicators for Colombia and Venezuela, 1980-1999.................. 267

Table 5.13: National Public Sector Employment in Colombia, 1985-1995 (Number of Employees) ................................................................................................... 269

Table 5.14: PL and PC Support in Gubernatorial Elections, 1998 ................................. 273

Table 5.15: PL and PC Mayoral Victories, 1988-97 (Percent Offices Won) ................. 274

Table 5.16: Rates of Voter Abstention in Colombian Presidential Elections, 1970-98 (Percent)........................................................................................................ 277

Table 6.1: Argentine Presidential Elections, 1946 – 1999 (Percent Votes).................... 317

Table 6.2: Argentine Chamber of Deputies Elections, 1946 – 1999 (Percent Votes) .... 318

Table 6.3: Number of Candidates and Parties Competing for Seats in the Mexican Chamber of Deputies, 1946 - 1985............................................................... 324

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Table 6.4: Mexican Chamber of Deputies Elections, 1955 – 1985 (Distribution of Seats)....................................................................................................................... 328

Table 6.5: State Participation in the Mexican Economy, 1925-82 (Percent GDP)......... 332

Table 6.6: The Creation of the Mexican Public Sector................................................... 333

Table 6.7: Mexican Presidential Elections (1946-2000)................................................. 335

Table 6.8: Mexican Chamber of Deputies Elections in Single-Member Districts, 1946-2000 (Percent Votes)..................................................................................... 336

Table 6.9: Costa Rican Legislative Elections, 1949 - 1998 (Percent Votes).................. 340

Table 6.10: Costa Rican Presidential Elections, 1953 - 1998 (Percent Votes)............... 343

Table 6.11: Number of Political Groups Fielding Candidates in First Round Presidential Elections in Costa Rica, 1953-1994.............................................................. 344

Table 6.12: Costa Rican Municipal Elections, 1953 - 1994 (Percent Seats) .................. 347

Table 7.1: Constitutional Structure and Political Decentralization in Selected Latin American Countries ...................................................................................... 390

Table 7.2: Expenditures by Level of Government in Selected Latin American Countries....................................................................................................................... 405

Table 7.3: Expenditure Responsibilities by Level of Government in Selected Latin American Countries, Mid-1990s................................................................... 406

Table 7.4: Tax Collection by Level of Government in Selected Latin American Countries....................................................................................................................... 410

Table 7.5: Tax Assignments by Level of Government in Selected Latin American Countries, Mid-1990s ................................................................................... 412

Table 7.6: Sources of Provincial and Local Revenues in Selected Latin American Countries, Economic Reform Era (Early 1990s) .......................................... 413

Table 7.7: Type of Intergovernmental Transfers in Selected Latin American Countries, Economic Reform Era (Early 1990s)............................................................ 415

Table 7.8: Subnational Borrowing Autonomy in Selected Latin American Countries .. 420

Table 8.1: The Distribution of Argentine Population by Province and Region, 1947-1991....................................................................................................................... 468

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Table 8.2: Regional Delegations to the Argentine National Chamber of Deputies, 1947-1991............................................................................................................... 468

Table 8.3: Principal Provincial Import Substitute Products and Protectionist Policies in Argentina Prior to Economic Reform........................................................... 469

Table 8.4: Relative Provincial Expenditures Per Capita in Argentina, 1900-1934 ........ 477

Table 8.5: Percent of Federal Revenue Sharing Resources Allocated to Argentine Provinces, 1935-1994 ................................................................................... 481

Table 8.6: The Inter-Provincial (Secondary) Distribution of Federal Revenue Sharing Resources in Argentina, 1935-1994 (Percent) .............................................. 483

Table 8.7: Formulas for Calculating the Inter-Provincial (Secondary) Distribution of Federal Revenue Sharing Resources in Argentina, 1935-1987 .................... 485

Table 8.8: Per Capita Federal Revenue Sharing Resources By Province in Argentina, 1960-1989 ..................................................................................................... 487

Table 8.9: Argentine Federal Revenue Sharing Resources as a Percentage of GDP, 1935-1988............................................................................................................... 489

Table 8.10: Principal Federal Transfers to Argentine Provincial Governments, 1973-1995 (Percent of Total Transfers) .......................................................................... 491

Table 8.11: Continued Protection of Principal Provincial Import Substitute Products in Argentina After Economic Reform............................................................... 501

Table 8.12: Urban Unemployment in Provincial Argentina, 1989-1995........................ 503

Table 8.13: The Status of Provincial Public Enterprises in Argentina as of December 1996............................................................................................................... 506

Table 8.14: The Effect of Federal Revenue Sharing Transfers Since the Return to Democracy in 1983 on the Stability of Established Provincial Parties ........ 512

Table 8.15: The Effect of Federal Revenue Sharing Transfers in the Post-Economic Reform Era on the Stability of Established Provincial Parties ..................... 513

Table 8.16: The Effect of Patronage Employment on the Stability of Established Provincial Parties .......................................................................................... 515

Table 8.17: Established Parties in Argentine Elections, 1983 and 1995 ........................ 518

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Table 8.18: The Effect of Federal Revenue Sharing Transfers Since the Return to Democracy in 1983 on the Stability of Established National Parties in Provincial Ballots.......................................................................................... 520

Table 8.19: The Effect of Federal Revenue Sharing Transfers in the Post-Economic Reform Era on the Stability of Established National Parties in Provincial Ballots ........................................................................................................... 521

Table 8.20: The Effect of Patronage Employment on the Stability of Established National Parties in Provincial Ballots.......................................................................... 522

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LIST OF FIGURES

Figure 3.1: The Game of Selecting a Party Leader in Extensive Form .......................... 118

Figure 3.2: Pure Strategy Equilibrium Possibilities Where Both Politician 1 and Politician 2 Prefer the Policy of Candidate Z................................................................ 121

Figure 3.3: Pure Strategy Equilibrium Possibilities Where Politician 1 Prefers the Policy of Candidate X and Politician 2 Prefers the Policy of Candidate Z.............. 125

Figure 4.1: Percent Votes Won by AD and COPEI in Presidential and Legislative Elections, 1947-1988 .................................................................................... 143

Figure 4.2: Percent Votes and Percent Seats Won by AD and COPEI in Legislative Elections, 1947-1988 .................................................................................... 143

Figure 4.3: Percent Votes Won by the PL and PC in Presidential and Chamber of Deputies Elections, 1958-1990 ..................................................................... 166

Figure 4.4: Gross Domestic Product Per Capita in Venezuela, 1950-1998 (1984 Bolívares)...................................................................................................... 195

Figure 4.5: Average Real Income of Venezuelan Workers, 1950-1995 (1984 Bolívares)....................................................................................................................... 195

Figure 6.1: Percent Votes Won by the PLN and Anti-PLN Groups in Presidential and Legislative Elections in Costa Rica, 1953 - 1998......................................... 346

Figure 7.1: The Type and Origin of Subnational Expenditures in Selected Latin American Countries, Post-Economic Reform ............................................................... 417

Figure 7.2: The Type and Origin of Provincial and Local Expenditures in Selected Latin American Countries, Post-Economic Reform Era ........................................ 418

Figure 8.1: Federal Tax Revenue Sharing Resources Transferred to Provincial Governments in Argentina, 1983-1995 (Average Per Capita Transfers Across Provinces) ..................................................................................................... 488

Figure 8.2: Other Federal Transfers to Provincial Governments in Argentina, 1983-1995 (Average Per Capita Transfers Across Provinces)........................................ 492

Figure 8.3: Total Federal Resources Transferred to Provincial Governments in Argentina, 1983-1995 (Average Per Capita Transfers Across Provinces) ..................... 493

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Figure 8.4: Provincial Public Sector Employment as a Percent of Total Public Sector Employment in Argentina, 1973-1995 ......................................................... 494

Figure 8.5: The Relationship Between Federal Transfers and Argentine Provincial Public Sector Employment, 1983-1995 ................................................................... 495

Figure 8.6: Percent Provincial Resources from Federal Transfers, 1983-1995.............. 495

Figure 8.7: Provincial Public Sector Employment Per 1,000 Habitants in Argentina, 1983-1995 (Average Across Provinces) ....................................................... 496

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LIST OF ABBREVIATIONS

AA Acción Agropecuaria AC Alianza por Cambio AD Acción Democrática AD-M19 Alianza Democrática-Movimiento 19 de Abril AM Alianza por México ANAPO Alianza Nacional Popular APRA Alianza Popular Revolucionaria Americana ATN Aportes del Tesoro Nacional BCRA Banco Central de la República Argentina CACM Central American Common Market CFE Comisión Federal Electoral CFVE Comisión Federal de Vigilancia Electoral CN Convergencia Nacional CNC Confederación Nacional Campesina CNE Consejo Nacional Electoral CNOP Confederación Nacional de Organizaciones Populares CONASUPO Companía Nacional de Subsistencias Populares Cop. Vial Coparticipación Vial COPEI Comisión de Organización Política Electoral Independiente COPRE Comisión Presidencial para la Reforma del Estado CPE Consejo del Padrón Electoral CR La Causa Radical CTM Confederación de Trabajadores de México ELN Ejército Liberación Nacional EPL Ejército Popular de Liberación FA Frente Amplio FARC Fuerzas Armadas Revolucionarias de Colombia FDR Fondo de Desarrollo Regional FEDEI Fondo de Desarrollo Eléctrico del Interior FEDERACAFE Federación Nacional de Cafeteros de Colombia FN Frente Nacional

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FODESAF Fondo de Desarrollo Social y Asignaciones Familiares FONAVI Fondo Nacional de Vivienda FREPASO Frente del País Solidario GDP Gross Domestic Product GE Genie Emergente GNP Gross National Product IFE Instituto Federal Electoral IMAS Institute Mixto de Ayuda Social IMF International Monetary Fund IMSS Instituto Mexicano de Seguro Social IPCN Independiente por la Comunidad Nacional ISI Import-Substitution Industrialization ISSSTE Instituto de Seguridad y Servicios Sociales de los Trabajadores del

Estado JAC Juntas de Acción Comunal LDP Liberal Democratic Party LFOPPE Ley Federal de Organizaciones Políticas y Procesos Electorales MAS Moviemiento al Socialismo MEP Movimiento Electoral del Pueblo MIR Movimiento Izquierda Revolucionario ML-19 Movimiento del 19 de Abril MLN Movimiento Liberación Nacional MNR Movimiento Nacionalista Revolucionario MRL Movimiento Revolucionario Liberal MSN Movimiento de Salvación Nacional MVR Movimiento Quinto Revolucionario PAN Partido Acción Nacional PAN Partido Autonomista Nacional PARM Partido Auténtico de la Revolución Mexicana PC Partido Colorado PC Partido Conservador PCM Partido Comunista Mexicano PCV Partido Comunista Venezolano PD Partido Demócrata

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PDC Partido Demócrata Cristiano PDM Partido Demócrata Mexicano PFCRN Partido del Frente Cardenista de Reconstrucción Nacional PI Partido Independiente PJ Partido Justicialista PL Partido Liberal PLN Partido Liberación Nacional PMS Partido Mexicano Socialista PMT Partido Mexicano de los Trabajadores PN Partido Nacional PNR Partido Nacional Revolucionario PPS Partido Popular Socialista PPT Patria para Todos PR Partido Radical PR Partido Republicano PRD Partido de la Revolución Democrática PRI Partido Revolucionario Institucional PRN Partido Republicano Nacional PRT Partido Revolucionario de los Trabajadores PRVZL Proyecto Venezuela PSD Partido Social Demócrata PSDB Partido da Social Democrácia Brasileira PST Partido Socialista de los Trabajadores PU Partido Unidad PUN Partido Unión Nacional PUSC Partido Unidad Social Cristiana RFE Registro Nacional de Electores SI Socialista de Izquierda SNTV Single Non-Transferable Vote TSE Tribunal Supremo Electoral UCR Unión Cívica Radical UCRI Unión Cívica Radical Intransigente UCRLJR Unión Cívica Radical-Laborista Junta Renovadora UCRP Unión Cívica Radical del Pueblo

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UN Unificación Nacional UNO Unión Nacional de Oposición UP Unión Patriotica

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ACKNOWLEDGEMENTS

Over the years I have had the pleasure of interacting with many people, and I

would like to thank them for their help and support. Above all, I owe an intellectual and

personal debt of gratitude to Barbara Geddes. Barbara taught me how to think like a

political scientist and challenged me to be creative in my approaches to problem solving.

Whenever I visited or phoned her unexpectedly, she always took time to listen to my

budding ideas, gently steering me toward those most likely to bear fruit. As a result of

her steady encouragement, I set my sights on higher goals, ones that I had thought out of

reach. I owe any academic success -past, present, or future- to her. The worst part about

finishing the dissertation cutting the institutional ties that bound us together; the best part

is being able now, finally, to move from student to friend.

I would also like to thank George Tsebelis and Miriam Golden. George was the

first professor who took an interest in me at the University of California, Los Angeles

(UCLA). He inspired me to learn about game theory and the effects of political

institutional arrangements on party systems. To this day, I do not know whether I tried so

hard to learn about these things because of his teaching, or my own interest. Perhaps it

was a little of both. George’s help during my effort to model internal party politics was

invaluable, and I loved coming to his office to discuss my progress. I will miss seeing his

smiling face. Miriam deserves special thanks for hiring me as a research assistant. Her

early support allowed me to stay in graduate school at a time when I was thinking of

dropping out. Miriam also gave me the best piece of advice I received on conducting

xviii

field research: she told me to “follow my nose.” Thanks to her, I pursued my interest in

Argentine provincial economies and party systems, even though I did not know how

important they would become to my subsequent work.

William Summerhill, Alberto Diaz-Cayeros, and Michael Thies also gave advice

and encouragement along the way. Bill suggested ways to streamline my argument at an

early stage of the dissertation. Only an historian could see through the muddle of

political science jargon to pull out what was most important. Bill was instrumental in

another way, as well. Always willing to write letters of recommendation on short notice,

he helped me get the funding I needed to finish this project. I appreciate his time and

effort on my behalf. Although Alberto was only at UCLA for a short time, our

discussions about Latin American politics and party systems were influential in helping

me find ways to build and support my argument. His comments highlighted

inconsistencies that only a Latin American would notice. I am looking forward to many

more years of sharing ideas with him. Mike turned out to be an unofficial dissertation

committee member. He read everything I gave him, and his comments were so incisive

that I sometimes dreaded reading what he had to say. Mike also allowed me to TA for

his undergraduate Japanese politics course. Unfortunately, I think the course taught me

more than I was able to teach my poor students, who had hoped for an expert on Japanese

affairs! Mike’s knowledge of Japanese politics challenged me think more systematically

about the relationship between patronage resources, electoral systems, and party politics,

and my work is better for it. He has gone above and beyond the call of duty, and I have

appreciated his mentorship and friendship over the years. (Mike, I owe you a beer!)

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I would also like to draw attention to several scholars who, though not directly

involved in the dissertation, were instrumental to its successful conclusion. Michael

Coppedge´s book, Strong Parties and Lame Ducks, was an early inspiration for this

study. His research set me to thinking about the complex interrelationship between

patronage resources, intra-party disputes, and inter-party politics. Kathy Bawn and John

Londregan offered advice at critical stages during the development of my game theoretic

model. Scott James carefully read a draft of the main theory chapter and gave comments

that helped substantially during revisions. In Argentina, the late Guillermo Molinelli

exposed how narrow my conceptions of Argentine politics were, and forced me to see

beyond them. Mariano Tomassi gave me a home at the Universidad de San Andrés and

the Centro de Estudios para el Desarrollo Institucional while I was in Buenos Aires. His

time, extensive contacts, and institutional support facilitated my field research. Brian

Crisp generously provided data and information on Colombian and Venezuelan politics

and government. Edward Gibson and Mark Jones read early drafts of my work and

shared Argentine economic and political data. Ed´s invitation to participate in a

conference at the Centro de Investigación y Docencia Económicas (CIDE) introduced me

to this institution’s rich academic environment. Thanks, in part, to him I am happily

employed at CIDE.

My time at UCLA was made more productive because of the resources of several

granting agencies. Title VI awards for studying Spanish and Portuguese facilitated

learning the languages of the area I was most interested in studying. Grants from the

Ford Foundation, directed through UCLA´s Latin American Center, and UCLA´s

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International Studies and Overseas Programs enabled me to travel to Argentina, to

conduct field research, and to participate in conferences. Most of the dissertation was

written with the support of a Chancellor’s Dissertation Year Fellowship from the

University of California’s Office of the President. Without such funding, I would not

have been able to undertake or finish this project. Additionally, I would be negligent if I

did not extend a few words of appreciation to the German Federal Republic and City of

Berlin who, thanks to my husband’s skillful grantsmanship, unwittingly funded my

research at different stages. I spent several months each in Göttingen and Berlin

supported by the D.A.A.D., stays that allowed me to plan my upcoming field research

and later to collect my thoughts about what I had learned abroad. Most of my final year

in graduate school was spent in Berlin, thanks to the Berlin Parliament’s

Abgeordnetenhaus Stipendium.

I would like to draw special attention to the important part that UCLA´s

University Research Library and Inter-Library Loan (ILL) staff played in my studies.

The UC collection is matched by few. At any one time, I must have had fifteen ILL

books at home or on call. No matter how overdue any became, the ILL staff managed to

overlook my foibles and still deliver new ones in a timely manner. In Argentina, the

library staff at the Ministerio de Economía was friendly and eager to help me with my

research. I am grateful for their expert help in locating obscure documents on the

provincial economies. The Niedersächsische Staats- und Universitätsbibliothek in

Göttingen, and the Staatsbibliothek zu Berlin and Ibero-Amerikanisches Institut in Berlin

enabled me to continue my research uninterrupted by journeys to Europe. The Latin

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American collection at Berlin´s Ibero-Amerikanisches Institut is an undiscovered

academic gem.

Someone once told me that the best friends I would make would be in graduate

school, and this has certainly proved to be the case. I would not have survived the past

eight years without six very special friends. Daily phone conversations and coffee breaks

with Johanna Birnir helped me to get through the lonely process of writing. By the end

of graduate school, I thought I could tell when she was calling by the sound of her ring!

Every graduate student should have such a wonderful and trusted friend. Michael

Blakley tolerated countless hours of prattle about whatever I had been working on that

day, and even fed my frenzy by topping off my beer. I do not understand how he put up

with it, always listening and giving sound advice. He is a great friend. Terri Givens was

a constant source of moral support and taught me to laugh about some of the difficulties I

faced during graduate school. Amie Kreppel showed me how to have fun in LA and gave

me the courage to approach the professors I most wanted to work with but also most

feared. Kimberly Niles has been witness to some of my most embarrassing moments,

and somehow I have survived her teasing. She cheerfully goaded me into improving my

cumbersome and boring means of written expression, often over tortilla crusted chicken.

I hope that she will approve of the final product. She will always be a treasured friend.

And, most important, Michael Sauter, my husband, has changed my life in so many ways

that I feel as if I have become a new person. Corny but true nonetheless.

Finally, I would like to thank my parents, Marilyn and Eugene Benton. The

unsung heroes of most graduate students are loving and generous parents. My parents

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helped to lift me out of graduate student poverty through occasional cash transfers, and

regular dental and eye care. My mother paid for me to attend more than one conference,

and my father willingly sent money to Argentina when the UCLA bureaucracy neglected

to send my stipend. After eight years on the Benton gravy train, I can now finally give up

my seat. I hope that this finished product will convince my ever skeptical father that I

really was in graduate school all these years, and that I really did get a Ph.D..

xxiii

VITA

June 10, 1967 Born, Santa Ana, California 1991 B.A., Political Science; Minor, French Literature High Honors from the Department of Political Science

Distinction in General Scholarship University of California at Berkeley

1994-2000 Research Assistant Department of Political Science

University of California, Los Angeles

1995-2000 Teaching Assistant Department of Political Science

University of California, Los Angeles 1996 M.A., Political Science

University of California, Los Angeles

June 1997 Field Research, Buenos Aires, Argentina Funded by Latin American Center University of California, Los Angeles

1998 Best Conference Paper Submitted by a Graduate Student Department of Political Science University of California, Los Angeles

1998 Field Research, Buenos Aires, Argentina Funded by International Studies and Overseas Programs

University of California, Los Angeles

June 1999 Field Research, Mexico City, Mexico 1999-2000 Chancellor’s Dissertation Year Fellowship

University of California, Office of the President Starting 2001 Assistant Professor

Centro de Investigación y Docencia Económicas, A.C. Mexico City, Mexico

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PRESENTATIONS

Benton, Allyson Lucinda (February 1997). The Decline of Party Stability in Latin America. Presented at the annual PCCLAS-RMCLAS Conference, San Diego, California.

-- (April 1997). Explaining Recent Party Instability in Latin America: Combining

Insights From Economic and Institutional Based Analyses. Midwestern Political Science Association Annual Meetings, Chicago, Illinois.

-- (April 1997). Patronage Games: The Effects of Economic Reform on Intra-Party

Politics in Venezuela. Paper presented at the Latin American Studies Association’s XX International Congress, Guadalajara, Mexico.

-- (March 2000). Economic Reform in Decentralized Systems: How Decentralizing

Institutions Protect Subnational Politicians and Their Party Machines From the Effects of Economic Reform. Paper presented at the Latin American Studies Association’s XXII International Congress, Miami, Florida.

-- (August 1997). Patronage Games: The Effects of Economic Reform on Internal Party

Politics in Latin America. Paper presented at the American Political Science Association Annual Meetings, Washington, D.C..

-- and Barbara Geddes (June 1997 and June 1999). The Effect of Federalism on Latin

American Party Systems. Paper presented at the Conference on the Transformation of Argentina: Democratic Consolidation, Economic Reforms and Institutional Design, Center for the Study of Institutional Development, Universidad de San Andrés, Argentina and the Conference on Federalism, Democracy, and Public Policy: Comparative Perspectives, Centro de Investigación y Docencia Económicas, Mexico City, Mexico.

-- (August 2000 and September 2001). Federalism and the Stability of Provincial Party

Systems in Argentina: Regional Development Policies, Fiscal Resources, and Provincial Politics During Economic Reform. Paper presented at the American Political Science Association Annual Meetings, Washington, D.C. and the Latin American Studies Association’s XXIII International Congress, Washington, D.C..

xxv

ABSTRACT OF THE DISSERTATION

Patronage Games:

Economic Reform, Political Institutions,

and the

Decline of Party Stability in Latin America

by

Allyson Lucinda Benton

Doctor of Philosophy in Political Science

University of California, Los Angeles, 2001

Professor Barbara Geddes, Chair

The principal question addressed in this study is why new parties are becoming

successful contenders for power in some Latin American countries, but not in others.

This question is answered by comparing five of the most historically stable party systems

in the region. In three, Argentina, Mexico, and Venezuela, voters have abandoned

established parties for new ones, causing historic two-party and single-party dominant

systems to become three (or more) party systems. In the other two, Colombia and Costa

Rica, traditional parties remain firmly in control. To explain the recent, radical changes

to party systems, this study shows how the shift away from state-led economic

xxvi

development policies since the early 1980’s interacts with political institutions to

undermine established machine party organizations. Prior to economic crisis and reform,

dominant parties controlled access to state resources and policy-making, using these tools

to reinforce their positions in the political system. As a result, new parties could not

challenge their hold on power, and disgruntled politicians who might have considered

leaving established parties for new ones remained loyal. It was unlikely that constituents

would follow even the most prominent politicians to new parties offering few tangible,

immediate rewards. In such a context, the costs to politicians for leaving dominant

parties were high, while the avenues open to new parties seeking to challenge established

party machines were few. During the economic reform era, in contrast, the position of

established machine parties weakened. Economic liberalization threatens dominant

parties by removing many aspects of economic policy-making and thus the distribution of

state goods and services from political control. For this reason, politicians must think

about new ways to attract support and build political careers because they are no longer

able to deliver customary benefits. Although most politicians will remain in established

parties, others will try their luck in new ones. Whether or not they do depends on the

chances that nascent party organizations have for winning offices, that is, on whether

political institutions permit the entry and survival of new parties in the system.

1

CHAPTER ONE

Introduction:

The Decline of Traditional Parties in Latin America

The Puzzling Demise of Latin American Party Stability

In many Latin American countries, political parties have had long, stable lives,

just as in the United States and Europe. The historic strength of parties is especially

impressive compared to other areas of the developing world. Latin American parties

have survived coups, long periods of military rule, years underground, and severe

political repression. During democratic government, parties regularly endured violent

anti-government demonstrations, strikes, and dangerous guerrilla and revolutionary

movements. Parties in the region have also weathered destabilizing internal factional

disputes, public criticism about their representation of societal interests, and scandals

over corruption and the misuse of public funds.

Between 1945 and 1995, for example, Argentine politics was dominated by two

political parties, the Partido Justicialista (PJ) and the Unión Cívica Radical (UCR),

despite authoritarian interludes and periods when the PJ was proscribed from political

activity. While the PJ was founded in the 1940s, the UCR traces its origins to the 19th

century. Colombia’s traditional parties, the Partido Liberal (PL) and Partido Conservador

(PC), trace their roots to the 19th century as well. Multiple civil wars and even a period

of repressive military rule in the 1950s did not weaken these parties’ grip on democratic

2

government. In Uruguay, the Partido Colorado (PC) and the Partido Nacional (PN)

steadily controlled politics between 1918 and 1971. As in Colombia, these parties trace

their origins to the 19th century, making both the Uruguayan and Colombian party

systems among the oldest in the world. Similarly, Chile’s Partido Radical (PR) formed in

the 1800s, although it no longer carries the same political weight it once during the mid

20th century.

Even though most contemporary Latin America parties do not have ties to 19th

century political groups, many parties founded during the 20th century have proved quite

durable, regularly competing in elections and surviving authoritarian interludes and even

civil war. In Costa Rica, the Partido Unión Nacional (PUN) survived the 1948 civil war

and remained an important player in Costa Rican politics for several years. Many Costa

Rican parties formed just after the civil war still compete for and win elected office. The

Partido Liberación Nacional (PLN), for example, officially founded in 1951 but tracing

its roots to political groups founded before the civil war, continues to win the presidency

and significant shares of seats in congress. In Venezuela, Acción Democrática (AD) and

the Comisión de Organización Política Electoral Independiente (COPEI) emerged in the

early 20th century in opposition to ruling dictators, survived periods of authoritarian rule,

and monopolized politics until 1993.

Similarly, the Chilean Communist and Socialist parties, founded in 1912 and

1933, respectively, survived General Augusto Pinochet’s authoritarian regime during the

1970s and 1980s, and still regularly field candidates. The Partido Demócrata Cristiano

(PDC) has also remained one of Chile’s most important political organizations since its

3

foundation in the 1950s. In Bolivia, the Movimiento Nacionalista Revolucionario

(MNR), organized in 1941, survived military coups and still wins public offices. Even a

few parties in Peru have proved durable enough to survive authoritarian rule. The

Alianza Popular Revolucionaria Americana (APRA), formed in 1924, was the principal

axis of Peruvian politics until recently, despite (or perhaps because of) its frequent

ideological transformations.1

Despite the remarkable resilience of Latin American parties during the 20th

century, in several countries upstarts have suddenly challenged historic party

organizations for power. Though Argentina has been a stable, two-party system

throughout most of the 20th century, in 1995 a coalition of small parties, the Frente del

País Solidario (FREPASO), joined forces to win 29.2 percent of the presidential vote.

José Octavio Bordón, a former governor of Mendoza province who had built his political

career in the PJ political machine, left this party to stand as FREPASO’s first presidential

candidate. Bordón’s coalition received more support than the historic UCR, though he

did not win. In 1999, President Fernando de la Rúa (UCR) was only able to win the

Argentine executive office in alliance with this new political force. The structure of

Argentine party politics, including the identity of the historic UCR, has undergone a

considerable transformation in a span of less than 10 years.

The Venezuelan party system has lately experienced even more startling change.

In 1993, a coalition of small parties defeated both AD and COPEI in presidential and

1 APRA’s ideological orientation has ranged from anti-system, to reformist, conservative, and populist.

4

congressional elections. Ironically, Rafael Caldera, the founder of COPEI, led this new

political alliance to victory. A former army officer and attempted coup leader, Hugo

Chávez Frías and his Movimiento Quinto Revolucionario (MVR) won presidential

elections held in 1998 and 2000. AD and COPEI are now only surviving at the margins

of a political system they once controlled.

In Mexico, after nearly 70 years of single party rule, two opposition groups, the

Partido de la Revolución Democrática (PRD) and the Partido Acción Nacional (PAN),

effectively challenged longtime PRI hegemony.2 In 1988, a former PRI politician,

Cuauhtémoc Cárdenas Solórzano, fought his former party for control of national

government. Many political analysts believe that Cárdenas really won the presidential

race. In July 2000, PAN presidential candidate, Vicente Fox Quesada, won with the help

of the newly formed Alianza por Cambio (AC). Fox’s win has been heralded as evidence

of the successful democratization of Mexican politics. In the span of only 15 years, the

Mexican political system has gone from a single-party dominant, largely authoritarian

system to one where three parties compete over elected offices.

In contrast to the countries just mentioned, some established parties have been

able to protect their historic political positions, despite confronting major economic crisis

and notable political institutional reform. In Colombia, the historic PL and PC have been

2 Though Mexico has been criticized for undemocratic political system, it has also been remarkably stable throughout the 20th century, steadily ruled by the Partido Revolucionario Institucional (PRI) until only recently. This study includes an analysis of recent political events in Mexico in order to demonstrate how economic reform and political institutional arrangements not only weaken support for traditional parties in democratic systems, they also undermine hegemonic parties in less competitive political environments.

5

hanging onto power at all levels of government, even amidst potentially destabilizing

political institutional change, including the introduction of a new constitution, electoral

restructuring, and noteworthy decentralizing reforms. In Costa Rica, the PLN and PUN

have maintained control over of all levels of government as well, despite economic crisis

and the implementation of economic adjustment measures in the 1980s. The disparate

experiences of Latin American party systems in recent years raise the following question:

why are new parties suddenly challenging historic party organizations for power in some

Latin American countries, but not others?

Explaining Recent Party System Change

The principal aim of this dissertation is to identify the conditions under which

ambitious politicians are able to challenge the dominant position of established parties,

and thus to explain why new parties are becoming successful contenders for power in

some Latin American countries, but not in others. To understand the recent, radical

political changes occurring in many Latin American countries, this dissertation compares

five of the historically most stable party systems in the region. In three, Argentina,

Mexico, and Venezuela, voters have abandoned established parties for new ones, causing

historic two-party and single-party dominant systems to become three or more party

systems. In the other two, Colombia and Costa Rica, traditional parties remain firmly in

control.

Comparison of these five countries shows how the shift away from state-led

economic development since the early 1980’s interacts with political institutions to

undermine established party organizations. Prior to economic crisis and reform,

6

dominant parties controlled access to state resources and policy-making, using these tools

to reinforce their positions in the political system. As a result, new parties could not

challenge their hold on power and disgruntled politicians, who might have considered

leaving established parties for new ones, remained loyal. It was unlikely that constituents

would follow even the most prominent politicians to new parties offering few tangible,

immediate rewards. In such a context, the costs to politicians for leaving dominant

parties were high, while the avenues open to new parties seeking to challenge established

party machines were few.

During the economic reform era, in contrast, the position of traditional machine

parties weakened. Economic liberalization threatens dominant parties by removing many

aspects of economic policy-making and thus the distribution of state goods and services

from political control. For this reason, politicians must think about new ways to attract

support and build political careers because they are no longer able to deliver customary

benefits. Although most politicians will remain in established parties, others will try their

luck in new ones. Whether or not they do depends on the chances that nascent party

organizations have for winning offices, that is, on whether political institutions permit the

entry and survival of new parties in the system.

Alternative Explanations for Recent Party System Instability: The Effects of

Retrospective Voting and Electoral Reform

Latin American politics and party systems have come under considerable scrutiny

in recent years. The difficult return to democracy, painful economic crisis and

7

adjustment in the 1980s and, more recently, extensive political institutional restructuring

in the 1990s all appear to have had a hand in transforming many Latin American political

systems. The two approaches most frequently used to explain changes in Latin American

party politics rely on theories about retrospective voting and political institutional

arrangements. As will be shown, these approaches by themselves do not systematically

account for recent political developments in the region.

Retrospective Voting Against Economic Crisis and Adjustment

During much of the 20th century, swings between unfeasible populist policy

programs and unpopular economic stabilization measures led to regular political backlash

against incumbent parties in many Latin American countries. Several studies of mid-20th

century Latin American politics, influenced by theories about retrospective voting in U.S.

politics, demonstrated that radical shifts from state-interventionist development strategies

to more liberal economic policy approaches led voters, particularly the popular sectors, to

punish incumbent parties at the polls. Skidmore (1977), in particular, showed that efforts

by Argentine and Brazilian governments to bring down inflation between 1950 and 1980

with orthodox stabilization caused voters to throw out incumbent parties in subsequent

elections, often preparing the way for military rule.

During the 1980s, the debt crisis pushed many Latin American countries into even

worse economic positions than those experienced at other times during the 20th century,

putting economic reform at the top of political agendas. Since the end of the Second

World War, and particularly during the 1970s, most Latin American countries relied on

foreign loans to correct balance of payments crises and finance over-valued exchange

8

rates, public deficits, and import bills, all results of these countries’ import-substitution

industrialization (ISI) development programs. In 1982, however, when the Mexican

government announced its inability to meet foreign interest payment obligations,

formerly plentiful international finance disappeared. This left most countries in the

region unable to make even minimum interest payments on foreign debt. Most of Latin

America subsequently plunged into economic crisis.

The severity of the region’s economic problems required radical economic

makeovers, including the introduction of economic stabilization programs and thorough

structural adjustment. Many scholars of Latin American politics and of developing

countries more generally predicted that, as before, such measures would lead citizens to

punish incumbent parties, or would undermine the stability of nascent democratic

governments. Retrospective voting hypotheses led most observers to expect that parties

undertaking economic reforms would be blamed for hard economic times and would soon

lose office. Moreover, many countries in the region had just made the difficult transition

back to democratic rule, and it was widely held that infant democracies could not

implement or weather such painful economic reforms. Social and political unrest would

follow in the form of strikes, electoral volatility, party instability, and military coups.

Even if reforms were initially well received, support would soon erode as the costs

became clear (see, for example, Przeworski 1991).

Despite these ominous predictions, economic restructuring in the 1980s did not

always lead citizens to punish incumbent parties at the polls, nor to authoritarian coups.

In fact, some parties responsible for economic adjustment were reelected with

9

overwhelming majorities. In Argentina, for example, President Carlos Saúl Menem (PJ),

overseeing extensive reforms in the early 1990s, was reelected in 1995. Similarly,

President Alberto Fujimori, leader of the Cambio ’90 movement in Peru, and President

Fernando Henrique Cardoso, leader of the Partido da Social Democrácia Brasileira

(PSDB) in Brazil, both implemented economic reform programs and were reelected in

the 1990s. In Bolivia, two avowedly neoliberal oriented presidential candidates, Gonzalo

Sánchez de Losada and Hugo Banzer, outpaced the more populist Max Fernández in

1993. In that same year, Chile’s Concertación candidate, Eduardo Frei, swearing to

uphold the orthodox economic policies inherited from his predecessors, former dictator

Augusto Pinochet and democratically elected President Patricio Aylwin, was elected with

58 percent of total national votes.

Scholars reacted to these events by adapting retrospective voting theories to fit the

new Latin American economic context. By the early 1990s, many were asserting that

successful reforms could generate political support, citing the countries mentioned above

(see, for example, Krueger 1994).3 Similarly, some scholars argued that parties making

little attempt to repair foundering economies would be punished in subsequent elections,

relying on such examples as the poor showing of Argentina’s UCR in 1988 after the

troubled presidency of Raúl Alfonsín Foulkes and Venezuela’s ruling coalition in 1998

after the presidency of Rafael Caldera.

10

Despite the apparent relevance of retrospective voting theories to Latin American

politics, however, empirical evidence once again weakened their explanatory power.

Although many countries had managed successful, substantial reorganization of old

economic systems, there was considerable variation in the ability of incumbent parties to

survive such change. In some adjusting countries, incumbent parties were reelected, in

others they were thrown out, leaving the record decidedly mixed (see, for example,

Haggard and Kaufman 1992). Even more troubling for scholars of the region was that,

where governments initiating painful economic reforms were defeated, policy reversals

did not usually follow (Geddes 1994a). And, politicians were not always rejected when

economic reform programs failed (Geddes 1995). Retrospective voting models could not

accommodate the variety of political responses to economic reform, and thus could not

clarify the mechanism linking economic restructuring with subsequent political events.

By focusing on retrospective voting, most scholars emphasized the fate of

incumbent parties in the wake of economic crisis and reform. In many Latin American

countries, however, both incumbent and well established non-incumbent parties have

come under threat from new party organizations that have never before been viable

political contenders. Even when established incumbent parties have been credited with

successful economic stabilization and reform, they often faced new political forces

threatening their hold on power. When old parties were blamed for economic downturns,

3 In many of these studies, whether voters supported or rejected incumbents depended on post hoc evaluations of whether reforms were “successful” or not, something problematic from the perspective of social scientists needing comparable measures of “success.” Was “success” when

11

new parties only occasionally challenged them. Analysis of retrospective voting behavior

alone cannot explain when historic incumbent and non-incumbent parties will be

challenged for power, or when voters will be willing to throw their support behind new,

untried political alternatives.

Rather than focusing on the fortunes of incumbent parties, this study emphasizes

the economic and political conditions determining the viability of new parties in the

system. That is, the dissertation examines the larger political implications of economic

crisis and reform for party building in Latin America, and uses this analysis to clarify the

contribution of economic restructuring to recent political change. Throughout Latin

America, economic reform has put an end to import-substitution industrialization (ISI),

the principal strategy used by most governments to promote economic growth during the

20th century. ISI not only allowed politicians to direct the course of economic

development, it also allowed them to manipulate public policy for political gain.

Politicians’ strategies for building party organizations have been tied to their ability to

engage in state-led economic development.

In the era of economic crisis and reform, in contrast, politicians from both

incumbent and established non-incumbent parties have been unable to use state-led

economic development to deliver benefits and preferential policies to supporters.

Economic restructuring meant to turn economic relationships over to market forces

weakened ties to constituents, and thus the basis of party support. This study shows how

a government could push through a reform package, or when reforms, however extensive, hurt the fewest people?

12

radical changes in customary economic policies undermine traditional strategies for party

building, thus enabling new political groups to challenge historic ones for power.

Understanding the economic conditions undermining traditional party support helps to

explain the economic foundations of recent party system change in Latin America.

Of course, retrospective voting can be adapted to account for the rejection of both

incumbent and some established non-incumbent parties at the polls. Many voters

evaluate incumbent party performance, as well as the performance of those parties

holding office just before the incumbent came to power. If both parties had exposed

citizens to economic hardship and had been unable to provide citizens with customary

benefits and policies, we would expect citizens to reject not only incumbents but also any

other party that had held office in recent years. Even so, though retrospective voting can

explain why citizens might reject more than one party at the polls, it does not predict who

voters will support instead, particularly in unstable or multi-party systems where nascent

parties are lurking in the wings. Retrospective voting theories only spell out who voters

will support in stable, two-party systems, that is, where political institutional

arrangements raise the barriers to the entry of new and small parties in the system.4

Political institutional arrangements determine the number and type of options

available to voters hoping to punish incumbent and even established non-incumbent

4 In Peru, for example, the most stable parties, Acción Popular (AP) and APRA, both controlled the presidency during major economic crises in the 1980s. Voters were most likely ready to punish these parties for painful economic times, but retrospective voting does not predict who, if anyone, they would support instead.

13

parties at the polls.5 Though this dissertation shows how radical economic policy reform

weakens traditional ties between established parties and constituents, encouraging voters

to think about punishing established parties at the polls, the political context of economic

crisis and adjustment explains when new parties can become viable contenders for power,

leading to party system change. The following section discusses political institutional

arrangements and their contribution to the recent emergence and success of new parties in

many Latin American countries.

Electoral Reforms and the Structure of Party Systems

Building on work developed to explain the structure of European party systems, 6

many scholars of Latin American politics have studied the effects of political institutional

arrangements on party politics.7 Different electoral laws (and their myriad of

combinations), such as those determining the type of executive and legislative ballots, the

formula for translating seats into votes, the size and number of districts, and the timing

and frequency of presidential, legislative, and local elections, have been analyzed to

5 In the Peruvian case, the lack of an established alternative party combined with a fairly permissive institutional context enabled newcomer Alberto Fujimori to win the 1990 presidential race. 6 Work on electoral laws and European party systems influencing later scholars of Latin American politics include, most notably, Duverger (1954), Lijphart (1984), Lijphart (1994), Rae (1971), Sartori (1976), and Taagepera (1989). 7 Work on Latin American party systems relying on the insights of scholars of European politics include, among others, Ames (1994), Ames (1995a), Ames (1995b), Carey (1998), Carey and Shugart (1995), Coppedge (1994), Crisp (2000), Jones (1994), Jones (1995a), Jones (1999), Kornblith and Levine (1993), Mainwaring and Scully (1995), Shugart and Carey (1992), and Shugart and Cox (1994).

14

explain the numbers of parties in Latin American party systems, whether politicians will

tend to cultivate a personal or party vote, and the level of party discipline.

While analyzing electoral laws helped scholars understand the structure of Latin

American party systems, these analyses also prepared the way for explaining the political

effects of institutional reforms being implemented in the 1990s. Many countries have

drafted new constitutions, made substantial changes to national electoral laws, and

introduced radical decentralizing reforms allowing the election of regional and local

offices for the first time. In several countries, laws have been passed to simplify the

process of registering political parties, and in some cases registered parties are now

entitled to receive state funds.

Table 1.1 summarizes the incidence of electoral reform during the 1990s in

selected Latin American countries. As can be seen, most countries in the region have

introduced some political change. In the countries under study in this dissertation, more

specifically, all but Costa Rica have undergone institutional restructuring in recent years.

Argentina drafted a new constitution in 1994, changed the timing of legislative elections,

as well as altered the method for selecting the president and national senators. Formerly

chosen by provincial legislatures, national senators are directly elected by provincial

popular vote. Argentina no longer uses an electoral college to elect the president;

presidents are now popularly elected by qualified majority. Likewise, Colombian

presidents, once elected in single-round contests, are now elected by qualified majority in

two rounds. Until 1991, Colombian departments elected national senators. Now senators

are elected from a single, nationwide district. Colombia has also initiated a process of

15

electoral decentralization, turning many local offices over to electoral competition for the

first time. Colombian departments now elect their own governors, and municipalities

their own mayors and local administrative councils.

Table 1.1: National Political Institutional Reform in Selected Latin American Countries in the 1990sa

Country New

Constitution Presidential

Formula Legislative

Formula Electoral Timing

Argentina Yes Yes Yes Yes Bolivia Yes Yes Brazil Yes Chile Yes Yes Colombia Yes Yes Yes Costa Rica Ecuador Yes Yes Mexico Peru Yes Yes Uruguay Yes Venezuela Yes Yes Source: Jones (1995, 11) and Political Database of the Americas (Various Years).

a See Jones (1995a) and Jones (1995b) for a description of these changes.

The Venezuelan electoral system has also undergone considerable restructuring.

In the 1990s, Venezuela switched to a German-style, mixed electoral system to fill seats

in the national chamber of deputies. At the local level, during the 1980s Venezuela

allowed open party lists to elect municipal councils, created the mayoral office directly

elected by plurality vote, introduced separate ballots using open lists to elect state

legislatures, and began the direct election of state governors for the first time by plurality

vote. More recently, Venezuelans elected a constituent assembly and drafted a new

16

constitution. Among other things, the 1999 Constitution strengthened the powers of the

president relative to other branches of government, extended the presidential term to six

years, and reduced the national legislature to a single chamber. In Mexico, institutional

reforms introduced in 1977 added 100 seats to the national chamber of deputies and

reserved them for minority parties. All new seats were filled through proportional

representation. The introduction of this mixed-style electoral system, along with

simplifications of the process of party registration, made it easier for opposition parties to

win representation in this exclusive political system.

Scholars relying on theories about the relationship between political institutional

arrangements and the structure of party systems predicted that electoral reforms would

reshape Latin American party systems (see, for example, Jones 1995a and Shugart 1992).

Despite the acknowledged relationship between institutions and party systems, however,

in a few Latin American countries political restructuring did not lead to commensurate

party system change. In Argentina, for example, minimal modifications to electoral laws

were followed by significant party system instability. A third political force is now

challenging the hitherto dominant PJ and UCR, leading to the weakening of this

country’s historically stable two-party system. In Mexico, there was a noticeable lag

between reforms undertaken in the 1970s and the subsequent rise of opposition parties.

Nearly a decade passed before new and small parties were able to take advantage of the

changing political environment to challenge the hegemonic PRI. In Venezuela, important

changes to the system used to elect national congressmen, as well as departmental and

local governments, were accompanied soon thereafter by near complete party system

17

breakdown. The formerly powerful AD and COPEI political machines are now only

surviving at the margins of a political system they once controlled.

In contrast to the countries just mentioned, Colombia’s historic two-party system

has remained largely intact, even after the implementation of a new constitution, notable

changes to the national electoral system, and path breaking decentralizing reforms

allowing many local elections for the first time. The disparate experiences of these

countries with electoral change lead us to wonder whether political institutional

arrangements alone are responsible for shaping the structure of party systems in the

region, or whether there are other forces at play that influence the way that institutions

affect Latin American party politics.

Rather than focusing on political institutions alone to understand recent party

system change in Latin America, this study integrates our knowledge of how institutional

arrangements affect politicians´ strategies for building careers with a study of the effects

of economic policy change on politicians´ ability to build political support. The analysis

shows that political institutions affect party systems according to differences in economic

context. More specifically, severe economic crisis exacerbates the expected political

effects of institutional restructuring, leading politicians and voters to abandon historic

parties in favor of new ones, as seen in Venezuela during the 1990s. Continued

economic policy stability, in contrast, moderates the projected political effects of radical

institutional change, keeping politicians and voters loyal to established parties and party

systems largely intact, as seen in Colombia. The dissertation thus shows how differences

in economic context, and in the economic interests of politicians and voters, affect the

18

way institutional arrangements shape party systems. In the end, this study explains why

institutions by themselves do not determine the structure and stability of party politics in

Latin America.

Understanding the Destabilizing Effects of Economic Crisis and Reform in the Context of

Political Institutional Arrangements

Even though approaches relying on the political effects of economic reform or

political institutions do not independently explain recent levels of party stability in Latin

America, economic reforms together with permissive political institutional arrangements

create the conditions favorable for the emergence of new parties. As will be shown

below, this dissertation integrates insights about the effects of economic and institutional

reform on politicians´ strategies for building political careers and party support.

Understanding the evolving nature of party building in Latin America will help to explain

why established parties have suddenly lost support in many Latin American countries,

leading to considerable party system change.

A New Approach to Understanding Latin American Party Stability: Economic

Policy-Making, Political Institutional Arrangements, and Party Building

This study analyzes politicians’ strategies for building political careers and party

organizations in Latin America throughout the 20th century. In particular, it emphasizes

the elite response to political opportunities created by changing economic and political

conditions. In this way, the dissertation draws attention to the elite origins of most

19

political associations in the region and focuses on the behavior of politicians as the first,

critical catalyst for the emergence of new parties.

Economic Policy-Making and Latin American Party Building

This dissertation begins by showing how Latin American politicians have

traditionally relied on public spending, the distribution of particularistic benefits, and

policy rewards to develop party organizations, build campaign chests, and maintain party

loyalties. Politically useful state goods and services included individual benefits such as

patronage jobs, contracts, import licenses (often traded for kickbacks or campaign

contributions), and help for the poor (usually distributed to those belonging to the "right"

party); local public goods, or "pork," such roads, clinics, and schools; and politically

useful policies, such as tariffs and state-sponsored subsidies for food, gasoline, and other

necessities.

As long as politicians could easily manipulate public policy for political gain,

they were able to reinforce their chances of winning elections and thus the dominant

positions of their political groups in the system. This was particularly true in countries

where institutional arrangements already favored large parties at election time. For this

reason, throughout much of Latin America, small and new parties found it difficult to

challenge the privileged positions of established party organizations. Most efforts by

small and new parties to strengthen their organizations by enticing politicians from

established parties to join their ranks failed. Disgruntled politicians who might have

considered leaving traditional parties for new ones remained loyal because it was unlikely

that constituents would follow even the most prominent politicians to new parties

20

offering few tangible, immediate rewards. In such a context, the costs to politicians for

leaving traditional parties are high, while the avenues open to new or small parties to

challenge traditional party machines are limited.

Economic crisis and reform, however, place politicians from established machine

parties in a precarious position. Economic reform programs meant to liberalize economic

policy-making reduce political discretion over the distribution of state resources.

Without the ability deliver state goods and services in exchange for support, politicians

have to think about new ways to attract votes and protect their political careers. Although

some politicians will remain in established parties, others will abandon their long-time

party affiliations, since the costs of doing so are now notably lower. Economic crisis and

subsequent reform projects often weaken citizens’ loyalties to parties no longer able to

distribute customary benefits and held responsible for current economic troubles. Small

parties thus have a better chance of attracting votes, as well as the support of politicians

willing to join them.

Political Institutions and Latin American Political Careers

The analysis of party building in the context of state-led economic development

must be integrated with our understanding of how political institutional arrangements

affect politicians’ prospects for pursuing careers in new and small parties. Institutional

arrangements shape politicians’ responses to changing economic conditions. Every

politician cares about political survival; different institutional settings, however, pose

different threats to political careers. Under certain institutional arrangements, politicians

guarantee their survival by remaining in established party organizations, regardless of the

21

strength of latent popular opposition to them. In other situations, politicians respond by

abandoning established parties to try their luck in new ones. Understanding how

institutions shape politicians’ reactions to economic adjustment explains when they are

most likely to break from historic party organizations, creating the basis for party

instability.

Whether or not politicians will try their luck in new parties during periods of

economic crisis and reform depends on the chances that small parties have for winning

offices. Winning is easier in countries with permissive party registration laws, simple

rules for adding candidates to ballots, low minimum vote requirements to win seats, high

district magnitude, methods used to translate votes into seats favoring small parties, and

frequent local and regional, as well as national elections. Accordingly, new parties are

more likely to succeed in countries that institute economic reform programs and have low

institutional barriers to entry, as in Argentina, Mexico, and Venezuela. Politicians will be

less likely to switch parties in countries with higher barriers to entry, even if the country

is experiencing severe economic crisis and reform, as in Costa Rica. As a corollary,

politicians will be unlikely to leave established parties in countries where the availability

of state resource remains about the same, even if the barriers to entry are low or the

country is undergoing radical institutional restructuring, as in Colombia. Economic

stability thus works to moderate the expected political effects of institutional change. See

Table 1.2 for a summary of the cases examined here.

22

Table 1.2: Economic Reform, Barriers to Entry, and Vote Shifts to New Parties

Economic Crisis and Reform? Permissive Political

Institutional Arrangements? Country

Party Instability? Description Description

Argentina Yes

(1990s) Yes Severe economic crisis in

the 1980’s. Major economic reform starting in 1991. Significant reduction in the size of the public sector and state spending.

Yes History of state and local elections enabling small parties to win offices. 1994 reforms introduced direct popular election of the president in qualified majority system. Direct election of senate, and main opposition party given one senate seat in each province.

Mexico Yes (1980s)

Yes Economic crisis leads to inability to make debt payments in 1982. Extensive reform policies implemented to reduce the public sector and state spending, and to restructure the economy.

Yes 1977 electoral reforms ended exclusion of opposition parties. All parties allowed free access to media. 100 new seats in Chamber of Deputies distributed by proportional representation.

Venezuela Yes (1990s)

Yes Severe economic crisis by 1989 elections. Modest economic reform attempts between 1989-93. Stalled reforms lead to severe economic crisis. Economic crisis leads to significant decline in ability of politicians to provide state resources to supporters.

Yes Electoral reforms beginning in 1988 end unitary* system. Introduction of mixed, German-style system to fill seats in national Chamber of Deputies. Initiation of state and local elections.

Colombia Temporary (1990s)

No History of moderate economic policies resulted in less severe economic crisis. Modest economic reforms have not, so far, affected public sector or the traditional distribution of benefits.

Yes Electoral reforms beginning in the 1980s end unitary* system. Changes to presidential formula to two-round system. Initiation of state and local elections.

23

Table 1.2: Economic Reform, Barriers to Entry, and Vote Shifts to New Parties

Economic Crisis and Reform? Permissive Political

Institutional Arrangements? Country

Party Instability? Description Description

Costa Rica

No Yes Significant stabilization programs and some economic restructuring starting in 1982. Decline in state spending.

No Difficult for parties to register. Unitary* system provides little chance for small parties to see their candidates elected.

Note: * A unitary system is one where state governors are appointed by the president. Often state governors are then empowered to appoint local officials.

Political Institutions, Economic Policy-Making, and Party Instability

Changing economic and institutional conditions create a complex environment in

which politicians try to build political careers. This study highlights the unusual problem

faced by politicians who owed their privileged political positions to formerly restrictive

institutional arrangements and the provision of particularistic benefits only made possible

by now obsolete economic policies. Analysis of the economic and institutional

conditions where politicians learned to build political careers thus reveals the conditions

favorable for the viability of new parties in the system. Understanding Latin America’s

changing economic and political environment where politicians build party organizations

and cultivate support helps to explain when and why some politicians have been finding

it politically expedient to abandon historic parties in favor of new ones. Economic

liberalization and political institutional arrangements jointly explain why we are seeing a

rise of new parties in some countries in Latin America, but not others. The study

demonstrates that economic context interacts with political institutional arrangements to

affect party building and party systems in Latin America.

24

Testing the Joint Contribution of Political Institutional Arrangements and

Economic Reform to Recent Party Instability in Latin America

To support and test the argument, this study compares the five most historically

stable party systems in Latin America. In particular, matched-case country comparisons

isolate and emphasize the contributions of economic adjustment and political institutional

arrangements to party building and recent party instability. Identifying implications of

the central argument and using these to conduct critical tests on the five countries under

study here also support the analysis. The basis for case selection, as well as the

importance of matched-case country comparisons and critical tests are discussed below.

Case Selection: The Most Stable Party Systems

The dependent variable, the level of party stability, in this study is measured as

changes in the traditional vote share going to established parties. Party systems where

the same party organizations have regularly captured most of the popular vote in national

and local elections during the 20th century are considered to have also been the most

politically stable. Instability is defined as situations where historic parties have suddenly

lost significant shares of electoral support. The historically most stable countries in Latin

America have all been two-party or single-party dominant systems, and include

Argentina, Colombia, Costa Rica, Mexico, and Venezuela.

Two parties, the PC and PN, also controlled Uruguayan politics during much of

the 20th century. This country, however, is not included in this study. During the 1970s,

a third political force, the Frente Amplio (FA), fought its way onto the political scene.

Even though Uruguay was experiencing severe economic crisis caused by failing ISI

25

policies at the time, and thus apparently following the argument here, Uruguay’s

economic and political changes were not contemporaneous with those of the other

countries included in this dissertation. In order to control for any factors that might be

common to all Latin American countries in the late 20th century, this study limits its

analysis to the politics and party systems of this period.

Limiting the study to Latin America’s historically two-party and single-party

dominant systems makes it easier to detect when new political groups are challenging old

parties for power. Though Argentina, Mexico, and Venezuela have been remarkably

stable throughout most of the 20th century, they experienced sudden shifts in votes from

established parties to new ones in recent years. In Argentina and Mexico, historic two-

party and single-party dominant systems became three or more party systems. Venezuela

has undergone wholesale party system breakdown. These countries are compared to

systems that have experienced few recent or lasting vote shifts to new parties, Colombia

and Costa Rica. This point of comparison helps to explain why we are seeing a decline

of party stability in some Latin American countries, but not in others.

Matched-Case Country Comparisons

As a first step toward testing the argument in this dissertation, two matched-case

country comparisons are conducted. These comparisons serve to isolate the effects of

political institutional arrangements and economic reform on the level of party system

stability. The first country comparison matches Colombia and Venezuela in Chapter

Five. These countries have undergone startlingly similar institutional reforms in recent

years, mostly meant to decentralize their political systems. Though several scholars

26

predicted that such reorganization would lead these party systems to change in

comparable ways, they did not. These countries’ disparate experiences with economic

crisis and reform in recent years have intervened to mitigate or exacerbate the expected

effects of political institutional change. In Colombia, the continuation of customary

economic policies in the face of institutional reform has enabled traditional parties, that

is, the PL and PC, to protect their positions. In Venezuela, in contrast, the onset of

economic crisis and reform exacerbated the effects of institutional restructuring on party

politics, enabling ambitious politicians to challenge old, established parties.

The second set of countries is matched, though arguably less well, according to

their levels of economic crisis and reform. As shown in Chapter Six, Argentina, Costa

Rica, and Mexico have all experienced economic crisis during the 1980s and 1990s, and

governments in these countries have all pushed through economic reforms meant to

restructure their shaky economies. As a result, politicians from traditional parties have

been prevented from distributing customary benefits to build support. Even so, levels of

party stability in these countries have varied markedly. In Costa Rica, traditional parties

have retained their former vote shares; while in Argentina and Mexico new party groups

have confronted longtime machine parties. This chapter shows how differences in

political institutional arrangements determine the extent to which economic crisis and

reform will undermine party stability. While electoral reforms have increased the

chances that new parties have for winning elections in Argentina and Mexico, in Costa

Rica institutional barriers to the entry of new and small parties have remained high,

preventing new parties from emerging onto the political scene.

27

Testing Implications

In addition to matched-case country comparisons, the dissertation also develops

and tests two implications of the central argument. Chapter Seven shows how, just as the

incentives for politicians to challenge dominant parties vary according to economic and

institutional conditions across nations, so too do they vary according to these conditions

within countries as well. Comparing levels of economic crisis and reform at both

national and local levels in centralized and decentralized political systems adds cases to

the study, as well as highlights the economic and institutional conditions enabling local

politicians and their parties to continue to cultivate political support amidst national

economic crisis and reform. Furthermore, it demonstrates the conditions enabling locally

based traditional party groups to weather the effects of national economic and political

change.

In countries where local politicians are able to continue the distribution of

benefits, even amidst national economic crisis and reform, they are able to maintain their

dominant political positions in local party politics, as generally seen in Argentina. Where

local politicians lose access to customary resources and where institutional arrangements

keep barriers to the entry of new and small parties low, traditional parties suffer in local

elections, as seen in Mexico and Venezuela. Where local resources are largely

untouched, as seen in Colombia, politicians from established parties are able to protect

their dominant positions in local government, even amidst radical institutional

restructuring. Finally, where national economic crisis reduces the level of state resources

28

available to local politicians to cultivate political support, as long as institutional barriers

are high, as in Cost Rica, new parties cannot challenge traditional party groups.

Chapter Eight builds on the test in Chapter Seven to discuss variations in the level

of local party system stability in Argentina. Support for traditional parties in provincial

elections has varied by province. In most provinces, established parties continued to win

local elections, despite electoral changes at the national level. In a few provinces,

traditional provincial parties were greatly weakened, often resulting in the loss of local

political control. If the argument about economic benefits, political institutions, and

party stability is correct, then variations in these conditions should explain differences in

provincial party politics. The chapter shows that, holding provincial political institutional

arrangements constant, variations in the ability of traditional provincial party leaders to

continue the customary delivery of benefits and policies affected provincial electoral

outcomes.

Organization of the Dissertation

This dissertation is divided into three parts. The first section develops the central

argument to explain party building and party change in Latin American. The second uses

country comparisons to highlight the individual roles of institutions and economics in

party building, and recent party system instability. The third section presents more formal

tests of the main hypothesis. These sections and the chapters within them are discussed

below to preview the remainder of the dissertation.

29

Section One: Theory and Formal Model

The central argument is developed in two stages. First, the dissertation analyzes

inter-party politics and party building in Latin America to explain the economic and

institutional conditions enabling new parties to become viable contenders for power.

Second, the study delves into an analysis of internal party politics to explain how changes

to customary economic policy-making affect politicians’ strategies for building political

careers, causing them to stay in parties during periods of state-led development but

leading them to consider abandoning established parties in the post-reform era.

Chapter Two shows how parties in Latin America historically have relied on the

distribution of particularistic benefits, state services, and other governmental resources to

build party organizations and cultivate political support. Without access to such state

largesse, politicians in new and small parties had little chance of winning elections. As a

result, economic policy-making, as much as political institutional arrangements, became

critical to party building and the stability of party systems in the region. This chapter

uses these insights to argue that economic crisis and subsequent reform programs

undermine the ability of politicians to rely on traditional machine politics by reducing

their discretion over economic policy-making. As the capacity to exchange state

resources for political support declines, so too do the costs to politicians of leaving

established parties. Whether politicians strike out on their own, however, depends on

their chances of winning elections in new parties, that is, on the political institutional

arrangements of the system.

30

The dependence on the exchange of state goods and services to cultivate support

affects the behavior of politicians inside parties, as well as between them. Even though

preferential access to state largesse historically has enabled politicians from established

parties to build party organizations and strengthen support for their parties at the polls,

access to such state benefits has also led to competition among co-partisans. Chapter

Three uses a game-theoretic model to demonstrate how the exigencies of machine politics

require politicians to exclude party colleagues from sharing the benefits of office, leading

to divisive internal factional disputes during periods of state-led economic development.

As a result, when party leaders have been most able to deliver benefits to buttress support

for parties at the polls, they have been least able to rely on such tactics to ensure intra-

party cohesion. In addition, the model in this chapter also examines the political tradeoff

between patronage benefits and public goods to show that, in systems dominated by

machine political relationships, attention to policy brings few political rewards.

Section Two: Country Comparisons

The second section of the dissertation compares party building in the five most

historically stable party systems in Latin America: Argentina, Colombia, Costa Rica,

Mexico, and Venezuela. To begin, Chapter Four discusses party building in Colombia

and Venezuela to emphasize the role of public policy-making, alongside restrictive

political institutional arrangements, for the structure and stability of these countries’ party

systems. Established parties in both countries regularly intervened in markets and crafted

economic policies to distribute benefits to key supporters and to service political

machines. Though political institutional arrangements favored large parties at election

31

time, economic policy-making also contributed to the emergence and stability of two-

party systems in these countries. Moreover, analysis of internal party politics shows that,

though plagued by frequent and divisive factional disputes, traditional parties remained

stable and firmly in control of their political systems. The patronage resources needed to

build party organizations and political careers caused even the most discontented party

politicians to stay in established parties, rather than striking out on their own.

Understanding the joint contribution of public policy and political institutions to

the structure and strength of party systems in Colombia and Venezuela helps explain the

notable differences in recent levels of party stability in these countries, despite the

introduction of remarkably similar electoral reforms. As shown in Chapter Five,

beginning in the 1980s, institutional reforms were introduced in both systems in the

hopes of increasing political participation and lowering the institutional barriers to the

entry of new and small parties. Though giving politicians ample resources to reward

supporters, however, a history of moderate economic policy-making allowed Colombian

governments to avoid major economic adjustment. The continuation of customary

economic policies in the face of political institutional reform mitigated the expected

effects of institutional restructuring, and even insidious guerrilla warfare and narco-

trafficking. As long as established party politicians from the PL and PC are still able to

deliver benefits, their parties will remain largely stable and firmly in control of

Colombian politics. In contrast, when political institutional reforms are joined by shifts

in the traditional distribution of benefits through economic crisis and adjustment,

fundamental changes to the structure of party systems obtain, as seen in Venezuela.

32

Chapter Six compares party politics in the remaining countries, Argentina, Costa

Rica, and Mexico, to emphasize the role of political institutional arrangements in recent

party system change. Though political institutions gave larger parties electoral

advantages throughout most of the 20th century, the position of established parties in each

of these countries was reinforced by their ability to manipulate public spending and

policy-making. Even though economic adjustment has undermined the ability for

established parties to continue the customary delivery of benefits in all three countries,

there has been considerable difference in the ability for established parties to remain

dominant players amidst such change. In Argentina and Mexico, established parties have

lost startling levels of support, while in Costa Rica they have remained firmly in control

of all levels of government.

To explain differences in party system stability in Argentina, Costa Rica, and

Mexico, this chapter emphasizes how restrictive political institutional arrangements

reduce the electoral opportunities available to new and small parties, as in Costa Rica,

even amidst severe economic crisis and reform. In contrast, thanks to its relatively more

permissive political environment, economic restructuring has been met with considerable

party system change in Argentina. Ambitious politicians are now challenging the

hitherto dominant PJ and UCR political machines in national and some local contests. In

Mexico, economic adjustment in a context of recent political reforms designed to reduce

barriers to the entry of opposition parties in this traditionally restricted political system,

has enabled new parties to challenge the PRI at both national and local levels.

33

Comparison of these three countries also addresses the complex application of

retrospective voting theories in the Latin American context. In countries with more

restrictive political institutional arrangements, retrospective voting theories are useful in

understanding switches in party support. In Costa Rica, the introduction of economic

crisis and reform in the 1980s led voters to punish the PLN by throwing their support

behind the Partido Unidad Social Cristiana (PUSC). The inability for new and small

parties to win public in Costa Rica office meant that voters would behave according to

our expectations about retrospective voting. In Argentina, in contrast, voters have

punished the UCR and PJ, both blamed for increasing economic hardship associated with

economic crisis and reform, in recent years. Retrospective voting theories alone cannot

explain why voters would suddenly throw their support behind new and untried political

contenders in Argentina, but not in Costa Rica. This chapter explains how Argentina’s

relatively more permissive political institutional environment facilitated the formation

and survival of new parties, leading voters to abandon both incumbent and established

non-incumbents in favor of nascent political groups. Institutional arrangements thus help

to explain when retrospective voting will to the defeat of incumbent parties, or to party

system change more generally.

Section Three: Empirical and Statistical Tests of the Implications of the Argument

The third section of the dissertation focuses on developing and conducting critical

tests of the argument. Chapter Seven distinguishes between national and subnational

governments in order to test the argument in Chapter Two. This chapter analyzes the

political and economic conditions enabling subnational parties to rely on traditional

34

machine politics amidst national economic reform. The chapter shows that when local

electoral contests, policy authority, and fiscal resources are uncoupled from national

ones, local party organizations are able to continue the delivery of customary benefits,

even when their national counterparts cannot. This explains the general survival of

traditional parties at the provincial level in Argentina. In contrast, more centralized

systems disadvantage local parties during economic crisis and reform. The lack of policy

tools and fiscal resources available to local politicians in Venezuela and Mexico hinders

their ability to overcome the harmful political effects of changing national economic and

political conditions. Comparison with Colombia and Costa Rica further underscores the

role of intergovernmental relations for the stability of subnational party systems in the

context of economic reform.

Although traditional parties in Argentina have remained largely in control of local

politics, as shown in Chapter Seven, party systems in a few provinces have changed

radically in response to national economic reform. Chapter Eight examines cross-

provincial variation in party system stability. The chapter finds that, though all provinces

have felt the effects of national economic adjustment, the capacity of established

provincial parties to continue politics as usual varies according to their share of federal

fiscal transfers. Using data collected during field research on provincial financial

resources and economies, the chapter demonstrates how those provinces favored by the

redistributive Federal Tax Revenue Sharing system are better able to continue traditional

spending patterns, and thus the delivery of benefits and customary policies amidst

changing economic conditions. In contrast, those provinces receiving a

35

disproportionately low share of federal funds are less able to balance the political effects

of economic reform, increasing their vulnerability to challenges by new parties. By

showing that party system stability varies according to the level of fiscal resources, this

chapter presents another test of the argument in Chapter Two.

To conclude, Chapter Nine draws together the central argument, formal model,

empirical tests, and country studies to summarize the causes underlying recent party

system instability in Latin America. In addition, the implications of this study for how

we should expect to see party systems in Latin America evolve in the future are

discussed. Preliminary evidence shows that, as politicians lose control over the ability to

distribute patronage benefits, they turn to emphasizing policy platforms to cultivate

political support. As a result, parties in Latin America are, of necessity, becoming more

policy oriented and thus programmatic, something that should lead to better public goods

provision and improve the quality of life for many Latin Americans.

36

CHAPTER TWO

Neoclassical Economics Confronts Machine Politics:

Economic Reform, Political Institutions, and the Decline of Traditional Parties in

Latin America

Introduction

Despite of surprising levels of party stability in Latin America during most of the

20th century, in the 1990s upstart parties have suddenly threatened well-established party

organizations that appeared unchallengeable only a decade earlier. This dissertation

shows how economic crisis and subsequent reforms often weaken citizens’ loyalties to

historic parties no longer able to distribute customary benefits and blamed for current

economic troubles. Recent economic liberalization and adjustment have undermined the

ability of politicians to rely on traditional machine politics by reducing their discretion

over economic policy-making. As a result, in the post-reform era new parties are

suddenly finding that their chances of attracting votes, as well as the support of

politicians willing to join them, have improved markedly. Whether politicians will

challenge dominant parties, however, depends on their likelihood of winning elections.

Political institutional arrangements shape the opportunities available to new and small

parties in the system, and thus the electoral prospects of politicians in them.

Most prior research on the political effects of economic reform concentrates on

how such measures influence voting behavior. This study, in contrast, reorients our

37

analytical focus to the behavior of politicians under changing economic conditions, rather

than keeping it on voters. The analysis in this chapter also reveals the relationship

between access to economic resources and the persistence of clientelist politics. As the

ability to manipulate economic policy for political gain declines, so too do parties who

owe their support to the provision of particularistic benefits. As a result, this focus

illustrates how economic policy choices shape party organization, party systems, and the

behavior of politicians. Finally, the argument demonstrates how economic policy and

political institutional arrangements interact to affect the behavior of politicians during

inter-party contests.

Economic Reform, Political Institutions, and the Decline of Traditional Machine Parties

This chapter focuses on inter-party politics and how politicians act to increase

their parties’ chances at the polls. Specifically, the chapter shows how politicians’

strategies for pursuing political careers change according to economic and institutional

conditions. For this reason, the chapter highlights three important characteristics of

politics in Latin America. First, it shows the connection between import-substitution

industrialization (state-led) economic policies and the incentive to engage in clientelist

(machine) politics. Second, it demonstrates how the crisis of import-substitution

industrialization and requisite economic reforms affect the ability of politicians to build

support through clientelist (machine) means. Finally, the chapter shows how the

institutional arrangements of a political system, particularly the institutional barriers to

the entry of new parties, shape the structure of party systems by influencing the decisions

38

of politicians to form or join new parties. Together these three factors explain the recent

emergence of new parties in several Latin American countries.

Politicians and parties in Latin America are placed in a precarious position once

economic reform programs begin, due to their historic reliance on state resources and

policy-making to supply benefits needed to attract support. Prior to economic

adjustment, state goods and services were regularly distributed within parties among their

politicians in order to help them build party organizations and cultivate support. The

widespread manipulation of the state and its resources for political gain made it difficult

for politicians in established parties to consider giving up access to such largesse. As

long as some politicians increased support for their parties through such means, others

had to copy these practices to ensure the highest probability of winning elections.

Citizens’ loyalties to traditional parties were strong, thanks to a history of loyalty built in

part through machine politics. This loyalty made it unlikely that politicians who switched

parties could persuade voters to switch, too. Politicians thus were unlikely to consider

leaving dominant parties to found new ones or join small ones, especially since new and

small parties had little access to the state, its resources and policy-making tools. In such

a context, the costs to politicians for leaving traditional parties were high, while the

avenues open to new and small parties to challenge dominant party machines were few.

In the post-reform era, however, with far lower levels of state resources available

to cultivate political support, the costs to politicians for leaving established parties

declined, while the opportunities available to ambitious politicians willing to strike out

against dominant parties multiplied. Economic reforms, such as the deregulation of

39

financial markets, privatization of state-owned enterprises and publicly held banks,

elimination of extensive subsidy programs to industries and consumers, reduction of

tariffs and quota systems on imports, and vast improvements in tax and duty collection,

remove economic policy-making from political control. Curtailing access to such

politically useful economic benefits means politicians must think about new ways to

attract votes and build political careers. Although most politicians will remain in their

parties for ideological reasons, others will try their luck in new or small ones, since the

costs of doing so are now notably lower. Indeed, in some cases the costs of remaining in

traditional parties may even rise. Economic crisis and subsequent reforms often weaken

citizens’ loyalties to parties held responsible for current economic troubles, leading

politicians to imagine that support will follow them to new parties.

Whether ambitious politicians will be able to challenge dominant party

organizations depends on the chances that new parties have for winning offices, that is,

on whether political institutional arrangements permit the entry and survival of new and

small parties in the system. Winning office is easier in countries with permissive party

registration laws, simple rules for adding candidates to ballots, low minimum vote

requirements to win seats, large numbers of seats available to office-seekers, methods

used to translate votes into seats favoring small parties, and frequent local, regional, and

national elections. Accordingly, new parties are more likely emerge in countries that

institute economic reform programs and that have low institutional barriers to the entry of

new parties, as in Argentina, Mexico, Venezuela. Ambitious politicians will be less

threatening to dominant parties in countries with higher barriers to entry, even if the

40

country is experiencing severe economic crisis and reform, as in Costa Rica. As a

corollary, politicians will be less likely to mount successful challenges against established

parties in countries where the availability of state resources remains reasonably high,

even if the barriers to entry are low, as in Colombia.

Organization of the Chapter

This chapter argues that economic crisis and reform undermine historic machine

parties in several stages. First, the chapter discusses clientelism and machine politics in

Latin American parties in order to show how state-led economic policy, the dominant

economic policy throughout most of the 20th century in Latin America, played an

important part in the development of clientelist (machine) parties in this region. Second,

economic reform programs after the 1980s are discussed, with particular attention given

to how they can be expected to inhibit the practice of clientelist politics and weaken party

machines. Third, the chapter discusses how political and electoral institutions impede the

viability of new or small parties in these systems. Lower institutional barriers create

incentives for political entrepreneurs to abandon traditional party affiliations during times

of economic crisis and reform. Fourth, these basic relationships are combined to explain

how new parties only emerge when economic reform programs undercut the ability of

politicians to deliver customary benefits to supporters and when institutional

arrangements create conditions favorable for the survival of new or small parties in the

system. Finally, to introduce Chapter Three, the argument is broadened to show that the

political uses of state largesse also affect intra-party politics.

41

Clientelist Politics and Machine Parties in Latin America

In Latin America, politicians’ strategies for cultivating support for their parties at

the polls are wedded to economic conditions due to their traditional reliance on the

distribution of particularistic benefits, goods, and services to build party organizations.

This exchange of goods and services for political support is referred to as clientelist or

machine politics and has a long history in Latin America. As Chalmers (1977, 414)

notes, “All party systems have some elements of this particularistic patronage and public

works mechanisms for support-building. The distinctiveness of Latin America comes

from the predominance of this type of benefit over more universalistic or class benefits.”

In order to show how changing economic conditions affect party systems, we

must first understand how parties were built in Latin America. This section discusses the

origins of political parties in the region in order to illustrate how party organizations were

constructed from clientelist relationships and machine politics. The word clientelism8

describes social relationships and groups which form among unequal individuals based

on an exchange of personal loyalty and obligation for goods and services (Zuckerman

8 Patterns of patron-client relationships have been a popular subject of study among anthropologists and sociologists, beginning in the 1950s and continuing well into the 1970s. This work focuses primarily on describing how clientelist networks structure social and economic relations in places such as Latin America, Southeast Asia, tropical Africa, Greece, Italy, Japan, and the Soviet Union (Schmidt et al. 1977). The study of clientelism was later extended to the analysis of political relationships in these same areas. For well-known country studies using the clientelist model to understand politics, see Ike (1972), LaPalombara (1964), Legg (1969), and Tarrow (1967). For more general works from this period on the use of clientele networks by political parties, see Scott (1969) and Weingrod (1968).

42

1979).9 A patron “provides economic aid and protection against both the legal and illegal

exaction of authority” (Wolfe 1966, 16-17). The client in return repays the patron with

labor, loyalty, esteem, information, and political support (Zuckerman 1979, 16-17).

Showing how politicians developed clientelist ties to build political support and political

parties helps to explain recent changes in Latin American party systems.

Rural Clientelist Systems and Their Migration to Urban Areas

In Latin America, traditional land tenure systems and social relations established

by the Spanish persisted after independence.10 In the mostly rural environment, the rural

landlord represented “almost the sole source not only of land but also of work, loans,

seed and livestock, and help in the event of trouble with administrative authorities”

(Nelson 1979, 179). In return for the landlord's patronage, the tenant worked the land,

giving the landlord a share of his produce, and showing his appreciation to his patron

through demonstrations of loyalty and esteem. Later, when suffrage came to rural areas,

landlords were in a strong position to elicit political support from the client, either for

themselves or for politicians they favored.

9 Sociologists and political scientists alike dispute the precise nature of what constitutes a “clientelist” relationship (Martz 1997, 9-10). Martz (1997, 10), though, points out that regardless of any specific conceptual disagreements, the “[q]ualities of dependence, unequal status, reciprocity, and personalization are consequently fundamental to the patron-client relationship.” 10 For arguments about why people in Latin American tend to develop clientelist social and political relationships, and the link between clientelism and this area’s Spanish heritage, see Chalmers (1977), Lipset (1967), and Silvert (1967). For arguments about how Iberian values found in Latin America contributed to its slow economic development, see Lipset (1967), Silvert (1967), and Wiarda (1982). For contrasting views, see Coatsworth (1978), Leff (1972a), and Leff (1972b). For a description of how central governments ruled through local patrons and their clienteles, see Adams (1967).

43

Patron-client relations are not found exclusively in rural areas. The arrival of

large numbers of people in cities, due to internal migration from rural areas as well as

immigration from abroad (usually hailing from less-industrialized parts of Europe during

this period such as Italy and Spain), means that patterns of patron-client relations are

often re-established in urban areas. Nelson (1979, 180-181) notes:

The tendency to seek out patrons in the city may reflect residual rural attitudes on the part of some migrants. But it is also and more importantly a rational reaction to objective insecurity and the absence of institutionalized protection. Patrons are, quite simply, a form of insurance...Beyond emergency aid, patrons may provide a means of upward mobility in a context where formal or institutional channels of mobility are scarce.

Sometimes rural networks transfer to urban areas relatively intact. Even so, most

patron-client ties found in urban areas are not as all-encompassing nor as long-term as

they once were in rural areas (Nelson 1979). Patrons do not have the same type or extent

of influence they once did as landlords who were able to control or monitor most aspects

of their clients' lives. This enables the client to seek out more than one patron in the

urban context. And this is possible in an environment where there is an increasing

likelihood that more than one potential patron exists in your immediate area. As a result,

patrons cannot expect to maintain a monopoly on the services they provide, while clients

can often choose from a variety of offers. What might be considered a clientelist cartel of

sorts in rural areas becomes more competitive in urban environments. There, patrons

must compete for clients who are seeking the most promising offer.

44

Martz (1997) stresses that the process of economic modernization alongside the

centralization of political power changes the structure of traditional clientelist

relationships, even in rural areas. “While traditional landowners and local patrons were

essentially community-oriented, in time the very community had to be linked more

effectively to leaders at the national level. This stimulated patrons to become brokers, as

socioeconomic and political forces were required to operate in progressively more

centralized fashion” (Martz 1997, 20).

In both rural and urban areas, patron-client networks became useful during the

spread of suffrage and the rise of mass-based parties in Latin America. Parties and party

elites understood the advantages of using pre-existing clientelist networks and systems of

loyalty, both in the country and in the city, to contact large numbers of voters, as well as

to incorporate them into party organizations. The extension of suffrage to peasant and

rural populations by urban-based political elites almost always results from an initiative

by the urban partner (Powell 1971). In particular, the impulse for the incorporation of

rural and peasant groups, and an alliance between urban and rural groups, “arises when

an urban elite, engaged in a struggle for power at the center, perceives the need for a

massive base of support and determines that such a base is available in the peasantry”

(Powell 1971, 2). To cultivate support, the extension of suffrage is often coupled with

agrarian reform (Powell 1971).

Local urban and rural bosses, also referred to as patrons, caudillos, or caciques,

often become important political brokers who are able to compete for and deliver the vote

of large groups better than other party activists. While local bosses promise and

45

exchange a variety of benefits to their clients in return for political support, promises of

material rewards are made by politicians to gain the loyalties of local bosses. Even so,

stable party identification of local bosses is not always the rule (Chalmers 1977, 415).

Sometimes bosses, like voters (clients), can choose between politicians.11 This exchange

of goods and services between local bosses and politicians, and between bosses and

voters is clientelist politics.12 In such clientelist systems, “[p]ersonal and collective goals

are intertwined, the interests of local-level brokers and high-level politicians are

reciprocal, and the channels of political participation become an elaborate web of patron-

client ties” (Nelson 1979, 190). Such an environment creates difficulties for would be

party activists lacking the ability to supply protection or particularistic goods and

services. Once established, clientelist systems tend to encourage all who play to engage

in such behavior.

Political Clientelism and Machine Politics Today

The clientelist moniker is often used to underscore the backward or pre-modern

nature of societies under study. However, clientelism has also been used to describe

political relationships developed by modern political parties in such advanced industrial

societies as present day Japan and Italy. Clientelist-driven political systems and their

parties are what scholars of 19th and 20th century U.S. city and state politics refer to as

11 Bosses in this way become clients of politicians. 12 See Martz (1997, 20-21) and Nelson (1979, 189-190) for discussions of the emergence and role of brokers in clientelist networks.

46

“machine politics.”13 Since both political clientelism and machine politics are based on

the exchange of private benefits and services for political support the terms are used

interchangeably in the dissertation.14

Although Chalmers (1977, 413-414) highlights the similarity between clientelist

politics in Latin America and U.S. urban machines, this treatment could be contentious.

For some scholars, political clientelism implies politics that take advantage of pre-

existing, often primordial patron-client networks. This includes networks not

fundamentally structured for the purposes of political activity or party affiliations but,

instead, for personal (economic or social) reasons that are usually autonomous from

politics. Machine politics, in contrast, describes how parties construct networks from the

ground-up for the explicit purpose of generating political support. A political machine,

however, is not precluded from using pre-existing networks, nor is the traditional patron

13 Chalmers (1977, 413-414) notes this as well. “The small-scale particularistic and even individual benefits which Latin American parties distribute are very much like the benefits distributed in U.S. politics in the heyday of the urban machines and by the modern congressman in his so-called ‘errand running’. ” 14 Martz (1997) attempts to distinguish between clientelist and machine politics when he discusses the development of “bureaucratic clientelism” in Colombia. For Martz, “bureaucratic clientelism” refers to parties whose structure changed from earlier forms of clientelism based on regional and local bosses to more modern party organizations relying on the distribution of government resources and bureaucratic appointments to maintain support. He argues that only occasionally do modern parties retain local orientations, instead relying on nation-wide networks. Despite his claims that parties based on national networks are different from more locally based ones, “bureaucratic clientelism” appears to be yet another description of machine politics. Indeed, Martz (1997, 30-31) undermines his efforts to distinguish between the two when he acknowledges that “there are strong clientelistic characteristics in the functioning of even the most broad-based parties…rewards and penalties are meted out to the rank-and-file, as well as to local patrons and brokers; the national patrons decide such important matters in response to the loyalty and allegiance of the clients…Be that as it may, the mass-based parties may sometimes constitute superb examples of elitist entities operating on the basis of political clientelism.”

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prohibited from becoming a politician. In most systems plagued by machine politics,

machines take advantage of just these two things.

There is a large body of work in U.S. urban politics to explain the initial rise of

political machines in American cities and states. Most of this work is devoted to

describing how machines deliver goods, services, and favors in exchange for votes, as

well as the struggle between progressive reformers and political bosses. A political

machine, according to U.S. scholars, is a distinct type of political party. Headed by a

"boss," its workers and members are vertically organized along geographical lines,

extending down to the levels of neighborhoods. This organization is designed to enable

the distribution of individual benefits to voters in exchange for political support at the

polls. Election victories give the party machine access to city resources (goods, services,

jobs, contracts), which are used to continue the exchange of state resources (material

goods) for votes.

Reflecting the conclusions of scholars of traditional forms of clientelism, those

studying U.S. urban politics claimed that political machines cultivated the support of

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poor, often ethnic, voters.15 In particular, recent immigrants were good targets for

incorporation into political machines. Often these arguments highlight the importance of

cultural traits to explain the propensity for these groups to be easy targets of machines.

What appears to be more important is the underlying assumption that poor voters,

regardless any cultural characteristics, are more likely to value the particularistic,

individual benefits and favors being traded for their votes. According to U.S. scholars,

wealthier citizens, including the upper class, middle classes, and professional groups,

15 This claim is tied to work on patron-client relationships in traditional and rural societies. For example, the rise of machine politics in U.S. cities is often tied to their cultural, ethnic, and racial composition (Banfield 1958; Banfield and Wilson 1963; Gosnell 1937; Merton 1968; Reid and Kurth 1992; Rice 1977). Relatedly, political machines in U.S. cities are frequently said to be the result of the dislocating effects of immigration and urbanization (Berger 1978; Brice 1916; Eldersveld 1964; Stave 1970; Zorbaugh 1929). Taken together, this work argues that foreign-born, "ethnic" groups are more predisposed to being assimilated into machines than those who are not. People from pre-industrial and rural societies base their loyalties on kinship, friendship, and ethnicity, even in the context of their new industrial homes. Upon arrival in America, recent immigrants are poor, insecure, and lack skills, connections, and assurance, leaving them with a sense of dislocation and isolation, especially compared to their formerly strong kinship networks. This makes them an easy target for manipulation by machines offering material goods and swift integration into a network of "friends" (the machine). However, since not all cities with immigrant populations had machines, this line of reasoning does not appear to explain the whole story. Indeed, contrary to conventional wisdom, Menes (1995) finds that machines are correlated with the children of immigrants, not immigrants themselves. Regardless of the particular origins of their supporters, there does appear to be a strong correlation between poverty and the existence of political machines.

49

tend to value programmatic goods more than particularistic benefits (Menes 1995).16

Indeed, the kinds of particularistic goods offered to the poor (turkeys at Christmas, help

meeting bail or with the Immigration and Naturalization Service) are not very valuable to

voters with higher incomes. Consequently, members of these groups tended to become

political reformers, or at least sought alliances with them.17

In 20th century Latin America, the influx of immigrants looking for a better life,

internal migration to urban areas by people hoping to escape rural poverty, and the

general persistence of poverty in both rural and urban areas meant the existence of large

16 Interestingly, according to Menes (1995), political bosses were unlikely to reduce public goods spending, although they did increase spending on particularistic goods and services, which added to the size of budgets in U.S. cities. The public goods that Menes measures, however, are roads, whose construction provides jobs (particularistic goods) for the poor, as well as public goods for wealthier citizens. While most authors assume that poor voters prefer particularistic benefits to public ones, others argue that, as community sentiment develops among people toward their neighborhoods, people will support machines that promise to aid community development. Instead of acting according to cultural or material incentives, citizens use machines to secure community (public) goods, and pork projects. See, for example, Guterbock (1980) for this approach. He bases his argument on the work of Greer (1960), Janowitz (1952), and Suttles (1972) who analyze the development of community sentiment in urban areas and urban social organization. Whether communities were motivated by the acquisition of private benefits or public goods, the corruption associated with machines supplying these goods was well known and highly publicized at the time. Several authors point out that opposition to city machines was often based on concerns about theft and corruption, and not on their anti-democratic practices.

50

pools of poor voters available to politicians willing to trade individual benefits for

political support.18 Poor voters in Latin America were not the only ones to benefit from

clientelism and machine politics. Some upper and middle class groups were direct

beneficiaries of, and even owed their newfound socio-economic status to, the activities of

political machines, their politicians, and their bosses.19

State-Led Economic Policy and the Survival of Political Machines in Latin America

Clientelist or machine politics in Latin America has been facilitated by the

particular structure of Latin American economies in the 20th century. State-led

development policies pursued throughout the region have produced the resources

17 Hofstadter (1955) finds that local Progressive leadership was usually Protestant and upper middle class. Hays (1964) finds most reformers to be from the upper class. Mowry (1958) finds in his study that the majority of reformers were lawyers, with journalists, independent merchants and manufacturers the next most numerous groups. Griffith (1974) finds that the Progressive leadership was overwhelmingly business and professional, which made sense, since these groups had education, resources, and access to power needed to lead reform. And it was these groups who were being hurt the most by monopolies, and the undemocratic and corrupt nature of machine politics. For discussions of who was behind city reform see Chandler (1971), Hays (1964), Hofstadter (1955), Mowry (1958 and 1971), Pease (1971), Rice (1977), and Stave (1972). See Griffith (1974, 21-23) for the differences between Progressive reformers and Progressives as a political party, for the interaction between state and city Progressivism, and for a discussion of differences within the progressive movement: especially between businesses, over prohibition and morality issues, and over the scope and substance of welfare. The most important thing to note is that the Progressive movement was by no means unified, though neither was it polarized. 18 For work on clientelist political networks among poor rural and urban populations in Latin America see, for example, Auyero (1997) for a description of the Peronist machine in urban Argentina; Archer (1990) for a description of how politicians and brokers manage clientele networks in Colombia; Martz (1997) for Colombian urban political clientelism; Eckstein (1977) for an analysis of how the Partido Revolucionario Institucional (PRI) in Mexico manages its political machine in poor urban areas. 19 See Samuels (1998) for a description of Brazilian clientelist politics. See Coppedge (1994) for the machine practices of Acción Democrática (AD) in Venezuela.

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required for politicians to develop and support clientelist networks and machine parties.

This section explains the connection between state-led economic policy and the

accessibility of state resources, revealing the strong incentives for politicians to continue

to engage in clientelist politics. Due to the interdependence of economic structure and

clientelist politics, economic reforms threaten the survival of traditional machine parties.

Party Strategy and Political Careers in the Context of Machine Politics

How parties and politicians behave depends upon the context within which they

operate. The argument in this chapter assumes that parties compete as if to maximize

success at the polls (Downs 1957; Schumpeter 1942), and that politicians act as if to

further their own career success (Mayhew 1974).20 Building upon these assumptions, the

chapter theorizes about how parties and politicians can be expected to behave in a context

of machine politics. These expectations are then used to show how parties and politicians

accustomed to pursuing careers in clientelist systems will behave when the resources

needed to support their political machines decrease.

For Schumpeter (1942) party competition is akin to competition between firms in

the economic marketplace. Like firms, parties and politicians try to maximize the

number of consumers (voters) of their product (political output). Later, Downs (1957)

built upon Schumpeter’s ideas when he reasoned that parties use platforms and policy

20 The as if clause is an important part of the rational choice approach. Rational choice does not assume that politicians and parties are self-interested, per se, but instead act as if they are. Regardless of whether parties and politicians are motivated by policy-making or personal ambition, either must get elected before pursuit of such interests can occur. It is therefore not difficult to assume that parties and politicians want to do as well as possible in elections and in pursuit of their careers, since success in these areas is instrumental to any later objectives.

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appeals to help in the competition to attract the maximum number of voters. In the

Downsian world, platforms were not simply a statement of party objectives to be carried

out once in office, but instead a device to be used strategically by parties during inter-

party competition.

In political systems where parties have been constructed in part from a series of

clientelist relationships, in order to compete effectively in the political marketplace,

parties and politicians need to promise particularistic benefits to secure the allegiance of

politicians, support of important power brokers and local constituents, and to build

campaign chests. Maintaining this complex array of allegiances requires that politicians,

party activists, and political brokers have steady access to money, jobs, and material

goods that can be exchanged for political support. This is not to say that all votes and

political support depend upon the exchange of private goods and services. Indeed, some

support will be for ideological and other reasons. In systems, though, where machine

politics is widely used, all else being equal, the distribution of jobs and favors increases

the probability of being elected (Geddes 1994c).21

Import-Substitution Industrialization Policies and State Resources

In most political systems, winning elections means that parties gain control over a

variety of resources and policy tools. What is notable about Latin American politics is

21 The extent to which the distribution of state resources influences voting habits and political support is impossible to measure. However, it is not an absolute measure of the quantity of state resources or an estimation of the level of influence that state resources have in a political system that renders more plausible a discussion about their importance for practicing machine politics. It is simply that, all else being equal, the distribution of jobs and favors increases the probability of being elected.

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that the dominant economic policy pursued throughout most of the 20th century, import-

substitution industrialization (ISI), greatly increased the amount and variety of resources

available to politicians for developing and maintaining clientelist (machine) parties.

ISI policies were not undertaken by most Latin American states until after the

Great Depression. From the mid-19th century to the Great Depression in the early part of

the 20th century, Latin American countries were encouraged to develop their economies

through the export of primary products (agriculture and minerals) (Hirschman 1968;

Krueger 1994). World War I and the Great Depression, though, hit the Latin American

economies very hard. Not only did demand and prices for their commodities fall, but

goods available for import also declined (Hirschman 1968). These events undermined

the traditional acceptance of the international division of labor between the industrialized

and agricultural economies.

Declining export revenues also meant that Latin American countries could not

pay for what they imported. This created opportunities for domestic manufacturers to

produce previously imported products. After the Second World War, policies were

implemented to continue the domestic production of import-substitutes in the face of

changed international conditions.22 Policies included increasing tariffs on imported

goods, over-valued exchange rates, and subsidies. Tariffs paid by importers and

consumers on imported goods were designed to protect domestic producers from foreign

competition and to procure government revenues. Over-valued exchange rates made

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domestically produced goods more expensive abroad, but also made imports of the

capital and intermediate goods needed for industrialization less expensive.23 Generous

government subsidies were extended to fledgling industries and businesses to encourage

economic entrepreneurs. What emerged were protected economies designed specifically

for producing import substitutes.

ISI policies meant that politicians and bureaucrats made allocative and

distributional decisions instead of markets. Politicians took an active part in the economy

and worked to direct resources to the industrial sector, both to state-owned industries and

private enterprises. Not only did politicians choose which industries to support for

development, they also decided which mechanisms would be used to encourage and

support their growth. As stated, politicians set tariffs and quotas on imported goods to

encourage the development of fledgling industries to replace these products. Financial

policies were also used to support the development of chosen industries. Cheap loans

from government owned banks or outright financial transfers were granted to specific

enterprises, while scarce foreign exchange was allocated at favorable rates to make

imported inputs into the production process cheaper for domestic industries. Politicians

set state subsidies on inputs into the production process, including electricity and water.

Vast infrastructure projects were undertaken to support industrial development. Finally,

22 See Chenery (1975), Furtado (1970), Krueger (1994, 43-48) and Prebisch (1950) for accounts of the factors and the ideological grounds leading governments to change from export-oriented strategies to import-substitution industrialization.

55

an extensive bureaucracy was built to administer these policies and to monitor economic

and industrial development.

The Political Uses of State-Led Development Policies

ISI policies appealed to politicians who foresaw their potential political uses

(Ames 1987; Geddes 1994a; Nelson 1990a; Waisman 1987). State-led economic

development and industrialization requires politicians to direct and even create economic

relationships that were formerly determined by the invisible hand of markets. As such,

supporting ISI programs increases the ability for politicians to mold economic

relationships according to political criteria. In exchange for such economic favors,

politicians expect political rewards. Material benefits from state intervention in the

economy “have played a central role in building parties and maintaining party loyalties,

and politicians have needed access to state resources in order to further their political

careers” (Geddes 1994a, 115). Geddes (1994b) notes that public sector employees are

often party activists. In many countries, civil servants and their families hold extensive

interests in enterprises benefiting from ISI policies, implying a complicity of interests

between the two (Nelson 1990, 357).

The large bureaucracy required to administer and monitor state-led development

programs, as well as the numerous public enterprises associated with import-substitution

industrialization programs, gives politicians in Latin America large numbers of positions

23 Overvalued exchange rates can happen as a part of direct government intervention in the exchange rate regime, or they can happen as a result of an influx of foreign capital into the country (through loans or exports), because the economy is growing faster those of other countries, or because adjustments to the exchange rate lag behind inflation.

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to fill in the state sector. For example, presidents in Latin America must fill vast numbers

of public sector positions upon assuming office. Presidents name ministers, staff

ministries and other federal agencies, as well as make large numbers of appointments to

positions in public industries and utilities. In addition, presidents have the power to

determine recipients of pork-barrel programs, and to dole out lucrative contracts to

businesses. In many cases executives have the power to set prices and quotas, special

exchange rates for target industries and quotas on the allocation of scarce foreign

exchange. As expected, presidents use appointments and policy-making tools to reward

loyal campaign supporters. Parties do not have to control the presidency to gain control

over vast numbers of politically useful state goods and services. Winning a seat in the

legislature means gaining access to state resources as well.

In addition, ISI provides opportunities for bureaucrats and other public sector

employees to use state resources and policy measures to benefit or cultivate loyal

political supporters for themselves or their parties, as well as to extract rents. Public

sector employees and bureaucrats often receive their jobs from presidents or legislators as

rewards for political support and party activism. Once received, party activists can use

their public sector positions for political purposes, whereby perpetuating the clientelist

system, especially when these jobs are protected by civil service laws. Indeed, party

activists hoping to rise within their party organizations will often use their newfound jobs

to cultivate support for themselves, as well as for their party organizations. Similarly,

Krueger (1974) describes how restrictive import licensing, a part of ISI, provides

opportunities for government workers to direct these valuable licenses to particular

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individuals or businesses, often in exchange for bribes, campaign contributions, and even

political support. Summers and Thomas (1993, 248) discuss the potential rents caused by

an over-valued exchange rate. "Overvaluation leads to the rationing of foreign exchange,

which is invariably associated with its discretionary allocation and appropriation by

government officials and their friends." Frieden (1989, 25-26) draws attention to the

ability of governments strategically to channel foreign loans to different sectors. This

ability to benefit target groups or regions also applies to subsidies, state sponsored

projects, and contracts.24 Although a number of public employees and politicians will

use their ability to direct economic policy-making for personal financial gain, politicians

and bureaucrats also have a strong incentive to use the spoils of office to cultivate

political support for themselves and for their parties at the polls. Ensuring support for

dominant parties willing to continue existing state-led development policies protects

politicians’ and public employees’ access to jobs and state largesse.

Even after presidents or legislators are replaced, state employees protected by

civil service laws can continue to use their positions to cultivate political support for their

parties or themselves at the polls. When state employees find themselves without jobs

due to party turnover, economic favors that were done in the past can be rewarded by

political support in the future. This makes it difficult for parties that have never held

24 On the more corrupt side, many people benefited from government intervention in the economy through their ability to extract rents. Frieden (1989) points out that over-valued exchange rates along with foreign loans channeled through financial sectors enable groups to engage in financial speculation. ISI in general increases the opportunities for bribery, diversion of public funds, and corruption (Nelson 1990, 357).

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public office nor been responsible for public sector appointments to challenge parties that

have.

In short, the resources available for clientelist (machine) politics included: (1)

individual benefits such as patronage jobs, contracts, and programs to help the poor such

as subsidized housing or housing materials, free lunches, or land during land reform

(these benefits are usually distributed by party activists to those belonging to the "right"

party); (2) public goods, or "pork," such as state sponsored infrastructure projects, and

subsidized food, fuel, and transportation; and (3) other individual benefits made possible

by politically useful policy tools like tariffs, and the allocation of import licenses and

foreign exchange (often traded by politicians for kickbacks or campaign contributions).

That state resources were so easily available to cultivate political support

explains, at least partially, why the initiation of economic reform programs was so

difficult in these countries (Geddes 1995; Geddes 1999). Politicians have little incentive

to initiate and complete reform projects that will result in cutting off access to resources

needed to service their political machines.

Economic Reform and the Weakening of Machine Politics in Latin America

While state interventionist policies create opportunities for governments and their

employees to use state resources to concentrate benefits on select individuals and groups

in exchange for political support, the effect that the availability of state resources has on

the power and longevity of such clientelist-driven parties is understudied and/or

unknown. Some authors studying clientelism and machine politics assume, either

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explicitly or implicitly, that clientelist politics are the result of “cultural” traits

predisposing some people to seek out the sponsorship of patrons. As mentioned, in the

case of Latin America, scholars often recall the region’s Iberian heritage to explain its

tendency toward patron-client relationships. This section emphasizes the dependence of

clientelist politics on access to state resources by demonstrating how the decline of these

resources after economic reform threatens the political dominance and even survival of

parties relying on such distributive tactics to build support.

Economic Crisis and Reform Programs in Latin America

The untenable nature of import-substitution industrialization policies became

apparent over time. The budget and trade deficits entailed by the import-substitution

industrialization strategy were impossible to sustain without an inflow of foreign loans.

Balance of payments crises were exacerbated by the dramatic rise in interest rates in the

early 1980s. Latin American countries were often unable to meet even minimum

repayment of interest on their loans. After Mexico announced its inability to meet its

interest payment obligations, Latin American countries could no longer expect foreign

loans to finance over-valued exchange rates, public deficits, and import bills. Foreign

countries and international financial institutions, such as the International Monetary Fund

and the World Bank, encouraged Latin American countries to liberalize their

economies.25

25 See Currie (1981), Drake (1994), Kahler (1992), Remmer (1986), and Stallings (1992) for discussions of various aspects of international influence on the reform process in developing countries.

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Liberalization, also referred to as orthodox (market-oriented) economic policies,

includes both immediate stabilization and longer-term structural adjustment components.

Stabilization refers to measures taken to reduce (hyper)inflation. It also includes

exchange rate stabilization, deregulating financial markets and monetary reform,

eliminating immediate budget deficits, and sometimes short-term measures aimed at

wages and prices.26 Structural adjustment requires dealing with underlying structural

inefficiencies in the economy. In Latin America, this usually means moving resources

from nontradable goods production to tradable goods production. Reforms include: (1)

measures to decrease inefficiencies in the public sector like rationalization of public

investment, and the restructuring (through re-organization, lay-offs, wage cuts) or

privatization of state-owned enterprises; (2) measures to shift resources to tradable goods

production like trade liberalization (tariff reduction and the elimination of quota systems),

elimination of subsidies to state-owned enterprises and other protected sectors, and

reforms of the price system; (3) measures to strengthen economic and financial

institutions like improvements in the collection of customs duties and internal taxes, and

reform of the banking sector (including regulatory reform and privatization of publicly

held banks).27 Stabilization and structural adjustment policies are interrelated and

mutually reinforcing.

Turning over the economy to market forces reduces the opportunity structure for

politicians, bureaucrats and other government employees to use the public sector to

26 See Sachs and Larrain (1993,745-754) for a more detailed explanation of these policies. 27 This list is largely based on Sachs and Larrain (1993).

61

cultivate political support, or to collect rents, bribes, and other types of resources from

which campaign chests are often built (Nelson 1990a). One of the biggest losers from

such reforms is the public sector and its employees (Geddes 1995). Reduction in state

spending and the public sector entail down-sizing the bureaucracy and public sector

enterprises either through lay-offs or outright privatization. Yet, most students of both

Africa and Latin America also agree that these areas have traditionally been used for

political purposes (Geddes 1994a; Nelson 1990a).

Progressive Reformers and the Demise of Political Machines in the U.S.

While much work has been done on the rise of clientelist politics in Latin

America, little attention has been paid to the decline of clientelist politics and political

machines in this region, or how this affects party systems. This lack of attention seems

due primarily to the fact that economic reform and the decline of traditional parties in

many of these countries have occurred only recently. There is, however, an extensive

literature on the decline of political machines in the United States. Work on U.S. urban

politics supports my analysis of the mechanisms through which machine-style politics are

threatened in Latin America, and how this should affect party systems. Even though

political machines operated primarily at local and sometimes state levels in the U.S.,

many of the insights made by U.S. scholars about their origins, survival, and ultimate

demise are useful to understanding the development, survival, and recent decline of more

nationally based party machines in Latin America.

Scholars of U.S. city politics frequently highlight the effects of changing

economic conditions, as well as organizational, administrative, and electoral reforms on

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the demise of urban machines (electoral reforms will be discussed in the following

section).28 Economic change refers to changes in job sites, land-use, housing,

transportation, and the labor market. According to Boulay and DiGaetano (1985),

population movements and business relocations due to economic restructuring and

change disrupt the ties between machines and their voters, making it increasingly difficult

for machine operatives to “service” their constituents.29 While not obviously relevant to

the Latin American situation, this argument draws attention to the importance of

maintaining clientelist ties to the operation and longevity of party machines. Recent

economic reforms and structural change in Latin America have interrupted the flow of

state largesse from politicians to clients, making it difficult for machines to service their

constituents.

Understanding the relationship between political machines and the resources

needed to service them, the Progressives proposed numerous reforms to reduce the access

of machines to city resources and their singular control over decision-making in the

28 A third area of explanation focuses on the changing urban cultural climate due to demographic shifts within cities. According to this argument, a decline in ethnic populations and thus urban poor (with respect to other groups like the middle classes) reduces the number of people willing to support a political machine (Cornwell 1973). While this argument implies that poor voters are those most attracted to the particularistic benefits provided by political machines, it does not seem to apply to Latin America. Since the demise of traditional parties in Latin America, cities have seen an increase in the numbers of voters living in poverty (due to the effects of economic reform programs). For this reason, changing city composition due to a decline in poor voters cannot explain the demise of machine parties in Latin America. 29 See also Lotchin (1981).

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U.S..30 One common type of organizational reform included combining city executive

and legislative branches into city commissions.31 Individual commissioners were to be

elected by popular vote to direct different agencies. According to DiGaetano (1991, 39),

“proponents of the commission plan anticipated that the centralization of public authority

and the establishment of clear lines of administrative responsibility would disrupt the

political bosses' decentralized system of distributing rewards to business and electoral

supporters. ” Another change was the establishment of the city manager charter. This

was meant to insulate municipal administration from partisan influence by placing all

executive power in a professional public administrator (the city manager). According to

reformers, the professionalization of administration would prevent political bosses from

turning the bureaucracy into a source of patronage.

These organizational reforms are reminiscent of some changes that have recently

occurred in Latin America: executive branch reorganization and consolidation of

ministries, implementation of rational, meritocratic hiring and promotion practices, and

the increasing tendency to appoint technocrats.

30 Explanations highlighting the role of the Progressives in undermining political machines focus on who the reformers were, what the reforms were, and how these measures contributed to the decline of machine power. For discussions of the content of reforms see DiGaetano (1991), Fox (1977), Griffith (1974), Rice (1977). Boulay and DiGaetano (1985) explain the decline of machines as a result of demographic and economic shifts, coupled with institutional reform. 31 I discuss organizational and administrative reforms in this section, rather than in the following one covering the contribution of political institutions to the demise of machine parties. Administrative reforms, though technically reforming the institutions of state, reduced the resources available to party machines in both the U.S. and Latin America. For this reason, I discuss such reforms in this section rather than in the one about which political institutional arrangements increase the electoral opportunities to new and small parties seeking to challenge established machine party organizations.

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Administrative reform during the progressive era included the adoption of civil

service regulations and centralized purchasing. Civil service reforms were designed to

remove hiring, promotions, and firing from political discretion. Centralized purchasing

was designed to depoliticize the process of awarding city contracts where a bidding

system was used to allocate contracts, rather than political favoritism. The object of these

reforms was to reduce the numbers of patronage jobs and contracts that could be used as

political resources by city bosses. It was thought that this would inhibit the servicing of

political machines.

In Latin America, economic reform programs are responsible for major decreases

in the numbers of patronage and civil service jobs and the numbers of government

contracts available. Competition over government contracts has been rationalized, and in

many cases has become open to highly competitive international bidders. More effort has

been made to keep track of the budgets and the progress of contracts already underway.

In some countries, the official budget process has become more transparent,

internationally accepted accounting practices have been adopted, and the official budget

is published and thus made publicly available for inspection. This is a major change from

previous years when national accounts were more the stuff of mystery than public debate.

Taken together, what these reforms point to is the importance of the availability of

state resources for the survival and decline of party machines in both the U.S. and Latin

America. Economic reforms by themselves, however, do not explain why party systems

in Latin America have changed more in some countries than in others. As stated, parties

in some Latin American countries have been able to weather economic reforms and the

65

reduction of state resources. Costa Rica, for example, implemented a major economic

reform program yet her traditional parties’ hold on power remained unthreatened.

Indeed, in the U.S., even when city and state machines declined in importance as a result

of reforms, the party systems in which they survived often remained unaffected.32

Political institutional arrangements determine how the effects of economic

reforms are translated into the structure of party systems. While it is true that reforms

will require a significant change to the way that politicians have traditionally cultivated

political support for their parties at the polls, whether and how their parties’ dominant

positions are undermined by new parties depends on the institutional arrangements of the

system. The following section explains how low institutional barriers to the entry of

small and new parties during periods of economic crisis and reform provide politicians

with new opportunities to challenge established machine parties and their grip on power,

leading to changes in the structure of party systems. In contrast, higher institutional

barriers reduce the chances that new and small parties have for winning seats. This

maintains the dominance of established machine parties and keeps party systems stable,

regardless of the extent of economic crisis and reform or any changes in parties’ methods

for attracting political support. It is therefore the combination of changing economic

32 In the U.S., not all machines disappeared after reforms. Indeed, some machines even sprang up after the initiation of new procedures, showcasing their ability to adapt to new economic and institutional environments. For example, many machines were able to get their members elected to commissioner jobs in U.S. cities. Likewise, in Latin America some machine parties are surviving amidst economic reforms, highlighting their ability to adapt to the new rules of the game. Whether old machine parties will turn to corruption to replace lost clientelist resources, or will learn to gain support based on policy programs, remains to be seen. Although it is unlikely that all clientelist parties will disappear, we will certainly see a difference in their abilities to cope in their changing environments.

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conditions and institutional arrangements that threatens the dominance of traditional

political parties, leading to changes to the structure of historically stable party systems.

Political Institutions and Barriers to the Entry of New Parties

Curtailing resources through economic reform programs threatens politicians’

abilities to exchange benefits for support. Whether or not the dominant positions of

historic machine parties in the political system are threatened as well depends on political

institutional arrangements. This section reveals the variety of political institutions that, in

interaction with economic reforms, enable new and small parties to challenge the

dominant position of established parties, leading to party system instability.

National Electoral Laws and Barriers to Entry

Electoral institutions that favor the emergence of two major parties make it more

difficult for new and small parties to become viable contenders for national offices. In

systems already dominated by parties that use their access to state resources to reinforce

their hold on power, institutional structures favoring two-party systems create additional

barriers to challengers. Machine politics compounds the effects of such institutional

barriers to entry. In systems where established parties have a long tradition of machine

political relationships, dominant parties control access to the state, giving them important

advantages over challengers who have never held public office nor the ability to

distribute state benefits. In these circumstances, even if barriers are lowered, if

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politicians in dominant parties retain access to state resources, it is unlikely that new

parties can challenge their hold on power.

Most countries in Latin America are presidential systems with popularly elected

national executives and proportionally elected lower houses.33 Indeed, most upper

houses, traditionally weaker than lower houses in Latin America, are also elected

proportionally.34 Electing a national president creates a single-member district effect that

sometimes counterbalances the fragmenting tendency of a proportionally elected

legislature. According to Duverger (1954), single-member districts tend toward two-

party systems. Jones (1994) notes that the single-member district effect of presidential

elections is “particularly strong in systems where the framework for the election of the

president (by plurality or majority formula and with a district magnitude of one) tends to

33 The few exceptions include Mexico, recently reformed Venezuela, and Bolivia. As of 1988, Venezuela uses a German-style electoral system where part of the lower house elects 87 members proportionally from 23 districts, while the remainder is elected from 102 single member districts. Mexico, too, recently reformed its electoral system and since the 1994 election elects members to the lower house in both 300 single member districts and one 200 member nation-wide district using proportional representation (Jones 1995b). Since 1994, Bolivia has used two separate ballots to elect legislators. One department-level ballot (fused) elects the president, senators, and deputies proportionally from a department party list. There are nine departments. A separate ballot is used to elect 68 lower chamber representatives from 68 single member districts. In each of the nine departments, at least one-half of the deputies are elected from single member districts. In departments with an odd number of seats, the extra seat is elected from a single member district (Jones 1997). 34 The exceptions are Argentina, Bolivia, and Brazil who elect senators in plurality elections. Voters in Argentina elect two senators per district (province) in staggered elections. Until only recently, senators in Argentina were elected by provincial legislatures. Voters in Brazil and Bolivia elect three senators per district. In Brazil, each state elects two senators every other four-year period. Voters get two votes that must be used for separate candidates (Jones 1995b). In Bolivia, all seats in each district are renewed at each election, with 2/3 of the seats going to the top vote getter, and 1/3 to the next runner up. Jones (1995) calls this a semi-proportional system.

68

contrast with the rules governing the selection of the legislature (PR from multi-member

districts).”

Whether or not a two party system ultimately arises at the national level depends

on whether presidents are elected by a plurality or majority formula (Duverger 1986), and

whether presidential elections are held concurrently with legislative elections (Shugart

and Carey 1992). Presidential elections using plurality systems tend toward two-party

systems, while majority systems with run-off elections tend to increase the bargaining

power of smaller parties. If small parties do well in the first round, they can expect to be

important coalition partners in the second. When presidential and legislative elections

are held concurrently, presidential elections are thought to have a coattail effect on

legislative outcomes. This coattail effect is not expected to influence non-concurrent

legislative elections or midterm elections, making it easier for smaller parties to compete

in such staggered electoral contests.

In national legislatures, the electoral formula, district magnitude, electoral

threshold, and aforementioned rules for selecting the president affect the numbers of

parties that can compete for seats in the system (Duverger 1954; Lijphart 1994; Rae

1971; Shugart and Carey 1992; Taagepera 1989). Depending on the electoral formula in

use, translating vote shares into numbers of seats can be biased against small or large

parties. The district magnitude can sometimes offset any biased effects of the electoral

formula. The larger the district magnitude, for example, the more likely it is for small

parties to win seats. Thresholds are often set to prevent parties that do not meet certain

vote requirements from winning seats. Some electoral formulas, due to their bias

69

favoring large parties, have an implicit threshold built into them. Any of these effects are

often partially offset by the use of compensatory seats doled out to small parties or

indigenous groups who would not have received seats according to the electoral formula.

In addition, according to (Jones 1994), the presidential formula also affects the numbers

of parties winning seats in legislatures. As a result, we can expect that at times of

concurrent presidential-legislative elections, the numbers of parties able to compete for

seats will increase if a majority-run-off system is being used.

Party registration laws and campaign financing laws can make it more difficult for

new and small parties to register in some countries. Requirements that parties obtain

signatures from “members” in more than one electoral district before being allowed to

run in national-level contests make it difficult for small, often locally based parties to get

on the ballot. Laws removing parties that fail meet minimal vote requirements in

elections from national party registration lists also make it difficult for small parties to

survive in a political system. Voter registration rules can make it difficult to get to pools

of formerly untapped voters, while campaign financing laws often favor large, well-

established parties.

When ballots are structured so that local electoral contests are fused with national

ones, it is difficult for locally based parties to field candidates. In most fused ballot

systems, national party organizations produce their own ballots, with a single ballot used

to elect all levels of government. For example, until recently in Venezuela, voters cast

only two votes: one for president, and the other for a party ballot that elected members to

the national senate and chamber of deputies, departmental assemblies, and municipal

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councils. In Colombia, until recently, a voter choosing to vote for a particular senator

meant casting a vote for candidates at all levels of government on that list as well. Fused

ballots, whether a function of internal party procedures or national electoral laws, make it

difficult for local parties too small to field candidates for all levels of government to

compete at election time. Indeed, fused ballots coupled with restrictive party registration

laws can work to prevent everything but large, nationally oriented parties from winning

elections.

These electoral and political institutions are important for determining the

numbers of parties that are able to compete in the political system. In some systems,

rules combine to favor the emergence of two dominant parties, making it difficult for

small parties to challenge their privileged position. In others, small parties can more

easily emerge to threaten traditional parties. The combinations of these laws and their

effects on the party systems in the countries under study here will be discussed in more

detail in the comparative country chapters.

Internal Party Institutions and Barriers to Entry

Though national electoral laws determine the type of system used to elect the

national executive and allocate seats to legislatures, political parties are usually left to

their own devices when deciding how to select candidates to run for these offices.35 The

internal party procedures for selecting candidates and filling seats have indirect and often

important effects on the barriers to the entry of new and small parties in political systems

35 The effect of nomination procedures on internal party politics and politicians’ strategies for building political careers inside parties is the subject of Chapter Three.

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by making it easier for politicians to consider leaving their historic political parties and

strike out on their own.

Using an open list system to fill seats in the legislature removes control of the

order in which politicians are given seats from party leaders and, instead, gives it to

voters. In such systems, politicians must cultivate a personal vote among their

constituents, as well as develop their own support networks among local bosses and party

activists (Ames 1995b; Carey and Shugart 1995). Though party leaders and elites are

influential in helping candidates to cultivate the political support of party activists,

political bosses, and voters, politicians who win elections in open list systems usually

have cultivated at least some political support independently from party leaders and other

party elites.36 In situations where politicians know that they have a personal political

following, and where career advancement is not based entirely on the support of party

elites, they are more inclined to believe that their personal, locally-based support

networks will follow them in the event that they switch parties. This makes it easier for

politicians in open list systems who are dissatisfied with their parties to consider striking

out on their own, especially if the chances of winning elections in the system are fairly

high due to low institutional barriers to the entry of new parties.

In contrast to open list systems, in parties where leaders maintain strict control

over candidate selection for offices and lists, as well as access to the ballot, it is less

likely that individual politicians will need or be able to cultivate personal followings in

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their constituencies. In closed list systems, for example, party elites have control over the

placement and order of candidates on legislative lists, and hence the order that seats are

allocated. In such systems, political hopefuls must curry the favor of party leaders and

elites who organize lists, rather than that of local constituents. Prior to institutional

reform in Venezuela, when closed lists were still the only means of filling legislative

seats, it was unusual for voters to know who their representatives were.37

Internal party control over who is able to run under the party label reduces the

ability of lower level politicians to develop personal support networks. This applies to

candidates seeking to run in single member districts who may need official party

sponsorship before being allowed on the ballot, as well as to the ability of party members

to create competing lists under the same party umbrella. In these situations, politicians

will not be independent from party leaders in getting elected. This will require at least

some elite support.

In countries allowing multiple party lists, sometimes called lemas, to run

simultaneously, even if lists are closed, it is easier for dissatisfied legislators to consider

leaving traditional parties, since they already have been successful in getting elected

under their own lists. Typically, lemas are credited with reducing the proliferation of

36 The importance of party elites during electoral contests in open list systems is discussed in Chapter Three. What is important here is not the power of party leaders and elites within parties, but the ability for lower level politicians to act independently from them. 37 This perhaps isn’t that surprising. Only about a quarter of American citizens know who their representatives are. Unlike voters in the U.S., however, those in Venezuela have little chance of knowing who their candidates are at election time, since lists are closed and only the most politically inquisitive are likely to take the trouble to find out who gained seats after election results are announced.

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political parties. Lemas keep dissatisfied politicians inside parties when party elites

refuse them preferential positions on ballots by giving them the opportunity to form and

head alternative lists under their party umbrella. Moreover, lemas are said to increase the

choices available to voters inside parties, thus reducing the chances that frustrated voters

will turn to small and new parties at election time.

While lemas certainly reduce the incentive to abandon established parties, under

certain conditions lemas can also work to the advantage of political entrepreneurs hoping

to pursue political careers in new and small parties. For example, while lists are closed in

Colombia, parties have no control over the number of lists that can run under the party

label. Legislators are usually supported and elected by their local constituencies with the

help of local power brokers from lists that they themselves have put together. Brokers,

and usually voters, are aware of who is heading the list and thus who is representing their

interests in congress. Systems allowing lemas, much like open lists systems, increase the

flexibility of politicians to respond to changing institutional and economic conditions by

moving to new and small parties, since they have greater name recognition among voters

and better developed personal support networks than politicians elected from closed lists.

More generally, in systems with open lists or lemas internal party contests over

legislative seats are played out concurrently with national elections. The use of such

internal party primaries is an alternative means for choosing between candidates prior to

national electoral contests. Party primaries can be expected to take the power of

candidate selection out of the hands of a small number of party elites and, instead,

increase the importance of lower-level politicians and party activists, as well as the rank-

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and-file membership in selecting candidates. This works to the advantage of politicians

hope to survive in new or small parties, since they can expect that voters will be familiar

with them and their policy positions.

Interestingly, a similar logic has been used to explain the effects of institutional

reforms in U.S. cities on the demise of political machines. Scholars of U.S. urban politics

and Progressive era reforms credit the initiation of internal party primaries to select

presidential and other candidates with the decline in power of local bosses in several

cities. Political “bosses” or machine politicians were notorious for their ability to select

delegates to conventions and then control the candidate selection process. In order to win

nominations, candidates had to cultivate the support of local party machines and their

bosses, rather than support from the rank-and-file. Internal party primaries were designed

to eliminate the "boss" from this process, increasing the importance of rank-and-file party

members during candidate selection processes.

As in the U.S., Latin American parties historically have relied on elite-run party

conventions or caucus systems to select candidates for both presidential races and

legislative lists. In recent years, however, there has been a somewhat increased use of

internal party primaries, including those restricted to party members as well as those open

to all registered voters. While this does not necessarily imply that party bosses, power

brokers, and party elites will lose influence over candidate selection, it does mean that

there will be a drastic increase in the number of players important to internal party

politics and decision-making. Indeed, if “bosses,” power brokers, and internal party

elites wish to remain important players in their parties, they will need to show that they

75

control a larger portion of party members than before. The use of primaries to select

presidential and legislative candidates encourages politicians to seek support from all

levels of the party membership, including the rank-and-file, party activists and power

brokers, and party elites in order to increase their chances of winning primaries. Open

primaries, where party members and non-party members alike are able to vote, encourage

politicians to seek a wider range of support. For this reason, candidates who are chosen

as a result of internal party primary contests, rather than at the discretion of party elites,

will be better able to think about leaving their parties, since their success has not

depended on the outcome of behind-the-scenes negotiations.

Internal party procedures encouraging politicians to cultivate their own support

networks directly from voters make it easier for political entrepreneurs to consider

striking out on their own. Under such institutional environments, politicians can

reasonably expect voters to follow them to new or small parties should they choose to

abandon their old party affiliations. As a result, the barriers to the entry of new parties in

the system are lower than in systems where voters have little opportunity to know their

elected public officials.

Subnational Elections and Barriers to Entry

Elected subnational governments increase the number of competitive offices

available in the system, as well as make it easier for small and new parties to win public

offices. Although nationally oriented parties will develop local party organizations to

organize campaigns for local offices, aspiring politicians not affiliated with established

national parties can create parties to compete in provincial and local electoral contests as

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well. Frequent local elections reduce the barriers to the entry of new and small parties in

the system, since the share of votes required to win local contests is notably smaller than

that required for national offices. The increased political opportunities that regular

subnational elections present to small and new parties thus can interfere with the effective

operation and dominance of established national party organizations. When small parties

win local contests, they remove offices from the orbit of national parties, thereby

weakening the influence of hitherto dominant parties at local levels. As a result,

subnational elections enable local party organizations to challenge the dominant position

of established national machine parties at local levels, sometimes leading to a weakening

of national party machines.

In politically centralized systems, on the other hand, where local elections are

restricted or only held sporadically, there are fewer opportunities for politicians to run in

local contests, thus precluding small parties from challenging established national party

organizations. Fused ballots also prevent local party organizations from competing in

local elections, even in the most politically decentralized systems, because winning

positions means winning national electoral competitions, not local ones. For this reason,

the use of fused balloting systems also tends to reduce the availability of elected

subnational offices, and thus the opportunities for small and new parties to gain entrance

to the political system.

Not all local political entrepreneurs hoping to challenge national party

organizations in local contests are necessarily averse to clientelist politics, seeking to win

the affection of local voters based on policy appeals rather than particularistic benefits.

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As will be shown in Chapters Seven and Eight, often local clientelist networks making up

the national party machine survive the detrimental effects of national economic reform

intact, thanks to the continued availability of locally derived state benefits and policy-

making authority amidst national economic change. Under these conditions, local

clientelist leaders from established parties can challenge established national party

organizations should they become unwilling to cooperate with national party leaders.

The decline in the ability of national parties to control traditional local party machines

means that political entrepreneurs from established parties are given opportunities to

strike out and challenge their weakened national party machines for control of local

governments. This is so even if their goal is ultimately to maintain or build their own

independent local political machines. Traditional local party machines will only lose

control over local politics when their ability to manipulate local policy and the resources

of office for political gain declines.

The U.S and Latin American Experiences Compared

The similarities between the U.S. experience and that of Latin America should not

be overstated. In the U.S., local political machines not national parties were undercut by

reforms, whereas in Latin America the political dominance of national machine parties

has been threatened. This difference is due, in part, to changes in the institutional barriers

to the entry of new parties in Latin America. However, another important reason for

these different outcomes is due to certain fundamental differences between the types of

reforms implemented in each of these areas. In the U.S., administrative and political

reforms undermined the influence and power of local political bosses through a

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centralization of political control. Removing administrative decision-making and the

control of local resources from the hands of local political bosses undercut the political

and economic power of party machines. In Latin America, on the other hand, the

combination of economic and institutional reforms has been primarily decentralizing.

Economic reforms undercut national-level politicians’ ability to direct national level

economic policy according to political goals, while institutional reforms have created

opportunities for political entrepreneurs to challenge national level party machines at

both national and local levels.

Regardless of how economic reforms filter through different political systems,

low institutional barriers to the entry of new parties enable politicians to form or join new

and small parties that have chances of winning elections. It is only under the condition of

such permissive institutional arrangements that political entrepreneurs will strike out and

challenge the dominance of established parties in Latin America.

Explaining Recent Party System Instability: Economic Reform, Institutions, and the

Weakening of Machine Parties in Latin America

This chapter explains why upstarts are now suddenly threatening traditional

parties in Latin America. The argument focuses on the salience of economic and

institutional conditions for providing the incentives to political entrepreneurs to challenge

traditional machine parties. Prior to economic reform, import-substitution

industrialization policies provided parties with ample opportunities to use state resources

to cultivate political support through machine politics. Since nearly every traditional

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party channeled resources to politicians to cultivate and maintain support, this meant that,

all else being equal, politicians had to provide such benefits in order to be viable players

in the system. In such a system, politicians cannot afford to surrender access to state

resources by leaving traditional parties. New or small parties do not usually have access

to such resources, making it difficult for them to compete with dominant ones.

After reform, changing economic structures removed the ability for politicians

and parties to plunder the state for resources to build party support. Since not all

politicians from traditional parties could expect to continue to be able to use resources to

service their traditional party machines, this significantly lowered the costs to politicians

of leaving parties. Further, without such resources, constituent support was less likely to

be as stable as it once was. This left political entrepreneurs with potential opportunities

to strike out and join or form new parties. Whether or not they could take advantage of

this changing economic climate, however, depended on the barriers to entry for new and

small parties in the system.

This chapter remains primarily focused on the level of inter-party politics. Here,

parties are treated as unitary actors. Any attention to the behavior of individual

politicians only expresses how they behave in order to further the interests of their parties

as a whole. Party systems, parties, politics, and the lives of politicians are much more

complex than this focus would lead one to believe. It is with this in mind that the

following chapter turns to an analysis of how state largesse affects politicians’ behavior

within their parties and thus intra-party politics. The emphasis will be on how politicians

must build careers and support within their parties in order to rise within the general

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political system. Using a game-theoretic model, the next chapter demonstrate how

building careers in machine systems requires politicians to exclude co-partisans from

sharing the benefits of office, leading to divisive intra-party factional disputes. When

party leaders have been most able to deliver benefits to cultivate support for parties at the

polls, they have been least able to rely on such devices to ensure intra-party cohesion. In

this way, the discussion explains the puzzling behavior of politicians whose career-

motivated actions within their parties often harm overall party integrity.

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CHAPTER THREE

The Strategic Struggle for Patronage:

Political Careers, State Largesse, and Factionalism in Latin American Parties

Introduction

Despite historic party system stability in much of Latin America, parties have

been regularly plagued by factional disputes that augured party disintegration. Although

factionalism in the region is not unusual given its frequency in European and North

American parties, it is puzzling given the argument made in Chapter Two. Chapter Two

demonstrates how the political expediency of maintaining access to state resources

dissuades politicians from leaving established parties, preserving party system stability

throughout most of the 20th century. It is only after economic crisis and reform programs

undercut the availability of such benefits that politicians think about abandoning their

traditional party affiliations. Given the historic role of state goods and services for

keeping politicians loyal to established parties and party systems stable, it appears strange

that they were not useful for squelching factional rivalries inside parties as well.

This chapter explains the puzzling relationship between state resources, internal

party factionalism, and party system stability in Latin America. The chapter builds on the

argument in Chapter Two to analyze how the political uses of state goods and services

affect the behavior of politicians inside parties, rather than just between them. Even

though preferential access to state largesse historically has enabled politicians in

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established parties to strengthen party organizations, access to such benefits also has led

to competition between party colleagues. This chapter explains how the logic of machine

politics encourages fellow party members to compete over patronage needed to service

political machines, leading to divisive internal party factional disputes. As a result, when

party leaders have been most able to deliver state goods and services to buttress support

for parties at the polls, they have been least able to rely on such tactics to ensure internal

party cohesion. This chapter shows how factional disputes are, paradoxically, caused by

the same resource-based incentives that shape politicians’ decisions to remain in

established parties.

State Resources and Internal Party Politics

To understand the relationship between state resources, factionalism, and party

system stability in Latin America, this chapter emphasizes two aspects of internal party

politics not usually incorporated into analyses of party systems. First, the chapter

describes how politicians must rise within their party organizations as a first step toward

building political careers. Second, the chapter explains how advancing within parties

requires the support of fellow party members. Using these insights, a game-theoretic

model is developed to show how the customary exchange of state goods for political

support in Latin America dominates the strategies of politicians for rising within parties,

leading to patterns of internal party factionalism surprisingly different from those found

in other countries.

Politicians in any party must have the support of party colleagues to further their

political careers. In most systems, politicians promise a combination of state goods and

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services (primarily private benefits) and policies (primarily public goods) to cultivate

support for themselves and for their parties at the polls. The predominance of clientelist

political relationships in Latin America, however, has encouraged politicians to

concentrate more on promising particularistic benefits than on policies to cultivate

support. As a result, those politicians with the greatest ability to distribute state largesse

had the best chance of building support, and thus of surpassing party colleagues during

the race to further political careers. This chapter shows how factional disputes

historically dividing Latin American parties have usually been the result of politicians’

struggles over acquiring state resources, rather than disagreements over policy.

Accordingly, when access to the state and its resources has been greatest, politicians have

been most willing to sacrifice policy goods for patronage benefits, leading to divisive and

predictable patterns of factionalism in parties.

Placing internal party politics in the context described in Chapter Two explains

why politicians, even those losing out in the struggle over state largesse, have found it

politically expedient to remain in established parties. Throughout most of the 20th

century, leaving these parties entailed abandoning all future access to the state and its

resources, very costly to political careers. New and small parties have only limited

access to such resources, making it difficult for politicians to consider leaving dominant

parties to found or join new ones. Although factions emerged within established parties

to fight over the distribution of patronage and other state resources, they were unlikely to

lead to party splits, keeping the structure of party systems intact. After economic crisis

and reform reduce the ability for politicians to use state largesse to cultivate support,

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politicians find it less costly to leave established parties when political institutional

arrangements provide opportunities for new or small parties to win elections. In such

circumstances, those politicians and factions inside parties disgruntled with the

distribution of private benefits will be inclined to strike out on their own.

Organization of the Chapter

To unpack the relationship between state resources, factionalism, and party

system stability, the chapter first reviews existing explanations for internal party disputes.

This review emphasizes that few scholars agree on the underlying causes of factionalism,

or on how it systematically affects political parties and inter-party politics. Departing

from previous work on factionalism, I then develop an alternative explanation for internal

party disputes that emphasizes how they arise from politicians’ efforts to build political

careers. This section likens the rise of factions to the formation of political coalitions.

Politicians form such coalitions to orchestrate their rise within parties, something

instrumental to advancing careers within the political system more generally. Building

on these insights, I develop a game-theoretic model to demonstrate how career building

in clientelist systems leads to a particular type of internal party factionalism.

Specifically, the model shows that internal party politics is driven primarily by the quest

to maximize access to private benefits, rather than to coordinate more advantageous

policy positions. Maximizing benefits requires excluding others, resulting in internal

party competition and factional disputes. To conclude, the chapter discusses the

implications of the model for career building in Latin American parties, as well as places

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intra-party factions within the larger political and economic context outlined in Chapter

Two.

(Mis)Understanding Factionalism

Faction or factionalism refers to sub-groups forming within political parties

(Duverger 1954; Eldersveld 1964; Sartori 1976). These groups can range from short-

term associations of politicians to well-defined, long-term associations with formal

responsibilities in the activities of the party. They may go on to become parties

themselves, but as long as they remain within the party they are factions. This section

reviews previous explanations for internal party disputes to show that they provide little

insight into explaining patterns of factionalism in Latin America.

Factions as Cleavages

As in early work on the origins of political parties, most studies of factionalism

point to the variety of personal, social, and ideological cleavages dividing party

members.38 Factions are said to result from personal conflicts, or familial or regional

differences.39 Differences in opinion, policy, or ideology are claimed to underlie

38 See Eckstein (1963), Lipset and Rokkan (1967), and Rose and Urwin (1970) for how parties arise from cleavages. 39 For example, see Landé (1965) and Machado (1978) for how factions in the Philippines trace their origins to local communities and prominent landowning families. In Colombia, local brokers build clientelist networks that become factions around party leaders (McDonald 1978). In Uruguay, local neighborhood machines link elected leaders to voters, leading to factions (Campiglia 1969; McDonald 1978).

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factional rivalries,40 while clientelist networks based on kinship and other personal ties

are said to cause internal party splits.41 Fights over public and party offices often cause

divisions among political elites.42 Cultural (ethnic, racial, religious, linguistic) cleavages,

class divisions, or regional variations lead to factionalism.43 In all, factions are said to

capture a variety of personal, cultural, socio-economic, regional, and ideological

cleavages in societies and political systems.44

To say that factions emerge to represent underlying cleavages, however, leaves

unanswered two important questions. First, why do specific cleavages become

manifested as factions in some instances, but not in others? Second, under what

circumstances do cleavages form within parties, rather than between them? By showing

that factions embody a diverse set of cleavages under a variety of circumstances, scholars

40 For example, see Rose (1964) on ideologically-based factions in British political parties, Kessel (1968) on factions based on ideological differences in U.S. parties, and Nef (1978) on factionalism caused by ideological disputes in Chile. 41 Early empirical work on factions is traced to social anthropologists studying pre-modern political organizations and their clientelist relationships (Nicholas 1965 and 1966; Schmidt et al. 1977). Political scientists used these insights to understand how clientelist groups based on kinship or personal ties were incorporated into political parties, becoming the basis for factional divisions in traditional societies. Scholars of U.S. political parties emphasized the role of personal coteries and party machines for factions (Eldersveld 1964; Key 1949; Key 1952). 42 See Mitchell (1978) for a description of how competition over elected offices in Bolivia causes factionalism among party elites, and Key (1949 and 1952) for how the U. S. Southern Democrats frequently split over gubernatorial nominations. 43 Many studies of disputes within the Congress Party in India emphasize the role of culture and caste loyalties for factional alignment. Regional divisions are said to underlie factions in the U.S. Democrats (Key 1949 and 1952). 44 Largely in response to the deluge of empirical studies on cleavages, scholars developed typologies to analyze factions. Factional typologies, however, are problematic, since the attributes of factions often change over time.

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have done more to eliminate them as an explanation for factionalism than to demonstrate

their responsibility.45

Factions and Intra-Party Procedures

A few scholars apply insights about internal party rules to examine the emergence

of factional disputes.46 For example, some focus on the role of candidate selection

procedures in generating factionalism.47 Others analyze methods for selecting party

45 Even though cleavages are not shown to be responsible for factionalism in this chapter, the argument presented here does not rule out any role for them during factional disputes. It is likely that politicians are more apt to rally around party members with similar social, personal, or ideological predispositions, making cleavages important during the effort to build coalitions and political careers. 46 Most work on internal party politics concentrates on describing party organizations and the extent of internal party democracy. While factions are occasionally mentioned in this work, they do not receive any significant theoretical attention. See Apter (1965), Duverger (1954), Jupp (1968), Michels (1959), Neumann (1956), Ostrogorski (1902b), and Panebianco (1988) for descriptions of internal party organizations. With respect to internal party democracy, Ostrogorski (1902a, 177) argues that organizational features within British parties meant to increase internal party democracy tended, instead, to decrease it. Michels (1959) emphasizes the anti-democratic tendencies associated with the emergence of party leaders necessary for winning elections. 47 Probably the most memorable study is by Key (1949 and 1952) who argues that party primaries for gubernatorial candidates lead to factionalism. See also Polsby (1983) for his analysis of presidential primaries in the U.S. Democratic Party and their effects on later inter-party competition.

88

policy-making bodies48 or the party president.49 Even systems for campaign financing

have been linked to factional disputes.50

Sartori was the first to hypothesize systematically about the effects of internal

party procedures on the emergence of factions, treating parties as miniature political

systems.51 Drawing on Duverger’s observations about the effect of electoral laws on

party systems, Sartori (1976, 95-105) hypothesized that internal party electoral systems

directly affect the size and number of factions.52 Majoritarian systems, where single

officers or candidates are chosen, tend to reduce the number of factions. In parties using

proportional systems for selecting internal party positions and configuring party lists, the

number of factions will be greater.53

48 Scholars of Italian politics analyze the organization of the Christian Democrats to argue that its proportional system for electing members to the party’s national council (the main policy-making body) leads to the emergence of competing lists and thus factionalism (Zariski 1960; Zuckerman 1979). Others argue that this system is a product of pre-existing factionalism, rather than a catalyst for it (Zariski 1978). 49 For example, scholars of Japanese politics argue that the selection of the president of the Liberal Democratic Party (LDP) by LDP Diet members encourages internal party factionalism (Leiserson 1968; Thayer 1969; Zariski 1978). 50 Scholars argue that decentralized systems of party financing produce internal party factionalism. For example, in Italy and Japan factions have their own sources of funding which helps them to survive independently as separate organizations (Fukui 1978). 51 Eldersveld (1964) was one of the first to suggest that parties ought to be analyzed as miniature political systems, though he did not look systematically at their institutions and electoral rules. 52 Duverger (1954) analyzed electoral laws, mainly district magnitude, and how they affect the number of parties competing in districts. Scholars built upon this work to hypothesize about a host of other electoral laws and their effects on parties and party systems. For example, see Cox (1997), Lijphart (1994), Rae (1971), Riker (1982), and Taagepera (1989). 53 Sartori also argues that the effects of proportionality are mediated by allocation formulas. If the largest faction in the party receives more slots on the list than would be given according to strict proportionality, the number of factions is reduced. Smaller factions, on the other hand, will flourish in parties allocating positions on party lists according to strict proportionality.

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Although Sartori’s emphasis on the role of internal party rules appears to explain

factionalism in the U.S., Italy, and Japan, several authors convincingly argue the reverse.

Some argue that Italian factions pre-existed the shift to internal party procedures using

proportional representation, claiming that these rules were the result of factionalism

rather than the other way around (Pasquino 1972; Passigli 1972; Zariski 1978; Zincone

1972). Although several scholars of Japanese politics reason that competition over the

Liberal Democratic Party’s (LDP) presidency is responsible for maintaining factionalism,

that multiple factions remain active year after year weakens the claim that majoritarian

elections lead to fewer factional divisions. As for the U.S., candidates for presidential or

gubernatorial races are often selected without factional divisions, weakening the link

between factionalism and majoritarian elections.

Sartori assumes that internal party politics operate according to clearly

identifiable formal procedures and that these procedures are constant over time.

Although Sartori may not be wrong about the contribution of such electoral procedures to

factional divisions, it is difficult to judge their effects without controlling for other factors

that intrude upon this relationship. Parties and politicians often do not adhere to formal

internal procedures. Indeed, to say that factions emerge within parties simply as a

consequence of internal party competition is an oversimplification of what politicians

must consider and accomplish within their parties and political systems. Politicians must

select a series of party officers and candidates for public office using a variety of systems,

act as executives or legislators, all while thinking about winning both internal and general

electoral competitions.

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National-Level Electoral Systems and Factional Disputes

Other scholars turn to the influence of national-level political institutional

structures to explain the emergence of factions. Some argue that countries using

proportional representation to allocate seats to national legislatures encourage internal

party factionalism.54 Others reason that factions emerge when legislators are elected in

single member districts with plurality formulas.55 Scholars explain how internal party

factions tend to emerge in dominant party systems, in systems where incumbents only

face weak competition, or primarily in incumbent parties.56 Rose (1964) argues that non-

incumbent parties face more internal party factionalism. Scholars analyze factions in

two-party and multi-party systems, separating factions according to the type of party

system in which they exist to argue that the type of party system affects the frequency

and type of factionalism (Belloni and Beller 1978).

The most prominent work relating national political institutions to internal party

factionalism is on Japan’s LDP. Many scholars convincingly argue that Japan’s unusual

54 Zariski (1960 and 1978), for example, argues that the use of proportional representation in general elections is the primary cause of factionalism in Italy and Israel. 55 Beyme (1985, 229) argues that factions emerge around the selection of legislative or presidential candidates in relative majority systems, like the U.S. and Great Britain, as well as in presidential and semi-presidential systems, like the U.S., France, and Finland. 56 Key (1949 and 1952) observes that in dominant party systems factions emerge to fight over offices and candidate selection, where factions often represent the only source of political competition. Scholars built on this to analyze the formation and duration of factions in other single-party dominant systems such as Japan, India, Italy, Israel, France, China, and the Soviet Union (see Belloni and Beller 1978). Key (1952) argues that internal party cohesion increases in parties facing strong opposition at election time, and Budge (1984) claims that factionalism is strongest in parties where external pressures are removed. Some reason that incumbency leads to factionalism (Belloni and Beller 1978; Coppedge 1994; Michels 1959; Panebianco 1988; Zuckerman 1979).

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electoral system, the single non-transferable vote (SNTV) used until the early 1990s, is

responsible for factionalism in the LDP (Baerwald 1986; Fukui 1978; Ramseyer and

Rosenbluth 1993).57 As Fukui (1978, 50) notes, “An active member of the LDP’s 1972

‘mainstream’ faction once declared that so long as he is forced to compete not only with

opposition candidates but also with senior men from his own party, he needs the support

of his faction simply to survive. The support of a faction is highly important to an LDP

candidate for campaign funds. It is perhaps even more critical for earning a nominee the

official party endorsement....”

Other authors built on this relationship to theorize about the effects of SNTV for

the duration and institutionalization of factions (Cox and Rosenbluth 1993; Kohno 1997),

the high costs of financing campaigns in Japanese elections (Cox and Thies 1998), and

how the system encourages personal or clientelist politics (McCubbins and Rosenbluth

1995). Cox and Rosenbluth (1993) integrate the effects of an SNTV electoral system

with those of the internal party procedure for selecting the LDP president to explain the

formation of institutionalized factions. Similarly, Morgenstern (1996) analyzes the

effects of national electoral laws on factionalism in Latin America. His analysis shows

how electoral laws in Uruguay allowing parties to present multiple lists affect the level of

organization, institutionalization, and durability of factions in this country.

57 In SNTV systems with multiple member districts, voters cast one vote for a single candidate, not a party or a list, with the top vote getters receiving seats. This vote is non-transferable, with those candidates receiving more votes than necessary to win a seat unable to transfer any “extra” votes to a voter’s second choice. This means that members of the same party compete against each other for seats at election time.

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It seems that both Cox and Rosenbluth (1993) and Morgenstern (1996) are correct

in their conclusions that some kinds of national electoral laws contribute to the

emergence of long-term, durable, and institutionalized factions. However, the insights of

these authors appear limited to those systems where internal party competition and thus

party primaries are synchronous with national inter-party competition. Most countries do

not use an SNTV electoral system or allow parties to field multiple lists, yet most parties

in Latin America and elsewhere have suffered some form of internal party factionalism.

Factions and Political Careers

Despite attracting the attention of political scientists since the 1930s, little

progress has been made toward developing an explanation for the rise of internal party

factions. There is little agreement on how they systematically affect political parties,

inter-party politics, and party systems across countries, with the most developed

arguments applying only to a small number of unusual political systems. In the next

section, I develop an alternative explanation for internal party factionalism. Although my

explanation does not incorporate cleavages, internal party rules, or national level electoral

laws as catalysts for factional disputes, it can accommodate their effects in new ways.

Cleavages are not the causes of factionalism but may provide opportunities to politicians

willing to exploit them as a means of building their careers. Even though internal party

and national electoral laws do not explain the initial rise of factions, such laws are

incorporated into the strategies of politicians trying to form factions during the course of

their careers.

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Internal Party Factionalism and the Pursuit of Political Careers

Before delving into an explanation for the patterns of factionalism in Latin

American parties, it is important to understand the role of factions for politicians in all

political systems more generally. In this section, I explain why factionalism arises from

politicians’ efforts to build political careers. For most politicians, building careers in the

general political system requires being successful within party organizations. As a result,

politicians’ efforts to advance their careers lead them to strategize over how to outpace

fellow party members, resulting in internal party competition and factional disputes.

Political Parties and Their Politicians

While treating parties as unitary actors is often appropriate for analyzing inter-

party politics, it does not present a realistic picture of political competition in any

country. In Chapter Two, parties are largely treated as unitary actors, acting as if to

maximize their success at the polls (Downs 1957; Schumpeter 1975). Any attention

given to the behavior of individual politicians concerns how they single-mindedly act to

further their parties’ chances at election time. Politicians in parties, however, do not

always agree on policy programs, making it difficult to expect they will consistently act

in unison. Even during instances of internal party accord over policy positions,

politicians frequently diverge over what strategies are required to achieve them.

Whether politicians are motivated by public service or pure self-interest, they

must succeed in their political careers to achieve any personal or policy goals. Politicians

are frequently willing to sacrifice party good for personal career objectives, regardless of

how dedicated they appear to be to their party organizations. On this point, Carey (1998,

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40) writes, “Of course, the electoral interests of parties and the career interests of their

elected representatives are often directly contradictory, and when such a conflict exists,

incumbent politicians tend to sacrifice partisan goals for individual security.”58 Indeed,

most voters expect that even the most avowedly civic-minded politicians will at some

point in time sacrifice the public good for personal career objectives (Black 1972). For

both ideological and selfish reasons, it is easy to recognize that politicians will not always

act in concert with party objectives.

In this chapter, political parties are unpacked and treated as collections of rational,

self-interested politicians, who act as if to further their personal career success (Ames

1987; Fiorina 1977; Geddes 1994c; Mayhew 1974). Treating parties as collections of

politicians enables us to accommodate both civic-minded as well as more self-interested

party members in theories about political competition.59 While career success may

occasionally be achieved by pursuing common party objectives jointly with other

politicians, treating parties as collections of individual actors allows us to take into

account the times when policy objectives, career goals, and the strategies required to

achieve them diverge from those of other politicians and their parties.

58 Carey cites Cain (1984). 59 Treating parties as collections of rational self-interested individuals also enables scholars to explain empirical puzzles, such as why party members do not always act in unison to further party goals, why parties often appear to behave in sub-optimal ways, and “why it is that politicians so often fail to serve the interest of their class or of the groups with which they are personally connected” (Schumpeter 1975, 285).

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Internal Party Politics and Political Careers

Most studies of political careers and office seeking fail to discuss the influence of

internal party politics on politicians’ paths to career success. Instead, most analyses of

political careers emphasize how political ambition encourages politicians to seek election

to public office, to maximize their time in office, and to rise to more prestigious offices.

Politicians’ strategies and chances for winning elections are influenced by, among other

things, the prestige of elected public offices held in the past, their parties’ electoral track

records, their legislative voting records, the amount of pork and other benefits brought to

constituents, the campaign costs of seeking election and availability of financing, the

ability to adopt or speak to new issues, the strength of competitors, and the general

electoral laws under which politicians compete.60

For most politicians, however, political careers begin within parties. Parties play

an important part in organizing, publicizing, and financing political campaigns. Although

countries have laws for electing public offices, the method of selecting candidates for

these posts is usually left to the discretion of political parties and internal party politics.

Yet scholars frequently pay little attention to how politicians rise within their party

organizations to become candidates in the first place. If a politician has been lucky

enough to win public office without the assistance of a political party, in most cases he

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eventually joins or forms one to help him organize support for future contests. Since

parties play an important part in determining the path and nature of political careers, to

succeed in the political system means thriving within them.

Not all analyses of political careers and office seeking ignore the role of internal

party politics for later career success. In systems using closed lists to allocate seats in

legislatures, where party leaders have discretion over the composition and order of party

lists, politicians are said to curry the support of party elites to ensure favorable list

placement and thus improve their prospects for election.61 This system and its effects on

politicians’ strategies for winning elections is contrasted to those using preferential

voting where voters choose between or rank candidates on party lists at election time. In

such systems, politicians are encouraged to seek the support of voters, rather than party

elites, to increase their chances of winning legislative seats (Ames 1995b; Carey and

Shugart 1995).62

60 See, for example, Fiorina (1977) and Mayhew (1974) for analyses of the office seeking behavior of U.S. congressmen. Black (1972), Gilmour and Rothstein (1996), Kernell (1977), Levine and Hyde (1977), Rohde (1979), and Schlesinger (1966) analyze how opportunities shape political ambition and paths to public office. Other authors, such as Rohde (1979), analyze the conditions under which politicians choose to seek higher office, given their career paths thus far, the status of the their present offices, the probability of winning, and the campaign costs and political risks associated with seeking a higher office. Most work on political careers focuses on the U.S., but see Samuels (1998) for a recent application to Brazil. 61 The analysis of closed-list systems is used to explain internal party discipline, especially in national legislatures. The argument is that politicians owing future list placement to party elites are more likely to tow the party line, even when their interests diverge. 62 As with closed-list systems, analysis of open-list systems is used to explain the lack of party discipline. The argument is that politicians owing their election to voters, not party elites, are not penalized for displaying undisciplined behavior in legislatures.

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In this chapter, however, I depart from such comparisons of open and closed list

systems and their effects on the behavior of politicians to show that the logic of internal

party politics means that politicians’ strategies about how to succeed at election time are

not limited to responses to national electoral laws and how parties present candidates at

the polls. Rather, politicians in any party, regardless of the nature of nationally mandated

ballot structure, must navigate a variety of internal party organizations and processes to

improve their career prospects.

Political scientists have frequently noted the importance of internal party

processes for things such as defining issues, selecting candidates, and winning control

over the party organization (Key 1952; Ranney and Kendall 1956; Schattschneider 1942).

Few, however, have made explicit the connection between such functions and the future

career paths and success of party members. In single member district systems, for

example, although it is up to voters to choose between contestants at election time,

candidates often must first be selected by their parties to run for office. Parties prefer to

submit a single candidate at election time in order to increase their chances of winning.

Whether or not the candidate is chosen through an internal party primary or some other

procedure, politicians aspiring to receive the nomination must first navigate a sea of

internal party politics to win the nomination.

Even in the preferential voting systems described above, party elites and party

organizations can play an important part in determining electoral outcomes. While it is

true that politicians must appeal directly to voters to succeed at election time, party elites

frequently control large pools of voters, as well as campaign funds critical for cultivating

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the support needed to outpace competitors in opposition parties, and even party

colleagues. Party leaders are often instrumental in deciding who is allowed on the party’s

list or ballot in the first place, regardless of the structure of that ballot.63 For this reason,

politicians must be, above all else, favorably placed within their parties in order to

succeed at election time.

A few scholars have noted that politicians sometimes aspire to internal party

positions as alternatives to elected public office (Eldersveld 1964, 145; Luebbert 1986).

Internal party offices, especially party secretaries or presidencies, carry important weight

both in parties and in the general political system. Party officers typically are responsible

for the construction of policy programs, as well as selecting candidates for public offices

and/or ranking lists, assigning patronage appointments and other bureaucratic jobs, and

allocating campaign funding and running campaigns. Not only can internal party offices

be career ends in themselves, they are also instrumental to politicians aspiring to higher

public office. Party leaders are often selected as candidates for president or prime

minister, while other party officials regularly secure jobs in national ministries and the

public sector. The reverse can be true as well: politicians winning national electoral

contests are often chosen for internal party positions of similar rank or prestige.

Regardless of whether politicians aspire to internal party posts, ministry or other

bureaucratic jobs, or elected public offices, all politicians in any political institutional

63 In Italy, under the old electoral system, factions and their leaders were important for getting out the vote for candidates (Belloni 1978; Zuckerman 1979). In Japan, under the old SNTV system, politicians seeking to run in elections as LDP candidates needed the party’s official sponsorship

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environment must be able to negotiate internal party politics and rise within their parties

to make progress in their political careers. Politicians who fail to do so will find their

paths to success blocked.

Building Careers in Political Parties

The prospects for politicians hoping to advance within parties depend upon their

ability to build internal party support. A few authors have noted the importance of

internal party politics for building careers. However, these scholars tend to compare

parties to miniature political systems, emphasizing strategies for winning party elections.

Treating parties as miniature political systems, however, assumes that they always adhere

to well-defined internal rules and electoral procedures, and approximate democratic

systems. Yet parties rarely, if ever, stick to such formalities. Internal party politics is

often guided by informal practices, often making procedures for carrying out party

business opaque and unpredictable. Even in the most internally democratic parties,

where party congresses are regularly elected according to specific rules to run the party

organization and decide party matters, elite politicians and party leaders still retain

considerable influence over drawing up and ordering party lists, choosing party officers,

deciding party strategy and policy programs, and even selecting candidates to party

congresses. In many cases internal party business is run completely informally, the result

of behind the scenes negotiations in smoke-filled rooms. Internal party politics is

somewhat informal in all systems, with the extent of this informality nearly impossible to

to get on the ballot. This sponsorship came from internal party factions and their leaders (Cox and Rosenbluth 1994).

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gage or predict by outsiders. This makes analysis of politicians’ strategies for rising

within parties based on how they navigate formal institutional structures extremely

difficult, and sometimes even irrelevant.

At some point in any political career, in any type of party organization, a

politician will need to curry the favor and support of other politicians or party members

to rise within the party hierarchy, making internal party politics comparable on a more

general level. This applies both to elite politicians, as well as those just starting their

political careers. Rather than go it alone, politicians find it expedient to cultivate the

support of other politicians and party members to outcompete party colleagues for access

to policy-making bodies, limited internal party positions, candidacies for public office,

and campaign resources. The favor of elite politicians and party leaders is particularly

useful to politicians hoping to advance their careers. And it is unlikely that political elites

will be averse to lending support to aspiring politicians, since they, too, need the support

of party members in order retain their privileged positions within the party. As such,

career building requires developing reciprocal relationships and ties between politicians

from numerous levels in the party hierarchy.

Whose support politicians need, as well as the number of supporters needed,

depends upon the particular context within which they operate. When relatively

democratic internal party elections are used to fill positions and select candidates,

politicians will need to develop support from large groups of party members, including

party activists and politicians from all ranks, to win internal elections and rise within the

party. Even so, often the easiest way to cultivate support among large numbers of

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activists is to gain the favor of party elites, since they often direct the political fortunes

and votes of wide networks of politicians and party activists.

While building support is important for any politician, it is particularly noticeable

among politicians seeking positions of party leadership. Aspiring and incumbent party

leaders must build and sustain majority support within their parties. “Even in parties

where regular, formal elections are held to select leaders for fixed terms, leaders must

work to retain command over internal party politics, politicians, and policy-making. It is

not unusual for elected party leaders to be so only in name, with real power lying

somewhere behind the scenes” (Panebianco 1988, 37). For this reason, party leaders

must continually cultivate support within a party to maintain control over party business.

Careers, Coalitions, and Internal Party Factionalism

Politicians build coalitions to help them battle for the scarce resources and policy

positions necessary for building successful political careers. “Even when a single leader

seems to exercise an almost absolute power over an organization, observation often

reveals a more complicated power structure: ...the leader...must (more often than not)

negotiate with other organizational actors: he is at the center of a coalition of internal

party forces with which he must at least to a certain degree negotiate” (Panebianco 1988,

37). That numerous scholars describe parties in Europe and the U.S. as coalitions of

small groups or factions supports this contention. Duverger (1954, 17) calls parties a

“collection of communities, a union of small groups throughout the country.” Key (1952,

350) describes parties in the U.S. as alliances of local leaders. Eldersveld (1964, 6-7)

argues that parties in the U.S. are alliances of subcoalitions. Sartori (1976) characterizes

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parties as organizations of rival groups. Irving (1979) describes parties in Western

Europe as coalitions of mini-parties run by factional leaders. Such descriptions are nearly

always given to capture internal party struggles over things like policy programs,

nominations, party offices, ministry jobs and patronage appointments, and positions in

the party leadership. As some groups rise within the party hierarchy, others lose out in

the struggle, surrendering control of scarce positions and resources, sometimes frustrating

political careers.

Coalitions provide the support necessary for politicians aspiring to rise within

party organizations. Coalitions battling over policy positions, scarce party offices, and

nominations to elected public offices are called factions. Yet most authors’ accounts of

internal party factionalism imply that these disputes are aberrant phenomena that threaten

the cohesion and unity of normally organic party organizations. Authors rarely present

factionalism as a normal part of the internal party process. Even the most centralized

parties coexist with internal party subgroups that are built piece by piece for the purpose

of furthering individual political careers. As a result, both decentralized and centralized

parties can be divided by factional contests. As long as factions are instrumental to

career success, politicians will have incentives to build them. In this chapter, factions are

shown to be coalitions that result from politicians strategically seeking to bolster their

careers. Just how these factions are built and the incentives for politicians to join them is

the subject of the following section.

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Private Benefits, Policy Goods, and the Formation of Factions

The strategies that politicians employ to build coalitions depend upon the tools

available to them for cultivating support. This section shows how coalition building

inside parties is similar to that in parliamentary systems, legislatures like the U.S.

Congress, and the international system. In each case, political actors promise and

distribute a combination of private benefits and policy goods to build support, and it is to

compete for and secure these benefits that actors form and join coalitions in the first

place. The discussion of policy goods and private benefits in this section provides the

basis for the game-theoretic model of internal party politics to follow.

Private Benefits, Policy Goods, and Coalition Formation

The formal literature on coalitions can help to demystify the intricacies of

coalition building and thus the formation of intra-party factions. Many theories of

coalition building trace their insights to early work by Riker (1962).64 In Riker’s world,

coalitions are built from the exchange of fixed numbers of side-payments to players.

These side-payments are private goods, where consumption by one individual prevents

anyone else from consuming and deriving benefit from the same good.65 Since all

players are most interested in the private benefits they receive from joining a coalition

more than any payoff to the coalition as a whole, they always act to maximize their

personal take (Riker 1962, 36). Players form coalitions with only the minimum number

64 Riker analyzed the process of coalition building using cooperative game theory.

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of players needed to win because “the greater the number of losers, the greater the sum of

their losses and hence the greater the gains of the winners. Or conversely, the fewer the

winners, the more each can expect to win (Riker 1962, 33).”66

Riker’s conclusions about coalition formation hinge on the use of finite numbers

of private goods as payoffs.67 However, not all scholars accept such policy-blind

interpretations and incorporate more policy-driven motives into the process of coalition

formation. Analyses of public goods provide an interesting alternative. The benefits of

public or policy goods payoffs do not decrease with additional users because excluding

potential beneficiaries does not increase the gains to coalition members.68 Indeed, efforts

to exclude people from enjoying the benefits of public or policy goods are usually

impractical or impossible. As a result, in a hypothetical environment where everyone is

able to enjoy the benefits of a particular public or policy good, the provision of that good

should lead to universalistic coalitions in favor of it.

Now most scholars agree that some combination of private benefits and policy

appeals are used to attract coalition members, leading to a complex array of incentives

65 Private goods produce benefits that are rival and excludable. Rivalry of consumption refers to goods that, once consumed, cannot bring benefits to others. Excludability means that players can withhold the benefits of consumption from others at little or no cost (Cornes and Sandler 1996). 66 Riker also argues that coalitions will tend to be larger than minimum winning size under conditions of uncertainty or imperfect information. 67 The logic of Riker’s argument has been extended to situations where pay-offs are not fixed in numbers, generating positive-sum games. Here, the addition of more players adds to the total pool of pay-offs, and thus does not affect each player’s individual share, leading to more universalistic coalitions. See, for example, Weingast's (1979) work on pork barrel legislation in the U.S. Congress.

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that politicians face when building, joining, and maintaining coalitions. The use of policy

goods and private benefits to build coalitions, however, is complicated by several

political problems associated with using these goods to build support. When finite in

number, distributing private benefits risks marginalizing players not receiving them. The

loss of resources can lead to intense political struggles between winners trying to hold on

to benefits and losers trying to overcome the political damages associated with losing

access to such goods. Most public goods and the policies used to provide them are not

necessarily or usually universal in their application. Rather, most policies and public

goods benefit a chosen target group, within which people cannot be excluded. For this

reason, it is difficult to expect that policy promises will always lead to universalistic

coalitions. The limited basis of most policy appeals thus risks alienating players not

expecting to benefit from them, making them receptive to politicians willing to craft

policies more in line with their as yet unmet preferences. 69

Scholars of European parliamentary systems explore the complex exchange of

policy goods and private benefits to build governmental coalitions (Laver and Schofield

68 Public goods are nonrival and nonexcludable. The consumption of one unit of a public good does not prevent anyone else from consuming that unit as well, and the benefits of consuming a public good cannot be withheld from others (Cornes and Sandler 1996). 69 This explains why many political scientists conceptualize policy preferences in spatial terms, with the preferences of populations normally distributed along a left-right continuum. When a politician makes a policy proposal, his policy falls somewhere along this left-right continuum. Those citizens with preferences lying closest to the policy proposal also stand to benefit the most from its provision. As a result, the proposal is likely to attract their support. In contrast, those citizens located further away from the policy proposal along the continuum are less likely to benefit from the policy, and thus less likely to support it.

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1990). Analyses of the policy and portfolio70 compromises, for example, that parties

make when building coalition governments imply that potential members consider the

political problems associated with joining coalitions. Coalition members must accept the

policy positions of other parties, agree to be associated with any new and compromise

policies, as well as agree to the division of cabinet portfolios, which means a loss of

control over some policy areas and any private benefits gained from holding that office.

Such compromises incur political costs to all coalition members because they can lead

voters to abandon parties at election time.71

Similarly, scholars of international relations theorize about how alliances reward

members with both public benefits and private pay-offs, creating a multifarious array of

incentives that keep members in alliances and alliance systems stable (Conybeare and

Sandler 1990; Murdock and Sandler 1984). Scholars, however, also emphasize the

potential problems associated with maintaining international alliances, as well as how the

70 Initially, most scholars of European coalition building treated cabinet positions as private goods. Even those who acknowledge the policy aspect of ministry positions often assume that ministers are “policy dictators” in their discussions of coalition building (Laver and Shepsle 1990). However, several scholars turned to policy-based approaches, focusing on the minimization of ideological space between parties as a criterion for coalition formation (De Swan 1973). Axelrod's (1970) introduction of the minimal connected winning coalition highlights both office seeking and policy goals, showing how parties choose coalition partners closest to their ideal policy positions yet that minimize the number of players seeking offices. Later political scientists used the effects of policy goals to explain the existence of surplus coalitions and minority governments, arguing that policy goals were the only reason why such coalitions would form (Budge and Laver 1986). Now most scholars agree that coalitions are based on the distribution of both private (portfolios) and public (policy) goods (see, for example, Austen-Smith and Banks 1990). Some even argue that policy and office payoffs are fungible, with policy concessions used to compensate for portfolios, and vice versa (Laver 1985). The model in this chapter shows the conditions under which policy goods are not substitutable for private benefits. 71 See Budge and Laver (1986) for a discussion of the political costs of governmental coalition formation.

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financial cost of supporting alliances is distributed across its members. Often these costs

lead to free-riding on the efforts of other member states, and an emasculation of the

alliance system.72 Likewise, studies of U.S. politics examine the problems associated

with distributing private benefits and public goods to gain political support at the polls, as

well as within legislatures (Shefter 1994, 21).73 More generally, thinking in terms of

72 An early analysis of how costs affect alliance building is found in Olson and Zeckhauser (1966). These authors argue that, although alliances produce public goods for member states, members also face costs in maintaining them. Since alliances provide public goods to member states, individual members are tempted to contribute less than others to their maintenance. Further, the costs of maintaining an alliance often encourages members to withdraw, since members are unable to prevent nonmember states from reaping the security and deterrence benefits from the alliance. Later scholars did not agree with this logic, since states can be penalized for not participating in, or withdrawing from, alliances. Others separated the benefits of alliances into those that accrue to members and non-members alike (public), those that are country specific (private), and those only enjoyed by alliance members (impure public goods or club goods). See Conybeare and Sandler (1990) and Murdock and Sandler (1984) for such models. 73 Many students of the U. S. Congress, for example, emphasize the variety of political problems arising from the position of policy proposals on the left-right continuum, and the strategies required to build support for these proposals in Congress. As for private benefits, scholars study the process of building coalitions to support district specific pork barrel projects. Pork barrel projects are instrumental to cultivating constituent support and winning re-election. There is some question about whether pork barrel projects, however, are really private or public goods. Some types of projects, for example hydroelectric dams, roads and bridges, and water and sewage systems, have many elements of public goods. However, since these types of projects are usually targeted to particular areas, they are meant to benefit specific constituencies and thus to help their respective politicians increase support. Even if such projects have positive externalities for other districts and constituencies, it is unlikely that a politician will benefit electorally from bringing a project to a constituency other than his own. For this reason, even though pork barrel projects are frequently public goods in themselves, most scholars treat them as private goods, since they bring private benefits to politicians at election time. In a twist on Riker’s early speculations about the effect of private benefits on coalition building, many scholars argue that, when all districts share the financial costs of pork barrel projects, legislators are dissuaded from playing hardball coalition politics. Instead, legislators agree to deliver projects to all districts, even though this ultimately raises the tax burden on all citizens, because legislators are uncertain about whether their projects will be included in smaller coalitions (Shepsle and Weingast 1981; Weingast 1979). See also Niou and Ordeshook (1985) for an analysis of how collectivized costs encourage voters to elect legislators who will bring home inefficient and costly pork projects, rather than none at all. Other scholars argue the reverse: that collectivized costs produce incentives favoring the formation of minimum winning coalitions, not universalistic ones (see, for example, Baron 1991).

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private benefits and policy programs has enabled scholars to explore how different

combinations of these goods affect the behavior and strategies of players trying to build

and maintain coalitions.

Policy Goods, Private Benefits, and Building Coalitions in Political Parties

Like actors in legislatures and international arenas, politicians have a variety of

private benefits and policy goods available to them to distribute to party members,

activists, and fellow politicians in order to build support. Private benefits, such as

campaign funds, favorable list placement, internal party posts, and patronage jobs, can be

traded to party members eager to further their own career advancement. Policy positions

are also useful for generating the support of party colleagues, since policies are useful to

politicians for building constituent support at the polls. Unlike private benefits, policies

are potential public goods from which all politicians in the coalition can benefit (or lose)

at election time.

As in legislatures and the international system, however, there are also political

problems associated with the distribution of private benefits and making policy promises

inside parties. Promising limited private benefits increases the chances of internal party

rivalries between politicians hoping to exclude others from acquiring these scarce goods

so vital to political careers. Promising particular policy programs can trigger internal

party disputes, as well as earn the ire of party colleagues and their constituents, especially

when these policies threaten to harm some constituents and thus their party colleagues at

the polls. How such coalitions play out in terms of intra-party factionalism, however,

depends on the combinations and types of these goods offered in exchange for support.

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Understanding the potential political tradeoff between private benefits and policy

goods is important to understanding patterns of intra-party factionalism. In the following

section, a game-theoretic model is developed to examine the role of private benefits and

policy promises in building coalitions and thus political careers inside parties. The

section analyzes internal party struggles over controlling the party apparatus. Politicians

are eager to trade their support for resources offered by potential party leaders hoping to

negotiate their rise to power, since policies and private benefits are in turn used by

politicians to cultivate support from fellow party members and citizens. As a result,

politicians strategize carefully over whom to support during their efforts to build political

careers. The model to follow, however, shows how the exigencies of machine politics

causes politicians in Latin America to seek the particularistic benefits of office at the

expense of policies.

The Internal Party Political Game: Private Benefits, Policy Goods, and Factionalism

in Latin America

In Latin America, politics has been dominated by the distribution of private

benefits, more so than policy positions, to build support. This section uses a game-

theoretic model to show how, though politicians in the region consider policy positions

when selecting who to support for party leader, the exigencies of machine politics

requires politicians to concentrate on gaining access to private benefits during their quest

to build careers.

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Policy Goods, Private Benefits, and Party Leaders

The general logic for building coalitions to support career advancement applies to

politicians at any stage of a political career and any level of the party organization. Party

elites build coalitions to support their rise to powerful positions, and lower level

politicians trade their support to party elites and other party colleagues who matter most

for the building careers. Politicians’ strategies for who they support are influenced by

which party colleagues can realistically trade access to the private and public goods

needed to build careers, as well as the combinations of these goods being offered.

Politicians aspiring to high level ministry jobs or pursuing important internal party policy

shifts, for example, will choose to curry the support of party colleagues who can offer

access to such jobs and influence over policies. Politicians hoping for lower level offices

or inconsequential policy compromises may only need to win the favor of lower level

party colleagues.

Since party leaders and national executives ultimately control the distribution of

state resources and policy orientations, being close to such party elites is important for

building political careers. With this in mind, the remainder of this chapter focuses on

how politicians strategize over choosing party leaders, even though the logic is applicable

to any level of internal party politics. Politicians at all levels of the party hierarchy are

affected by who rises to such elite positions because they handle the distribution of

benefits and the choice of party policy positions.

Politicians have good reason to strategize carefully over whom to support for

party leader, as well as to consider what is being offered in exchange for it. All party

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politicians cultivate links to party elites who have access to the private benefits and

policy tools needed for career development. For politicians preferring access to private

benefits, choosing to ally with a leader who cannot deliver such resources will hinder

future career success, while successfully choosing to support someone able to deliver as

promised means a more secure future. For those politicians considering the variety of

policy proposals made by party leaders, choosing leaders who deviate too far from their

policy objectives and those of their constituents can cause politicians to lose the support

of their own supporters at election time.74 As a result, politicians must choose alliances

carefully, making certain that their leaders and partners are relatively close to them in the

policy space, as well as intend to hold to their policy promises once in office.

Determining which party elites will most likely control access to state resources

and policy-making is a difficult and risky process. Internal party politics is dynamic and

somewhat unpredictable, with elites moving up and down in prestige and power without

warning. An important party officer, a party secretary-general, or a president might find

himself voted out of office or quickly replaced. Aligning as soon as possible stands to

yield more promised resource benefits and policy influence, yet the earlier a politician

throws his support behind someone, the more he risks associating himself with the

"wrong" person. Should a politician realize, however, that he is in the wrong camp, he

cannot easily bounce from one alliance to another without penalty. Deserting alliances

undermines a politician’s credibility the next time he seeks to join one because leaders

74 While this does not seem to present much of a problem inside parties, as between them, it is not totally irrelevant in parties making appeals to a wide range of voters, especially parties in

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know that he may only remain loyal for a short time. As a result, politicians must choose

carefully with whom to align, since leaders place a high value on loyalty and subsequent

moves can be costly.

The Structure of the Game of Choosing a Party Leader

The internal party process of selecting a party leader or other elite party position

such as a presidential nominee is modeled as a noncooperative game. In the model, two

politicians, Politician 1 and Politician 2, choose between two alternatives { , }ix X Z∈ ,

where X is to support Candidate X for party leader and Z is to support Candidate Z.

Only one candidate can win the position at stake. The model assumes that when both

politicians support the same candidate, they believe that candidate will win. When they

choose to back different candidates, they believe that only one politician will find himself

and his chosen candidate on the winning side, though in this situation the model does not

specify which candidate will win.75

The model represents a simplified version of a larger political process where

multiple politicians take sides until all who are essential to selecting candidates for

developing countries. 75 This is not necessary, since the model is not designed to determine who wins. Rather, the model is designed to analyze the strategies followed by politicians trying to choose whom to support for party leader, given the policy and private benefits promised to them in return for their support.

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leadership positions or presidential nominees have made their choices.76 In any political

party, most politicians know whom others have chosen to back during the race to select a

party leader. However, politicians do not know with any certainty what their party

colleagues will choose to do in the future, that is, whether anyone will switch allegiances.

The model simplifies this possibility by representing internal party politics and the

process of selecting a party leader as a single round, simultaneous game. While the

structure of the game and its expected payoffs are known to both politicians, each

politician is uncertain about what the other will do.

The model also simplifies internal party politics by giving politicians only two

candidates from whom to choose. Candidate X and Candidate Z in the model represent

those candidates emerging strongest out of a larger pool of contenders. The model thus

assumes that each candidate has some exogenous probability of winning the internal

party selection process, but that these probabilities are constant and equivalent.77 As

weaker candidates trade their support to stronger ones, they take on the role of politicians

76 Admittedly, including only two politicians in the model is an oversimplification of the political world. The point is, however, to use the model to think about a more realistic political environment where multiple politicians are building coalitions around potential candidates. In most parties, only a few candidates emerge with coalitions strong enough to make them viable contenders for party leader. The two politicians shown in this model are meant to represent the final stages of the leader selection process, where only a few (two) coalitions are strategizing about whether to join forces or to challenge one another in the race to choose their party leader. Though I expect the logic and conclusions drawn from the model to be similar with more players (coalitions), in the future I intend to investigate this possibility further. 77 In the future, I would like to account for the exogenous probability that a candidate will win the nomination in the calculations of the politicians choosing alliances. For now, however, I have chosen to hold this probability constant and equivalent across both candidates, in order to focus on what I am most interested in discussing in this chapter: the tradeoff between policy appeals and private benefits made by politicians trying to build careers in machine parties.

114

themselves, or strategic actors, in the model. As the selection process continues, the pool

of potential candidates shrinks until, finally, only two candidates capable of winning

remain.

Politicians’ Strategies for Choosing a Party Leader

Given the structure of the game, the utility functions of the politicians, Politician

1 and Politician 2, are derived from the combination of policy packages and private

benefits offered by candidates during their efforts to rise to power within their party

organizations.

Candidates for elite party offices are expected to choose policy positions and

private benefits packages to maximize the number of potential supporters. In races where

only two candidates emerge, candidates will most likely choose policies that reflect the

preferences of the median voter within the party organization. In multi-candidate races,

however, it is possible that candidates will choose policies that diverge from the median

voter in order to attract the maximum possible support. In addition, candidates offer as

many private benefits as possible to supporters, given certain resource constraints, in

order to increase their chances of winning internal party elections. In return, party

followers strategically choose which candidate to support based on the distance between

their constituents’ policy preferences and that of the candidates; the amount of private

benefits promised by the candidates in exchange for support; and the exogenous

probability that the candidate will win. In this way, the model emphasizes how, even

though it is important for candidates to have politicians supporting them during their

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climb power, it is equally important for politicians to choose carefully which candidates

to support.78

In the model, B represents the finite number of private benefits that each

candidate is able to distribute to potential followers in exchange for their support. For the

sake of simplicity, the model assumes that each candidate has access to the same quantity

of private benefits. jp is the policy position associated with each candidate j. For each

politician, the utility gained from supporting a particular candidate’s policy position is a

function of his constituency’s ideal policy ip relative to that offered by the candidate, jp .

In this way, the model treats policy preferences as Euclidean, where the utility of

candidate j’s policy position jp for politician i is the distance between ip and jp , or

j ip p− − . As this distance grows, the value gained from supporting a candidate

declines.

When Politician 1 and Politician 2 both support the same candidate j, their utility

functions are written as:

( )2i j iBU j p p= − −

78 The treatment of Politician 1 and Politician 2 as strategic actors diverges from most descriptions of coalition building. Most work on the U.S. Congress treats members making policy proposals as strategic, with legislators acting as policy-takers. There have been some attempts to model strategic voting. Austen-Smith (1988), for example, shows how voters in parliamentary systems calculate potential governmental coalitions and base their votes accordingly. Similarly, Palfrey (1989) explains how voters abandon preferred candidates when their second choices are expected to win more votes.

116

where the two politicians must share B benefits, bringing each only ½ the utility that

would have been gained by the one who supported the winner had they supported

different candidates.79 In this way, the model captures the effect of promising benefits

that are rival and excludable on the behavior and strategies of party politicians. In

contrast, the nonrival and nonexcludable nature of policy goods means that the utility

derived from supporting a particular candidate’s policy position does not diminish as the

number of supporters increases. The model captures the effects of policy promises on

politicians’ strategies as well. No probabilities are shown because it is assumed that

when both politicians support the same leader, they believe that he will win. As a result,

both politicians expect that they will receive a share of private benefits and the policy

promised by the candidate they both supported with probability 1.

When Politician 1 and Politician 2 choose to support different candidates, the

utility for politician i of choosing candidate j is:

( ) ( )( ) 1i j i i i ijU j B p p q p p q= − − − − −

where iq is the probability that each politician believes he will help build the winning

coalition around a candidate, (1 )iq− is the probability that each politician associates with

the rival candidate should he not throw his support behind him, and j is “not j”, that is,

79 Of course, in reality politicians would share private benefits with more than just one other politician, since their coalition would include more than two party members. Furthermore, their share of benefits would not necessarily be equal to that received by others in the coalition. Powerful politicians usually receive better political rewards or favors, such as ministry positions or high placement on party lists, than their party colleagues with less political influence. For the sake of simplicity, however, the model assumes that all politicians in a candidate’s coalition share private benefits equally.

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the other candidate not chosen by politician i. The variable iq is designed to capture

each politician’s estimation of his own political leverage or clout within his party. Those

politicians with the greatest control over party politics will also be the most influential

players when it is time to choose party leaders.80 The utility function describes how each

politician expects that he will build the winning coalition with probability iq , and thus

receive all B private benefits and the policy position of the winning candidate with

probability iq . Should the rival candidate win, with probability (1 )iq− each politician

expects to receive only the policy position of the alternative candidate, that is, of the

winner that he did not support. Assume that for all politicians 0 1; 0iq B≤ ≤ ≥ .

The Strategic Struggle for Patronage: Or Why Patronage Causes Factionalism

The game is shown in extensive form in Figure 3.1. Assume the payoffs and

structure of the game are known to both politicians. Politician 1 and Politician 2 choose

their strategies simultaneously, represented by the information set’s dashed line, leaving

Politician 2 uncertain as to whether he is in the upper or lower node of the game.

80 In a large voting population, the probability that a single voter will be decisive in selecting the winning candidate is extremely low. In a smaller voting pool, such as that described in this chapter, the chance that a single politician will affect the ultimate outcome is higher, especially for elite party politicians. As a result, each member of the party elite believes he can play an important, even decisive, part in selecting the winning candidate. In this way, iq is not an exogenous probability that a candidate will win, but the probability that a politician thinks that if he throws his support behind a candidate, his chosen candidate will win.

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Figure 3.1: The Game of Selecting a Party Leader in Extensive Form

1 2,2 2z zB Bp p p p⎛ ⎞− − − −⎜ ⎟

⎝ ⎠

1 2,2 2x xB Bp p p p⎛ ⎞− − − −⎜ ⎟

⎝ ⎠

( ) ( )( ) ( ) ( )( )( )1 1 1 1 2 2 2 21 , 1z x x zB p p q p p q B p p q p p q− − − − − − − − − −

( ) ( )( ) ( ) ( )( )( )1 1 1 1 2 2 2 21 , 1x z z xB p p q p p q B p p q p p q− − − − − − − − − −

Z

Z

Z

X

X

X Pol

itici

an 1

Pol

itici

an 2

119

Solving for Equilibria

Each of the four outcomes can be sustained as a Nash equilibrium in pure

strategies given particular values of the parameters B , iq , and j ip p− − . The

conditions for each equilibrium are derived from the game tree and are solved in terms of

iq . The strategy combinations are written in terms of 1 2( , )x x .81

( , )X X - when both Politician 1 and Politician 2 support Candidate X – will be

an equilibrium if:

( ) ( )( )1 1 1/ 2 / x zq B B P P P P< + − − −

and

( ) ( )( )2 2 2/ 2 / x zq B B P P P P< + − − −

( , )Z Z - when both Politician 1 and Politician 2 support Candidate Z – will be an

equilibrium if:

( ) ( )( )1 1 1/ 2 / x zq B B P P P P< − − − −

and

( ) ( )( )2 2 2/ 2 / x zq B B P P P P< − − − −

( , )X Z - when Politician 1 supports Candidate X and Politician 2 supports

Candidate Z – will be an equilibrium if:

( ) ( )( )1 1 1/ 2 / x zq B B P P P P> − − − −

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and

( ) ( )( )2 2 2/ 2 / x zq B B P P P P> + − − −

( , )Z X - when Politician 1 supports Candidate Z and Politician 2 supports

Candidate X – will be an equilibrium if:

( ) ( )( )1 1 1/ 2 / x zq B B P P P P> + − − −

and

( ) ( )( )2 2 2/ 2 / x zq B B P P P P> − − − −

If either ( , )X X or ( , )Z Z hold, then the other two equilibria are not possible. Likewise,

if ( , )X Z or ( , )Z X obtain, then the first two equilibria cannot.

The conditions above also show that ( , )X X and ( , )Z Z are both possible given

certain values of iq and the parameters. This is true for ( , )X Z and ( , )Z X as well.

Figure 3.2 illustrates these possibilities for the case that Politician 1 and Politician 2 both

prefer the policy of Candidate Z to that of Candidate X, or z i x ip p p p− < − .82 The

81 See Appendix 1 for the calculations of equilibria. 82 See Appendix 2 for calculations showing how the values of iq are ranked when

z i x ip p p p− < − .

121

Figure 3.2: Pure Strategy Equilibrium Possibilities Where Both Politician 1 and Politician 2 Prefer the Policy of Candidate Z

1q

2q

( )1 1

/ 2

x z

BB P P P P− − − −

( )1 1

/ 2

x z

BB P P P P− − − −( )1 1

/ 2

x z

BB P P P P+ − − −

( )1 1

/ 2

x z

BB P P P P+ − − −

( , )Z Z

( , )X X

( , )X Z

( , )Z X

122

gray shaded area illustrates the values of iq where equilibrium ( , )Z Z is possible. The

diagonally striped area maps the values of iq supporting equilibrium ( , )X X . From

Figure 3.2, we see that the lower left quadrant is covered by both ( , )X X and ( , )Z Z .

For low values of iq , that is, ( ) ( )( )1 1/ 2 /i x zq B B P P P P< + − − − , both ( , )X X and

( , )Z Z are possible outcomes. When both politicians do not expect to be responsible for

building the winning coalition around a candidate on their own, they prefer to coordinate

their efforts. In this way, the politicians play what is often called an “assurance” game.

When a politician has only a small chance of building an alliance large enough to support

a candidate’s rise to power, he has only a small chance of receiving any private benefits

payoff going to those aligned with the eventual party leader. For this reason, when both

politicians are weak, if one chooses to support a particular candidate, the other will prefer

to support that same candidate, accept a smaller private benefits payoff but radically

increase his chance of receiving it. For values of iq where both ( , )X X and ( , )Z Z are

possible in pure strategies, a different mixed strategy Nash equilibrium is possible,

though this is not noted in the figure.83

As their individual estimates of iq grow, that is, as each politician’s political clout

increases inside his party such that ( ) ( )( )1 1/ 2 /i x zq B B P P P P> − − − − , both ( , )X Z and

( , )Z X are possible. In Figure 3.2, this is shown in the upper right corner of the figure

83 I do not note mixed-strategy equilibria in Figures 3.2 and 3.3 because I am only interested in evaluating pure strategy solutions to the game. See Appendix 4, though, for the mixed strategy equilibrium solution.

123

where the vertically striped area mapping equilibrium ( , )Z X and the horizontally striped

area mapping ( , )X Z overlap, forming a criss-crossed pattern. Here, each politician

prefers to avoid the choice made by the other in order to increase the expected payoff

gained from being in a minimum winning coalition, amounting to what is known as a

game of “chicken” in this region. The quadrant where both ( , )X Z and ( , )Z X are

possible in pure strategies also supports mixed strategy equilibria for the values of iq ,

though this is not noted in the figure.

When one politician carries significantly more political weight than the other, no

pure strategy Nash equilibrium emerges. As shown in Figure 3.2, the upper left and

lower right corner quadrants of the figure are not covered by pure strategy equilibria for

their respective values of iq . In this situation, both players think that the politician with

the highest political leverage, that is, with the greatest value of iq , will be the pivotal

player in the race to choose a party leader. The stronger politician seeks to build a

coalition with the minimum number needed to win in order to maximize his expected

payoff, and thus hopes to exclude the other politician from joining his alliance.84 The

weaker politician, however, complicates this objective by seeking to attach himself to his

stronger party colleague’s coalition in order to increase his chances of receiving a share

of the private benefits of office and thus his expected payoff. What results is a type of

124

“predator-prey” game between the two, where a substantially stronger prey is trying to

avoid a much weaker predator.85 For values of iq in these two regions, each politician

plays a mixed strategy to select which candidate to support for party leader.

The model shows that politicians with considerable political clout prefer to fight

over the selection of the party leader and thus will support rival candidates. As a result,

internal party factionalism ensues, regardless of whether party politicians disagree about

policy.

When politicians disagree over which candidate offers the most advantageous

policy position, similar conclusions obtain. Figure 3.3 shows the pure strategy Nash

equilibrium outcomes when Politician 1 prefers Candidate X and Politician 2 prefers

Candidate Z. Once again, low values of iq make both ( , )X X and ( , )Z Z possible,

84 Of course, in reality a powerful politician would not always be required to share the benefits of office with significantly weaker party colleagues, especially if their support were inconsequential to selecting the party leader. For the purposes of this model, however, I assume that stronger politicians are required to relinquish at least some small share of benefits to weaker politicians in the winning alliance, thus reducing the expected payoffs to stronger politicians (and increasing those to weaker party members on the winning side). 85 I would like to thank John Londregan for pointing this out to me.

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Figure 3.3: Pure Strategy Equilibrium Possibilities Where Politician 1 Prefers the Policy of Candidate X and Politician 2 Prefers the Policy of Candidate Z

1q

2q

( )1 1

/ 2

x z

BB P P P P− − − −

( )1 1

/ 2

x z

BB P P P P− − − −( )1 1

/ 2

x z

BB P P P P+ − − −

( )1 1

/ 2

x z

BB P P P P+ − − −

( , )Z Z

( , )Z X

( , )X Z

( , )X X

126

requiring politicians to coordinate their choices. When iq is high, both ( , )X Z and

( , )Z X can emerge, causing politicians to prefer avoiding the choices made by others.

The four corner quadrants support mixed strategy equilibria for different values of iq as

well.

Evaluating the Alternative Equilibria

Although for some values of iq more than one pure strategy equilibrium is

possible, politicians still exhibit preferences between them. The following comparison

highlights the critical role of private benefits in how politicians rank possible equilibrium

outcomes, and thus for politicians’ career strategies and the nature of internal party

politics in Latin America.

Assume that Politician 1 prefers Candidate Z ‘s policy position to that of

Candidate X. If private benefits are more important than policy positions to a politician

for building his political career, then his preference for the outcomes is:

( , ) ( , ) ( , ) ( , )Z X X Z Z Z X X> > >

Politician 1 prefers to be in a winning coalition backing Candidate Z with the minimum

number of politicians, that is, without Politician 2, in order to maximize his gains from

private benefits. Should Politician 1 find that Politician 2 also prefers the policy benefits

of Candidate Z, Politician 1 prefers to support Candidate X, even though this

candidate’s policy position leaves him worse off, rather than find himself in a coalition

with Politician 2. Supporting Candidate X enables Politician 1 to acquire a larger share

of B private benefits, leaving him better off than if he were to find himself in a coalition

127

of both politicians, or ( , )Z Z . The worst scenario for Politician 1 is to be in a coalition

with Politician 2 supporting Candidate X. Not only must he share private benefits with

Politician 2 but also he receives a policy position furthest from his ideal point.

The preferred order of the equilibria described above holds under the following

four conditions:86

( , ) ( , )Z X X Z> when

( ) ( )1 1 1 12 1 2 1x zq p p q p p− − > − − (1)

( , ) ( , )Z X Z Z> when

( )( )

11 1

1

2 12 1 x z

qB p p p pq−

> − − −−

(2)

( , ) ( , )X Z Z Z> when

( )11 1

1

2 12 x z

qB p p p pq−

> − − − (3)

( , ) ( , )Z Z X X> when

1 1z xp p p p− < − (4)

The same conditions obtain for Politician 2, substituting 2q for 1q and 2p for 1p , when

he prefers Candidate Z to Candidate X as well.

From conditions (1) through (4) we derive the following four conclusions:

First, from (1) and (4) we see that politicians prefer to support those candidates

offering policy positions closest to their own, all else being equal.87

86 See Appendix 3 for the calculations of these conditions.

128

Second, from equations (2) and (3), when 0B = it follows that

( , ) ( , )Z Z Z X> and ( , ) ( , )Z Z X Z> always. When private benefits are unavailable,

Politician 1 will support that candidate, in this case Candidate Z, offering a policy

position closest to his own ideal point. Since private benefits are not at issue, Politician 1

gains utility from the additional support of Politician 2 thrown behind Candidate Z.

More generally, as the level of private benefits available in the system declines,

politicians engage in less internal party competition, causing them to merge their support

and back a single candidate. As shown in (4), however, Politician 1 still prefers

( , ) ( , )Z Z X X> .

Third, from equations (2) and (3), when 12 1 0q − < , or 112

q < , it follows that

( , ) ( , )Z Z Z X> and ( , ) ( , )Z Z X Z> always. Internal party competition between party

colleagues decreases with the level of 1q estimated by Politician 1. In such a context,

politicians are inspired to converge on a single candidate. Indeed, even multiple small

groups having low values of iq will converge. This tendency is reinforced as the level of

87 The “all else being equal” proviso is essential. In situation (4), for example, the expected private benefits gained from the candidates are equivalent, and thus do not influence the choices made by the politicians. The preference for ( , )Z Z over ( , )X X results from the relative gains expected from the policy proposals offered by Candidate Z and Candidate X. In order to receive the maximum benefit, all else being equal, Politician 1 prefers to select that policy position closest to his own ideal point, in this case the policy proposal of Candidate Z. Similarly, in situation (1), the alternative outcomes ( , )Z X and ( , )X Z bring equivalent expected private benefits to Politician 1. Once again, the inequality between the two outcomes is driven by the relative values of the policy proposals made by Candidate Z and Candidate X. As long as the

expected value of 12 1q > , or 112

q > , to receive the maximum payoff, Politician 1 prefers to

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private benefits B available to potential supporters declines. As shown above, assuming

B is linearly related to its usefulness, as B declines, so too does the incentive to compete

with fellow party colleagues.

Fourth, from (2) and (3), when 12 1 0q − > , or 112

q > , and 2 2z xp p p p− < − it

follows that ( , ) ( , )Z X Z Z> and ( , ) ( , )X Z Z Z> always. When 0B > , as the expectation

1q that Politician 1 will choose the winning candidate increases, Politician 1 will seek to

be in a minimum winning coalition. Though Politician 1’s preferred outcome is ( , )Z X ,

( , )X Z is still better than ( , )Z Z when benefits are available. Under the condition that

Politician 2 supports Candidate Z and 2 2z xp p p p− < − , even if Politician 1 prefers

Candidate Z’s policy position as well, he will choose ( , )X Z over ( , )Z Z , especially as

his estimations of 1q and B benefits increase. More generally, internal party competition

increases with B and with iq for 12iq > .

Private Benefits, Policy Goods, and Political Leverage in Latin America

Though politicians always prefer to support candidates offering more

advantageous policy positions, large numbers of private benefits can be even more useful

than policy packages for later career success. When politicians think that they have at

least an even probability of building a winning coalition around a single candidate,

regardless of which candidate they choose to support, they will prefer candidates offering

select the candidate offering a policy position closest to his own ideal point, in this case the policy

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better patronage benefits, even if this entails sacrificing policy goals. For this reason,

when access to state resources is greatest, politicians will tend to form minimum winning

coalitions around candidates to maximize their private gains from office. Internal party

factionalism thus becomes a matter of the struggle over state resources, not policy

agendas. In contrast, as the state resources available to cultivate political support decline,

policy positions weigh more heavily in politicians’ calculations about how to advance

their political careers.

The model also shows that powerful politicians prefer to fight over whom to

choose for party leader, and thus over control of their party organizations, as long as there

are some private benefits to be gained and regardless of what policy positions are

proposed by the various candidates for office. In contrast, politicians with less leverage

tend to coordinate their efforts around a single candidate, even if this means sharing the

benefits of office. In situations, however, where one politician dominates his party

colleagues, even though weaker members hope to coordinate around a single candidate,

the stronger politician prefers to exclude as many minor party members as possible from

his alliance in order to maximize his expected benefit from being on the winning side.

Factionalism and Party Politics, Latin American Style

This chapter demonstrates that factionalism in Latin America is driven primarily

by politicians’ efforts to use patronage and pork to build political careers. In many

proposal of Candidate Z.

131

political systems, differences in party members’ estimates of their constituents’ preferred

policy outcomes underlie the variation in policy positions taken by candidates. For this

reason, policy differences serve as the primary catalyst for internal party disputes. This

chapter, however, shows that when party leaders need to maintain access to state largesse

to build their political careers, politicians are willing to sacrifice policy positions as long

as it means gaining access to increased amounts of private benefits. All else being equal,

those politicians able to offer better private benefits packages will cultivate greater

political support and will be able to build political careers faster than those offering few

tangible rewards. Politicians thus will switch internal party allegiances according to

changes in private benefits, rather than changes in policy positions.

This chapter also shows that powerful party politicians prefer to fight over control

of their party organizations, especially when there are considerable private benefits at

stake, even if this means sponsoring candidates with less attractive policy programs. In

contrast, when no single politician has the ability to create a strong support network

around a nominee, party politicians will prefer to coordinate around a single candidate,

even if they must share the benefits of office. Such cooperation can work to the

advantage of politicians and their parties later during national elections, since showing a

united front around a single candidate can help to inspire voter confidence at the polls.

The historic importance of pork and patronage for building party organizations

and cultivating support in Latin America has also meant that politicians have

concentrated on strategizing over how to maximize access to the benefits of office, rather

than on constructing coherent policy platforms or providing programmatic goods to

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constituents. Any attention to developing policy agendas brought only limited political

rewards to politicians within their parties, and even for their parties at the polls. The

importance of private benefits for building political careers inside parties thus explains

why politicians in Latin America have preferred to siphon resources from their

economies, rather than to fortify them with better and more coherent public policies.

In the end, this chapter also explains the relationship between state resources,

internal party factionalism, and party system stability in Latin America. Even though

politicians from established parties in Latin America have relied on the distribution of

state goods and services to strengthen party organizations and build support for their

parties at the polls, access to such largesse has also led to competition among party

colleagues. The logic of machine politics encourages fellow party members to compete

for the resources needed to service political machines, leading to continual factionalism.

As a result, when party leaders have been most able to deliver benefits to cultivate

support for their parties at the polls, they have been least able to use such goods to ensure

internal party cohesion. Even so, as shown in Chapter Two, the political expediency of

maintaining access to state resources has dissuaded politicians losing such internal party

struggles over state largesse from leaving established parties, preserving party system

stability throughout most of the 20th century.

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CHAPTER FOUR

Political Institutions, Economic Policy, and Party Building in Latin America:

The Rise of Stable, Two-Party Systems in Colombia and Venezuela

Introduction

Political institutional arrangements have been credited for the emergence and

survival of two-party systems in some Latin American countries. Though electoral laws

often favored large parties at election time, political institutions alone cannot account for

the stable control of the same two parties, the Partido Justicialista (PJ) and the Unión

Cívica Radical (UCR), over national and most local governments in highly decentralized

Argentina; for the long-term domination of the historic Partido Liberal (PL) and Partido

Conservador (PC) over Colombian politics, despite the replacement of several

constitutions and frequent electoral system change since the 19th century; or for the

sudden prominence of two parties, Acción Democrática (AD) and Comité de

Organización Política Electoral Independiente (COPEI), among a myriad of other

political contenders in newly democratic Venezuela.

This chapter explains how economic policy-making facilitated the transformation

large parties, already favored by political institutional arrangements, into their systems’

principal political players in many Latin American countries. To this end, the chapter

compares party building in two of Latin America’s most stable political systems,

Colombia and Venezuela. In Colombia, though a political pact struck between the

134

historic PC and PL in the mid-20th century gave these parties joint control over all levels

of government, their ability to confer economic benefits on key interest groups enabled

them to preserve historic levels of support, even after the end of power-sharing in 1974.

In Venezuela, though electoral laws favored large parties, AD and COPEI easily

outpaced their largest competitors during this country’s infant stage of democratic rule.

Early control over the national executive, and with this office public spending, enabled

AD and COPEI to build support faster than other fledgling political groups.

The comparison of Colombia and Venezuela in this chapter highlights the joint

contribution of political institutional arrangements and economic policy to the structure

and stability of party systems in Latin America. Though political institutions favored

larger parties at election time, the variety of policy-making tools and state resources

available to politicians controlling national government enabled large parties in Colombia

and Venezuela to become their countries’ primary political groups, leading to the

emergence of stable, two-party systems. Analysis of party building thus reveals the

limitations of relying on political institutional approaches alone to explain the structure of

party systems in these countries, and in Latin America more generally.

Even more important, this chapter contrasts strategies used by politicians for

consolidating party support in two countries that appear superficially similar to many

observers, thanks in part to their similarity in party stability during the 20th century. In

Venezuela, however, politicians used access to vast oil revenues to undertake major

public spending sprees, something that guaranteed AD and COPEI political support for

most of the 20th century. In Colombia, in contrast, the PL and PC relied on a more

135

moderate economic policy approach coupled with the careful distribution of

particularistic benefits to retain the loyalty of key interest groups. As will be shown in

the following chapter, the Venezuelan development strategy left its principal parties, AD

and COPEI, more vulnerable to challenges from opposition groups during economic

crisis and reform.

Organization of the Chapter

To explain the institutional and economic factors underpinning the rise of stable,

two-party systems in Colombia and Venezuela, this chapter analyses politicians’

strategies for building party organizations in these countries. To this end, the chapter

proceeds as follows: In the first two sections, the chapter examines political institutional

arrangements in Venezuela and Colombia to show how electoral laws facilitated the

emergence of large parties. The analysis, however, also demonstrates that electoral laws

did not guarantee the stability of these countries’ two-party systems.

To explain the survival of stable, two-party systems in these countries, the chapter

then reviews the principal economic development strategies followed in Venezuela and

Colombia during the 20th century. Public policy-making enabled politicians from large

parties to reinforce their institutionally privileged political positions. In Venezuela, party

building occurred simultaneous to the return to democracy and the expansion of suffrage.

This section shows how growing oil revenues enabled early AD and COPEI presidents to

use state development programs to deliver benefits to newly enfranchised groups, and

thus to strengthen infant party organizations.

136

The fourth section examines state economic policy choices and their ties to party

building in Colombia. In contrast to Venezuela, Colombian party organization occurred

during the 19th century, well before the expansion of suffrage and the introduction of

import-substitution industrialization (ISI). For this reason, party building required

maintaining a favorable economic climate for the country’s coffee producers, with those

politicians best able to advance the interests this group also most likely to further their

political careers. After the extension of suffrage in the mid-20th century, though the FN

power-sharing agreement ensured PL-PC political dominance, the exigencies of building

support for mass-based parties required Colombian presidents to couple export-oriented

development with the provision of particularistic benefits to the popular sectors. This

two-pronged approach enabled the PL and PC to preserve their historic political

positions, even with the end of power-sharing in the 1970s.

Taken together, these sections show how political institutional arrangements and

economic policy-making worked to produce stable, two-party systems in Colombia and

Venezuela, and in many Latin American countries more generally. To conclude, the

chapter explains why understanding the complex environment where Latin American

parties have learned to survive also reveals the political and economic conditions

favoring the viability of new parties in the region in recent years.

Electoral Laws and the Prevalence of Large Parties in Venezuela

This section discusses political institutional arrangements in Venezuela to show

how, prior to institutional restructuring in the 1980s, electoral laws encouraged the

137

formation and survival of large party organizations. Although political institutions laid

the foundations for this country’s two-party system, they should not be given sole credit

for the rise of AD-COPEI political dominance, or for their stable control over Venezuelan

politics. Public spending during the infant stages of democratic rule enabled these parties

to reinforce their prominent political positions.

The Emergence of Democratic Government in Venezuela

Venezuela did not try democratic government until the mid-20th century. Until

then, the country was ruled by a series of caudillos, most of whom were members of the

armed forces.88 In the early 1940s, acting president General Isaías Medina Angarita,

began to liberalize the country’s political scene, allowing the registration of some

political organizations for the first time. The increasingly tolerant environment enabled

leaders of AD and rebellious military officers in support of civilian rule to carry out a

coup in 1945. AD organized elections and soon thereafter won control of the national

executive and legislature, beginning a democratic period known as the trienio. AD’s

sudden dominance and its progressive social and economic policies, however, threatened

conservative interest groups, including business leaders and the Catholic Church, as well

as nascent party organizations that had hoped to be included in democratic decision-

making. In an effort to protect their positions, these groups collaborated to overthrow

AD in 1948. Ten years of repressive authoritarian rule ensued.

88 There was some clandestine political and labor organization during the early 20th century but Venezuela’s rulers did everything they could to thwart it.

138

During the dictatorship of General Marcos Pérez Jiménez, most political parties

and labor unions were dissolved and their leaders jailed, exiled, or killed. Ironically,

most of the political groups that had originally supported the coup were banned. Only

COPEI and the Unión Republicana Democrática (URD) retained their legal status,

providing some limited opposition to the regime. The URD, however, was outlawed in

the early 1950s after its strong showing in elections staged by the junta. The regime’s

repressive activities led the nation’s would-be political parties, even AD, to concur that

the future of democracy would require cooperation and compromise among competing

groups and an agreement not to resort to extra-democratic means to settle disputes.

Deteriorating economic conditions and social unrest turned members of the armed forces

against Pérez Jiménez, leading him to flee the country in 1958. About this same time,

Rómulo Betancourt, Rafael Caldera, and Jovito Villalba, leaders of the AD, COPEI, and

the URD, respectively, were meeting in exile to discuss ways to ensure the survival of

democracy once the regime fell.89 A provisional military government called elections

and a civilian administration took office in February 1959.

The Structure of the Venezuelan Democratic Government

The election of a civilian government inaugurated what scholars would eventually

proclaim to be one of the most stable democratic systems in Latin America. Democratic

89 This agreement was later named the Pacto de Punto Fijo, after Caldera’s New York home. In it, party leaders promised to respect the results of democratic elections as the only means of choosing government, to form a coalition government to stabilize the infant democracy, and to discuss openly policy positions and goals not jointly held. Other agreements over economic and social policy were formalized as well. These will be discussed later in the chapter.

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government in Venezuela, both during the trienio (1945-1948) and since 1959, has been

presidential, organized into executive, legislative, and judicial branches. Presidents are

elected for five-year terms and reelection is only possible after an elapse of ten years after

leaving office, or the equivalent of two presidential terms. The legislature is bicameral,

with all representatives elected for five-year terms at the same time as the president. As

in Colombia, the renewal of both houses is complete. Since Venezuela is constitutionally

federal, an upper house or senate is used to represent the country’s territorial divisions, or

states. Two senators are elected from each of these 21 districts, and one senator from

each federal territory. In addition, presidents become senators-for-life with the

completion of their terms. Representation in the chamber of deputies reflects the

distribution of population across states, and seats are allocated accordingly. The total

membership of the lower house has ranged from 127 in 1959 to 182 in the 1980s, not

including compensatory seats discussed below. States have their own governors, elected

since 1989, and elected state legislatures, and municipalities have elected councils and,

after 1979, elected mayors.

Electoral Laws and the Rise of Large Parties in Venezuela

Venezuela’s much celebrated political stability is attributed to its two-party

system, dominated by AD and COPEI, that emerged about fifteen years after the return to

democracy in 1959. These parties, as well as the URD, had their origins in the student

movements of the 1920s against the repressive government of Juan Vicente Gómez.90

90 See Alexander (1973), Levine (1973), Magallanes (1973), Martz (1966) for the histories and political orientations of these parties.

140

Led by Rómulo Betancourt, AD was officially founded in 1941 during the authoritarian

regime of General Isaías Medina Angartia. AD follows a nationalistic, social democratic

philosophy and has strong ties to urban labor unions and the rural poor. COPEI’s

founder, Rafael Caldera, was an important figure in the Catholic-oriented student

movements following the death of Juan Vicente Gómez in 1935, though his party was not

officially registered until 1946 during the trienio government. COPEI is Christian

Democratic and, like AD, has built strong ties to labor. Other important parties in the

early democratic period include the URD. Formally established in 1946, this party was

the personalistic vehicle for Jovito Villalba, a former figure in the government of General

Isaías Medina Angarita during the 1940s. This party attracted many former supporters of

this authoritarian government. Although the URD was an enthusiastic supporter of the

coup against the trienio government, this party became an important participant in the

overthrow of the Pérez Jiménez regime in 1958 (Alexander 1973, 33).

Venezuela’s use of a “first-past-the-post” presidential formula, fused ballot for

senate and chamber elections, and concurrent presidential-legislative elections favored

the emergence and survival large party organizations. Beginning with the Suffrage Act

of 1959, and lasting until 1993 when electoral reforms took effect for the first time,

voters cast only two votes to elect all national and state offices. One vote, on what was

called the “large card,” selected a candidate for president; the other, on the “small card,”

141

chose which party’s slate of candidates to support for legislative seats.91 The winning

party appointed state governors and there were no municipal mayors. The presidential

candidate receiving a plurality of votes in a single round election won this office. State

delegations to both houses of congress were selected according to each party’s percent

votes in statewide ballots, using the D’Hondt allocation formula. Each party’s slate of

candidates was closed and blocked, that is, voters could not indicate a preference among

party candidates, nor could they alter the list by adding choices.92 Until 1993,

representatives to state legislatures were also included on each party’s national slate,

which meant that voters simultaneously elected all national and state legislators on a

single ballot. From 1958 to 1973, the national legislative ballot also elected

representatives to municipal councils. Once in office, the president appointed state

governors. Governors were elected separately for the first time in 1989.

Concurrent presidential and legislative elections disadvantage small parties.

Presidential elections have a strong coattail effect on legislative outcomes. As in

Colombia, Venezuela’s “first-past-the-post” presidential competitions hurt small parties

because they cannot mount challenges for this office alone. The effect of Venezuela’s

single-round, plurality presidential competitions held concurrently with legislative

elections is demonstrated in Figure 4.1. This figure compares the percent vote won by

91 Large card ballots present a party logo, party name, and a picture of the presidential candidate it supports. See Coppedge (1994, 22-23), Crisp (2000, 43), Shugart (1992, 26) for a description of the presidential ballot.

142

AD and COPEI in presidential and legislative elections between 1947 and 1988. The

electoral fortunes of AD and COPEI in small card ballots closely followed those for

presidential races. AD and COPEI also tended to earn larger vote shares in presidential

races than they did in legislative elections. Since small parties could not hope to win the

presidency alone, they frequently joined forces behind a single candidate, or threw their

support behind candidates from larger parties.

The system used to allocate seats in the senate also favored large parties. Each

state elects two representatives to this body. Seats are allocated proportionately, using

the D’Hondt formula, according to the percent votes won by each party. The list with the

highest vote share gets one seat, and the second-place list gets the other. The only way

for a party to gain both seats is to win more than twice the vote of the second place party.

Proportional allocation in small, two-member districts has reinforced the

overrepresentation of large parties in the senate, and thus strengthened their position in

the electoral arena.

Figure 4.2 compares the percent votes received by AD and COPEI in legislative

elections to its share of seats in both houses of congress. These parties have been

continuously favored with disproportionate shares of seats. Representation in the

chamber of deputies is slightly less skewed in favor of large parties. The district

magnitude for state delegations to this chamber has ranged from an average of six seats in

92 In practice, this meant that voters were unaware of who was included on each party’s slate; the legislative ballot only gave voters a choice between party logos. Coppedge (1994, 22) notes that names of legislative candidates were sometimes published in newspapers in advertisements taken out by parties about one month prior to election time.

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Figure 4.1: Percent Votes Won by AD and COPEI in Presidential and Legislative Elections, 1947-1988

20

40

60

80

100

1947 1958 1963 1968 1973 1978 1983 1988

Year of Election

Perc

ent V

otes

Chamber of Deputies President

Source: Nohlen (1993).

Figure 4.2: Percent Votes and Percent Seats Won by AD and COPEI in Legislative Elections, 1947-1988

20

40

60

80

100

1947 1958 1963 1968 1973 1978 1983 1988

Year of Election

Perc

ent V

otes

or S

eats

Percent Votes in Legislative Elections Percent Seats in Senate

Percent Seats in Chamber of Deputies

Source: Nohlen (1993).

144

1958 to 8.7 in 1988. The larger number of seats at stake in each district, that is, the

higher district magnitude, in the chamber of deputies has meant that smaller parties could

hope to win representation, even though the D’Hondt formula used to convert votes into

seats is biased in favor of larger parties. Figure 4.2 illustrates this point, showing the

allocation of seats to the chamber of deputies to be less disproportionate than that of the

senate, but still more disproportionate than the share of votes received.

Some features of the Venezuelan electoral system favor small parties: high

district magnitude, compensatory seats, and easy procedures for registering parties.

Though they improved the electoral chances of small parties, they did not permit these

parties to challenge the largest political organizations. Despite the use of the D’Hondt

system and presence of concurrent, plurality presidential elections, some small parties

have been able to win seats in the national legislature. Indeed, the number of parties

winning one percent or more of total national votes has increased steadily over time,

going from four in 1959 to nine in the late 1970s and early 1980s. Compensatory seats

have been used to target small parties whose percentage of seats won in either chamber

during the allocation of seats in state-level districts does not reach their overall

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percentage of national votes.93 Even though compensatory seats give small parties

representation in congress, however, Shugart (1992, 33) rightly notes that these seats do

not fully remedy the advantages given to large parties during the initial distribution of

seats. First, there is a limit to the number of compensatory seats any party may receive.94

Second, compensatory seats are added to the total number of seats in congress, thus

reducing the effect that these seats have on the overall level of proportionality of

representation.95 Rather than compensating small parties for disproportionate seat

allocation, compensatory seats have encouraged the proliferation of micro-parties that

have no hope of winning representation in lower magnitude state-level districts but that

can hope to win compensatory seats (Shugart 1992, 33).96 In 1988, 79 parties won votes

93 Compensatory seats are allocated using a nation-wide district, with the distribution proportionate to the percentage votes won by the party at the national level and seats already received. To determine the number of compensatory seats each party is entitled to receive, each party’s percentage of total national votes is multiplied by the total number of fixed seats available in the chamber in question (this number does not include the compensatory seats). This calculation determines the number of seats the party would have received in a purely proportionate allocation (in a single, nation-wide district). No seats are awarded for remainders. Additionally, to be eligible to receive a compensatory seat, a party must receive at least one quota (equal to total national votes divided by the number of fixed seats in the chamber). The total number of compensatory seats has varied by session, determined by the number of parties qualified to receive them. Between 1958 and 1988, for example, an average of six compensatory seats were allocated in the senate, and 15 in the chamber of deputies, each year. See Jones (1995, 14-15) and Shugart (1992, 33). 94 The limit to the number of compensatory seats a party may receive has varied over time. In the 1980s, parties could receive no more than four compensatory seats in chamber of deputies and two in the senate. In 1993, these limits were raised to five and three. 95 The total number of seats in the congress changes with each election. If the number of compensatory seats were fixed, the effect of awarding an additional seat to a party on the degree of proportionality in congress would be much stronger. 96 In 1959, there were four parties receiving at least one percent of the national vote and four parties received seats. By the late 1970s, however, nine parties received at least one percent of the national vote but eleven parties received seats in the lower house.

146

in legislative elections, eleven received seats in the chamber of deputies, but only three

received seats during the regular allocation of seats using the statewide districts (Shugart

1992, 33).

The survival of small parties is eased by Venezuela’s liberal party registration

procedures. To register, state-level parties need only submit a membership list of .5

percent of the registered voters in that district. If a party registers in 12 states, it

automatically receives national status. Additionally, any group obtaining three percent of

the vote in a state or national election can legally become a party (Kornblith and Levine

1993, 18). In the end, however, large party organizations maintain a distinct electoral

advantage over their smaller counterparts, even if these groups eventually win seats in

congress through compensatory mechanisms.

Small parties are also at a disadvantage in local elections. Until 1989, presidents

appointed governors upon taking office. The office of mayor did not exist. Since

elections for state legislatures and municipal councils (until 1979) were coupled with

national ones, only those parties able to run candidates at all levels of government and

thus win votes in what amount to national electoral contests were able to win seats at

subnational levels.97 Such fused legislative ballots worked to the disadvantage of small

or regionally based parties who could not compete against larger, nationally organized

groups. The effect of concurrent presidential-legislative elections and plurality

presidential formula only served to exacerbate this effect. In 1979, separate elections for

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municipal councils were introduced, scheduled one year after national races. Parties still

presented closed lists until 1989. Even though nonconcurrent local elections should have

worked to the benefit of small, regionally based parties, the use of closed lists to fill seats

favored parties with label and name recognition. Also, holding municipal elections after

national ones may have led to bandwagoning as well. In Venezuela, larger parties who

won votes and public offices in national elections tended to be most favored by such a

system. As a result, though municipal councils were elected separately from national

offices in 1979 and 1984, large parties still retained a significant advantage at election

time.

The Puzzling Rise of AD and COPEI: Electoral Laws and Public Spending

In the end, Venezuelan electoral rules favored large parties, and many scholars

argue that this facilitated the rise of AD and COPEI political domination. It should be

pointed out, however, that it was not clear that AD and COPEI would emerge to control

all levels of government in the early stages of democratic rule. Rather, these parties

struggled with other contenders for control over the infant political system. During

elections held in 1958, 1963, and 1968, for example, the URD presented a formidable

challenge to both AD and COPEI, winning an average of 25.3 and 17.8 percent of total

national votes in presidential and legislative elections, respectively (see Tables 4.1 and

4.2). During this period, AD and COPEI together received, on average, only 58.6 and

97 Beginning in 1979, elections for municipal councils have been held the year following national presidential-legislative elections. The 1973 municipal council elections were the last to be held concurrently with national elections.

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Table 4.1: Venezuelan Presidential Elections (Percent Votes), 1958-2000

Term President AD COPEIAD-

COPEI

Total AD and

COPEI URD MEP MAS CN CR MVR 1959-64 Rómulo

Betancourt (AD) 49.1 16.2 65.3 34.6

1964-69 Raúl Leoni (AD)

32.8 20.2 53.0 18.9

1969-74 Rafael Caldera (COPEI)

28.3 29.2 57.5 22.3 19.4

1974-79 Carlos Andrés Pérez (AD)

48.7 36.7 85.4 3.1 5.1 4.3

1979-84 Luis Herrera Campins (COPEI)

43.3 46.6 89.9 1.1 5.2

1984-89 Jaime Lusinchi (AD)

58.4 33.5 91.9 3.4 3.5

1989-93a Carlos Andrés Pérez (AD)

53.0 40.4 93.4 2.7b

1994-99 Rafael Caldera (CN/MAS)

23.6 22.7 46.3 30.5c 21.2

1999d Hugo Chávez (MVR)

11.2e 11.2 40.2f

2000-05 Hugo Chávez (MVR)

0.0 18.9g 48.1h

Source: Nohlen (1993), Political Database of the Americas (2001c), Political Database of the Americas (2001d), Political Database of the Americas (2001e). Note: AA: Acción Agropecuaria; AD: Acción Democrática; CN: Convergencia Nacional; COPEI: Comité de Organización Política Electoral Independiente; CR: Causa Radical; GE: Genie Emergente; IPCN: Independiente por la Comunidad Nacional; MAS: Movimiento al Socialismo; MEP: Movimiento Electoral del Pueblo; MIR: Movimiento Izquierda Revolucionario; MVR: Movimiento V Republica; PCV: Partido Comunista Venezolano; PPT: Patria para Todos; PRVZL: Proyecto Venezuela; SI: Socialista de Izquierda; URD: Unión Republicana Democrática.

a The term was cut short with impeachment proceedings against President Carlos Andrés Pérez. b MAS/MIR coalition. c The CN was in coalition with MAS. These parties received 30.5 percent total popular votes. d This term was cut short due to the drafting and passage of a new Constitution in 1999. e AD and COPEI were allied with PRVZL and another small party. This coalition received 40.0 percent of total national votes (PRVZL: 28.8 percent; AD: 9.05, and COPEI: 2.15). f The MVR was allied with MAS, MEP, PPT, PCV, IPCN, GE, SI, and AA. This coalition received 56.2 percent of the total popular vote and supported the candidacy of Hugo Chávez Frías. g The CR was allied with four small parties and received 37.5 percent of the total national vote.

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h The MVR was alllied with MAS, MEP, PCV, IPCN, GE, SI, and AA. This coalition backed Hugo Chávez and received 60.3 percent of the total popular vote. Table 4.2: Venezuelan Legislative Elections (Percent Votes), 1958-1999

Term President AD COPEI

Total AD And

COPEI URD MEP MAS CN CR MVR PRVZL 1959-64 Rómulo

Betancourt (AD) 49.5 15.2 64.7 26.8

1964-69 Raúl Leoni (AD)

32.7 20.8 53.5 17.4

1969-74 Rafael Caldera (COPEI)

25.6 24.0 49.6 9.2 12.9

1974-79 Carlos Andrés Pérez (AD)

44.4 30.2 74.6 3.2 5.0 5.3

1979-84 Luis Herrera Campins (COPEI)

39.7 39.8 79.5 1.7 2.2 6.2

1984-89 Jaime Lusinchi (AD)

49.9 28.7 78.6 1.9 1.9 5.7

1989-93a Carlos Andrés Pérez (AD)

43.3 31.1 74.4 1.4 1.6 10.2b

1994-99 Rafael Caldera (CN/MAS)

23.9 22.8 46.7 10.8 13.6 21.1

1999c Hugo Chávez (MVR)

21.7 10.7 32.4 8.7 2.4 3.1 21.3 12.3

Source: Nohlen (1993), Political Database of the Americas (2001a), Political Database of the Americas (2001b). Note: AD: Acción Democrática; CN: Convergencia Nacional; COPEI: Comité de Organización Política Electoral Independiente; CR: Causa Radical; MAS: Movimiento al Socialismo; MEP: Movimiento Electoral del Pueblo; MIR: Movimiento Izquierda Revolucionario; MVR: Movimiento V Republica; PRVZL: Proyecto Venezuela; URD: Unión Republicana Democrática.

a The term was cut short with impeachment proceedings against President Carlos Andrés Pérez. b MAS/MIR coalition. c This term was cut short due to the passage of a new Constitution in 1999.

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55.9 percent of total national votes in these elections (see Tables 4.1 and 4.2). AD and

COPEI did not gain control over the political system until the 1973, when their share of

votes in presidential elections jumped nearly 28 percent over their 1968 totals (see Table

4.1). In the legislative ballot, their vote share rose 25 percent (see Table 4.2). AD and

COPEI dominated the political system for only four subsequent electoral periods, or 20

years, with both foundering in 1993. This was not a very long period of time.

The sudden surge in votes going to AD and COPEI in 1973 is difficult to explain

using electoral laws alone, even if such laws did favor large parties at election time. The

sudden emergence of AD and COPEI as this country’s principal political parties raises

three important questions. First, why did AD and COPEI, rather than another set of

parties, rise to dominate the political system? Of course, AD’s position was strong in the

early days of democratic rule, thanks to its role in the trienio government, but why did

COPEI eclipse its challengers? Second, what explains the sudden surge of votes going to

AD and COPEI in the 1973? Finally, why were the positions of other political

contenders undermined so thoroughly, even though electoral laws assured these parties

representation in congress?

As will be shown below, these questions are best answered when taking into

account the particular economic development strategy followed by Venezuelan presidents

after the return to democracy. Even though political institutional arrangements favored

large parties at election time, the rapid rise of AD and COPEI was the consequence of

their early accession to the presidency. With this office, each gained access to a wide

array of state goods and services that were instrumental to party building.

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Political Institutions and PL-PC Power-Sharing in Colombia

This section analyzes political institutional arrangements in Colombia. The

analysis shows how, prior to electoral reform begun in the 1980s, Colombian political

institutional arrangements encouraged the survival of the historic PL and PC political

organizations. Although political institutions supported this country’s two-party system,

as will be shown below they should not be given sole credit for its stability. Economic

policy-making has helped these parties reinforce their historic political positions,

particularly in recent years.

Colombia’s Historic Party System

Colombia is known for having one of the oldest party systems in the world. With

the exception of a brief authoritarian interlude in the 1950s (1953-1957), the same two

parties, the Partido Liberal (PL) and the Partido Conservador (PC), have dominated

Colombian politics since the late 1840s. To be sure, in the 19th and early 20th centuries

Colombian elections were limited to a small group of political, social, and economic

elites. Inter-party competition amounted to little more than inter-elite struggles over the

right to control the reins and resources of the central government.98 The principal

ideological difference between the PL and PC during this period stemmed from disputes

98 Ironically, this historic and stable two-party system also became the basis for regular civil conflict. Hartlyn (1988, 20) reports seven major partisan conflicts, not including numerous smaller ones, which lapsed into violence during the second half of the 19th century and accounted for nearly 125,000 deaths. Such partisan violence continued well into the 20th century, culminating in an undeclared civil war. This period, known as la violencia, lasted from 1948 until 1957 and led to the breakdown of democratic rule in 1953. It is estimated that there were, on average, 16,000 deaths per year during la violencia, falling to about 3,000 per year between 1958 and 1962 (Archer 1990, 8).

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over the nature of church-state relations and the structure of government. PC supporters

favored a unitary system and a dominant position for the Catholic Church in society and

politics (Martz 1962, 15 and 18). Members of the PL, on the other hand, supported

decentralized (federal) government and the denial of the Catholic Church’s right to

dabble in politics (Martz 1962, 15-16).99

Today there appears to be little to differentiate the two, partly because 19th

century ideological debates have long since been settled and partly because the parties

have not tended to differ much over the goal and direction of economic policy-making.

Even so, many authors emphasize the surprising strength of party identification in

Colombia. Even with the extension of suffrage in the 1930s, “it was not only different

factions of the oligarchy, but all social groups including the peasantry that became

socialized into identification with one or another political party” (Hartlyn 1988, 27).

Party affiliation was traditionally inherited by families, passed down from parent to child,

and ascribed to entire villages (Archer 1990; Dix 1967; Martz 1962; Taylor 1996).100

This tradition, however, is not quite as strong today. There has been a rapid decline of

traditional party identification since the 1970s.

99 Victorious parties reinforced their positions with new constitutions. Between 1863 and 1885, the PL dominated national government, passed anti-Church reforms and implemented a federal constitution. In 1886, a unitary constitution replaced the federal one when the PC won control of government, and the position of the Church was re-entrenched in politics with the signing of a Concordant with the Vatican. 100 Some scholars claim that Colombian party identification is practically an ascriptive trait, similar to race, ethnicity, and religious affiliation. See, for example, Martz (1962).

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The Structure of Colombian Democratic Government

Until the implementation of a new constitution in 1991, along with its historic

party system, Colombia had one of the oldest constitutional systems in the world. The

Constitution of 1886, though undergoing several substantial reforms during the course of

its public life, was in place for over 100 years. Colombia’s presidential system, with

national government organized into executive, legislative, and judicial branches, predates

even this historic document, tracing its roots to the early 1800s.101 Throughout the 19th

and 20th centuries, and during the period covered by the 1886 Constitution discussed

here, presidents were elected for four-year terms, with reelection only possible after the

elapse of one interim term. There was no elected vice president. Instead, congress

elected a designate (designado) for a two-year term, who then assumed the presidency in

the event of the executive’s death or unfitness for office.102

Even though the Constitutions of 1886 and 1991 specify that Colombia is unitary,

the legislature is bicameral, with both a Senado and Cámara de Representantes.103 Senate

101 Colombia emerged as an independent nation in 1830 with the breakup of the Gran Colombia federation. 102 The number and terms of designados has varied over time. Between 1910 and 1945, for example, two designados were elected for one-year terms. Between 1945 and 1991, Congressional members met in a joint session to choose the designado for a two-year term. After 1959, the designado was required to be from the same party as the president. See Taylor (1996, 107). 103 Between 1863 and 1885, Colombia had a federal system, outlined in the Constitution of 1863. This federal system was replaced by a unitary Constitution in 1886. Politicians hoped that the creation of a unitary political structure would strengthen the national executive and central government relative to powerful local leaders. In the Constitution of 1886, presidents were given the authority to appoint departmental governors for the first time. Governors had been locally elected throughout most of the 19th century.

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terms last four years, though senators have only been directly elected since 1947.104

Representatives held two-year terms until 1970, when they were extended to four years.

Renewal of both houses is complete at election time. Senate elections are held

simultaneously with those for the lower chamber, except, of course, during years when

only mid-term elections for the lower chamber occurred. Between 1935 and 1948,

congressional elections occurred one year after presidential contests, except during mid-

term election years. In 1949, congressional elections preceded the presidential race by

five months. Since the return to democracy in 1958, congressional elections have

preceded the presidential race by, on average, two months.105

Unlike in federal systems, the Colombian senate does not equally represent the

country’s principal territorial divisions, known as departments. By the late 1980s there

were 23 departments. Seats in both chambers are allocated between departments

according to population. Each department is guaranteed a minimum of two senators and

two representatives.106 Thanks to differences in the number citizens required per

congressman for each house, there are fewer senators than deputies assigned to each

104 During the 19th century until 1945, departmental assemblies elected senators (Archer 1990, 5). 105 In 1970 and 1974, presidential and congressional elections were held on the same day. In 1978, congressional elections preceded presidential elections by four months. 106 Regions that have not received departmental status are called intendencias. Intendencias are not entitled to receive the minimum number of seats in either house. Their citizens usually vote with and are represented by surrounding departments, though they are sometimes given their own representatives in the lower chamber (but never in the senate). Just prior to constitutional reform in 1991, for example, three national territories were given one seat each in the lower chamber. Department representatives spoke for all remaining territories.

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department.107 Senate membership has ranged from 80 in 1958 to 114 in the 1980s, just

prior to electoral reform. During this same period, the chamber of representatives was

nearly twice as large, with 148 members in 1958 and 199 in the late 1980s. Departments

have governors and departmental assemblies, municipalities have mayors and municipal

councils, and some larger municipalities are again subdivided and given local

administrative councils.

The return to democratic rule in 1958 was steered by elites from the country’s two

largest political groups. In an effort to ensure the future stability of democracy and the

end to traditional inter-party violence, leaders from the PL and PC stuck a power-sharing

agreement, called the Frente Nacional (FN). To support this pact, these parties agreed to

alternate the presidency for 16 years (four four-year terms), whereby elections would be

limited to only candidates of one party or the other, and to distribute legislative seats at

all levels of government equally among the parties. In addition, appointments to

administrative and bureaucratic offices, as well as cabinet seats were to be distributed

equally between the two parties.

Electoral Laws and Early PL-PC Party Politics

During the 19th and early 20th centuries, the PL and PC retained control over

Colombian politics through a set of particular political institutional arrangements,

including restricted suffrage, the incomplete list system, multiple party lists, indirect

107 In the senate, each department was given two senators, one representative was added for every 200,000 inhabitants, plus one for any fraction over 100,000 after the first 200,000. In the chamber of deputies, each department received two representatives, one per every 100,000 habitants, plus one for any fraction of 50,000 after the first 100,000.

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presidential and senatorial elections and, on occasion, electoral fraud. Until the 1930s,

property and literacy requirements restricted the number of citizens able to vote for

representatives to the national chamber of deputies or for the president, though, since

1853, male citizens were allowed to vote in municipal and departmental elections.

Suffrage was formally extended to all male citizens in 1936 with the removal of literacy

and property requirements.108 Restricted suffrage meant that only political elites could

vote, thus enabling the PL and PC to control the electoral process.

The incomplete list system was used to fill seats in the national congress,

departmental assemblies, and municipal councils until 1929 (Archer 1990, 5; Dix 1967,

185). This system, where winning parties receive 2/3 seats and the runner up the

remaining 1/3, ensured that only the top two party organizations, that is, the PL and PC,

would always dominate any legislative body. Both parties also resorted to stuffing ballot

boxes to ensure electoral outcomes (Archer 1990, 121). Each party’s slate of candidates

was closed and blocked, that is, voters could not indicate a preference among party

candidates, nor could they alter the list by adding choices.

Until the 1930s, party directorates, chosen by party officers and members from

multiple levels of the party hierarchy, prepared single lists of candidates for each level of

108 This reform was a part of a series of major changes made to the 1886 Constitution. See Archer (1990, 153-169) and Hartlyn (1988, 30-32) for a discussion of these constitutional reforms. Women were enfranchised in 1956, and people between the ages of 18 and 21 received the right to vote in 1976.

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Table 4.3: Colombian Chamber of Deputies Elections (Percent Votes), 1935-1998

Term President

Frente Nacional

PL PC

TOTALPL and

PC ANAPO

AD-M19 MSN UNO

1935-37 Alfonso López

Pumarejo (PL) 100.0 AB 100.0

1937-39 100.0 AB 100.0

1939-41 Eduardo Santos (PL)

64.4 35.1 99.5

1941-43 63.8 35.7 99.5

1943-45 Alfonso López Pumarejo (PL)

64.4 33.8 98.2

1945-47 63.0 33.6 96.6

1947-49 Mariano Ospina Pérez (PC)

54.7 44.4 99.1

1949-51 53.5 46.1 99.6

1951-53 Laureano Gómez (PC)

AB 98.6 98.6

1953a AB 99.7 99.7

1958-60 Alberto Lleras Camargo (PL)

Yes 57.7 42.2 99.9

1960-62 Yes 58.3 41.7 100.0

1962-64 Guillermo Valencia (PC)

Yes 54.6 45.4 100.0

1964-66 Yes 51.4 48.6 100.0

1966-68 Carlos Lleras Restropo (PL)

Yes 55.7 44.3 100.0

1968-70 Yes 53.4 46.6 100.0

1970-74 Misael Pastrana Borrero (PC)

Yes 51.3 48.7 100.0

1974-78 Alfonso López Michelson (PL)

55.7 32.0 87.7 9.0 3.0

1978-82 Alfonso César Turbay Ayala (PL)

55.2 39.4 94.6 3.0

1982-86 Belisario Betancour (PC)

56.4 40.3 96.7

1986-90 Virgilio Barco Vargas (PL)

47.7 37.0 84.7

1990 César Gaviria Trujillo (PL)

59.1 31.3 90.4

1991-94b 50.9 17.6 68.5 10.1 6.8

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Table 4.3: Colombian Chamber of Deputies Elections (Percent Votes), 1935-1998

Term President

Frente Nacional

PL PC

TOTALPL and

PC ANAPO

AD-M19 MSN UNO

1994-98 Ernesto Samper

Pizano (PL) 49.5 20.8 70.3 2.9 1.0

1998-2002

Andrés Pastrana Arango (PC)

54.0 27.0 81.0

Source: Hartlyn (1988), Nohlen (1993), Political Database of the Americas (1999b), Elections Around the World (2001). Note: AB means abstained from running in elections. ANAPO: Alianza Nacional Popular; AD-M19: Alianza Democrática-Movimiento 19 de Abril; MSN: Movimiento de Salvación Nacional; PC: Partido Conservador; PL: Partido Liberal; UNO: Unión Nacional de Oposición.

a There was a coup against the democratic government in 1953. b New elections were held in 1991 under the new 1991 Constitution.

government.109 In the 1940s, with the shift to a more proportional allocation system, this

centralized process began to break down. Rival party directorates emerged as a result of

disputes over party leadership, candidate selection, and list preparation.110 Since there

were no formal laws limiting the use of a party’s name or the number of lists a party

could present at election time, party elites allowed internal factional groups to run rival

lists, called lemas, rather than force these politicians to leave the parties altogether. The

use of lemas appears to have kept most party elites inside the traditional Liberal-

Conservative political realm, preventing challenges to the two-party system. Ambitious

politicians, though eager to win seats on separate lists, were unwilling to give up their

109 This system traces its roots to the 19th century (Martz 1962, 12). 110 See Hartlyn (1988) and Martz (1962) for descriptions of internal party disputes.

159

party affiliation, and with it preferential access to policy-making and the minimal

patronage resources available at this time.

Moreover, it should be also noted that the strong partisan identification among

Colombian voters stood to increase the costs to politicians of giving up the PL or PC

party label. If politicians chose to leave parties, they could not be assured that voters,

even those tied to their personal clientelist networks, would follow them to the polls.

Strong party identification combined with the low cost of remaining in established

parties, since they could form lemas at will and thus could not be denied nominations for

offices or forced to act in accordance with the wishes of party leaders, thus led even the

most disgruntled politicians to think twice about striking out on their own. As shown in

Table 4.3, between 1935 and 1953, the PL and PC never received less than 98.2 percent

total popular votes in elections for the chamber of deputies. These parties maintained

control of nearly all seats in the lower house during this period as well (see Table 4.5).

Since presidents and senators were elected indirectly throughout most of the 19th

and early 20th centuries, the PL and PC were able to guarantee the selection of their

preferred candidates to these offices. Departmental assemblies elected senators until

1945. Senators were directly elected for the first time in 1947. As in the chamber of

representatives, the toleration of lemas in senate contests permitted the PL and PC to

maintain control over the electoral field, even with the switch to direct elections (see

Table 4.4). Presidents were elected indirectly until 1910, ensuring that only a small

group of political elites would hold this office. After 1910, presidents were elected by

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Table 4.4: Colombian Senate Elections (Percent Votes), 1947-1998

Term President

Frente Nacional

PL PC

TOTALPL and PC ANAPO

AD-M19 MSN UNO

1947-51a Mariano Ospina

Pérez (PC) 55.0 44.6 99.6

1951-53b Laureano Gómez (PC)

AB 99.0 99.0

1958-62 Alberto Lleras Camargo (PL)

Yes 57.7 42.3 100.0

1962-66 Guillermo Valencia (PC)

Yes 54.6 45.4 100.0

1966-70 Carlos Lleras Restropo (PL)

Yes 52.6 47.4 100.0

1970-74 Misael Pastrana Borrero (PC)

Yes 46.8 53.1 99.9

1974-78 Alfonso López Michelson (PL)

55.8 32.0 87.8 9.0 3.0

1978-82 Alfonso César Turbay Ayala (PL)

55.2 40.0 95.2 3.0

1982-86 Belisario Betancur (PC)

56.3 40.3 96.6

1986-90 Virgilio Barco Vargas (PL)

49.3 37.0 86.3

1990 César Gaviria Trujillo (PL)

58.5 31.2 89.7 8.5 4.4

1991-94c 52.5 8.0 60.5 10.5 5.4

1994-98 Ernesto Samper Pizano (PL)

50.7 18.8 69.5 2.7 1.9

1998-2002

Andrés Pastrana Arango (PC)

55.9 24.5 80.4

Source: Hartlyn (1988), Nohlen (1993), Political Database of the Americas (1999a), Elections Around the World (2001). Note: AB means abstained from running in elections. ANAPO: Alianza Nacional Popular; AD-M19: Alianza Democrática-Movimiento 19 de Abril; MSN: Movimiento de Salvación Nacional; PC: Partido Conservador; PL: Partido Liberal; UNO: Unión Nacional de Oposición.

a The senate was directly elected for the first time in 1947. b There was a coup against the democratic government in 1953. c New elections were held in 1991 under the new 1991 Constitution.

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Table 4.5: The Distribution of Seats in the Colombian National Congress, 1931-1998 (Percent)

Chamber of Deputies Senate

Year Frente

Nacional

PL

PC

Total

PL and PC

Other

Parties

PL

PC

Total PL and PC

Other

Parties 1931 50.0 50.0 100.0 0.0 1933 53.4 46.6 100.0 0.0 1935 100.0 0.0 100.0 0.0 1937 100.0 0.0 100.0 0.0 1939 66.9 33.1 100.0 0.0 1941 62.6 37.4 100.0 0.0 1943 64.1 33.6 97.7 2.3 1945 63.4 36.6 100.0 0.0 1947 55.7 44.3 100.0 0.0 53.9 46.1 100.0 0.0 1949 53.0 47.0 100.0 0.0 1951 AB 58.2 100.0a 0.0 AB 64.5 100.0b 0.0 1953 AB 57.6 100.0c 0.0 1958 Yes 50.0 50.0 100.0 0.0 50.0 50.0 100.0 0.0 1960 Yes 50.0 50.0 100.0 0.0 1962 Yes 50.0 50.0 100.0 0.0 50.0 50.0 100.0 0.0 1964 Yes 50.0 50.0 100.0 0.0 1966 Yes 50.0 50.0 100.0 0.0 50.0 50.0 100.0 0.0 1968 Yes 50.0 50.0 100.0 0.0 1970 Yes 50.0 50.0 100.0 0.0 50.0 50.0 100.0 0.0 1974 56.8 33.2 89.9 10.1 58.9 33.0 91.9 8.1 1978 55.8 41.7 97.5 2.5 55.3 43.7 99.0 1.0 1982 57.8 41.2 99.0 1.0 55.2 42.9 98.1 1.9 1986 54.3 41.7 96.0 4.0 50.8 37.7 88.5 11.5 1990 61.8 35.2 97.0 3.0 57.9 33.3 91.2 8.8 1991 54.0 16.0 70.0 30.0 54.9 8.8 63.7 36.3 1994 54.6 35.6 90.2 8.8 59.0 27.0 86.0 14.0 1998 60.9 32.3 93.2 6.8 50.0 25.5 75.5 24.5 Source: Archer (1995), Martz (1962), Political Database of the Americas (1999a), Political Database of the Americas (1999b), Elections Around the World (2001). Note: PC: Partido Conservador; PL: Partido Liberal.

162

a The PL abstained during the 1951 legislative elections. An executive decree required that opposition parties fill a certain number of seats. The PL, however, refused to fill these seats, leaving 51 out of 122 seats vacant (Martz 1962, 125). b The PL abstained during the 1951 legislative elections. An executive decree required that opposition parties fill a certain number of seats. The PL, however, refused to fill these seats, leaving 22 out of 62 seats vacant (Martz 1962, 125). c The PL abstained during the 1953 legislative elections and refused to fill its allocated seats.

plurality in single-round contests. Such “first-past-the-post” competitions precluded

ambitious politicians from challenging the PL or PC party organizations for power. In

single-round plurality systems, small parties cannot mount challenges for this office

alone, and voters were usually unwilling to waste their votes on such doubtful

contenders. Moreover, single-round contests prevent small or new parties from carving

out positions as potential coalition partners, since they cannot demonstrate their strategic

political value with strong showings in first round elections. As a result, larger parties

tend to fare better in single-round, plurality contests, with small parties often ignored by

voters and even subsumed by larger parties over time. Table 4.6 illustrates the dominant

position of the PL and PC in presidential elections during this period. Together, these

parties’ share of total popular votes never dipped below 89.9 percent between 1930 and

1949.111

111 It is also interesting to note that the share in votes going to the PL and PC in legislative elections tended to outweigh those going to their presidential candidates (see Figure 1).

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Table 4.6: Colombian Presidential Elections (Percent Votes), 1930-1998

Term President

Frente Nacional

PL PC

TOTALPL and PC

ANAPO

AD-M19 MSN

Yes Colombia

1930-34 Enrique Olaya

Herrera (PL) 44.9 55.1a 100.0

1934-38 Alfonso López Pumarejo (PL)

97.6 N/C 97.6

1938-42 Eduardo Santos (PL)

100.0 N/C 100.0

1942-46 Alfonso López Pumarejo (PL)

89.8b N/C 89.8

1946-49 Mariano Ospina Pérez (PC)

58.6c 41.4 100.0

1949-53d Laureano Gómez (PC)

N/C 100.0 100.0

1958-62 Alberto Lleras Camargo (PL)

Yes 80.0 20.0 100.0

1962-66 Guillermo Valencia (PC)

Yes 62.1 62.1

1966-70 Carlos Lleras Restropo (PL)

Yes 71.8 71.8 28.2e

1970-74 Misael Pastrana Borrero (PC)

Yes 40.7 40.7 39.1f

1974-78 Alfonso López Michelson (PL)

56.3 31.4 87.7 9.5

1978-82 Alfonso César Turbay Ayala (PL)

49.5 46.6 96.1

1982-86 Belisario Betancur (PC)

41.0 46.8 87.8

1986-90 Virgilio Barco Vargas (PL)

58.2 35.8 94.0

1990-94 César Gaviria Trujillo (PL)

48.2 12.3 60.5 12.6 23.9

1994-98 (first round)

45.3 45.0 90.3 3.8

1994-98 (second rnd)

Ernesto Samper Pizano (PL)

50.6 48.5 99.1

1998-2002 (first round)

34.6 34.3 68.9 26.9

1998-2002 (second rnd)

Andrés Pastrana Arango (PC)

46.5 50.4 96.9

Source: Hartlyn (1988), Nohlen (1993), Political Database of the Americas (1999c), Political Database of the Americas (1999d), Political Database of the Americas (1999e), Political Database of the Americas (1999f).

164

Note: N/C means no candidate run. ANAPO: Alianza Nacional Popular; AD-M19: Alianza Democrática-Movimiento 19 de Abril; PC: Partido Conservador; PL: Partido Liberal.

a There were two Conservative candidates splitting this share of votes. b The vote was divided between two candidates: Carlos Arango Vélez received 41.3 percent total national votes and Alfonso López Pumarejo received 48.5 percent total national votes. c The vote was divided between two candidates: Jorge Eliécer Gaitán received 26.3 percent total national votes and Gabriel Turbay Ayala received 32.3 percent total national votes. d Deposed in 1953. e PL/ANAPO coalition. f PC/ANAPO coalition.

Political Institutions and 20th Century PL-PC Political Dominance

While political institutional arrangements enabled the PL and PC to monopolize

all levels of government during the early stages of democratic rule, so too did they ensure

combined PL-PC power after the return to democracy in 1958. Despite attempts by

politicians to win elections in new and small parties, the country’s Frente Nacional (FN)

(1958-74) power-sharing agreement, unique balloting system, concurrent elections for

national, departmental, and local legislatures, plurality presidential formula, and tricky

voter registration procedures favored the survival of the traditional PL-PC party structure.

Since the return to democracy, voter registration has benefited larger party

organizations. Although universal suffrage existed since 1956, it was difficult for most

voters to make use of their new enfranchisement without the aid of large parties.

According to Archer (1990, 124-126), the process of registering to vote in Colombia is

tedious and burdensome. Since the 1970s, people have received the right to vote upon

requesting their national identity papers. If, however, “they fail to vote in any national

election, … their names are dropped from the registration roles and they must register”

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(Archer 1990, 124-125). To reregister, citizens must visit the municipal seat, which is

difficult in rural areas. In the event that a citizen moves, the process of registering in a

new area requires “overcoming some extraordinary bureaucratic obstacles and a

considerable amount of paperwork” (Archer 1990, 125). Parties with extensive local

networks have learned to take advantage of this process. In particular, local power

brokers and party activists from the PL and PC frequently assume the task of registering

their supporters (Archer 1990, 125). The electoral benefits accrued to PL and PC

candidates through controlling local registration have also encouraged them to prevent its

reform.

Every fourth year voters have gone to the polls several weeks after legislative

elections to vote for the national president. Presidential candidates were responsible for

preparing and distributing their own ballots until 1990.112 This gave large parties a

distinct advantage over smaller groups unable to rely on large networks of party workers,

activists, and power brokers to distribute ballots.

During the FN power-sharing period, the PL and PC alternated control over the

national executive.113 Obviously, the FN agreement gave the PL and PC a monopoly

112 In 1988, a law was passed to switch to state produced and distributed ballot system. In presidential elections that year, the national government provided voter cards with party labels and candidate pictures (Archer 1990, 122). 113 During the FN, the distribution of votes across competing lemas often helped to determine which faction would choose the official FN presidential candidate.

166

Figure 4.3: Percent Votes Won by the PL and PC in Presidential and Chamber of Deputies Elections, 1958-1990

30

40

50

60

70

80

90

100

1958 1960 1962 1964 1966 1968 1970 1974 1978 1982 1986 1990

Year

Perc

ent

President Chamber of Deputies

Source: Hartlyn (1988).

over the presidency, helping them to maintain their historic two-party system. Even so,

their share of votes tended to vary dramatically from election to election (see Figure 4.3).

Presidential elections during this period functioned as a national plebiscite on the FN

political regime.

After the FN ended in 1974, presidents were once again elected in single round,

plurality contests, a system favoring larger parties. As shown in Table 4.6, the PL and

PC dominated presidential elections during most of the 20th century. In 1990, however,

these parties experienced a temporary loss of support, only to regain their traditional

political positions in 1994. They increased their vote share in the 1994 presidential race

167

despite the introduction of a strict majority system with run-offs.114 The use of plurality

elections helped to stabilize the PL and PC party vote, keeping these parties’ vote shares

more in line with theories about the effect of plurality presidential formulas on party

systems.115 In terms of elections for local executives, both during and after the FN, the

PL and PC controlled these offices. Presidents appointed all departmental governors,

while governors appointed municipal mayors.116 Such appointments precluded small

parties unable to compete for the national presidency from holding local executive

offices, preserving the traditional two-party regime at these levels of government.

The Puzzling Effect of Colombia’s Multiple List Electoral System on Party Politics

Between 1958 and 1991, Colombian voters regularly cast only one vote to fill

seats in the national legislature, departmental assemblies, municipal councils, and local

114 This reform was passed in 1991, but did not affect the presidential race until 1994. 115 It is interesting to note that legislative elections did not appear to have a strong coattail effect on presidential elections during this period. Though the PL and PC dominated these both presidential and legislative contests, their vote shares were not synchronized. Legislative elections in Colombia, even though they favored large parties because they allowed multiple lists, served as quasi-primaries between various factions within the PL and PC and helped party leaders choose which faction would nominate each party’s official presidential candidate. If legislative competition had any coattail effect on presidential elections, it was most likely a factional coattail effect, not a party one. 116 Governors were directly elected for the first time in 1991, and mayors were directly elected for the first time in 1988.

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administrative councils.117 Votes for these offices could have been cast separately, but

thanks to Colombia’s distinctive balloting system voters usually did not attempt to

differentiate between different levels of government. As in presidential elections, the

national government played no role in creating or distributing legislative ballots. Instead,

this task was left to the individual candidates heading party lists. All party lists were

closed and blocked. Archer (1990, 122-123) describes the process of creating and casting

the Colombian ballot as follows:

[t]he head of City Council List 1, at his own expense and initiative, will have his list printed up, and will make and distribute to his electorate the “sobres” or “paquetes” (ballot envelopes) into which the individual ballots have already been placed. Prior to distributing the ballot envelopes, the head of City Council List 1 will have received or personally printed up the ballots of his networks’ candidate lists for the Departmental Assembly, and the Chamber of Representatives and Senate, and inserted them into the ballot envelope along with his own. He then has the envelopes folded over, but not sealed (the law requires that they be unsealed, of a certain size, and of a certain color, white), and then begins the laborious process of distributing them to his electorate. When the time comes for casting the ballot, the voter signs the registration sheet, places the ballot envelope in the ballot box, and has one of his fingers dipped in indelible ink… While the voter has the option of substituting other lists, the tendency of candidates to restrict the handing out of the ballot envelopes until election day serve as a sharp disincentive to do so.

117 Prior to this period, local legislative elections were almost always held separately from national ones. For example, in 1931, elections for departmental assemblies were held in February, national congressional elections were held in May, and municipal councils were elected in October (Hartlyn 1988, 29). The presidential race occurred one year prior to these elections, in 1930. Presidents have appointed departmental governors since the Constitution of 1886 replaced the federal system outlined in the Constitution of 1863. Since the return to democracy, municipal and departmental elections have been held concurrently with national elections, except in years when only local elections were held. In 1972, 1976, 1980, and 1984 no national elections were held, though departments and municipalities elected local legislatures.

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Sometimes ballots were printed in newspaper advertisements run by parties or politicians,

which voters could then cut out and cast at the polls. Most voters received their ballots

from party functionaries (Taylor 1996, 122).

In theory, ballot envelopes could include one party slate with candidates for a

single level of government, for example, a local municipal council. In practice, ballot

envelopes always included a series of party slates, or a single party slate, listing

candidates for all legislative bodies being elected that day. Politicians had a strong

incentive to increase support for their lists by forming coalitions with lists running for

other levels of government. Because parties were allowed to field multiple lists for any

level of government, pre-prepared ballot envelopes simplified a potentially laborious

voting process, as well as cut down on ticket splitting. Envelopes that included more

than one slate of candidates for the same level of government were considered null and

void.

Seats in the national legislature, as well as in departmental assemblies, municipal

councils, and local administrative councils are distributed among lists using the Hare

formula with largest remainders, a system favoring smaller party groups or individual

lists. During the FN, the allocation of seats at all levels of government was fixed; the PL

and PC were each entitled to one half of total seats in each legislative body. This enabled

these parties to retain control over elections, as well as seats, since no “unofficial” FN

parties were allowed to run competing lists. The allocation of legislative seats among

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factions within the PL and PC depended on the list’s share of total party vote.118 The

only way for opposition parties to win offices was to run lemas within the official PC or

PL party umbrellas.119

When the FN ended in 1974, electoral competition was opened to opposition

parties. Parity in departmental assemblies and municipal councils, however, ended a few

years earlier with the Constitutional reform of 1968 (Taylor 1996, 88). The percent vote

received by individual lemas is used to determine their shares of seats in both national

and local legislatures. This means that votes received by each party’s lemas are not

pooled. The Hare quota is determined by dividing the number of valid votes by the

district magnitude, with each list receiving as many seats as quotas reached.120 All

remaining seats are distributed according to largest remainders. Here, lists are arranged

in descending order according to the number of remaining votes, with each list receiving

a seat until all seats in that district have been filled. Most politicians calculated that,

given the mechanics of this system in the absence of vote pooling, only a small

percentage the popular vote was required to win seats (Archer 1990; Cox and Shugart

118 This made Colombia’s electoral system during the FN somewhat similar to that used in Uruguay, with the obvious difference that the share of seats allocated to each party was predetermined at 50 percent. In Uruguay, votes for individual lemas are pooled first to determine the overall number of seats won by each party. These seats are then distributed across the competing lemas according to their share of the total pooled party vote. 119 One faction within the PL, the Movimiento Revolucionario Liberal (MRL), served as a means for members of radical political groups and the communist party to get their members elected to Congress (Hartlyn 1988, 88). The populist Alianza Nacional Popular (ANAPO), an electoral vehicle for the former dictato General Rojas Pinilla, ran lists under both the PL and PC party labels during the FN (Hartlyn 1988, 89). After the FN came to an end, these parties ran lists under their own formal banners in 1974, though they did not survive long on their own.

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1995; Shugart 1992).121 As a result, entrepreneurial politicians formed separate lists

under the larger PL or PC groups. In 1986, 104 different lemas filled the 144 senate seats

up for grabs that year. In the chamber of deputies, 170 lemas elected 199 deputies, with

153 lists winning only one seat each (Archer 1990, 72). Most lists elected only their top

candidate, with most seats handed out according to largest remainders. Since 1985,

parties have had legal control over the use of their labels, but most have chosen not to

limit the number of lists running in elections.

Although the Hare system with largest remainders tends to favor small parties,

most scholars argue that the use of multiple lists enabled the PL and PC to maintain their

privileged political positions, even after the end of FN legislative parity. Rather than risk

losing the benefits of name recognition accrued to members of established parties,

ambitious politicians formed lemas and ran under the established PL and PC umbrellas.

Scholars often refer to the intense party identification attributed to Colombian voters to

help support this argument. Pre-prepared party ballot envelopes favored established

parties because they reduced the likelihood that voters would split their tickets. Only

those politicians able to join ballot envelopes including lists for all levels of government

could hope to win elections, thus precluding smaller and regionally based parties from

gaining seats. Likewise, the organizational capacity required for distributing ballot

envelopes made it difficult for small parties to challenge the larger PL or PC party

120 For districts with only two seats, seats were allocated according to the Droop quota, equal to the total number of valid votes divided by the district magnitude plus one. 121 Colombia’s allocation system has been likened to the single non-transferable vote system used in Japan until the 1990s. See Cox and Shugart (1995) for this comparison.

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networks.122 As a result, rather than forming new parties, politicians preferred to join or

remain under the PL and PC party umbrellas, enabling the PL and PC to dominate the

popular vote, as well as most seats in congress (see Tables 4.3, 4.4, and 4.5).123

While the conventional argument about the effect of lemas on Colombian party

politics appears logical on its face, it suffers from one flaw. Some scholars of Colombian

politics have noted that running for offices in multiple list systems requires cultivating a

personal vote, not party name recognition, to win elections.124 Personal appeals are

particularly important in systems like the one in Colombia where votes are not pooled

and where separate ballots, and thus separate lists, elect national and local offices. In

such a context, lemas win seats at the expense of opposition parties and lists run by party

colleagues. Party label, though perhaps serving some purpose against opposition party

lists, does not help politicians win support over lemas fielded by party colleagues, a

major source of political competition, nor does it help win the support of local power

122 Winning seats in the national legislature required building the support of politicians, lists, and power brokers controlling votes at lower levels of government. Larger, established parties with extensive political organizations were in a much better position to accomplish such tasks. Likewise, winning seats in departmental assemblies and municipal councils were often tied to national electoral outcomes, thanks to ballot envelopes, significantly reducing the chances for small or new parties to win local offices. Even strong, regionally based party organizations found it difficult to win seats in local legislatures, since they were usually unable to construct larger coalitions with politicians running lists in elections for other levels of government. 123 These parties also remained in control of local elections, even when held in years without national competitions. In 1976 and 1980, the PL and PC received a total of 91.1 and 92.7 total votes in departmental elections, respectively. In 1984, they received a total of 91.4 percent total votes in municipal elections (Hartlyn 1988, 150-151). 124 Shugart (1992, 24), Carey and Shugart (1995, 429), and Taylor (1996, 84) have noted the importance of cultivating a personal vote in Colombia, though they do not address the fundamental puzzle discussed in this chapter. That is, why politicians in Colombia would choose to remain under the PL or PC umbrellas when they won their seats with a personal vote.

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brokers and party activists needed to get out the vote. Instead, personal appeals to both

power brokers and voters alike help politicians to outpace fellow party members and

opposition party lists.

To be sure, lemas served an important purpose during the 1940s when few, if any,

parties could challenge the PL-PC political regime. Lemas gave rival party elites an

opportunity to challenge party leaders for control over the party apparatus. During the

FN, lemas served a similar purpose but, more importantly, they acted as a means for

expressing opposition to the FN agreement. Since “unofficial,” non-PL or PC parties

were precluded from participating in elections, even the most ambitious politicians

refrained from trying their luck in new parties and chose to remain within one of the

“official” party groups. After the end of the FN, however, politicians were quick to take

advantage of the multiple list system, leading to a startling increase in the number of lists

running under the PL and PC banners. Even so, given the ease with which politicians

could win seats by running separate lemas, it remains puzzling that most would choose

remain within the established PL or PC after the end of the FN. The lack of party

discipline, thanks to the lema system, particularly in the national congress, meant that

presidents had to bargain individually with congressmen, even those from their own

parties, to ensure support for any policy programs and legislation needing congressional

approval. Politicians winning offices on separate lists thus could have used their

independent bases of political support to form their own parties, increasing their political

leverage against presidents and thus the benefits won from their support. Yet they did

not.

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It should be noted that many scholars emphasize the more ascriptive basis of party

loyalty in Colombia to explain the longtime strength of the PC and PL party machines

(see, for example, Dix 1967). Certainly, during much of the 19th and 20th centuries, party

identification was unusually strong among Colombian voters. Since the 19th century,

many voters have been tied to one of this country’s two political parties based on village

or familial ties. For this reason, politicians hoping to form new parties traditionally knew

that the costs of doing so would be high; it was unlikely that voters with such strong party

identification would follow them to the polls. In such a context, the low cost of

remaining within parties encouraged politicians to remain loyal, simply forming lists in

order to have more control over their own electoral fates.

While it is true that party identification has been remarkably strong in Colombia,

it is difficult to support the notion that such loyalties continue to be radically stronger in

Colombia than they have been in some other Latin American countries. Scholars have

regularly attested to the strength of ties between voters, particularly labor groups and

workers, and the Partido Justicialista (PJ) in Argentina, as well as have highlighted the

stable bases of support for the social democratic Partido Liberación Nacional (PLN) in

Costa Rica and Acción Democrática (AD) in Venezuela. Indeed, many party activists

and voters were willing to cast votes for the PJ, even when they were forbidden to do so

during periods of proscription. In Venezuela, many early AD supporters spent years

underground in an effort to see their country’s return to democratic rule, attesting to the

strength of support for this party even during periods of repression. Yet, while politicians

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and voters have remained loyal to the PLN in recent years, they have abandoned the PJ

and AD in surprising numbers since the early 1990s.

Furthermore, as noted above, several scholars of Colombian politics have recently

described the decline in traditional party identification among voters since the 1970s (see,

for example, Taylor 1996). Yet, most politicians and voters have continued to vote for

these historic political groups. The party loyalty of most PL and PC politicians becomes

even more puzzling given the intense public dissatisfaction with the undemocratic and

corrupt practices of the FN, and with the PL and PC in recent years, as expressed by

many citizens, rebel and guerrilla groups, and party members. While it is possible that

party loyalty may be quite strong in Colombia, even stronger than elsewhere in the

region, it is difficult to expect that such loyalty alone can account for the stability of these

parties, and their continued dominance over Colombian politics and government.

Economic Policy-Making and Party Stability in Colombia

While institutional arrangements certainly worked to the advantage of the

established PL and PC organizations, what is usually neglected in analyses of Colombian

party politics is the contribution of economic policy-making to the long lasting stability

of these parties. The use of multiple lists forced politicians to cultivate the support and

loyalty of local party activists and power brokers. As will be shown below, the patronage

benefits and other resources available to members of the dominant PL and PC political

organizations smoothed the process of cutting deals with power brokers and party

activists at election time. As a result, even the most popular politicians with extensive

personal support networks were dissuaded from giving up access to resources critical for

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servicing constituents and party networks, encouraging them to remain within the

established PL and PC umbrellas.125 Though institutional arrangements contributed to

the formation and survival of the PL-PC political regime, the stability of these parties’

positions as dominant players throughout the 20th century is owed to their steady control

over economic policy-making and the distribution of benefits, as will be shown below.

Public Spending and AD-COPEI Political Dominance

The sudden emergence of AD and COPEI as dominant political players in the

1970s was made possible by their early accession to the national executive. As AD and

COPEI traded control of this office, each in turn gained access to the fiscal resources and

policy-making tools necessary for building party organizations and strengthening

political support. This section shows how, thanks to their monopoly over public

spending, the infant AD and COPEI parties were able to eclipse their competitors,

contributing to the birth and stability of Venezuela’s two-party system. This section

explains how the distribution of state resources facilitated the transformation of large

parties into dominant ones, thus demonstrating how political institutions and public

policy worked together to produce Venezuela’s stable, two-party system.

125 Interestingly, several scholars do note the important role that such constituent service plays in helping politicians differentiate themselves from lists run by fellow party colleagues. However, they do not draw the connection between the need for such resources and the incentive to remain aligned with dominant parties able to provide them. See, for example, Shugart (1992, 24).

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The Policy-Making Powers of Venezuelan Presidents

Presidents are the most powerful political players in Venezuela and nearly all

other Latin American countries, making them central to party building. Despite the

substantial law-making authority granted to congress, presidents have been able to usurp

many of this body’s law-making functions to become the country’s principal policy-

makers.126 Between 1959 and 1995, for example, the executive branch drafted and

submitted 84 percent of all laws passed by congress (Crisp 2000, 73).127 Even more

important, presidents have extensive decree powers, which include those delegated by

126 According to the 1961 Constitution, both the senate and chamber of deputies can initiate legislation and create permanent committees to study and draft legislation in specific policy areas. The chamber of deputies retains the sole authority to initiate discussions of the budget and system of taxation, and it can censure and remove cabinet ministers. The senate maintains the right to open treaty deliberations, and authorize the sale of state-owned property. It also has the power to vote to impeach presidents. Like Congress, presidents, and any of their ministers, have the authority to initiate legislation, as well as the right to participate in its discussion in Congress. Presidents can also suspend the implementation of legislation passed by Congress, although if Congress subsequently overrides this veto with a two-thirds vote, he must enact the legislation within five days. This is the only type of veto available to presidents. 127 Figures for laws initiated in the legislature include a large percentage of bills simply approving actions already taken by the president or meant to rectify inconsistencies in previous legislation. With these removed, the legislature only passed, on average, eight pieces of original legislation each year (Crisp 2000, 51-52).

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congress and those derived directly from the Constitution. 128 Both decree authorities

enabled presidents to implement much of their policy programs without congressional

interference (Coppedge 1994). Presidents also make numerous appointments to the

national bureaucracy, called the centralized public administration, as well as to the

general public sector, known as the decentralized public administration. The state sectors

has grown steadily over time. It is estimated that the state sector employs approximately

60% of the Venezuela’s total labor force (Latin American Weekly Report, March 2,

1989).129 Control over the national public sector lets presidents influence the ultimate

interpretation and implementation of legislation, even that initiated and passed by

congress. Presidents in many other Latin American countries have similar powers.

128 Presidential decrees appear to be the principle method through which policy measures and laws are enacted in Venezuela. Between 1959 and 1995, Congress passed a total of 1,073 laws, amounting to 29 laws per year. This presents a stark contrast to the Colombian Congress, which passes over 70 laws per year (Coppedge 1994, 69-70; Crisp 2000, 73). All decrees take immediate effect, regardless of type, though Congress maintains the legal authority to override them. Presidents are constitutionally empowered to restrict the rights of citizens. Although such decrees are temporary and last only as long as rights are suspended, some rights, including the economic rights of citizens, have been suspended practically every year since the return to democracy (Crisp 2000). Between 1961 and 1994, presidents issued, on average, six decrees per year justified by the suspension of economic rights (Crisp 1998, 90). Decrees made with delegated authority become permanent laws. Though Congress has never granted a general decree authority to a president, between 1961 and 1999 five presidents were delegated a more limited power to issue decrees concerning economic and financial matters. Three of these presidents held majorities in Congress, and two were facing economic crises, explaining the delegation of this authority. Between 1961 and 1994, three presidents issued a total of 139 decrees aimed at such issues (Crisp 1998, 76-84). These figures do not take into account the multitude of decrees justified by the suspension of other constitutional rights, nor those issued with other types of limited authorities delegated by Congress. 129 The number of governmental ministries has increased from 13 under the presidencies of Rómulo Betancourt (AD) (1959-64) and Raúl Leoni (AD) (1964-69), to 15 under Rafael Caldera (COPEI) (1969-74) and Carlos Andrés Pérez (1974-79), to 20 under Luis Herrera Campins (COPEI) (1979-84) (Kelley 1986, 39). Each of these ministries is fully staffed. The nationalizations during Pérez's (AD) first term in office during the 1970s greatly enlarged the portion of the economy under state control.

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Crisp (2000) convincingly argues that the use of a close-list ballot and

proportional method of allocating seats in congress undermined the legislature’s position

relative to the president.130 Closed-lists increase the dependence of politicians on party

elites, since party leaders determine the order and composition of party slates. Though

many other countries used closed-lists systems, this process of creating lists has been

particularly centralized in Venezuela, with national party elites controlling the ultimate

composition of lists submitted by state party leaders (Coppedge 1994).131 National party

leaders also controlled decisions about which policy programs to support. Congressmen

in Venezuela therefore are reluctant to vote against the instructions of party elites

(Coppedge 1994, 19-22; Kelley 1971, 477-480). Strong party discipline ensues, reducing

the incentive of individual legislators to seek out information on constituent preferences,

or to educate themselves on technical or policy related issues. This undermines

congress’s capacity to act as a place to study, draft, debate, and negotiate laws and policy

programs.132 In contrast, presidents have an incentive to invest in the policy-making

process, which they are able to do given their authority to create commissions to study

policy issues, and draft legislation and implement decrees.

Crisp (2000) also notes that the use of proportional representation to allocate seats

in congress makes it difficult for a single party to win an absolute majority, the number

130 Other authors have noted the subservience of the Venezuelan legislature to the national executive as well, most notably (Coppedge 1994; Karl 1997). 131 Argentina, for example, uses a closed-lists system, but provincial party leaders, not national ones, control the order and composition of lists. See Chapter Eight for a more detailed account of the importance of provincial party leaders in Argentine parties.

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required to pass legislation or override presidential decrees. As a result, no party that has

been willing to compete with presidential interests has ever controlled congress. When a

party has held a majority in both houses, it has always been the same party as that of the

president, and thus unlikely to countermand his policy goals (Coppedge 1994).133

Indeed, each time the president’s party held a majority, he was delegated substantial

decree authority to carry out his policy agenda. When no party has held a majority, party

leaders and presidents have found it difficult to build working majorities.134 Legislators

have little political standing apart from their party delegations and are thus unlikely to

negotiate independent deals with opposition parties or presidents. Even if there are

political entrepreneurs willing to sell their votes, party leaders and presidents from

opposition parties have little incentive to negotiate with them, since they are likely to be

removed from office for violating party discipline. For this reason, parties hoping to

build congressional coalitions have had to build support through multi-party pacts, not

negotiations with individual politicians. These pacts, however, have also tended to be

temporary and difficult to hold together because of the inherent antagonism between

132 As a result, the Venezuelan committee system is quite weak compared to other countries, with committees poorly attended and meeting only rarely (Crisp 2000). 133 In addition, presidents are often freed from party discipline (Coppedge 1994, 65). As a result, presidents often do not consult their congressional delegations, allowing them to simply to present their policy programs as a fait accompli. 134 In fact, no Venezuelan president has been able to build a coalition in Congress since the late 1960s (Coppedge 1994, 68). Though coalitions sometimes formed among opposition parties in the legislature, presidents have simply circumvented them by enacting their policies through decree (Coppedge 1994, 69).

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Venezuelan parties, particularly AD and COPEI.135 This weakens the legislature’s ability

to pass original legislation, countermand presidential decrees, and thus protect its

institutional position relative to the president. The national executive is the most

important policy-maker in the system, and is able to use public policy-making to reward

constituents, party members, and party activists, and cooperative congressmen.

Presidents and Public Spending

Venezuelan presidents have the institutional capacity to direct most public policy,

and in addition the vast financial resources at their disposal reinforce their political

position relative to other governmental actors. As shown later in Chapter Seven, the

authority to implement policy in the absence of fiscal resources undermines the ability of

politicians to achieve any policy goals. Presidents in Venezuela, however, draft the

annual budget, control the decentralized public administration, and determine the

distribution of state oil revenues.136 Indeed, Karl (1997) argues that oil revenues, more so

than any formal institutional power, are responsible for the powerful position of

Venezuelan presidents in relation to other branches of government.

135 Coppedge (1994) notes that opposition parties frequently formed coalitions in Congress. These coalitions, however, did not manage to accomplish much in terms of passing original legislation or in the way of countermanding presidential decrees. Crisp (2000) finds no significant difference in the amount of legislation passed by Congress in any period. 136 Revenues earned from oil production have been the most important source of governmental income and foreign exchange throughout the 20th century. In the 1930s, oil products accounted for about 90 percent of all exports. This pattern has changed very little over time. Between 1970 and 1998, oil accounted for, on average, 78.5 percent of exports each year (de Janvry et al. 1994, 90; de Krivoy 2000, 259). For the past 30 years, yearly oil income has accounted for, on average, 58.8 percent of all ordinary governmental revenues (de Krivoy 2000, 259).

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Constitutionally, congress must approve the allocation of state revenues in the

annual budget prepared by the president. According to Crisp (2000, 67), “legislators

have the authority to alter some spending figures, but they cannot authorize expenditures

in excess of the executive’s estimate of government revenues.” When there has been no

legislative majority in favor of passing it, the budget has been rejected as a whole because

there is very little time allotted for drafting modifications. When the budget is rejected,

which has been only twice, the previous year’s budget takes effect, that is, the budget

drafted by last year’s president. This reversion point favors the national executive and

his policy goals, unless of course he or his party did not hold office the previous year. As

a result, congress usually passes the budget with only minimal changes and thus without

any major alterations to the president’s allocation of state resources (Crisp 2000, 67).

The largest part of the public sector, the decentralized public administration, is

“off-budget” and thus not subject to congressional supervision (Coppedge 1994, 69; Karl

1997).137 The decentralized public sector includes state-owned enterprises and various

agencies and commissions, including development banks and financial institutions,

created to work in areas not normally included in the business of central government

ministries. Presidents control the creation of enterprises and agencies in the decentralized

public sector, as well as appoint their directors. Presidents also manage the ministries to

which these public institutes are assigned (CLAD 1979; Crisp 2000, 67-68).

Decentralized public enterprises and agencies are allocated monies in the national budget;

137 In 1960, the decentralized public administration accounted for approximately 30 percent of total government spending; by 1980, their share had grown to 70 percent (Crisp 2000, 68).

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however, congress cannot direct how these resources are subsequently spent. The

decentralized public sector retains considerable autonomy from congress, and thus from

political parties and their politicians, giving presidents yet another means of carrying out

their economic and social policy agendas (Kornblith and Maingón 1985, 219).

Table 4.7: Governmental Income During Selected Venezuelan Governments, 1936-1978 (Millions of Current Bolívares)

Years President and Political Party Total Income a Average Yearly

Income 1936-40 General E. López Contreras

(Authoritarian) 471 94

1941-45 General I. Medina Angarita

(Authoritarian) 971 194

1946-48 Trienio, Rómulo Gallegos (AD) 2,337 779

1949-57 General M. Pérez Jiménez (Authoritarian)

14,578 1,620

1958 Provisional Government (Authoritarian) 2,713 2,713

1959-63 Rómulo Betancourt (AD) 16,285 3,275

1964-68 Raúl Leoni (AD) 25,573 5,114

1969-73 Rafael Caldera (COPEI) 36,952 7,390

1974-78 Carlos Andrés Pérez (AD) 148,640 27,728 Source: Karl (1997, 117).

a Karl (1997) uses current bolívares until 1973 due to the low inflation rates in Venezuela. After 1973, figures are in 1973 bolívares.

Any additional, unforeseen governmental income available for distribution to the

public sector during the course of the year is considered “off-budget” (Karl 1997, 164).

Early AD and COPEI presidents saw a dramatic rise in fiscal revenue, thanks to growing

oil revenues. As shown in Table 4.7, during his term in office (1959-1964) Betancourt

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(AD) had access to nearly twice as many revenues each year as did Pérez Jiménez.

Subsequent AD and COPEI presidents had access to even more fiscal resources,

particularly after the oil boom in the 1970s. Much of these growing revenues were

distributed as “credits” to various governmental agencies. Although they were not a

major part of state spending during the initial years of democratic rule, their size and

importance grew over time. In the 1970s, these funds amounted to, on average, 33

percent of the yearly budget or 17.5 percent of total governmental spending.138

The president also appoints the director of the Central Bank and can require him

to step down in the event of disagreements over state monetary policy (de Janvry et al.

1994, 104). Presidents also have considerable discretion over both monetary and fiscal

policy. In sum, presidents direct most state spending and public policy through their

control over the bureaucracy, public enterprises, and state agencies.

Presidential Policy-Making and State-Led Economic Development

The law-making tools, public agencies, and fiscal revenues available to

Venezuelan presidents make them central to policy-making. In the first decade of

democratic rule, AD and COPEI presidents used their policy prerogatives to improve

social welfare and economic development. Social spending, including education, health,

sanitation, water, and housing, nearly doubled with the return to democracy, reaching an

average of 28.1 percent of total governmental expenditures between 1958 and 1973

(Kornblith and Maingón 1985, 205). Spending on education and health went from 9.5

138 Calculated from Karl (1997, 166).

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percent of total governmental expenditures at the end of the Pérez Jiménez regime in

1957 to 24.5 by the end of Caldera’s (COPEI) presidency in 1973 (Echevarría 1995, 44).

Early AD and COPEI governments undertook major infrastructure projects in order to

improve living conditions and lay the foundations for economic development.

AD and COPEI presidents also implemented measures to promote import-

substitution industrialization. ISI is said to have come late to Venezuela, especially

compared to other countries in Latin America.139 What is important to note, however, is

most ISI expansion occurred after the return to democracy in 1959. AD and COPEI

presidents initiated programs to promote economic development through

industrialization, dramatically increasing the weight of the state in the economy. Despite

a major decline during the Betancourt (AD) administration (1959-1963), public

investment rose by 55.1 percent during Leoni’s (AD) tenure in office (1963-1968), and

by another 42.4 percent during the presidency of COPEI’s Rafael Caldera (1968-1973)

(see Table 4.8). This trend continued under Pérez (1973-1978), increasing by 98.8

percent (see Table 4.8). During this same period (1959-1973) public industrial

investment increased 438.2 percent, averaging 36.7 percent of all industrial investment

each year (Crisp 2000, 161). Government policies led to rapid industrialization, with 80

139 This conventional wisdom is not, however, supported by empirical evidence. ISI policies were undertaken in Venezuela as early as the 1940s, about the same time as other countries in Latin America (Hausmann 1987). During the brief trienio, for example, the AD government created financial institutions to support investment and promoted industrialization with protectionist policies. In addition, the AD government almost doubled the number of state-owned enterprises and institutes, creating ten in 1946 alone, as well as founded the Corporación Venezolano de Fomento (Karl 1997, 95). Karl (1997, 97) states that a sizeable portion of opposition to Pérez Jiménez solidified when he moved to reduce credits supporting the industrial sector that had been put in place by AD in the 1940s.

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percent of Venezuela’s industries being created after 1960 (Naím and Piñango 1986,

154).

Presidents channeled most public investment through the decentralized public

sector. Between 1959 and 1973, 135 state-owned enterprises, agencies, and

Table 4.8: Investment During Selected Venezuelan Governments, 1950-1999

Year President Public Investment (percent increase)

Private Investment

(percent increase)

Petroleum Investment

(percent increase) 1945-48 Trienio (AD) 140.4 161.4 234.1

1949-52 Junta (military) 59.2 36.2 -38.5

1953-58 Pérez Jiménez (military)

106.6 8.1 59.7

1959-63 Betancourt (AD) -51.6 15.2 -76.9

1964-68 Leoni (AD) 55.1 72.2 81.5

1969-73 Caldera (COPEI) 42.4 87.8 -23.4

1974-78 Pérez (AD) 98.8 93.7 93.4

1979-83 Herrera Campins (COPEI)

-44.9 -58.3 88.7

1984-88 Lusinchi (AD) 20.4 -30.0 226.8

1989-93 Pérez (AD) -13.3 5.0 -11.4

1994 Temporary Government

-39.8 -37.8 -14.7

1995-99* Caldera (CN/MAS) 140.4 161.4 234.1 Source: Calculated from Baptista (1997). Note: *Data for 1995 only.

governmental institutes were created (see Table 4.9). Public sector enterprises were used

to develop strategic sectors of the economy, such as the petrochemical, steel, iron, and

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aluminum industries (Sabino 1999, 165-166). In addition, public industries were created

to produce goods and services for domestic consumption. These enterprises included, for

Table 4.9: The Growth of the Venezuelan Decentralized Public Sector, 1958-1983

Term President

State Enterprises

Created

Autonomous Institutes Created

Enterprises with

Mixed Ownership

Created

Enterprises with State

ParticipationCreated

Other State Entities Created TOTAL

1959-63 Betancourt

(AD) 13 13 1 4 3 34

1964-68 Leoni (AD) 21 5 4 10 8 48

1969-73 Caldera (COPEI)

25 9 11 2 6 53

SUBTOTAL 59 27 16 16 17 135 1974-78 Pérez (AD) 78 21 6 5 11 121

1979-83 Herrera Campins (COPEI)

61 40 12 12 10 135

SUBTOTAL 139 61 18 17 21 256

TOTAL 198 88 34 33 38 391a Source: Sabino (1988, 96).

a CLAD (1979, 76 and 238-244) counted 185 decentralized public enterprises, institutes, and agencies by the late 1970s. The Oficina Central de Coordinación y Planificación counted 400 Decentralized Public Agencies in 1990 (Crisp 2000, 122). Most likely both of these counts, and the one presented in the table, underestimate the actual number.

example, sugar refineries, hotels, agricultural enterprises, and public utilities (Sabino

1999, 165-166). In all, public enterprises and utilities produced inputs into the industrial

process, finished goods for domestic consumption, and cheap energy that benefited

industry, agriculture, and consumers.

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The decentralized public sector included financial institutes and development

banks. According to estimates made by (CLAD 1979, 238-244), public financial

institutes accounted for 37.3 percent of all agencies in the decentralized public sector by

the late 1970s.140 Through these institutes and banks, cheap credit, subsidies, and

outright monetary transfers were directed to the private sector to aid the formation of

capital and industrialization (Kornblith and Maingón 1985). Between 1959 and 1976, an

average of 30.3 million dollars was channeled to private industry each year (Crisp 2000,

168-169). The government thus had a hand in about 13 percent of all private industrial

investment.

Presidents also used the decentralized public sector to aid the agricultural growth.

Cheap loans were given to agricultural enterprises through state development banks,

while government subsidies on inputs lowered the costs of production. Additionally,

large scale agricultural and cattle interests received government subsidies to raise the

prices received for their products on the domestic market, and keep domestic consumer

prices low (de Janvry et al. 1994, 100). These policies were critical to helping the

stagnating agricultural sector. The overvalued exchange rate, discussed below, and low

tariffs on agricultural goods combined to make imported foodstuffs cheap and exports

uncompetitive. In all, between 1959 and 1976 the government delivered an average of

51.5 million dollars each year in financial subsidies, tax credits, and debt forgiveness to

140 See CLAD (1979) and Echevarría (1995, 44-45) for a list of some of these agencies along with their dates of creation.

189

agricultural producers (Crisp 2000, 168-169). Such policies ensured that domestically

produced primary products were readily available as inputs to domestic industries.

AD and COPEI used tariff and non-tariff barriers, and an overvalued exchange

rate to promote economic development. Tariffs, quota systems, and import restrictions

protected fledgling industries from foreign competition, increasing investment in

domestic industrialization (de Janvry et al. 1994, 94). According to Edwards (1998, 248),

tariffs reached a 130 percent markup by the early 1980s. Naím (1993, 41) claims that

tariffs reached 940 percent on some goods. Overvalued exchange rates lowered the

relative price of imported industrial and agricultural inputs and capital goods. Between

1959 and 1983, the exchange rate was held at a constant 4.3 bolívares per dollar, despite

rising inflation.

Presidential Policy-Making and Party Building

State-led economic development required public officials, mainly presidents, to

make allocative decisions and determine the nature of economic relationships. As

intervention into the domestic economy increased, so too did the opportunities for

politicians to cultivate political support. Presidents thus have been able to use their

privileged political positions to dole out favors that were necessary for party building in

the early stages of democratic rule.

The growing public sector, for example, provided opportunities to reward party

followers, members, and activists. Upon taking office, presidents fill numerous positions

in government ministries and the centralized public administration. Even after civil

service reform in the 1970s, civil service laws did not cover most of these jobs

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Table 4.10: Public and Private Sector Employment in Venezuela, 1950-1998

Number of Employees Percent Total Employment

Year Public Sector

Private Sector

Other/ Informal

Increase in Public Sector Employment

(Percent) Public Sector

Private Sector

Other/ Informal

Employment

1950 113,740 807,697 784,884 -- 6.7 47.3 46.0

1971 541,437 1,178,463 1,108,796 376.0 19.1 41.7 39.2

1981 1,110,870 1,748,651 1,687,924 105.2 24.4 38.5 37.1

1985 1,049,242a 2,055,032 2,095,515 -5.5 20.2 39.5 40.3

1989 1,227,763 2,533,830 2,476,539 17.0 19.7 40.6 39.7

1990 1,279,357 2,491,738 2,675,221 4.2 19.8 38.7 41.5

1991 1,291,389 2,738,290 2,742,890 0.9 19.1 40.4 40.5

1992 1,264,195 2,965,395 2,773,042 -2.1 18.1 42.3 39.6

1993 1,188,252 3,011,820 2,870,756 -6.0 16.8 42.6 40.6

1998 1,405,574 3,052,164 4,147,401 18.3 16.3 35.5 48.2 Source: Sabino (1988, 170), de Janvry et al. (1994, 139), Oficina Central de Estadística e Informática (Various Years).

a Kelley (1986, 40) estimates that, by the presidency of Luis Herrera Campins (1979-84), there were 1.5 million government workers out of a total labor force of 5 million. This would put the percent public sector employment at about 30%. In the 1980s, it was estimated that the state sector accounted for approximately 60% of the labor force in Venezuela (Latin American Weekly Report , March 2, 1989).

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Table 4.11: Growth in Public Sector Employment During Selected Venezuelan Governments, 1950-1999

Year President

Governmental Employment per 1,000 Habitants (Average During

Term)

Increase in Governmental

Employment Per 1,000 Habitants

(Percent Change During Term)

Increase in Total Governmental Employment

(Percent Change During Term)

1945-48 Trienio (AD) 25.0 173.5 209.5

1949-52 Junta (military) 34.3 7.8 25.6

1953-58 Pérez Jiménez (military)

32.6 -11.2 25.1

1958 Provisional Government (military)

34.5 10.0 14.3

1959-63 Betancourt (AD) 34.8 0.2 21.5

1964-68 Leoni (AD) 40.0 28.0 53.3

1969-73 Caldera (COPEI) 47.1 11.2 30.1

1974-78 Pérez (AD) 51.2 12.5 31.9

1979-83 Herrera Campins (COPEI)

52.7 -2.7 14.3

1984-88 Lusinchi (AD) 47.9 -10.2 2.9

1989-93 Pérez (AD) 51.4 3.2 17.9

1994 Temporary Government

52.5 5.2 -2.7

1995-99a Caldera (CN/MAS) 58.1 10.7 13.1 Source: Calculated from Baptista (1997).

a Date ends in 1995. Term average or percent change calculated using 1994 and 1995 data.

(Coppedge 1994, 123). Until 1989, presidents appointed state governors, who then were

responsible for filling state offices and distributing spoils (Coppedge 1994, 123).

Presidents also made appointments to the decentralized public sector, and could create

new agencies altogether. As shown in Table 4.10, public sector employment nearly

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quintupled between 1950 and 1971, going from 6.7 percent of total employment to 19.1

percent. According to Baptista (1997), during this same period governmental

employment went from an average of 34.5 employees per 1,000 habitants to 47.1

employees per 1,000 habitants (see Table 4.11). The rise in governmental employment

looks even more startling when absolute numbers are taken into account. As shown in

Table 4.11, AD and COPEI increased in public sector employment by nearly 105 percent

between 1959 and 1973.

State-owned banks made cheap loans available to favored industrial and

agricultural interest groups. Banks were also used to distribute benefits to union leaders

and the working classes. For example, the Venezuelan government made substantial

contributions to the state-owned, union-run Banco de los Trabajadores de Venezuela

during the 1960s and 1970s (Crisp 2000, 171). Through this bank, union leaders

controlled a number of state-owned enterprises and a major financial empire. Import

quotas were awarded on an individual basis, and all industries needed them to survive

(Karl 1997, 102). Although a formal procedure for awarding import licenses existed in

theory, in practice the awards process was highly discretionary, handed out through

personal or political contacts (Karl 1997, 102). Overvalued exchange rates benefited

private investors, particularly those dependent on imported inputs or in the process of

repaying overseas loans. The multi-tiered exchange rate put into place in the early 1980s

enabled many politicians, party activists, and political supporters to reap substantial

financial windfalls (Coppedge 1994, 84; Karl 1997, 176). Rent seeking and corruption

were also facilitated by state interventionist economic policy. Public officials frequently

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used economic policy to line their own pockets, or those of their friends and political

supporters. Allegations of corruption were brought against every administration.

If individual citizens were not the direct recipients of political spoils or policy

favors, they benefited from social spending, subsidized consumer goods, jobs in protected

private sectors, and rising real wages. As noted, state expenditures on social welfare

increased dramatically, becoming the key method for “delivering jobs and services to the

middle and lower classes…and for fostering patronage” (Karl 1997, 104). Price controls,

supported by governmental subsidies, on basic foodstuffs and consumer goods raised the

living standard of nearly all Venezuelans. Fuels and electricity were also cheap, thanks

to governmental ownership of utilities and subsidized petroleum. This further raised the

living standards of average Venezuelans. Protective policies led to increases in private

sector employment. As shown in Table 4.10, between 1950 and 1971 private sector

employment went from just over 800,000 employees to over one million, representing an

increase of 47 percent. Manufacturing employment alone increased 82.6 percent between

1959 and 1973 (see Table 4.12). Thanks to the growing economy and industrialization,

unemployment was kept low, despite increasing urbanization (see Table 4.12). Per capita

Gross Domestic Product (GDP) increased dramatically during the early stages of

democratic rule, as did real wages (see Figures 4.4 and 4.5).

The economic well being of most Venezuelans soon became tied to state-led

economic development and public spending programs, with the policies used by

presidents to sustain the Venezuelan economy also employed to reward political

supporters, party members, and party activists. In such an environment, controlling the

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presidency quickly became the key to party building. Individuals and interest groups

without direct access to the president or at least tied to his party organization had little

hope of gaining spoils or favorable policy programs. The absence of such political

connections reduced the opportunities available to both ordinary citizens or

entrepreneurial politicians to seek rents, engage in corruption, or deliver benefits to

Table 4.12: Economic Indicators for Selected Venezuelan Governments, 1953-1999 (Average for Term)

Year President

Manufacturing Employment

(percent increase)

Unemployment(Percent)

Urban Population

(Percent Total

Population)

Real GDP Growth

(Percent) 1953-58 Pérez Jiménez

(military) 14.5 8.2 47.4 8.4

1959-63 Betancourt (AD) 22.2 13.0 53.1 2.5

1964-68 Leoni (AD) 22.9 8.3 59.2 8.6

1969-73 Caldera (COPEI) 37.5 6.1 65.1 4.8

1974-78 Pérez (AD) 52.1 5.8 68.9 4.5

1979-83 Herrera Campins (COPEI)

-1.8 6.5 72.4 -2.9

1984-88 Lusinchi (AD) 16.3 10.7 74.4 2.6

1989-93 Pérez (AD) 5.5 8.6 76.4 3.3

1995-99 Caldera (CN/MAS) 3.4* 9.4** 77.9* -0.2* Source: Baptista (1997) and de Krivoy (2000). Note: * Data for 1995 only. **Data for 1995-98.

political groups. Those parties who won the presidency in the early decade of democratic

rule thus had considerable leverage over those who had never held this office, or had little

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Figure 4.4: Gross Domestic Product Per Capita in Venezuela, 1950-1998 (1984 Bolívares)

15,000

17,000

19,000

21,000

23,000

25,000

27,000

29,000

31,000

33,000

35,000

1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998

Year

1984

Bol

ívar

es

Source: Banco Central de Venezuela (1990) and Banco Central de Venezuela (Various Years).

Figure 4.5: Average Real Income of Venezuelan Workers, 1950-1995 (1984 Bolívares)

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995

Year

1984

Bol

ívar

es

Source: Baptista (1997).

196

chance of winning it in the future. For this reason, the infant AD and COPEI parties were

able to cultivate support faster than parties without access to the national executive. AD

and COPEI soon became notorious for their extensive political machines delivering

particularistic benefits, state goods, and policy services to important individuals, interest

groups, and party followers (Coppedge 1994, 111; Powell 1971; Ray 1969). This

explains the sudden rise of AD and COPEI within Venezuelan politics; once these parties

had traded control over public spending, no other political group could challenge their

party machines.

Unpacking Venezuela’s “Pacted” Democracy

Some scholars of Venezuelan politics emphasize the critical role of political pacts

for this country’s democratic stability.141 Prior to the return to democracy, leaders of AD,

COPEI, and the URD signed formal agreements to guarantee the survival of democratic

government. 142 In these accords, AD, COPEI, and URD party leaders agreed to “sow the

petroleum,” that is, to use growing oil revenues to promote economic development and

industrialization. These pacts also required parties winning the presidency to share

political spoils, including patronage jobs and ministry appointments, in proportion to

electoral results (Karl 1997, 98-99). This assured the three main political organizations

that their interests would not be neglected, even if they did not win the presidency

(Coppedge 1994; Karl 1997, 101). Supposedly, increasing state oil revenues would

141 See, for example, Karl (1986) and Levine (1973). 142 These included the Pacto de Punto Fijo, the Declaración de Principios y Programa Mínimo de Gobierno, and the Aveniniento Obrero-Patronal.

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facilitate the survival of “pacted” democracy by creating a positive sum game, where the

distribution of benefits and policy-making would never incur losses for any political party

or interest group.

In contrast to Colombia, however, the signatories of the Venezuelan political

pacts did not strictly adhere to their agreements. While it is true that early AD presidents

made attempts to distribute governmental resources and ministry positions as agreed, in

practice the delivery of benefits was somewhat skewed in favor of AD supporters.

Allegations of corruption, favoritism, and rent-seeking abounded during these early

administrations. More important, all efforts to share political spoils and access to policy-

making in proportion to electoral support ended after the second AD administration. In

1968, COPEI’s Rafael Caldera chose not to make opposition party appointments to his

government and, instead, concentrated benefits on his own party’s politicians, cronies,

and supporters. Those scholars crediting political pacts for the survival of democratic

government in Venezuela cannot account for the sudden reluctance of Caldera to follow

the accord he signed, or why his refusal did not undermine the stability of the infant

democratic system.143

In contrast to scholars who emphasize the role of inter-party cooperation and

political pacts in maintaining democratic stability in Venezuela, this chapter (and the

dissertation more generally) shows how competition over policy-making and the

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distribution of benefits strengthened party organizations, leading to the emergence of

Venezuela’s stable, two-party system. Since all parties relied on political spoils to

cultivate support, sharing state resources, even increasing ones, with opposition parties

served to undermine each presidents’ own party organization and thus their political

careers. For this reason, despite claims to the contrary, early AD and COPEI presidents

saw the division of public resources and policy-making as a zero sum game, not a

positive sum one as claimed by some Venezuelan scholars.144

Caldera’s breach of the inter-party political agreement, however, did not

undermine the nascent party system. Development policies followed by both AD and

COPEI presidents appealed to most interest groups, including those who might have been

inclined to challenge democratic rule. For this reason, new and small parties found it

increasingly difficult to mount effective challenges against AD and COPEI. And

electoral laws further reduced the incentive for voters to support opposition party

organizations, even those run by former AD or COPEI politicians, since they were

143 Interestingly, the same scholars who emphasize the relationship between rising oil revenues for the survival of “pacted” democracy also note the increasingly divisive nature of inter-party politics during this same period. Indeed, these scholars even attribute growing inter-party struggles to competition over governmental spoils, thus undermining their original assertions that oil revenues supported “pacted” democracy. 144 Indeed, the analysis in Chapter Three supports this conclusion as well. The chapter demonstrates how politicians’ efforts to build political careers cause them to seek to maximize access to particularistic benefits and the spoils of office, leading to highly divisive political struggles, even when such resources are in greatest supply. This not only explains internal party factionalism, but also the divisive nature of inter-party struggles and why political pacts were largely ignored.

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unlikely to win the presidency.145 AD and COPEI thus found it politically expedient to

use presidential policy-making tools and public spending to buttress support, rather than

to appease opposition party groups by adhering to political pacts. As AD and COPEI

refused to share political spoils, opposition parties weakened. Without access to political

spoils, small parties were unable to keep pace with the growing AD and COPEI

organizations, enabling them quickly to dominate Venezuelan politics. Competition over

political spoils thus combined with institutional arrangements to produce Venezuela’s

stable, two-party system.

Party Stability Amidst Factionalism in Venezuela

Once AD and COPEI each gained access to public spending, other political

contenders could not challenge them. Not only did institutional arrangements favor

larger parties at election time, the tangible benefits needed to cultivate support were only

available to party members able to win the presidency. As a result, despite being plagued

by intense factional disputes during most of the 20th century, AD and COPEI remained

intact, keeping them stably in control of Venezuelan party politics.

Economic policy-making in the context of institutional arrangements favoring

large parties was the key to the stability of party politics in Venezuela, and in the other

countries under study in this dissertation. When electoral laws favor large parties, those

parties winning the presidency, particularly at early stages of democratic rule, are also

best able to use public spending to strengthen support. Of course, all presidents in Latin

145 This explains the quick end of the Movimiento Electoral del Pueblo (MEP), a party formed by AD party members.

200

America have been able to manipulate public spending for political gain. What

distinguishes Venezuela and the other countries under study here from most countries in

the region, however, are institutional arrangements. When electoral laws permit multiple

parties to win sizeable shares of seats in legislatures or compete for the presidency,

presidents are unlikely to concentrate state largesse on only their own party

organizations. The political exigencies of building support in multiple round presidential

contests or coalitions in congress increase the incentive for presidents to use public policy

to confer benefits on multiple party groups, rather than just their own. Indeed,

concentrating state resources on only one party would alienate potential coalition

partners, thus undermining the political position presidents and their parties in

government and elections. As a result, in systems with more permissive institutional

arrangements, the ability of presidents to use public spending to strengthen support for

their parties at the polls is mediated by their need to build political coalitions, reducing

somewhat the patronage benefit of holding the presidency.146 In these cases, multiple

party systems will remain.

When electoral laws restrict the ability for small parties to win the presidency or

seats in legislatures, however, those parties controlling the presidency are more likely to

use public spending to confer benefits on only their own party organizations. Presidents

elected in single-round contests do not need to prepare support for second rounds. When

146 Of course, this proposition remains to be tested. However, the consistent efforts of Brazilian presidents to share patronage resources and other state benefits with parties responsible for their rise to power support this point. Parties controlling the presidency in coalition with others cannot

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only a few parties hold most seats in congress, the chances that presidents will have

working majorities are higher, thus reducing their need to negotiate with multiple parties

to pass legislation. Indeed, when only a few votes of individual congressmen are needed

to build majorities, presidents will tend to seek the support of cooperative congressmen,

rather than try to build costly coalitions with entire party organizations. Restrictive

institutional arrangements thus not only increase the chances that large parties will

control access to state resources, they also reduce the necessity and incentive for

executives to share the benefits of office with other parties. As a result, restrictive

institutions enhance the effect of patronage spending on the structure party politics.

In Venezuela, more specifically, institutional arrangements combined with the

public spending prerogatives of presidents to enable AD and COPEI to build party

organizations and strengthen support faster than other political groups during the initial

stages of democratic rule. As will be shown in the following chapter, however, AD and

COPEI would only dominate party politics for four consecutive electoral periods, or as

long as public spending and electoral laws remained unchanged. Political institutional

reforms and economic crisis in the late 1980s and early 1990s undermined the economic

and political bases of AD and COPEI power, leading to party system instability.

hope to confer all benefits of office on only their own party organizations, since they will suffer in upcoming elections.

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Economic Policy and Party Stability in Colombia

Though political institutional arrangements in Colombia favored large parties,

institutions alone cannot account for the long-term stability of Colombia’s two-party

system. Most Latin American politicians have relied on machine party organizations to

cultivate support, and politicians have regularly intervened in markets and manipulated

state policy-making to confer benefits on select interest groups and to service political

machines. In Colombia, politicians from the PL and PC have used extensive clientelist

party networks to get out the vote as well. In contrast to most countries in the region,

however, these parties have also been known for their successful economic policy

choices. This section explains how Colombian economic policy-making, though

historically moderate, nonetheless guaranteed the loyalty of a wide range of political

elites, party activists, power brokers, and voters, leading to a surprising level of party

system stability. This section thus explains how political institutions and public policy

worked together to produce Colombia’s stable, two-party system.

Economic Policy-Making and Party Building Among Colombia’s Coffee Producers

The same two parties controlling modern Colombian politics also dominated the

system a century before. Party networks created by PL and PC politicians during the 19th

century survived into the 20th, creating a political and organizational continuity found in

few other Latin American countries. The principal exceptions are Honduras, Paraguay,

and Uruguay. Several of the most important political parties in these countries in recent

years were formed during the 19th century. Though this did not prevent countries like

Uruguay from undertaking expansionary state-led economic development programs

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during the 20th century, in Colombia the prominent position of coffee producers in the

historic PL and PC since the late 19th century that has given Colombian politics and

policy-making a level of stability not seen elsewhere. It is the sustained position of

coffee growers in Colombian politics that explains this country’s traditional economic

policy restraint and, more important, the lack of swings between populist programs and

orthodox remedies that have plagued most of Latin America throughout the 20th

century.147

Party Building and Early Democratic Rule

The structure of 19th and early 20th century Colombian politics was organized

along pre-existing socio-economic relationships, which were mostly rural based since

urban areas only accounted for about 10 percent of total population even in the 1930s.

National level politics was dominated by a small group of political notables, mostly

descendants of famous generals, intellectuals, and economic leaders. To win the

presidency, notables needed the support of regional, usually department level, bosses or

caciques. Regional bosses cultivated the support of local landowners and other patrons,

who in turn made sure that their dependents (clients) voted for lists favored by regional

bosses (Archer 1990, 56-57).

Early PL and PC party organization followed this hierarchical structure, with most

negotiations over party lists and candidate selection dealt with on a personal level.

147 Many scholars attribute Colombia’s economic policy moderation to the FN power-sharing agreement (1958-74). While it is true that this pact acted as an institutional brake on drastic

204

National notables dominated national party directorates, though regional bosses had a

hand in selecting members of these bodies. National notables, regional bosses, and local

landowners relied on their personal economic resources to facilitate negotiations with

clients and to secure support. More specifically, national party directorates were

responsible for negotiating with regional bosses over the selection of presidential

candidates. Regional bosses dominated departmental party directorates. Departmental

directorates composed party lists for departmental assemblies, as well as for the national

chamber of representatives. Until 1947, departmental assemblies elected national

senators, giving regional bosses another point of entry into national politics. Municipal

party directorates were composed of loyal supporters of regional bosses and were

responsible for selecting municipal officers (Archer 1990, 57-59). In this way, party

networks reached from the national to the local level, with most of the voting population

incorporated into one or another patron-client network. This personalistic system of

party building existed well into the 1930s, and lasted into 1950s in some parts of the

country (Archer 1990, 59).148

policy shifts from one administration to the next, in this chapter the origins of policy restraint are traced to the 19th century and the exigencies of party building. 148 Many scholars of Colombian politics highlight the elite nature of this country’s democratic system, and use it to help explain the lack of radical economic policy choices by Colombian governments. Indeed, words such as “controlled,” “oligarchical,” and “traditional bipartisan elitist” have been used to describe Colombian politics and to set this country apart from other Latin American democracies. This chapter, in contrast, highlights the important position of Colombian coffee growers, raging from large plantation holders to small producers, for this country’s balanced policy choices. See Hartlyn (1988, 2) for an account of the elite nature of politics in Colombia. Hartlyn cites Bagley (1979), Cardoso and Faletto (1979), Wilde (1978), and Williams (1976).

205

Party Building, Coffee Production, and Export-Oriented Policy-Making

The economic livelihood of most political elites was connected to coffee

production, with coffee interests dominating both political parties.149 Though Colombian

exports included things such as bananas, tobacco, and hides, coffee quickly became the

country’s leading export. In 1905, coffee accounted for 39 percent of total exports

(Thorp 1991, 2).150 On the eve of the return to democratic rule in 1958, coffee accounted

for nearly 90 percent of total exports (Hartlyn 1988, 111). Coffee growers were not the

only groups that had a stake in coffee production and export. Most nascent

industrialization was related to the coffee sector, particularly during the late 19th century

and early 20th, either to its processing for export, or to the manufacture of capital goods

for cleaning, roasting, and packing coffee beans (Hartlyn 1988, 33; Thorp 1991, 6-7).

Like coffee farms, these industries were also well distributed throughout the country

(Thorp 1991, 7 and 57).

Colombian economic stability soon came to depend on the success of coffee

production. Regardless of which party has controlled the national executive, throughout

much of the 19th and 20th centuries economic policy-making has been dedicated to

ensuring a favorable economic climate for coffee production and exports (Juárez 1994,

59; Thorp 1991, 5). National macro-economic policy has focused on stabilizing

149 See Palacios (1983) for a more detailed account of the Colombian coffee sector and its ties to political parties. See Bates (1997) and Cárdenas S. and Partow (1999) for a discussion of the coffee sector’s relationship to national government and policy-making, and how both parties adopted “median” economic policy positions favored by this group.

206

exchange rates, keeping inflation under control, and creating ties to international markets.

At the micro-level, political and economic elites have worked to develop ways to counter

the effects of fluctuating international coffee prices.151 Departmental governments also

did their share to promote the coffee sector by supporting local infrastructure investment

and building railways and ports (Thorp 1991, 5).

As long as coffee interests were well tended, the economy prospered and the PL

and PC remained stable and firmly in control of party politics. Indeed, the economic well

being of Colombia’s political elites, as well as much of the middle and popular classes

was tied to coffee production. During most of the 19th and 20th centuries the Colombian

coffee sector has had the power to make or break governments (Bates 1997). Though

coffee was grown on large plantations, most coffee farms tended to be small and

medium-sized family endeavors that were regionally well distributed throughout the

country (Hartlyn 1988, 28; Thorp 1991, 7 and 57). As a result, even with the extension

of suffrage in the 1930s, the PL and PC were not forced to accommodate the interests of

newly enfranchised popular sectors with more populist-oriented economic policies.

150 In 1914, coffee accounted for 40 percent of total exports, and in 1924 80 percent (Hartlyn 1988, 28). 151 The solution was found with the creation of the Federación Nacional de Cafeteros de Colombia (FEDERACAFE) in 1927, a private organization empowered to collect an export tax on coffee, and to spend it to stabilize local coffee prices (Hartlyn 1988, 33; Thorp 1991, 8-9). FEDERACAFE also built warehouses, instituted monitoring and controls on quality, and extended credit to farmers (Thorp 1991, 9). Later, the national government introduced the Fondo Nacional de Café, which included government financing. The Fondo Nacional de Café strengthened the position of FEDERACAFE, enabling it to invest in shipping, build schools and hospitals, as well as provide technical services to its members (Thorp 1991, 10).

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Several authors have suggested that pre-existing patron-client networks allowed

the PL and PC to survive the extension of suffrage in the 20th century without having to

abandon export-oriented policies in favor of populist policy appeals. Many new voters

were already linked in some way to existing patron-client networks, thanks to their

economic dependence on traditional socio-economic elites. The peasantry was “almost

totally dependent materially and politically on their patron’s personal largess” (Archer

1990, 61). Even in the country’s growing cities, workers depended on elites for jobs and

other favors to survive. As a result, newly enfranchised groups in Colombia were easily

manipulated at election time by PL and PC party elites.

While many new Colombian voters were certainly materially dependent on socio-

economic elites, this was also true in most of Latin America. Yet, new and old parties

throughout the region adopted populist policy programs soon after the extension of

suffrage, while in Colombia the PL and PC did not. Rather than relying on the strength

of patron-client relations to explain the lack of populist policy appeals, this chapter

emphasizes the important role of coffee production as a moderating force on politicians’

policy choices. In most Latin American countries, major export crops were grown on

large farms or plantations, with the profits earned from exports benefiting wealthy

landlords rather than ordinary citizens. While pro-export policies were politically

feasible during most of the 19th century, during the extension of suffrage they became

difficult electorally. Most parties hoping to appeal to new voters promised to increase

industrial jobs and raise wages, as well as keep prices for essential goods, foodstuffs, and

utilities low through state subsidies.

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In Colombia, in contrast, the principal export crop, coffee, was grown on both

large, as well as small and medium sized farms, and both small and larger enterprises

could handle other stages of coffee production and export. Coffee production was also

geographically well dispersed throughout the country. As a result, most newly

enfranchised groups benefited from policies encouraging coffee production and export,

making the country’s customary pro-export orientation successful electorally, even after

the extension of suffrage. The PL and PC thus were able to appeal to new voters without

resorting to populist promises, major public spending sprees, and massive foreign

borrowing that have typically accompanied the extension of suffrage and party building

in other Latin American countries.152 And Colombian policy-makers retained a generally

orthodox economic orientation.

The Coffee Sector and Moderate ISI During the FN

Though Colombian successive governments maintained policies to promote

coffee exports during the 19th and 20th centuries, several governments experimented with

ISI policies in the 1950s and early 1960s. As in other Latin American countries, the

origins of Colombian ISI date to the Great Depression and the Second World War.

During this period, fledgling industries benefited from natural protection resulting from

the lack of importable goods, and later from more explicit state policies to provide

industries with cheap loans and tariff protection. Most ISI development, however,

occurred during the country’s authoritarian government in the 1950s, when protectionist

152 See Bergquist (1986) for an analysis of how Colombian political and economic elites did not

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policies were strengthened in reaction to a major drop in world coffee prices and thus in

the ability to pay for imported goods and materials (Thoumi 1980, 328).

After the return to democracy in 1958, the PL and PC remained supporters of the

ISI development strategy. Industry, however, grew more slowly under the FN regime

than it had in previous years because of the new government’s limitations on foreign

capital investment and imported intermediate goods needed as industrial inputs (Berry

1980, 293). The FN bias against foreign investment and its efforts to curb practices that

might lead to balance of payments crises with each drop in international coffee prices

acted as a moderating force on ISI.

More important, the need for the PL and PC to accommodate the interests of both

coffee producers and growing industrial groups put a brake on radical ISI expansion.

Most PL and PC politicians saw ISI industrialization as complementary to agricultural

development. Landowners and merchants had been responsible for most initial

industrialization during the 19th and early 20th centuries, and agricultural and industrial

elites developed a strong voice in government through their links to political parties,

informal family connections, and formal bi-partisan producer associations (Hartlyn 1988,

79-82; Juárez 1994, 53). Many members of the country’s socio-economic elites and most

important producer groups also held government positions (Dix 1987, 123-124). Not

only did this act as a natural brake on radical ISI expansion, it also led the PL and PC to

avoid implementing policies to appeal to industrial workers altogether, as well as to the

have to compromise their economic policy interests in order to appeal to the popular sectors.

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occasional repression of workers’ strikes and political demonstrations.153 As a result, the

economic interests of Colombian landowners, industrialists, and other economic elites

were permanently allied, something that prevented policy-makers from taxing

agricultural production to procure resources for industrial development.154 Instead, the

state relied on tariff barriers and import restrictions (quotas and licenses) to support

fledgling industries, while policy-makers worked to preserve fiscal and monetary

prudence, lower inflation, raise tax receipts, and maintain international creditworthiness,

policies favored by exporting groups (Thorp 1991, 150-152).155

The Colombian experience with ISI development stands in marked contrast to

Venezuela, and to other countries in the region. In most Latin American countries, the

shift to ISI broke the traditional link between agriculture and industry. Prior to ISI, most

early industries were spin-off enterprises related to agricultural production, thus creating

a natural tie between landowners and early industrialists, even when these industries were

producing for domestic consumption. The introduction of ISI policies, however, led to

the creation of a new group of industrialists and workers whose interests were furthered

by protectionism. The most agricultural goods producers were opposed to policies

necessary for supporting inward-oriented industries, paving the way for a new political

alliance between ISI elites and workers that pushed landlords from power. In Colombia,

in contrast, the traditional economic connection between coffee producers, landowners,

153 See Dix (1987) and Juárez (1994) for a discussion of the role of labor in Colombian politics and parties. 154 This stands in marked contrast to countries like Argentina and Venezuela. 155 See also Juárez (1994) for an analysis of Colombian economic policies during this period.

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and industrialists was not broken by the rise of ISI industries. The continued importance

of coffee producers and their ties to most industries prevented a political alliance between

ISI industrialists and workers hoping to exclude coffee growers from power.156

Even though Colombia’s ISI experiment was less extensive than elsewhere in

Latin American, the Colombian economy was still protectionists by the standards of most

industrialized nations. As a result, Colombia suffered from several problems associated

with ISI development, such as an overvalued exchange rate and balance of payments

crises, particularly during the early years of FN rule (Thoumi 1980, 333-34). The

political importance of maintaining macro-economic stability, however, led FN

presidents to address these problems, with the most significant reforms occurring during

the Carlos Lleras Restropo (PL) government (1966-70).157 Though not representing an

end of ISI, Lleras supported a series of measures to promote the development and

diversification of both agricultural and industrial exports.158 These policies led to a real

devaluation of the exchange rate, something good for exporters, and lowered inflation

(World Bank 1984, 42-43). Later presidents maintained this general policy direction

(World Bank 1984).

156 Indeed, several scholars have noted that urban and rural labor unions have been much less important in Colombian politics than they have in other Latin American countries. These sectors have had only limited access to government policy-making circles (Dix 1987, 127-134). 157 In addition to re-orienting the economy, Lleras’ policy measures were aimed at reducing patronage spending and corruption in the Colombian government. Most legislators opposed Lleras’ reforms because they reduced their access to state largesse. Lleras was only able to implement his economic policy measures after a highly contested institutional reform in 1968 that significantly increased presidential powers and reduced legislative powers.

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Colombia’s more balanced, export-oriented policy approach led to notable

industrial and agricultural expansion and the rise in manufacturing and agricultural

exports during the 1960s and 1970s, mostly thanks to the Lleras reforms (Thorp 1991,

11-19 and 51-52). Between 1967 and 1972, industrial exports went from $55.6 million to

a startling $253.0 million (Thoumi 1980, 331). In 1958, non-traditional exports

represented about 10 percent of total exports (Hartlyn 1988). By the end of the FN in

1974 they accounted for 50 percent of total exports (Hartlyn 1988). In monetary terms,

both traditional and non-traditional exports increased by 240 percent in just 12 years,

with non-traditional exports accounting for nearly 70 percent of this growth. This export-

oriented economic growth reflected “the economy’s release from the shackles which

increasingly difficult import substitution were imposing on it” (Berry 1980, 296).

FN Institutions Reinforcing Economic Policy Moderation

The FN institutional arrangement also contributed to the country’s economic

policy moderation and lack of radical ISI development by allowing the PL and PC to

cater to agricultural interests and industrial elites, rather than to country’s growing urban

popular sectors (Juárez 1994, 53).159 When PL and PC political elites agreed to alternate

the presidency, they also agreed to support jointly an “official” FN candidate. This

158 Reforms included a crawling peg exchange rate, tax credits for exporters, and a reduction of restrictions on imported inputs and investment goods required for export production (World Bank 1984, 42). 159 Indeed, the FN can be said to be the product of negotiations between socio-economic and political elites. Producer associations, including industrialists, bankers, and merchants, played an important role in the fall of the General Gustavo Rojas Pinilla’s dictatorship in 1957 by helping to organize a national strike that led to the final crisis of the faltering regime (Hartlyn 1988, 79).

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process ensured that only those candidates favorable to both parties leadership would be

officially nominated, preventing more radical politicians from gaining power. Once in

office, FN presidents were required to maintain parity between the parties in the cabinet.

Rather than allowing ministers to act as policy dictators, however, all policy programs

were negotiated by party leaders (Hartlyn 1988, 92). As a result, only those policies

acceptable to both PL and PC elites were chosen. Thanks to bureaucratic parity, both the

PL and PC controlled the distribution of ministry positions and governmental offices,

giving both parties access to patronage.160

Parity in the national congress acted as moderating force on economic policy,

though not because it meant that PL and PC legislators cooperated to support FN

presidential programs. Congressional parity in a context of the 2/3 votes required to pass

legislation led to frequent presidential-congressional stalemates. Moreover, presidents

could not even count on the support of their own congressional delegations. The use of

multiple lists to fill seats meant that legislators usually reflected a variety of divisions

between political elites, as well as pro- and anti-FN factions. As a result, Colombian

presidents frequently resorted to ruling by decree, or to declaring states of siege and

national economic emergency (Hartlyn 1988, 91; Juárez 1994, 61). Unlike in Venezuela,

the use of decrees did not lead to radical policy programs and public spending sprees by

160 Juárez (1994) argues that FN governments oversaw a general increase state capacity through the development of a more technocratic bureaucracy. It is true that both parties had an interest in increasing state technical capacity during the FN, mostly because FN party members wanted to make sure that the party controlling the presidency would not overlook their supporters’ economic interests. This chapter, however, argues that this trend can be traced to an earlier period and to the important role of policy moderation in party building.

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presidents hoping to build support among the popular sectors. The FN pact required that

all decrees be acceptable to the leadership of both parties and obtain the signatures of all

cabinet members. Presidents thus tended to suggest only those policies favored by the

country’s political and economic leaders.161

Most important, the FN power-sharing agreement reduced political competition to

only PL and PC politicians, creating insurmountable institutional barriers against

“unofficial” political groups. Small and new parties were excluded from political

participation outside of the FN umbrella, thus preventing the emergence of parties that

might have been able to appeal to the increasing number of urban voters with populist

policies. The lack of political opposition meant that the PL and PC were not forced by

the exigencies of political competition to adopt populist policies in an effort to outbid

political competitors.

Economic Policy Moderation in the Post-FN Period

Even after the introduction of competitive elections in 1974, politicians from both

the PL and PC continued to support a moderately orthodox economic policy line.

Maintaining the allegiance of traditional coffee producers for party stability precluded

radical policy changes. Indeed, any presidents attempting to personalize their

161 Presidents were also somewhat constrained in their capacity to concentrate benefits on their supporters by FN rules requiring that the Minister of Government, responsible for appointing departmental governors, and the attorney general and national comptroller, both elected by Congress, be from the opposite party. In addition to acting as a check on presidential authority, this removed sizeable patronage resources from presidential hands. Departmental governors had access to their own resources, while the attorney general and the national comptroller controlled congressional patronage (Hartlyn 1988, 91-92).

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administrations and increase electoral support through agrarian and fiscal reforms, and a

redistribution of income, were opposed by powerful socio-economic elites, with these

policies either thwarted in their infancy or dismantled over time.162 Even Carlos Lleras

Restropo (PL) (1966-70), who had overseen the country’s initial re-orientation toward

export promotion, incurred the wrath of producer groups and landowners threatened by

his efforts to increase the role of the state in the economy, as well as reform land

distribution and build peasant associations (Hartlyn 1988, 110-111).

The importance of coffee producers in Colombia led politicians to support

moderately orthodox policies to maintain a favorable climate for exports throughout the

1980s and 1990s. Politicians from both the PL and PC continually implemented

measures to prevent balance of payments crises, reduce inflation, and maintain a stable

exchange rate favorable for exporters (Argáez 1987; Cámara de Comercio de Bogotá

1993; World Bank 1984).163 Even though the Colombian economy was still protectionist

compared to industrialized countries,164 the state’s efforts to maintain a balanced macro-

economic environment set Colombia apart from other Latin American countries, as well

as precluded the need for major structural adjustment in the 1980s and 1990s.

162 See Hartlyn (1988, 112-118) for an analysis of such reform efforts and the role of political elites in thwarting them. See World Bank (1984) for a description of Colombian economic policy orientation just after the FN. 163 See also Juárez (1994) and Thorp (1991) for descriptions of the orthodox policy measures followed by the PL and PC after the end of the FN. 164 See Edwards (1998) for a discussion of Colombia’s protectionism.

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Party Building Among the Masses: Machine Politics and the Provision of Particularistic

Benefits

Despite their historically balanced economic policy approach, Colombian parties

have also been known for their clientelist political practices. Scholars regularly attest to

the important role of clientelist networks for PL and PC political power and electoral

success.165 Most studies of Latin American machine politics, particularly this one,

however, associate such clientelist practices with state-interventionist economic

development. While politicians elsewhere in the region were supporting extensive ISI

programs and using these to tie voters to infant party organizations, in Colombia the more

limited nature of ISI reduced politicians’ ability to use state-led development to cultivate

the support of the growing popular sectors. Why were Colombian politicians willing to

continue customary export-oriented economic policies in a system where cultivating a

personal vote was critical to building political careers?

Though many workers benefited from the government’s export-oriented economic

policies, many citizens also benefited from the distribution of particularistic benefits and

pork barrel projects funded by state coffers. During the 19th and early 20th centuries,

politicians relied on the beneficence of the country’s socio-economic elites to maintain

clientelist political relationships (Archer 1990). There were few patronage resources

available to politicians through governmental channels (Archer 1990, 61). With the

expansion of suffrage and the return to democratic rule in 1958, however, politicians

165 See, for example, Colombians scholars Díaz Uribe (1986) and Losada Lora (1984), and American scholars Archer (1995), Bagley (1984), Dix (1987), Martz (1997), and Schmidt (1974).

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Table 4.13: National, Departmental, and Municipal Public Sector Employment in Colombia, 1964-1982

Number of Public Employees* Percent Total Public Sector

Employment Percent Change in Public Sector

Employment

Year Nacional Departmental Municipal Nacional Departmental Municipal Nacional Departmental Municipal 1964 186,174 N/A N/A N/A N/A N/A N/A N/A N/A 1965 186,801 “ “ “ “ “ 0.3 “ “ 1966 212,933 “ “ “ “ “ 14.0 “ “ 1967 214,414 “ “ “ “ “ 0.7 “ “ 1968 246,084 “ “ “ “ “ 14.8 “ “ 1969 266,530 “ “ “ “ “ 8.3 “ “ 1970 298,775 “ “ “ “ “ 12.1 “ “ 1971 319,902 “ “ “ “ “ 7.1 “ “ 1972 367,397 “ “ “ “ “ 14.8 “ “ 1973 389,062 “ “ “ “ “ 5.9 “ “ 1974 414,460 “ “ “ “ “ 6.5 “ “ 1975 448,030 “ “ “ “ “ 8.1 “ “ 1976 499,793 78,692 26,288 82.6 13.0 4.3 11.6 “ “ 1977 517,756 86,536 27,117 82.0 13.7 4.3 3.6 10.0 3.2 1978 538,483 90,012 27,341 82.1 13.7 4.2 4.0 4.0 0.8 1979 561,493 94,919 27,813 82.1 13.9 4.1 4.3 5.5 1.7 1980 586,704 102,256 35,326 81.0 14.1 4.9 4.5 7.7 27.0 1981 600,501 107,928 36,757 80.6 14.5 4.9 2.4 5.5 4.1 1982 614,140 110,507 36,390 80.7 14.5 4.8 2.3 2.4 -1.0 Source: Colombia. Departamento Administrativo del Servicio Civil (1986). Note: Note: NA: Not available. *Data includes public sector enterprises and state-owned industries at the national, departmental, and local level.

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relied more heavily on state largesse to pay for the goods and services needed to reward

power brokers and build support. As noted by Dix (1987, 217), it “might well be argued

that Colombia’s traditional party system survives essentially because of its regionally

distributive policy-making style – that is, its ability to allocated jobs, goods, and services

to regional elites and their supporters in a reasonably equitable manner.”

Public sector employment, though not part of an orthodox economic strategy,

provided a crucial source of patronage to politicians seeking to reward political brokers,

party activists, and constituents. During the 1960s and 1970s, the requisites of providing

patronage jobs to supporters were dealt with by increasing public sector employment

(Hartlyn 1988, 179).166 As shown in Table 4.13, public sector employment more than

doubled in just ten years (1964-74) and continued to increase through the 1980s. Figures

for departmental and municipal employment show major increases in short periods as

well. Hartlyn (1988, 179) notes, however, that administrative reforms implemented by

some FN presidents served to reduce somewhat the ability of politicians to make

patronage hires in national government. Politicians were best able to place people in

congressional offices, of course, as well as in the judiciary, and those decentralized

agencies overseeing public works and social services. Only some ministries were

susceptible to such pressures. In contrast, almost all jobs in departmental and local

166 During the FN, large-scale dismissals were difficult, since major turnovers would bring bad publicity and stood to threaten the nascent democracy and the survival of power-sharing (Hartlyn 1988, 179). To the extent that large turnovers did occur with the change in government, they occurred at the departmental and municipal levels (Hartlyn 1988, 179).

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governments were filled through patronage hiring, explaining high rates of turnover at

these levels following elections.

In addition to bureaucratic jobs, placement in other public offices was used to

reward political supporters. In particular, throughout most of the 20th century, national

presidents appointed departmental governors, while departmental governors appointed

municipal mayors. Appointment to these positions ensured politicians, local political

brokers, and party activists a ready source of patronage, since these local executives had

access to their own political appointments and patronage funds. In addition, politicians

and party activists were often given jobs as suplentes. In Colombia, politicians running

for legislative office are entitled to choose substitutes, or suplentes. This practice was a

result of the legally sanctioned ability for politicians to withdraw from public office for

periods of time to serve in different elected governmental167 or administrative bodies, or

to pursue other interests or professional occupations (Archer 1990, 59). The suplente

occupied the position until the elected official returned, providing a potential resource to

politicians seeking to reward political brokers or party activists.

Congressional pork barrel funds, called auxilios, provided politicians with another

important resource for building political support. Congressional auxilios have accounted

for around one to two percent of the annual governmental budget in Colombia since the

1950s (Hartlyn 1988, 174). Each year congressmen negotiate the share of funds to be

167 Recall that politicians were allowed to run for and hold multiple offices.

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devoted to auxilios with the national executive.168 Once the total figure is agreed, it is

divided by the number of departments, and then by the number of congressmen within

each department (Hartlyn 1988, 172). In addition, politicians holding commission and

committee posts in congress also receive additional auxilio funds.

Hartlyn (1988, 172-73) reports that most auxilio funds are channeled through

government ministries, with politicians entitled to use auxilio funds for designated

ministry projects.169 Politicians seeking to deliver auxilio benefits to constituents must

do so through appropriate government channels. The Ministry of Government, for

example, provides water to schools, constructs health clinics, oversees electrification

projects, and builds roads and schools. Congressional funds organized through the

Ministry of Heath go to clinics, hospitals, and old folks’ homes. Funds allocated to the

Ministry of Education have gone to specific schools, paid for school supplies, and

provided scholarships to individual students. One program gave away 85,205

scholarships in 1983. Though there is little guarantee that the aid provided through

auxilios will translate into votes on election day, but most “politicians have viewed the

auxilios and scholarships as crucial to their electoral survival” (Hartlyn 1988, 173).

Juntas de Acción Comunal (JAC) are also used to deliver benefits to supporters.

According to Archer (1990, 68-69), during the first decade of the FN, politicians made an

168 In the early years of FN rule, auxilios figured directly into the national budget and were thus indistinguishable from other expenditures. Constitutional reforms in 1968, however, reduced the role of congress in the budget process. Since the 1970s, monies allocated to Congressional auxilios have been published in a separate volume of the central budget called “Aportes para el plan de programas de fomento a empresas útiles y benéficios de desarrollo regional” (Hartlyn 1988, 283).

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effort to deliver benefits to local peasant communities. One such method was through

JAC’s, whose purpose was to promote local development through self-help projects. By

1966, there were nearly 9,000 local JAC’s, and by 1974 there were 18,000. JAC’s

managed large portions of the government’s local infrastructure investment in both urban

and rural areas (Archer 1990, 69). Governmental ministries funded some JAC’s, but

many received monies from decentralized agencies, congressional auxilios, as well as

private sector and international organizations. According to Bagley (1989, 9), the

political benefits of the JAC’s were “even greater than the economic ones.” JAC’s gave

local politicians access to the resources needed to fund local clientele networks, and for

this reason local party leaders also tended to head local JAC groups (Bagley 1989).

In addition to state resources, politicians also used their own professions to

deliver benefits. Lawyers and doctors, for example, could use their positions to provide

services for constituents (Hartlyn 1988, 175). Politicians could use their political office

to help, serving as intermediaries with bureaucracies or agencies, for example during land

title legalization, or could help contract public services and transportation. Upper level

politicians could use their offices for larger projects.

In all, the patronage jobs, particularistic benefits, and bureaucratic and

professional service, though small compared to Venezuelan standards, have been critical

for political survival and party stability in Colombia. “In a context of high abstention and

an increasing turn to the election of uninominal lists, the mobilization of a few thousand

votes one way or another has sometimes spelled the difference between victory and

169 In the early years of the FN, such controls did not exist (Hartlyn 1988, 283).

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defeat” (Hartlyn 1988, 176). Most parties in Latin America have resorted to devices like

these to deliver benefits and build support. As will be shown in the following chapter,

however, what distinguishes Colombia from other countries in the region has been its

ability to continue the delivery of patronage jobs and other state resources to constituents

even after the beginning of the Latin American debt crisis in the 1980s. Colombia’s more

moderate economic policy approach kept it from having to undertake radical economic

restructuring, leaving politicians’ ability to provide patronage resources mostly intact.

Party Stability Amidst Colombia’s Multiple Lists

Together, balanced macro-economic policy choices coupled with the distribution

of particularistic benefits, pork, and patronage enabled traditional PL and PC politicians

to maintain the support of elites, middle classes, and the popular sectors. Indeed, it is

Colombia’s historic economic policy restraint that, ironically, has enabled PL and PC

politicians to oversee the unbroken distribution of particularistic benefits to supporters,

even in recent years amidst an increasingly liberal economic environment.

Though there has been some variation in the type of policy measures required to

achieve these ends, most PL and PC politicians support the country’s moderate policy

approach. Since there has been little disagreement over public policy, as in Venezuela,

most political competition has surrounded the distribution of political spoils, especially

during the FN. During this period, the requisites of power-sharing required that

bureaucratic appointments, public offices, and political spoils be divided evenly between

the PL and PC, and proportionately among competing party lists according to the share of

party vote. Due to institutional restrictions on political participation and patronage parity,

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any politicians unhappy with FN power-sharing or the distribution of benefits could not

challenge the established PL or PC political organizations, though they could present

separate lists. As a result, both pro- and anti-FN factions, and even many opposition

party groups, remained within the “official” PL and PC party umbrellas, electing

politicians according to their share of party vote.

Factions surviving in the post-FN era, however, still chose to remain in

established parties. Though institutional restrictions on opposition party participation

were removed, the requisites of cultivating a personal vote have worked to keep

politicians from leaving established parties. Cultivating a personal vote requires

delivering tangible benefits to political brokers, party activists, and constituents. The

important role of Colombian presidents in drafting legislation and the national budget,

staffing ministries and government bureaucracies, and allocating state resources and

discretionary funds among congressmen has meant that politicians in parties unable to

win this office are least able to service political machines (Archer 1990, 206-25). As a

result, politicians from established parties choosing to form their own lists, though

usually controlling adequate shares of votes to win seats on their own, have also chosen

to remain in the established PL and PC party umbrellas. Giving up party membership

would mean ruining political careers.

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The Political Economy of Party Building and Party Stability in Colombia and

Venezuela

Although electoral rules facilitated the emergence of large parties, economic

policy-making contributed to the stability of two-party systems in both Colombia and

Venezuela. The comparison of party building in this chapter thus emphasizes the strong

tie between political institutions, economic policy-making, and subsequent rise and

stability of these countries’ historic party systems. Moreover, this chapter highlights

important differences in the types of economic policies parties needed to survive.170 In

Venezuela, party building occurred simultaneous to the return to democracy and the

expansion of suffrage, leading presidents to focus on public spending sprees to build

support from a variety of interest groups. In Colombia, in contrast, initial party building

occurred in an elite democracy, leading politicians to focus on the provision of policies

more suited to the interests of socio-economic elites. It was only after the expansion of

suffrage that politicians coupled elite-oriented policies with the provision of

particularistic benefits to the popular sectors, leading to a two-pronged approach to

building political support.

The important contribution of economic policy-making and the delivery of

benefits to the stability of historic two-party systems in Colombia and Venezuela

becomes more apparent in the chapter to follow. Although both countries underwent

similar electoral and institutional reforms in the in 1980s and 1990s, party systems in

170 The relationship between particular types of economic policy-making and party building is also discussed in the context of Argentina, Mexico, and Costa Rica in Chapters Six and Eight.

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these countries did not endure similar change. In Colombia, economic stability and the

continuation of customary benefits enabled the Liberal and Conservative parties to hold

onto power, despite institutional change. In Venezuela, in contrast, declining oil

revenues and changes to the distribution of benefits in the 1990s undermined the ability

of AD and COPEI to cultivate support amidst institutional reform, contributing to the

breakdown of this country’s two-party system.

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CHAPTER FIVE

The Critical Role of Economic Crisis and Reform in Recent Party Instability:

The Colombian and Venezuelan Experiences Compared

Introduction

Much has been made of recent political institutional reforms being implemented

throughout Latin America. As discussed in Chapter One, many scholars of Latin

American politics predicted that institutional restructuring would reshape party systems.

Despite the apparent relationship between political reforms and party instability,

however, institutional reorganization in Colombia during the 1980s and 1990s has not

been accompanied by expected party system change. The historic two-party system in

Colombia, controlled by the Partido Liberal (PL) and Partido Conservador (PC) since the

19th century, has remained intact, even after the drafting of a new constitution, notable

changes to the national electoral system, and path breaking decentralizing reforms. In

Venezuela, in contrast, changes to the system used to elect national congressmen, as well

as departmental and local governments, were accompanied soon thereafter by near

complete party system breakdown. The formerly dominant Acción Democrática (AD)

and Comité de Organización Política Electoral Independiente (COPEI) are now only

surviving at the margins of a political system they once controlled. The disparate

experiences of Colombia and Venezuela with recent political institutional restructuring,

despite striking similarities in their reform projects, might lead scholars to question the

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extent to which theories about the role of political institutions in shaping the structure of

party systems apply in the Latin American context.

Building on the analysis in Chapter Four, this chapter demonstrates how the effect

of political institutional arrangements, and any changes to them, on party systems must

be analyzed within the context of economic policy-making. Parties in Latin America

have traditionally intervened in markets to distribute benefits to supporters, and have

relied on the state and its resources to service political machines. Without access to

public spending, politicians in small parties had little chance of winning elections, or of

challenging dominant parties. Economic policy-making, as much as political institutional

arrangements, thus contributed to the structure and stability of party systems in Latin

America. For this reason, the continuation of customary economic policies in the face of

political institutional reform mitigates the expected effects of institutional restructuring,

as seen in Colombia. It is when institutional reforms are joined by shifts in the traditional

distribution of benefits through economic crisis and adjustment that fundamental changes

to the structure of party systems obtain, as seen in Venezuela.

Organization of the Chapter

The analysis in this chapter of the political consequences of institutional reform in

interaction with both traditional and neoliberal economic policies serves as a critical test

of the argument in Chapter Two. Furthermore, the comparison of party politics in

Colombia and Venezuela reveals the limitations of relying on political institutional

approaches alone to explain the structure and stability of party systems in Latin America.

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In this way, this chapter demonstrates the important role of economic crisis and

adjustment in recent party system change.

To make these interrelated points, the chapter proceeds as follows: First, the

chapter discusses recent political institutional reforms in Venezuela and Colombia.

These sections show how, though markedly similar in their composition and intent,

institutional restructuring in Venezuela and Colombia has resulted in surprisingly

different outcomes. Second, the chapter analyzes recent economic trends in Colombia to

show how this country’s stable economic policy environment moderated the expected

effects of major political institutional restructuring. Although Colombia underwent

considerable institutional reform in the 1980s and early 1990s, a tradition of balanced

economic policy-making, where the delivery of benefits to supporters was left largely

unchanged over time, enabled the historic PL and PC political organizations to remain

dominant players at all levels of this country’s political system. Even the most ambitious

politicians were unlikely to assemble the resources necessary to challenge the positions of

these historic party organizations.

Third, the chapter shows how the effects of political institutional reorganization

on party systems are often amplified when accompanied by changes to the conventional

distribution of benefits. This section examines party politics in Venezuela to show how

economic crisis and the unfeasibility of state-led economic development in the late 20th

century exacerbated the expected effects of political institutional reform. Economic

restructuring in interaction with an increasingly permissive political institutional

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environment enabled political entrepreneurs to challenge the erstwhile dominant AD and

COPEI political machines, leading to near complete party system breakdown.

To conclude, the chapter discusses recent political institutional reforms in Latin

America more generally. Though institutions certainly contribute to the structure of party

politics in the region, in systems dominated by machine political organizations,

institutional restructuring unaccompanied by reductions in the resources available to

established parties mitigates party system change. When parties can continue the

delivery of benefits to supporters, they will be able to overcome many of the political

pressures brought by political institutional reform.

Recent Political Institutional Reform in Colombia

Since the 1980s, Colombia has introduced a new constitution, as well as

implemented measures to decentralize its unitary system. This section discusses these

institutional changes, as well as analyzes their expected effects on Colombian party

politics according to current theories about the relationship between political institutional

arrangements and the structure of party systems. As shown below, though reforms

introduced notable changes in historic institutional arrangements, they did not lead to

expected political outcomes.

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The Prelude to Electoral and Constitutional Reform

The failure to dismantle the Frente Nacional (FN)171 power-sharing agreement in

1974 paved the way for political institutional changes in the 1980s, culminating with the

new Constitution of 1991. Even though national presidential and legislative elections

were opened to opposition parties in 1974, inter-party politics between 1974 and 1990

was still heavily influenced by the FN political pact.172 A constitutional reform in 1968

extended judicial and bureaucratic parity for 10 years (Taylor 1996, 87-88). Presidents

were required to offer cabinet positions and other national bureaucratic appointments to

opposition party politicians indefinitely.173

Many voters saw PC and PL efforts to prolong many FN power-sharing

provisions as a means of preserving PC and PL political privileges and control. As a

result, the political atmosphere of the 1980s was marred by growing distrust of traditional

politics, parties, politicians and, most important, a desire for reform (Taylor 1996, 89).

Growing criticism of the undemocratic practices of the PL and PC organizations was

accompanied by (and likely the cause of) increasing numbers of assaults by various

guerrilla movements.174 Efforts by successive Colombian presidents to deal with this

problem, ranging from repression to negotiation and amnesty agreements, were largely

171 The Frente Nacional political pact between the PC and PL is discussed in the previous chapter. 172 Parity in departmental assemblies and municipal councils ended in 1968 with constitutional reforms. 173 Taylor (1996, 88) notes that, “while the formal Front agreement fully lapsed after 1978, the basic concept of power-sharing was institutionalized through Article 120...” 174 The Movimiento del 19 de Abril (ML-19) became active, as did the Fuerzas Armadas Revolucionarias de Colombia (FARC), Ejército Liberación Nacional (ELN), and the Ejército Popular de Liberación (EPL).

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unsuccessful (Taylor 1996, 89). Violence associated with Colombia’s role in the

international narcotics trade grew as well. These problems, along with the mounting

“perception that clientelist practices were diverting state resources away from the public

good caused the political class to be highly criticized, with many citizens opting not to

participate in elections” (Taylor 1996, 89).

In response to escalating guerrilla warfare and popular unrest, the Colombian

government, led by President Belisario Betancur (PC) (1982-86), instituted a series of

reforms designed to liberalize the political system and bring the country’s guerrillas into

the political system. These reforms included, among other things, the popular election of

mayors for the first time in 1988. Betancur’s reforms only served to whet the general

appetite for change. The national congress dominated by the PL and PC, however,

thwarted further attempts at institutional reform. In response, over two million voters

cast unofficial ballots during congressional elections in 1990 calling for the election of a

national constituent assembly to draft a new constitution. The newly elected president,

César Gaviria Trujillo (PL), honored the unofficial results, implemented state of siege to

circumvent the intransigent congress, and scheduled elections for a constituent assembly

to draft a new constitution.

Electoral Reform, Constitutional Change, and Their Projected Political Effects

The Constitution of 1991 introduced important changes to traditional political

institutional arrangements, electoral laws, and the distribution of power and design of

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Table 5.1: The Colombian Electoral System, Pre- and Post-Electoral Reform Prior to Electoral Reform,

1958-1990a After Electoral Reform, 1991-presentb

National Level Timing of Presidential-Legislative Elections

Concurrentc Concurrentd

Presidential Formula Direct election by plurality, no run-offs

Direct election by absolute majority, run-off between top two cands. if no majority

Legislative Ballot (Senate and Chamber of Deputies)

Ballots are party-printed and placed in pre-prepared ballot envelopes; voters cast the ballot envelopes at the polls

State-printed ballots; voters choose between lists of candidates running for each office

Seat Allocation in Senate

Proportional in departmentwide district

Proportional in nationwide district Compensatory seats

Seat Allocation in Chamber of Deputies

Proportional in departmentwide district

Proportional in departmentwide district Compensatory seats

National Legislative Party Slates

Separate and closed party lists for each office; parties allowed to present multiple lists; candidates allowed to be listed for and win more than one office

Separate and closed party lists for each office; parties allowed to present multiple lists

Department Level Timing of National-Departmental Elections

Concurrent, with mid-term elections

Nonconcurrent

Gubernatorial Formula

Appointed by President Direct election by plurality, no run-offs

Dept. Assembly Ballot

Ballots are party-printed and placed in pre-prepared ballot envelopes; voters cast ballot envelopes at the polls

State prints ballots; voters choose between lists of candidates running for each office

Dept. Assembly Party Slates

Separate and closed party lists for each office; parties allowed to present multiple lists; candidates allowed to be listed for and win more than one office

Separate and closed party lists for each office; parties allowed to present multiple lists

Municipal Level Timing of National-Municipal Elections

Concurrent Nonconcurrent

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Table 5.1: The Colombian Electoral System, Pre- and Post-Electoral Reform Prior to Electoral Reform,

1958-1990a After Electoral Reform, 1991-presentb

Mayorial Formula Appointed by Governor Direct election by plurality, no run-

offse Municipal Council Ballot

Ballots are party-printed and placed in pre-prepared ballot envelopes; voters cast ballot envelopes at the polls

State prints ballots; voters choose between lists of candidates running for each office

Municipal Council Party Slates

Separate and closed party lists for each office; parties allowed to present multiple lists; candidates allowed to be listed for and win more than one office

Separate and closed party lists for each office; parties allowed to present multiple lists

Local Administrative Councilf Ballot and Party Slates

Existence and elections the discretion of Municipal Councils; lists are closed

Easier to create and elect; lists are closed

Source: Archer (1990), Shugart (1992), and Taylor (1996).

a The Frente Nacional lasted from the return to democracy in 1958 to 1974. The Constitution in place during this period was drafted and passed in 1886. b A new Constitution was drafted and passed in 1991. c Legislative elections are held approximately two months prior to presidential contests, except in 1970 and 1974 when they were held the same day. Between 1958-1974, legislative elections were held every two years. d Legislative elections are held approximately two months prior to presidential contests. In 1991, however, extraordinary legislative elections were held under the new Constitution and electoral system. e Elected for the first time in 1988. f Local administrative councils are known as juntas de administración local. Members are called edils.

various governing institutions (Taylor 1996, 93).175 For the purposes of this chapter, the

most important reforms, summarized in Table 5.1, include the shift to a qualified

175 The structure of government, that is, the unitary and presidential system, remained the same. Indeed, many articles in the new constitution are simply rewrites of ones taken from the previous one.

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majority, two-round presidential contest, the election of national senators from a single

national district, the direct election of departmental governors, the introduction of state

printed ballots, a decrease in the number of members in both the upper and lower houses

in congress, the increase in the number of departments (districts), the introduction of

compensatory seats in the national legislature, and the shift to an elected vice-

president.176 Though not part of the 1991 Constitution, the switch to directly elected

mayors in the 1980s and reforms to laws governing the registration and financing of

political parties in 1985 also introduced important changes to prior institutional

arrangements.

Since 1994, Colombia has elected its national executive by qualified majority.

Under this system, should no candidate win an absolute majority in the first round, a

second round between the top two finishers is held. The candidate receiving the most

votes in this election wins. Unlike in the “first-past-the-post” system used to elect

previous administrations, qualified majority systems are believed to benefit small parties.

Small parties, and dissident lemas within established party organizations, have an

incentive to run their own candidates in first round elections, since strong showings

increase their chances of becoming important coalition partners in second round

competitions.

The shift to an elected, rather than appointed, vice-president in Colombia,

however, should complicate the typical advantages accrued to small parties in qualified

176 Other changes introduced in the new constitution include the right for citizens to call a referendum, introduce initiatives, recall public officials, propose constitutional reforms, and call

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majority presidential races. Although vice-presidential candidates need not be from the

same party as presidential candidates, the same ticket must be presented in both first and

second round competitions. Presidential hopefuls in large parties must think strategically

when choosing their running mates in order to maximize votes. A similar logic applies to

small parties who must decide whether to seek coalitions with large parties prior to first

round elections (where they might name vice-presidential candidates) or to stake out

positions as potential coalition partners in second round elections by running separate

tickets in the first round (but losing the chance to share the presidential ticket in the

second round, though perhaps receiving some other form of compensation). For many

small parties, joining forces with large parties early on may be their best hope for sitting

in the national executive office.

In 1991, the number of senators was reduced from 114, a number that could be

adjusted according to changes in population, to a fixed 100 seats. This number does not

include two compensatory seats allotted to indigenous groups. In 1991, senators were

elected from a single, nationwide district for the first time. Even though the number of

representatives declined, the switch to a single district dramatically reduced the barriers

to the entry of small and new parties, as well as for lemas within established parties.

Under the old system, party lists had to win, on average, 20 percent of the total

departmental vote to win a senate seat (Taylor 1996, 117-118). Under the new system,

parties could win as little as 0.5 percent of the total national vote and still gain

for a constituent assembly.

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representation (Taylor 1996, 117-118).177 Of course, the number of votes necessary for

reaching a 20 percent departmental vote share varied from department to department. In

the largest departments, however, this amount was not much less than 0.5 percent total

national votes. The use of a single, national district thus increased the ability of parties

strong in any single district, particularly the larger ones, to win enough votes to receive a

senate seat. If all seats were handed out through largest remainders, that is, no list

received a Hare quota, a senate seat might only require winning a minimal 0.006 percent

of the total national vote (Taylor 1996, 116-117).178 Parties and lemas with support

concentrated in the country’s most populous districts, parties with nationwide appeal, and

parties with support scattered across multiple districts thus should benefit from the move

to a national district. For this reason, politicians hoping to form their own lemas within

established parties, as well as those hoping to form new parties altogether, should be

encouraged to strike out on their own.

Although the method for electing the lower house was not altered, the number of

deputies allocated to each department changed. Each department still receives a

minimum of two seats, though now one additional representative is allocated for each

250,000 citizens, and one for every fraction of 120,000. Under the previous system, one

representative was allocated for each 100,000 habitants, plus one for every fraction of

177 This is the threshold of exclusion under the Hare formula with largest remainders. The formula used to calculate this threshold is 1 divided by the district magnitude (M) plus 1. That is, 1/(M+1). See Taylor (1996, 265).

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50,000. Additionally, nine departments were created, each receiving the minimum of two

seats, raising the number of departments from 23 in 1990 to 32 in 1991. Even with the

addition of new departments, the number of seats in the lower house declined from 199 in

1990 to 161 in 1991 when the first elections were held under the new electoral system.179

The reduction of the number of representatives combined with the addition of new

departments significantly reduced the average district magnitude in this chamber. In the

1970s and 1980s, the average district magnitude was 7.65 representatives per department.

By 1994 it had dropped to 4.88, or 4.79 if we include the special district created for the

country’s black communities. In contrast to the senate, reforms to the chamber of

deputies should increase the barriers to the entry of small parties, increasing the minimal

share of votes required to win seats.

The introduction of state printed ballots should also work to the benefit of small

and new party organizations by enabling them to challenge large parties at election time.

Colombia’s new ballots include separate electoral cards for each office being contested.

Each electoral card includes the names of all party lists fielding candidates for each

public office or governmental body, as well as a picture of the candidate heading each

list. Voters choose from among the competing lists, casting as many ballots as electoral

competitions. Since voters are no longer given pre-prepared ballot envelopes with pre-

178 Prior to reform, a party had to win, on average, at least 4.7 percent of the total departmental vote to get a seat through largest remainders. The threshold of inclusion under the Hare formula with largest remainders is equal to 1 divided by the district magnitude (M) multiplied by the number of lists (L) per district. That is, 1/(ML). See Taylor (1996, 265). 179 In 1994, this body increased to 163 as a result of the addition of two special compensatory seats for “comunidades negras” or black communities Taylor (1996, 109).

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selected lists of candidates for each chamber or public office, it is easier to split tickets

and single out small parties only running candidates for specific offices. Large

established parties cannot assume that voters will vote according to the wishes of local

power brokers, party activists, or politicians, or that a vote for national senator will also

be a vote for lists allied with that senator for other offices, such as national deputy,

departmental assemblyman, and municipal councilor (Taylor 1996, 123).

The introduction of elected governors, municipal mayors, and local administrative

councils should help small parties, as opposed to party lists run by larger party groups.

Since 1991, departmental governors have been directly elected by plurality vote on

separate ballots. Though not a part of the 1991constitutional reforms, municipal mayors

have also been directly elected by plurality vote since 1988. Conventional wisdom

suggests that plurality elections, regardless of whether held at local or national levels,

should favor larger party organizations. When local elections are held for the first time,

however, as in Colombia (and in Venezuela) the effect should be the reverse: local

elections should give small, locally based parties new opportunities to concentrate their

limited resources on winning local offices, enabling them to compete for and win public

offices for the first time. The creation of nine new departments, and reforms making it

easier to subdivide municipalities into local administrative units, should also help small

parties by increasing the number of local offices available for election. New departments

elect their own governors and assemblies, while the local administrative units have their

own elected councils. As mentioned, state printed ballots should facilitate the ability for

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small parties to compete for and win local offices, since voters now will find it easier to

split their tickets and vote for parties unable to present lists for all levels of government.

Changes to the rules governing party registration and campaign financing should

also encourage the formation of small and new parties, as well as provide an incentive for

dissident politicians running lemas under established party umbrellas to strike out on their

own. In 1985, a law was passed giving parties the right to retain control over their labels.

This law also provided for some public campaign finance to legally recognized parties.

To register, parties had to submit their party statutes and party programs, as well as a

membership list of at least 10,000 citizens (Taylor 1996, 124). The 1991 Constitution

further refined many of these new rules. In terms of party registration, the constitution

states that any that party wins 50,000 votes, gains representation in congress, or obtains

50,000 signatures can petition the Consejo Nacional Electoral (CNE) for a party license.

To maintain legal status, parties must file an ethics statute with the CNE. Legally

recognized parties have the right to control their party label and symbols, the ability to

inscribe candidates, and the right to deny candidates the right to use the party label.

Legally recognized parties also receive partial campaign finances, franking

privileges during campaigns, and the use of the media during campaigns and to advertise

party ideas and accomplishments in non-election years (Taylor 1996, 124). These

reforms increase the incentive for entrepreneurial politicians, including those from large

party organizations and those just starting their careers, to join or form new parties, rather

than simply running lists under existing party umbrellas. Increased levels of campaign

financing and other state resources available to independently registered parties, rather

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than lemas, should encourage politicians who had been heading their own party lists to

leave established parties.

The Puzzling Lack of Political Change Amidst Institutional Restructuring

Most early analyses of Colombia’s recent institutional reforms led many scholars

to predict an increase in the number of new and small parties competing for positions in

all levels of government that would undercut the historic PL and PC party machines.

Although some reforms reduced the ability for small parties to win public office, most

electoral reforms in Colombia should increase the incentives for politicians to run their

own lemas, and many to break away and create new parties altogether. Not only can

small and new parties now gain access to their own state financial resources critical to

running campaigns, they can also hope to win offices at both local and national levels for

the first time. For this reason, political entrepreneurs, including politicians from

established parties who control their own lists, party activists, and power brokers, should

be encouraged to form or join new or small parties. As politicians strike out on their

own, drawing pools of voters with them, they will challenge the historic positions of the

PL and PC in Colombian politics, leading to a decline in traditional party system stability.

Contrary to expectations, however, electoral reforms have not led to major

changes in the structure of Colombian party politics. The historic PL and PC

organizations have retained control of nearly all levels of government. To be sure,

institutional reforms appear to have led to a rise in the number of small parties competing

at election time, as expected. However, these new parties have not been able to challenge

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the old PL and PC political machines for power. According to Table 5.2, 18 parties

fielded presidential candidates in 1994, and 13 in 1998. However, it should also be

Table 5.2: The Number of Candidates in Colombian Presidential Elections, 1974-1998

Year Number

1974 6

1978 9

1982 5

1986 5

1990 12

1994 (First Round) 18

1998 (First Round) 13 Source: Political Database of the Americas (1999a), Political Database of the Americas (1999b), Taylor (1996).

mentioned that 12 parties fielded candidates in 1990s, just prior to electoral reform. This

represented a major jump from previous elections where only five candidates ran (see

Table 5.2). It is therefore unlikely that changes to the presidential electoral formula alone

are responsible for the rise in the number of candidates running in 1994.

The number of parties contesting seats in congressional elections increased as

well, while there was also a notable rise in the number of party lists, particularly in

elections for the lower house. Most politicians, however, from the dominant PL and PC

chose to remain within their traditional party machines, rather than take advantage of new

party registration procedures or campaign and other financial perks accrued to new

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parties. As shown in Table 5.3, the number of lists competing per seat in the lower house

more than doubled, going from an average of 1.6 between 1974 and 1990 to an average

of 3.4 in the early 1990s. In the senate, 1.8 lists, on average, competed for each available

seat between 1974 and 1990, rising to about 2.0 lists per seat in the early 1990s. Most of

these new lists were formed within the PL and PC umbrellas.

Table 5.3: Number of Party Lists Competing for Seats in the Colombian Congress, 1974-1998

Chamber of Deputies Senate

Year Number of

Lists

Lists per Available

Seat Number of

Lists

Lists per Available

Seat

1974 256 1.3 176 1.6

1978 308 1.5 210 1.9

1982 334 1.7 223 2.0

1986 330 1.7 202 1.8

1990 351 1.8 213 1.9

1991 486 3.0 143 1.4

1994 640 3.9 251 2.5

1998 692 4.3 319 3.2 Source: Taylor (1996, 222) and Bejarano and Dávila (1998, 205).

Despite the rise in the number of candidates, parties, and lists competing in

national elections, there were only minor changes to the fundamental structure of

Colombian party politics. The 1994 presidential election saw the continued dominance

of the PL and PC political groups. As shown in Table 4.6 in the previous chapter, these

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parties received just over 90 percent of total national votes in first round presidential

elections, despite an increase in the number of parties and candidates running.

It was not until the 1998 presidential contest that the PL and PC had to contend

with a coalition of new and small parties, which received almost 27 percent of total

national votes in the first round. Given the political problems faced by the PL and PC

parties during the post-institutional reform period, however, it is not surprising that

electoral changes to the presidential formula had some effect on the distribution of votes

among parties in first round elections. Even so, in congressional elections, the reverse

occurred: the PL and PC suffered a setback in the early 90’s, losing about 20 percent of

their traditional vote share, only to recoup nearly 11 percent of this lost vote in 1998 (see

Table 4.3 in the previous chapter). In other words, the PL and PC went from sharing, on

average, 90.8 percent of total popular vote between 1974 and 1990, to receiving 81.0

percent in 1998, a moderate loss, though not indicative of a major change in their

traditional political position.

In the senate, a similar pattern obtained. According to Table 4.4, losses in the

early 1990s were largely recovered in 1998 when PL and PC part lists won 80.4 percent

of the total national vote. Even though the number of parties competing increased over

time, as did the number of parties receiving seats, the historic PL and PC managed to

maintain their dominant political position. The number of parties winning seats in both

chambers of the National Congress increased from 9 in 1990 to 25 in 1991 and 36 in

1994. Most of these seats were won through largest remainders. As shown in Table 5.4,

the number of seats allocated through largest remainders increased dramatically after

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electoral reform. Even so, in 1998 the PL and PC continued to control 93 percent of

lower house and 75.5 of upper house seats (see Table 4.5).

As in national elections, many new parties ran candidates and fielded lists in

municipal and departmental elections. For example, in 1991, the PL and PC presented

only 55.9 percent of all gubernatorial candidates (Taylor 1996, 183). Of those candidates

presented by other parties, 85.7 percent were from new parties (Taylor 1996, 183). In

Table 5.4: Percent Seats won by Hare Quota and Largest Remainders in the Colombian Congress, 1974-1994

Year Chamber of Deputies Senate

Hare Quota Largest

Remainders Hare Quota Largest

Remainders

1974 54.8 45.2 42.8 57.1

1978 41.2 58.8 27.7 72.3

1982 33.7 66.3 31.6 68.4

1986 27.6 72.4 20.2 79.8

1990 26.1 73.9 26.3 73.7

1991 9.3 90.7 41.2 58.8

1994 2.5 97.5 13.7 86.3 Source: Taylor (1996, 173).

municipal elections held in 1990, 85.4 percent of mayoral candidates were from the PL or

PC, whereas in 1992 only 58.4 percent were from these parties. Despite the rise of new

parties running in local elections, the PL and PC retained control of most offices. In

1998, the PL and PC won 90.6 percent of all gubernatorial races, with these parties

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sharing 89.4 percent of the popular vote. The myriad of new and small parties competing

at local levels made only a small dent into the traditional distribution of power.

Contrary to the expectations of most scholars of Latin American political

institutional arrangements, electoral reforms had only a moderate effect on Colombia’s

historic party system. Though small parties ran in elections at increased rates, the PL and

PC retained their dominant political positions, preserving the stability of this country’s

historic two-party system. As noted in Chapter Four, it is likely that the low cost of

running party lists within preexisting party organizations partially accounts for the lack of

party system change. Most authors, however, associate the low cost of remaining within

established parties to the strength of party identification among traditional PL and PC

voters. The incentive for politicians to take advantage of the new political institutional

context by forming new parties is low, since it is unlikely that they can lure voters with

historic ties to PL or PC parties to follow them to the polls.

While party loyalty may account for the reluctance of some politicians to strike

out in favor of new political groups, the recent rise of new parties in the wake of

institutional restructuring combined with the sudden shifts in votes between new parties

and old ones from year to year demonstrates the recent willingness of many voters to

abandon established parties in favor of new alternatives. Indeed, that sizeable pools of

voters have opted to support political newcomers in some elections support current

accounts of the general decline of traditional party identification in Colombia. If

traditional party loyalties are not as strong as they once were, the following, related

questions still emerge: (1) why have most politicians, both newcomers and long timers

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with substantial independent political support, chosen to run lists within established

parties when the benefits associated with forming new parties have increased in recent

years; (2) why have the PL and PC suffered and then been able to recoup short-term

losses; and (3) why have new parties, though able to secure the support of enough voters

to survive in the system, been unable to challenge the historic position of the PL and PC

party machines?

Whether or not party loyalty is stronger in Colombia than elsewhere in the region,

it is likely that other factors have also contributed to the enduring strength of historic

parties. The following section shows how the surprising stability of Colombian party

politics amidst recent institutional change becomes less puzzling examined in the context

of economic policy-making. In several Latin American countries, such as Argentina,

Mexico, and Venezuela, increasing electoral opportunities available to small parties were

accompanied by radical economic policy change. The ability for nascent political groups

to challenge historic political machines was strengthened by the inability for old parties

to provide customary benefits to supporters.

In Colombia, in contrast, institutional reforms facilitating the rise and survival of

new and small parties in the system occurred in a context of relative economic stability.

Historic parties could promise and deliver customary benefits to supporters, thereby

inhibiting the ability of new political groups, even those favored by institutional reforms,

from challenging PL-PC rule. More important, the political exigencies of cultivating a

personal vote in a multiple list system raise the costs to politicians of leaving parties that

control economic policy-making. As long as policy-making remained untouched by

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major economic reforms, politicians faced high costs of leaving parties with access to the

resources needed to service constituents. As a result, rather than taking advantage of new

electoral laws to form new parties, politicians have chosen to remain under the PL or PC

party umbrellas. Leaving would mean giving up access to state resources and policy-

making tools essential to political careers. Analysis of Colombia thus demonstrates how

the projected effects of institutional restructuring are diminished when established party

politicians must and are able to continue the customary delivery of benefits and

preferential policies to supporters.

Recent Electoral Reform in Venezuela

Venezuelan political institutional arrangements have also undergone major

remodeling in recent years. Not only were changes to the system of selecting national

representatives introduced, notable structural reforms were also undertaken to

decentralize the political system, as in Colombia. Despite the similarity in the Colombian

and Venezuelan institutional reform programs, however, Venezuelan politics took a

notably different turn in the post-electoral reform era. This section discusses recent

political institutional change in Venezuela and explains how they led to outcomes

unexpected by scholars of Latin American party systems.

The Prelude to Electoral Reform

In response to growing public criticism about the worsening economic conditions

and to fulfill a minor campaign promise, President Jaime Lusinchi (AD) established the

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Comisión Presidencial para la Reforma del Estado (COPRE) in 1984. COPRE was

instructed to evaluate Venezuela’s growing economic problems and its deteriorating

public services, and to propose remedies to reverse these trends. COPRE’s research and

final recommendations, however, went far beyond their original mandate to include a

critique of the political system, blaming political parties for many of the country’s

economic and political woes. More important, COPRE urged major political institutional

reforms, many of which the Venezuelan government quickly adopted.180

Electoral Reform and Its Expected Effects

For the purposes of this chapter, the most important reforms were those made to

the electoral system used to fill public offices. These changes, summarized in Table 5.5,

included the introduction of open party lists to elect municipal councils, the creation of

the mayoral office and its direct election by plurality vote, the implementation of separate

ballots using open lists to elect state legislatures, the initiation of direct, plurality

elections for state governors, and the switch to a German-style, mixed electoral system to

fill seats in the national chamber of deputies. Some of these reforms, particularly the

introduction of a mixed-style electoral system and use of open lists, are arguably more

important than the changes introduced in Colombia. However, what is notable in both

countries is the similarity of reforms designed to decentralize these formerly centralized

systems. Both countries suddenly allowed for the election of numerous local offices,

180 See Coppedge (1994, 165) for list of the proposed reforms and their status as of 1992.

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Table 5.5: The Venezuelan Electoral System, Pre- and Post-Electoral Reform Prior to Electoral Reform,

1958-1988a After Electoral Reform, 1989-1999b

National Level Timing of Presidential-Legislative Elections

Concurrent Concurrent

Presidential Formula Direct election by plurality, no run-offs

Direct election by plurality, no run-offs

Legislative Ballot (Senate and Chamber of Deputies)

Single vote for a party label used to elect representatives to both Senate and Chamber of Deputies

One vote for a party label elects representatives proportionally in statewide districts to both Senate and Chamber of Deputies; the other vote elects a representative to Chamber of Deputies in a single member districtc

Seat Allocation in Senate

Proportional in statewide district Compensatory seats

Proportional in statewide district Compensatory seats

Seat Allocation in Chamber of Deputies

Proportional in statewide district Compensatory seats

Proportional in statewide district for ½ seats; single member districts (plurality) within states for ½ seats Compensatory seatsd

National Legislative Party Slates

Single, closed party lists of candidates include nominees for both the Senate and Chamber of Deputies

To elect proportional seats, single, closed party lists of candidates include nominees for both the Senate and Chamber of Deputies; in single-member districts, parties present an individual candidate

State Level Timing of National-State Elections

Concurrent Nonconcurrente

Gubernatorial Formula

Appointed by President Direct election by plurality, no run-offsf

State Legislative Ballot

Fused to national legislative ballot

Separate ballot

State Legislative Party Slates

Single, closed party lists used for national legislative elections include candidates for state legislatures

Parties present single, open list of candidates

Municipal Level Timing of National-Municipal Elections

Concurrent until 1979; in 1979 and 1984 nonconcurrent

Nonconcurrent (concurrent with state-level elections)g

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Table 5.5: The Venezuelan Electoral System, Pre- and Post-Electoral Reform Prior to Electoral Reform,

1958-1988a After Electoral Reform, 1989-1999b

Mayorial Formula Office did not exist Direct election by plurality, no run-

offsh Municipal Council Ballot

Fused to national legislative ballot until 1979; separate ballot in 1979 and 1984i

Separate ballot

Municipal Council Party Slates

Single, closed party lists used for national legislative elections include candidates for municipal councils until 1979; in 1979 and 1984 lists are separate from national level lists but are closed

In 1989, parties presented a single, open list of candidates In the 1990s, 2/3 seats elected in single member wards, the remainder from municipal level party lists

Source: Coppedge (1994), Crisp (2000), Paredes Pisani (1991), and Shugart 1992).

a With the return to democracy in 1959, a new Constitution was drafted and passed in 1961. b A new constitution was drafted and passed in December 1999. Institutional changes included lengthening the presidential term, the immediate reelection of the president, and the creation of a unicameral congress. These reforms are discussed later in this chapter. c This change took effect for the first time in 1993. d This change took effect for the first time in 1993. e Since 1989, state elections have been held the year following national presidential-legislative elections. f Elected for the first time in 1989. g Since 1989, state elections have been held the year following national presidential-legislative elections. h Elected for the first time in 1989. i Beginning in 1979, municipal elections have been held the year following national presidential-legislative elections.

creating electoral opportunities that had never before been available to politicians,

parties, and voters.

Since 1979, municipal councils have been elected every five years, with elections

scheduled one year after national elections. Following COPRE’s recommendations, in

1989 Venezuelan voters used a Swiss-style panachage system to elect municipal

councils. Under this system, parties present open lists of candidates and voters have two

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choices when marking their ballots: they can cast a single vote for one party list, or they

can cast as many votes for individual candidates as there are seats to be filled.181 Votes

cast for individual candidates can be spread across multiple party lists, allowing voters to

split their tickets. The race to fill municipal council seats in 1989 was held concurrently

with elections for municipal mayors, state governors, and state legislatures. In the 1990s,

a German-style mixed system was introduced, where 2/3 of municipal councilors are

elected on a ward basis in single member districts, and the remainder elected according to

party lists (Nickson 1995, 261-262). Both reforms introduced major changes from

previous elections when the distribution of municipal offices was tied to national

electoral outcomes (1958-1978), or when voters could only choose between party labels

because lists were closed (1979 and 1984). Since municipal and state executives hold

three-year terms, elections for these offices subsequently ran on separate timetables,

though sometimes they happened concurrently with other elections. Municipal races that

are nonconcurrent with national elections, use separate ballots from other elections, and

present voters with open party lists or single member districts should allow small,

regionally based parties to concentrate their limited resources on winning local offices.

Conventional wisdom suggests that plurality elections in single member districts should

favor larger parties. When such plurality elections, however, are used to elect local

181 Each party can present up to three times as many candidates as there are available council seats when the magnitude is seven seats or lower. When the number of seats on the council is greater than seven, parties may present up to fifteen more candidates than there are available seats. See Shugart (1992, 35) for more information on how seats are allocated among parties.

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offices that were once nonexistent or tied to national ballots, they should provide small,

locally based parties with new political opportunities.

State legislative elections were also uncoupled from national legislative elections

for the first time in 1989, though state legislators still hold five-year terms. Now state

legislative elections are held the year following national elections, as well as use open

lists and separate ballots. As with municipal councils, small, locally based parties unable

present candidates at all levels of government or win at national levels should now be

able to concentrate their limited resources on competing for local public offices.

In terms of local executives, the office of alcalde or mayor was created.182

Mayors were elected for the first time in 1989 for three-year terms in single round, “first-

past-the-post” elections. Formerly appointed by national presidents, state governors were

also elected for the first time in 1989 for three-year terms in single round, plurality

contests. Though elections for these local executives are concurrent with each other, and

sometimes occur simultaneous to other national or local elections, ballots are separate.

Once again, conventional wisdom suggests that plurality elections should favor larger

parties. When such elections elect local public offices for the first time, however, they

should give small, locally based parties new opportunities to win public office.

Moreover, since mayoral and gubernatorial elections are nonconcurrent with national

182 As noted in Chapter Four, prior to 1978 council members elected the council leader from amongst their membership to serve as their executive officer. After 1978, council members in municipalities with more than 50,000 inhabitants were also required to appoint a municipal administrator. In practice, however, executive power remained with the council leader. The 1989 electoral reforms eliminated the posts of municipal administrator and council leader, paving the way for the newly created mayoral office. See Nickson (1995, 261-262).

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contests, large parties should not count on the presence of a national coattail effect on

local outcomes. Small party organizations thus can hope to challenge dominant parties in

electoral competitions for local executives.

Despite radical reforms to the system used to elect local governments, only one

change was made to national electoral laws. The Venezuelan government introduced a

German-style mixed electoral system to elect the representatives to the chamber of

deputies, beginning in 1993. In this system, each state elects one half of its

representatives (or one half plus one in the case of an odd number of total seats) from

single member districts by plurality vote. The remaining seats from each state are

distributed using the D’Hondt formula in proportion to the percent votes received by each

party in a statewide ballot. Voters thus cast two votes: one to elect an individual

candidate from a single member district, and the other to support a closed party list in a

statewide ballot. The party vote won in the statewide ballot determines the overall

allocation of all state seats among the parties, that is, for both single member district and

plurality seats. This differs from the German system where the percent votes won by

parties in a single, national district determines the overall distribution of seats among

parties. The system used to allocate compensatory seats remained the same, though, of

course, based on votes won by party lists. No changes were made to the system used to

elect senators or the president, and national presidential-legislative elections are still held

concurrently. Further, the ballot used to determine the statewide distribution of seats in

the lower house, as before, determined the allocation of seats in the senate.

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Scholars who study the effect of political institutional arrangements on party

systems predicted that, although small parties would win some single member districts,

larger party organizations should still retain significant a electoral advantage in national

elections. In particular, large parties should benefit from the use of the D’Hondt

allocation formula in statewide proportional districts, fused ballots electing senators and

some members to the chamber of deputies, single round presidential contests, and the

presence of presidential coattail effect as they have in the past.183

The Puzzling Effect of Institutional Change: Party System Breakdown

Analysis of political institutional arrangements should lead most scholars to

predict an increase in the number of small parties competing for and winning offices at

all levels of government, but the continuation of larger party dominance in national

elections. Contrary to expectations, however, AD and COPEI did not experience major

challenges from new and small parties in state elections until nearly ten years after the

first reforms took effect. In 1989, small parties were able to join forces and oust AD and

COPEI gubernatorial candidates in only two states: Aragua, a state near the Federal

183 With this in mind, Shugart (1992, 37), comparing Venezuela to Germany, predicted that Venezuela’s new electoral system should reinforce bipartism, although it was “likely that third parties will remain relatively more important than in Germany, owing to the difference in regime type.” Large parties have an advantage in Germany’s single member, plurality districts, and this advantage extends to party lists. Since Germany is parliamentary, voters are dissuaded from ticket splitting. Rather, they tend to vote for the same parties they do in plurality contests because they maximize their representation when their parties participate in government. Since Venezuela is presidential, in contrast, voters may be more apt to split their tickets when voting for party lists, since this may be the best means of maximizing representation. Even though ticket splitting increases the opportunities for small parties to win seats, larger parties will still tend to dominate Venezuelan elections thanks to the dynamics of plurality districts.

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Table 5.6: State Level Electoral Support for AD and COPEI, Pre- and Post-Electoral Reform

National Deputies (percent vote)

State Governors (percent vote)

State 1988 1998 1989 1998 Amazonas 78.0 61.1 81.8 62.3 Anzoátegui 75.7 30.9 79.4 31.2 Apure 90.0 62.0 94.4 54.7 Aragua 62.9 16.8 47.8 17.3 Barinas 85.0 46.5 94.1 48.2 Bolívar 76.3 31.8 53.6 40.6 Carabobo 71.8 13.6 72.4 4.2 Cojedes 86.1 66.3 89.1 73.1 Distrito Federal 69.8 13.2 N/A** N/A** Delta Amacuro 62.7 30.5 65.6 31.1 Falcón 78.2 62.9 86.6 68.4 Guárico 86.8 44.9 87.2 44.7 Lara 70.5 28.7 67.6 33.4 Mérida 80.9 51.4 90.9 57.4 Miranda 70.2 27.7 68.2 6.6 Monagas 88.3 45.7 89.1 47.2 Nueva Esparta 72.6 58.2 86.7 65.6 Portuguesa 77.4 55.4 59.9 58.8 Sucre 77.6 41.1 75.2 44.8 Táchira 80.8 47.0 71.2 59.3 Trujillo 86.7 55.0 90.9 55.7 Vargas N/A* 34.5 N/A* 37.6 Yaracuy 75.2 26.0 75.4 22.9 Zulia 71.9 49.8 66.1 55.6 Average 77.2 41.7 77.0 44.4 Source: Consejo Supremo Electoral (1990), Political Database of the Americas (2001a). Note: N/A: not applicable. *In 1988 Vargas voted with another department. **The executive officer of the Distrito Federal is a presidential appointee.

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District of Caracas, and Bolívar.184 AD and COPEI retained control of most state

governments, receiving an average of 77.0 percent total votes in each state (see Table

5.6). In 1992, small parties won four gubernatorial races, while AD and COPEI retained

an average 70.9 percent votes in each state.185 In 1995, small parties won five

governorships, with AD and COPEI winning the remaining 17 states.186 The share of

votes going to AD and COPEI gubernatorial candidates didn’t suffer a major decline until

1998 when it dropped to an average of 44.4 percent total state votes (see Table 5.6).

In contrast to local elections, AD and COPEI lost considerable vote shares to

small party organizations in national elections beginning with the implementation of

reforms in 1993. In congressional elections, contrary to expectations, plurality districts

did not work to the advantage of large parties, and many new and small parties won seats

for the first time. AD and COPEI went from a combined 74.4 percent total national votes

in 1988 to a 46.7 percent vote share in 1993 (see Table 4.2). In 1998, AD and COPEI

won only 32.4 percent votes (see Table 4.2). In presidential elections, many small

parties’ suddenly found their presidential candidates receiving sizeable vote shares,

undermining the traditional position of the large AD and COPEI party organizations. In

184 In particular, in Aragua the Moviemiento al Socialismo (MAS) won with 48.8 percent valid votes. AD received 30.4 percent and COPEI 17.4 percent valid votes. In Bolívar, a new party, La Causa Radical (CR), won with 40.3 percent of total valid votes. AD received 36.2 percent and COPEI 17.4 percent of total valid votes. See Consejo Supremo Electoral (1991). 185 In Aragua, Bolívar, Delta Amacuro, and Sucre.

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particular, according to Table 4.1, between 1988 and 1993 AD and COPEI went from a

93.4 percent vote share in 1988 to a 46.3 percent vote share in 1993. A coalition of small

and new parties supporting Rafael Caldera (formerly of COPEI) won this election,

signaling the first time AD and COPEI had not controlled the presidency. In 1998, AD

186 MAS won the governorship in Aragua with 48.9 percent state votes. Proyecto Carabobo won Carabobo with 40.6 percent of the popular vote. A coalition between MAS and Convergencia won Lara with 50.4 percent votes. Convergencia National (CN) won Yaracuy with a 45.8 percent vote share. La Causa Radical won Zulia with 30.5 percent state votes. In a sixth state, Portuguesa, MAS won the governorship in coalition with COPEI. This coalition received a 52.7 percent vote share. See Political Database of the Americas (2001b).

and COPEI won only 11.2 percent of total national votes (see Table 4.1), and in 2000

they did not even present presidential candidates.

Interestingly, AD and COPEI lost larger vote shares in presidential rather than

congressional elections. In other words, parties competing in the newly reformed

congressional electoral arena experienced comparatively less change than they did in the

unreformed presidential race. While AD and COPEI presidential candidates lost 47.1

percent national votes in 1993, their party lists lost a comparatively lower 27.7 percent

total national votes (see Tables 4.1 and 4.1). In 1998, AD and COPEI lost another

sizeable 35.1 percent vote share in the presidential ballot, while their party lists lost only

another 14.3 percent national votes (see Tables 4.1 and 4.2). Plurality presidential

elections no longer appeared to favor large parties, nor did they have their usual, strong

coattail effect on legislative outcomes.

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With these electoral outcomes in mind, political institutional arrangements do not

appear to account for recent patterns of party system instability. Moderate reforms to

congressional electoral laws were immediately followed by major party system change in

congressional elections. The unreformed presidential electoral system was accompanied

by near complete party system breakdown. Major reforms to local electoral institutions

were only belatedly followed by expected party system change at local levels. The

puzzling effects of political institutional arrangements on party systems become clear,

however, once we take into account economic policy-making. Unlike Colombia, political

institutional restructuring in Venezuela was accompanied by economic crisis and reform.

Changes to the customary distribution of benefits and policies undercut the ability of AD

and COPEI to weather the effects of electoral reform, leading to party system instability.

Economic Stability Amidst Political Institutional Reform: Explaining the Survival

of Colombia’s Historic Two-Party System

Analysis of Colombian electoral reforms showed that institutional restructuring,

particularly decentralizing reforms, did not lead to expected levels of party system

change. Although the Colombia’s multiple list system certainly undermined some of the

effects of electoral reform on party politics, the availability of state resources to

politicians from the PL and PC party machines for building support also helped to keep

these parties stable. This section demonstrates how moderate import-substitution

industrialization (ISI) allowed PL and PC politicians to continue the unbroken

distribution of particularistic benefits, patronage jobs, and pork barrel projects during the

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Latin American debt crisis, keeping both politicians and voters loyal to these established

parties. Stable levels of public spending thus moderated the effects of electoral reform,

preserving the historic position of the PL and PC in Colombian politics and government.

Balanced Macro-Economic Policy-Making, Moderate ISI, and Colombian Economic

Stability During Latin America’s “Lost Decade”

As demonstrated in Chapter Four, the important position of export-oriented

agricultural and new industrial elites for Colombian politics and party building led PL

and PC politicians continually to implement policies designed to maintain a favorable

climate for exports. In addition, timely fiscal and monetary adjustments throughout the

20th century preserved the country’s stable macro-economic environment. Such fiscal

and monetary prudence limited politicians’ willingness to undertake expansionary ISI

development. As a result, Colombian ISI was moderate in scope, with the public sector

accounting for a much smaller proportion of the economy compared to other Latin

American countries.

As shown in Table 5.7, the operating costs of the Colombian central government,

measured as current central governmental expenditures, accounted for, on average, 7.6

percent of annual gross domestic product (GDP) between 1985 and 1990. Though this is

not the same as the public sector, it is a good indication of the size of the Colombian

state. In contrast, the Venezuelan federal government’s operating costs amounted to, on

average, a much larger 16.5 percent. Between 1990 and 1995, the Colombian

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Table 5.7: The Relative Size of the Colombian and Venezuelan Public Sectors, 1985-1999

Current Central Governmental Exenditures*

(Percent Gross

Domestic Produtct)

Consolidated Public Sector Deficit**

(Percent Gross

Domestic Product)

Year Colombia Venezuela Colombia Venezuelaa 1985 N/A 20.2 N/A 3.5 1986 7.3 17.6 0.4 -4.3 1987 8.7 13.5 -1.7 -4.5 1988 7.0 14.3 -2.1 -8.6 1989 7.3 17.1 -1.9 -1.1 1990 9.0 19.3 -0.6 0.2 1991 9.6 17.7 -0.1 0.7 1992 10.0 15.9 -0.8 -5.8 1993 11.8 15.1 0.4 -3.9 1994 12.7 18.0 2.3 -14.5 1995 11.3 17.8 -2.3 -7.6 1996 12.9 16.4 -3.7 7.1 1997 13.5 17.8 -3.7 2.7 1998 14.4 13.4 -5.0 -14.8 1999 16.8 13.7 -7.3 -6.2 Average 1985-89 7.6 16.5 -1.3 -3.0 Average 1990-94 10.6 17.2 0.2 -4.7 Average 1995-99 13.8 15.8 -4.4 -3.8 Average All Years 10.9 16.5 -1.9 -3.8 Source: The Economist Intelligence Unit (Various Years-a), The Economist Intelligence Unit Various (Years-b), The Economist Intelligence Unit (Various Years-c). Note: N/A: Not available. *Current Central Governmental Expenditures include operating costs and interest payments. **Consolidated Public Sector Deficit refers to the non-financial public sector only.

a Figures exclude state and municipal governments.

government spent an average of 10.6 percent of GDP annually, compared to Venezuela’s

17.2 percent. Reflecting the different sizes of these countries’ states, public sector

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employment in Colombia, including national, departmental, and municipal governments,

accounted for only 9.5 percent of the economically active population during the 1970s

and 1980s (Hartlyn 1988, 178). The Venezuelan public sector, in contrast, accounted for

19.0 percent of this country’s labor force, twice as much as the Colombian public sector

(The Economist Intelligence Unit 1989, 12).

Thanks to Colombia’s smaller public sector, the state was able to sustain a more

manageable rate of public spending. Just prior to the debt crisis, most Latin American

countries were supporting numerous inefficient public industries, overstaffed

bureaucracies, and far-reaching and expensive state development programs. As expected,

few of these countries were able to generate the resources necessary to pay for such

financial obligations, particularly once the debt crisis began in the 1980s. As shown in

Table 5.8, during the 1970s most Latin American countries reported public deficits

averaging between Chile’s -3.1 percent and Mexico’s -6.4 percent. In Venezuela, state

spending led to public sector deficits averaging -7.4 percent of GDP. In 1979, this

country’s public sector deficit reached a startling -16.5 percent. In contrast, the

Colombian government’s public sector deficit during this same period averaged a much

lower –2.4 percent of GDP.

Lower public spending and governmental deficits reduced Colombia’s incentive

to borrow abroad. Table 5.9 presents the foreign debt obligations for the five countries

under study in this dissertation as a percent of each country’s Gross National Product

(GNP). Colombian foreign debt amounted to, on average, 36.2 percent of GNP during

262

Table 5.8: Public Sector Deficits in Selected Latin American Countries, 1970-1981 (Percent Gross Domestic Product)

Year Argentina Brazil Chile Colombia Mexico Peru Venezuela 1970 -1.1 -2.4 -5.2 -4.0 -1.9 -0.8 -2.6 1971 -3.8 -2.1 -12.4 -3.8 -2.3 -1.4 -2.6 1972 -4.6 -1.4 -16.7 -3.8 -4.1 -2.9 -7.1 1973 -6.6 0.4 -15.8 -3.8 -5.3 -4.5 -5.1 1974 -6.9 -0.1 -6.8 -2.9 -5.8 -6.8 2.2 1975 -14.0 -2.3 -1.7 -2.5 -9.1 -9.6 -7.6 1976 -9.8 -2.6 3.7 -2.5 -7.5 -10.0 -13.2 1977 -3.2 -1.8 1.3 -1.1 -5.2 -9.8 -11.4 1978 -3.8 -3.4 1.7 -1.1 -5.5 -6.2 -12.1 1979 -3.5 -1.7 5.2 -0.3 -7.5 -1.1 -16.5 1980 -4.3 -9.7 5.9 -1.4 -7.9 -6.5 -13.5 1981 -7.1 -7.1 3.2 -1.5 -14.5 -8.2 1.3 Average -5.7 -2.9 -3.1 -2.4 -6.4 -5.7 -7.4 Stand. Deviation 3.5 2.8 8.2 1.3 3.4 3.5 6.1 Source: Hartlyn (1988, 106).

the 1980s, presenting a stark contrast to Argentina (65.2 percent), Costa Rica (117.6

percent), Mexico (56.7 percent), and Venezuela (56.6 percent) during this same period.

Colombian foreign debt obligations remained lower during the 1990s as well, placing this

country in a better economic position than most other countries in the region. Though not

necessarily lower than other Latin American countries, Colombian inflation remained

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Table 5.9: Total External Debt as a Percent of Gross National Product in Selected Latin American Countries, 1970-1998 Year Argentina Colombia Costa Rica Mexico Venezuela 1970 23.8 23.3 25.3 16.2 8.8 1971 22.4 24.0 26.6 15.8 10.9 1972 23.6 24.4 28.3 15.0 12.7 1973 16.5 23.0 27.1 15.7 11.6 1974 12.7 20.3 31.3 16.1 7.0 1975 17.9 21.4 36.0 17.2 5.4 1976 22.0 19.2 36.0 22.4 10.5 1977 27.7 26.2 43.9 37.1 29.6 1978 31.3 22.1 49.1 33.9 42.2 1979 41.4 21.1 54.3 31.1 49.6 1980 48.4 20.9 59.5 30.3 42.0 1981 64.7 24.1 141.2 32.5 40.8 1982 83.8 26.9 166.6 52.5 41.3 1983 77.3 30.1 148.0 66.4 48.3 1984 67.5 32.3 117.0 57.1 65.3 1985 61.1 42.6 120.8 55.2 59.1 1986 51.9 46.0 110.7 82.9 58.2 1987 56.3 49.1 111.2 82.1 74.1 1988 48.4 45.2 106.3 60.3 59.4 1989 92.9 44.9 94.9 47.3 77.5 1990 46.0 45.1 69.1 44.8 70.3 1991 35.6 43.4 74.0 41.2 65.0 1992 30.7 20.0 60.2 31.7 64.2 1993 27.9 24.0 53.0 33.6 64.4 1994 29.8 27.7 47.8 34.1 65.2 1995 39.2 28.0 43.2 48.2 47.5 1996 41.9 30.3 38.8 46.7 51.6 1997 45.7 29.9 37.2 42.9 41.1 1998 49.5 33.1 39.0 42.0 39.6

Average 1970-79 23.9 22.5 35.8 22.1 18.8 Average 1980-89 65.2 36.2 117.6 56.7 56.6 Average 1990-98 38.5 31.3 51.4 40.6 56.5 Stand. Deviation 1970-79 8.1 2.1 10.2 8.6 15.8 Stand. Deviation 1980-89 15.3 10.4 29.8 17.7 13.3 Stand. Deviation 1990-98 7.9 8.3 13.7 6.0 11.7 Stand. Deviation All Years 20.7 9.5 41.4 18.7 22.6 Source: World Bank (1989a), World Bank (1989b), World Bank (1993), and World Bank (2000).

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steady and predictable throughout the 1970s, 1980s, and 1990s. As shown in Table 5.10,

the year-to-year fluctuation of inflation, measured as the standard deviation of yearly

inflation, was much lower in Colombia than in most other Latin American countries,

particularly during the crisis ridden 1980s.

Unlike other Latin American countries, Colombia’s judicious economic policy-

making placed it in a good position to survive the Latin American economic crisis

without the need for major austerity programs and extensive structural adjustment. Even

a precipitous drop in world coffee prices in 1979, Colombia’s main source of foreign

exchange, did not push its economy into crisis. In fact, Colombia continued to post

growth rates much higher than most other Latin American countries during this period.

As shown in Table 5.11, despite a slowdown during the early 1980s, the Colombian

economy grew at an average rate of 3.6 percent per year. In the second half of the

decade, economic growth reached, on average, 4.4 percent yearly. Venezuela, in

contrast, averaged only 1.1 percent growth per year, Argentina 0.7 percent, Costa Rica

2.1 percent, and Mexico 2.7 percent during this “lost decade.” Even more startling,

during the 1980s Venezuelan per capita GDP shrunk by, on average, 2.7 percent yearly,

while GDP per capita in Colombia grew by 1.5 percent per year (see Table 5.12).

The Distribution of Benefits Amidst Minor Economic Reform

Despite a history of careful economic policy-making, during the 1990s Colombia

faced several economic problems, most of which stemmed, ironically, from the country’s

political reforms. The 1991 Constitution mandated an increase in transfers to

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Table 5.10: Inflation in Selected Latin American Countries, 1970-1998 (Percent Change in Consumer Price Index)

Year Argentina Colombia Costa Rica Mexico Venezuela 1970 13.6 6.8 4.7 5.2 2.5 1971 34.7 9.1 3.1 5.3 3.2 1972 58.4 13.4 4.6 5.0 2.8 1973 61.2 20.8 15.2 12.0 4.1 1974 23.5 24.3 3.2 23.8 8.3 1975 182.9 22.9 17.4 15.2 10.2 1976 444.0 20.2 3.5 15.8 7.6 1977 176.0 33.1 4.2 29.0 7.8 1978 175.5 17.8 6.0 17.5 7.1 1979 159.5 24.7 9.2 18.2 12.4 1980 100.8 26.5 18.1 26.4 21.5 1981 104.5 27.5 37.1 27.9 16.0 1982 164.8 24.5 90.1 58.9 9.7 1983 343.8 19.8 32.6 101.8 6.3 1984 626.7 16.1 12.0 65.5 11.6 1985 672.2 24.0 15.1 57.7 11.4 1986 90.1 18.9 11.8 86.2 11.5 1987 131.3 23.3 16.8 131.8 28.1 1988 343.0 28.1 20.8 114.2 29.5 1989 3079.8 25.8 16.5 20.0 84.5 1990 2314.0 29.1 19.0 26.7 40.7 1991 171.7 30.4 28.7 22.7 34.2 1992 24.9 27.0 21.8 15.5 31.4 1993 10.6 22.6 9.8 9.8 38.1 1994 4.2 23.8 13.5 7.0 60.8 1995 3.4 21.0 23.2 35.0 59.9 1996 0.2 20.2 17.5 34.4 99.9 1997 0.5 18.5 13.2 20.6 50.0 1998 0.9 20.7 11.7 15.9 35.8 Average 1970-79 132.9 19.3 7.1 14.7 6.6 Average 1980-89 565.7 23.5 27.1 69.0 23.0 Average 1990-98 281.2 23.7 17.6 20.8 50.1 Stand. Deviation 1970-79 129.2 7.9 5.2 8.1 3.4 Stand. Deviation 1980-89 909.2 4.0 23.7 38.7 23.0 Stand. Deviation 1990-98 764.3 4.2 6.2 9.9 21.6 Stand. Dev. All Years 687.3 5.9 16.5 34.0 25.1 Source: International Monetary Fund (1993) and International Monetary Fund (1999).

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Table 5.11: Percent Growth in Gross Domestic Product Output in Selected Latin American Countries, 1970-1998

Year Argentina Colombia Costa Rica Mexico Venezuela1970 2.6 6.6 7.5 6.9 8.8 1971 3.4 6.0 6.8 4.2 3.0 1972 1.9 7.7 8.2 8.5 2.7 1973 3.2 6.7 7.7 8.4 6.3 1974 6.3 5.7 5.5 6.1 6.1 1975 -0.7 2.3 2.1 5.6 6.1 1976 -0.2 4.7 5.5 4.2 8.8 1977 6.2 4.2 8.9 3.4 6.7 1978 -3.3 8.5 6.3 8.3 2.1 1979 7.3 5.4 4.9 9.2 1.3 1980 1.5 4.1 0.8 8.3 -2.0 1981 -5.7 2.3 -2.3 8.5 -0.3 1982 -3.1 0.9 -7.3 -0.6 0.7 1983 4.2 1.6 2.9 -3.5 -5.6 1984 2.0 3.4 8.0 3.4 -1.4 1985 -6.9 3.1 0.7 2.2 1.4 1986 7.1 5.8 5.5 -3.1 6.3 1987 2.6 5.4 4.8 1.7 4.5 1988 -1.9 4.1 3.4 1.3 6.2 1989 -6.9 3.4 5.7 4.2 -7.8 1990 -1.8 4.3 3.6 5.1 6.9 1991 10.6 2.0 2.3 4.2 9.7 1992 9.6 4.0 7.7 3.6 6.1 1993 5.7 5.4 6.3 2.0 0.3 1994 8.0 5.8 4.5 4.4 -2.3 1995 -4.0 5.8 2.4 -6.2 4.0 1996 4.8 2.1 -0.6 5.2 -0.2 Average 1970-79 2.2 4.5 4.2 4.0 2.9 Average 1980-89 0.7 3.6 2.1 2.7 1.1 Average 1990-96 4.7 4.2 3.7 2.6 3.5 Stand. Deviation 1970-79 3.4 1.8 2.0 2.1 2.7 Stand. Deviation 1980-89 4.9 1.5 4.5 4.1 4.7 Stand. Deviation 1990-96 5.6 1.6 2.8 4.0 4.4 Standard Dev. All Years 4.7 4.2 3.7 2.6 3.5 Source: International Monetary Fund (1999).

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Table 5.12: Economic Indicators for Colombia and Venezuela, 1980-1999

Unemployment

(Percent)

Gross Domestic Product Per Capita

(Percent Change)

Year Colombia* Venezuela Colombia Venezuela 1980 9.9 5.9 2.2 -5.1 1981 N/A N/A 0.4 -3.3 1982 8.9 N/A -1.0 -2.2 1983 12.5 N/A -0.3 -8.2 1984 13.1 13.4 1.5 -4.0 1985 12.9 12.1 1.2 -2.5 1986 10.2 10.3 4.0 2.4 1987 10.2 8.5 3.3 2.0 1988 10.3 6.9 2.0 3.6 1989 9.4 9.6 1.4 -10.0 1990 10.6 9.9 2.0 4.3 1991 10.7 8.7 0.1 7.2 1992 10.8 7.2 2.3 4.4 1993 9.6 6.6 3.5 -3.3 1994 8.9 8.7 4.0 -4.5 1995 8.9 10.2 3.3 1.8 1996 11.2 13.7 0.3 -2.3 1997 N/A 11.1 1.6 3.7 1998 15.7 11.0 -1.2 -2.6 1999 19.5 14.5 -6.1 -9.0 Average 1980-89 10.8 9.5 1.5 -2.7 Average 1990-99 11.8 10.2 1.0 0.0 Average All Years 11.3 9.9 1.2 -1.4 Source: The Economist Intelligence Unit (Various Years-a), The Economist Intelligence Unit Various (Years-b), The Economist Intelligence Unit (Various Years-c). Note: *Figures are for Colombia’s seven major cities, Barranquilla, Bogotá, Bucaramanga, Cali, Manizales, Medellín, and Pasto, in December of each year. **Figure is for March.

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departmental and municipal governments, which rose from 4.9 percent of GDP in 1990 to

9.6 percent of GDP in 1998 (The Economist Intelligence Unit 2000, 19). Ambitious

development programs undertaken in the early 1990s, contributions to the debt-ridden

social security system, and increased debt servicing thanks to rising interest rates further

squeezed the government and its tight financial resources (The Economist Intelligence

Unit 2000, 19). As a result, the public sector deficit went from a manageable –0.6

percent of GDP in 1990 to an unprecedented -7.3 percent of GDP in 1999 (see Table 5.7).

To preserve Colombia’s traditional economic stability, presidents César Gaviria

Trujillo (PL) (1990-94) and Ernesto Samper Pizano (PL) (1994-98) introduced measures

to bring monetary policy under central bank control, liberalize the financial sector and

trade relations, and privatize state-owned industries. These reforms only reinforced

policies that had been followed throughout most of the 20th century, and thus did not

radically alter the structure of the Colombian economy and distribution of benefits.

Compared to other countries in the region, Colombian economic reforms were markedly

moderate in scope and composition.

In particular, Colombia’s traditionally smaller public sector meant that reforms

would adversely affect only a limited segment of the population. Indeed, the extensive

trade liberalization begun by President Gaviria benefited many citizens by reducing the

cost of goods formerly covered by high tariffs or licensing requirements. The value of

imports rose from 11 percent of GDP in 1991 to 16 percent in 1993 (The Economist

Intelligence Unit 2000, 30).

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Most importantly, the resources available to national congressmen, through

congressional auxilios, scholarships, pork barrel projects, and other discretionary funds,

remained untouched by economic reforms. In addition, despite a reduction in public

enterprise employment with privatization, overall public sector employment increased

during the 1990s. As shown in Table 5.13, national-level public sector employment went

Table 5.13: National Public Sector Employment in Colombia, 1985-1995 (Number of Employees)

Year Central

Government

Public Industries

and Commercial Enterprises

Other Public Entities

Mixed Enterprises

Total Employment

Percent Change in

Total Employment

1985 195,353 87,502 65,400 5,839 354,094 -- 1986 216,599 87,028 64,656 6,325 374,608 5.8 1987 218,061 92,821 69,700 6,690 387,272 3.4 1988 231,411 95,120 72,059 6,724 405,314 4.7 1989 181,097 95,798 68,962 5,529 351,386 -13.3 1990 307,420 93,973 72,973 6,884 481,250 37.0 1991 307,944 52,934 60,973 3,811 425,662 -11.6 1992 333,404 74,474 69,048 4,686 481,612 13.1 1993 333,460 73,277 52,440 3,677 462,854 -3.9 1994 349,684 65,648 59,977 2,569 477,878 3.2 1995 438,575 63,850 71,523 2,569 576,517 20.6 Source: Verano de la Rosa, Téllez Duarte, and Sandoval Brito (1999).

from 354,094 employees in 1985 to 576,517 in 1995, with most of this increase occurring

in the 1990s. Central governmental hiring accounts for most of this increase, more than

doubling in the span of ten years. These figures do not account for changes in

departmental and municipal level employment. Decentralizing reforms outlined in the

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1991 Constitution required the addition of new departments and JALs to the structure of

government. Not only did these new local governments elect new public offices, but they

also made appointments to new bureaucracies. These new bureaucracies were also

entitled to state transfers and other governmental funds, increasing the resources available

to local politicians and power brokers. This partly accounts for the startling rise in

central governmental transfers going to departmental and municipal governments in the

1990s. Increased transfers also contributed to Colombia’s rising deficits.

The Distribution of Benefits and the Survival of Traditional Party Machines

The continued availability of state resources to Colombian politicians enabled the

historic PL and PC organizations to weather institutional restructuring, mounting

economic troubles, and moderate economic reform in the 1990s. During the 1994

presidential contest, despite the introduction of a two-round balloting system, the PL and

PC won 90.3 percent of total national votes in first round elections. The careful

distribution of benefits by the PL and PC enabled their candidates to eclipse the myriad

of new political contenders hoping to stake out positions as potential coalition partners in

second round elections (see Table 4.6 for election results).

At the congressional level, PL and PC party lists averaged about 70 percent total

national votes in 1994 elections (see Tables 4.3 and 4.4). The share of votes going to PL

and PC lists presents a contrast to previous years. In 1990, PL and PC lists won 90.4

percent total national votes in elections to fill the lower chamber (see Table 4.3). Just a

year later, in 1991, PL and PC party lists accounted for 68.5 percent of total national

votes. In 1994, the PL and PC won 70.4 percent total national votes in elections for the

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national chamber of deputies. Between 1990 and 1994, the PL and PC lost about 20

percent of their former vote share.

The shift in votes going to the traditional PL and PC was largely due to a

temporary increase in the political activities of several guerrilla groups and their inclusion

in the electoral process during this period.187 During the late 1980s, peace negotiations

between Presidents Belisario Betancur (PC) (1982-86) and Virgilio Barco Vargas (PL)

(1986-1990) and the country’s growing number of guerrilla groups sought ways to

encourage them to lay down arms and rejoin civil society. In response, the FARC formed

the Unión Patriotica (UP) and fielded candidates in some elections as early as 1988,

winning some municipal mayoral races (The Economist 2001, 10). In 1989, negotiations

between government officials and guerrillas met with some success when members of the

Alianza Democrática- Movimiento 19 de Abril (AD-M19) were persuaded to abandon

their armed struggle and participate in national elections. The first major elections

including guerrilla groups were those held to select the constituent assembly in 1990.

AD-M19 won 19 out of 70 total elected seats (Taylor 1996, 93).188 The UP won 2

187 Colombia’s principal guerrilla groups emerged in response to the limited political opportunities available during the FN. Depending on the group, members supported some sort of communist revolution against the new regime. In 1964, guerrillas and peasant self-defense groups organized by the pro-Moscow Communist party left over from la violencia founded the FARC. One year later, the pro-Cuban ELN emerged. Drug cartels have transferred funds to these groups, helping them to buy arms. Today, the FARC has some 18,000 members, most of whom are armed, and controls large areas of the Colombian countryside. Though its members are mostly peasants, this group represents small landowners who are threatened by cattle barons, as well as farmers and day laborers in the coca industry (The Economist 2001, 10). 188 The PL won 22 seats, the PC 7 seats, the Movimiento de Salvación Nacional 11 seats, and eight other parties won the remainder (Taylor 1996, 93).

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seats.189 This paved the way for further participation of former guerrillas in national and

local elections, leading to the political inclusion of new interest groups and voters that

had never before been part of the country’s electoral process.

Though these groups won sizeable shares of votes in the early 1990s, their success

was short-lived. Vigilante paramilitary groups tied to the country’s drug cartels and

armed forces threatened guerrilla parties, with their politicians, candidates, and

supporters killed (The Economist 2001).190 Even in the late 1980s 1,000 UP members,

including two presidential candidates, were killed (The Economist 2001, 10). Increased

paramilitary violence against this group caused the FARC to demobilize it, leaving the

organization without a party or politicians in the 1990s (The Economist 2001, 10). As a

result of the government’s inability to enforce a ceasefire, during the mid-1990s the peace

process broke down and many guerrilla groups returned to violence.

189 In addition to the 70 elected seats, several ex-guerrilla groups were also given seats in return for laying down arms (Taylor 1996, 92). 190 Right-wing paramilitary groups are the counterparts to the leftist guerrillas. Vigilante groups existed in rural during la violencia, but the country’s drug barons founded most of the paramilitary bands operating today. During the 1980s, drug traffickers used their growing resources to acquire land and cattle farms. Guerrilla groups, however, also occupied these areas and regularly demanded protection money from the new landords. In response, drug cartels created local militias. While only comprising about 1,200 troops in the early 1990s, by 1998 paramilitaries had around 4,500 members (The Economist 2001, 12). In 2001, they accounted for 8,000 troops. Local militias have even formed an umbrella organization, called the United Self-Defense Forces of Colombia (AUC). In addition to their fight against guerrillas, paramilitary death squads have been responsible for many of the atrocities committed against civilians, including mass murder. Today, paramilitary groups retain strong ties to drug cartels, but also receive financing from cattle barons, and the support of politicians and military officers (The Economist 2001, 12). In fact, many of the paramilitary death squads are linked to the country’s armed forces. In many areas, the AUC controls local government through force, along with the local coca industry (The Economist 2001, 12).

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Table 5.14: PL and PC Support in Gubernatorial Elections, 1998

Department PL and PC

(Percent Vote) Party Winning

Governor’s Office

Amazonas 71.3 PL Antioquia 68.1 PC Arauca 100.0 PL Atlántico 92.1 PC Bolívar 100.0 PC Boyaca 93.0 PC Caldas 80.0 PL Caqueta 67.4 PL Casanare 100.0 PL Cauca 100.0 PL César 100.0 PL Córdoba 100.0 PL Cundinamarca 98.7 PL Chocó 63.0 PL Guainía 68.0 ASI Guaviare 100.0 PC Huila 54.0 MNC La Guajira 100.0 PL Magdalena 61.0 PL Meta 100.0 PL Nariño 70.6 PL Norte de Santander 100.0 PC (Coalition) Putumayo 100.0 PL Quindió 100.0 PC (Coalition) Risaralda 100.0 PL San Andrés 77.3 PL Santander 100.0 PC (Coalition) Sucre 98.3 PL Tolima 100.0 PC (Coalition) Valle de Cauca 100.0 PC (Coalition) Vaupés 44.6 FE Vichada 83.3 PL

Average Share of Vote 89.4 Percent from PL and PC 90.6 Source: Personal communication with Brian Crisp and Maria Escobar-Lemmon. Note: ASI: Movimiento Alianza Social Indigena; FE: Independiente Frente de Esperanza; MNC: Movimiento Nacional Conservador; PC: Partido Conservador; PL: Partido Liberal.

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Table 5.15: PL and PC Mayoral Victories, 1988-97 (Percent Offices Won)

Year PC PL Coalitions Total

PC and PL 1988 41.3 45.4 14.2 86.7 1990 38.8 56.1 12.1 94.9 1992 27.2 40.5 34.7 67.7 1994 36.8 51.1 18.6 87.9 1997 27.9 44.8 34.3 72.7

Source: Bejarano and Dávila (1998).

Increased guerrilla violence has turned voters against their fledgling political

groups, enabling the traditional PL and PC party machines to recoup electoral losses

suffered in the early 1990s. In 1998, PL and PC politicians won, on average, 80.5

percent of total national votes in senatorial (80.4) and chamber of deputies (81.0)

elections (see Tables 4.3 and 4.4). This gave PL and PC candidates 93.2 percent of seats

in the chamber of deputies and 75.5 percent of seats in the national senate. At the

departmental level, as shown in Table 5.14, PL and PC gubernatorial candidates shared,

on average, 89.4 percent of departmental votes and won 90.7 percent of all governorships

in 1998. Though there was some cross-regional variation, in several departments the PL

and PC candidates took all votes cast. In municipal elections, PL and PC candidates won

86.7 percent of all mayorial races in 1988, when they were held for the first time (see

Table 5.15). After sustaining losses in 1992, thanks to wins by many guerrilla parties, PL

and PC candidates reasserted their political dominance in 1994 and won 94.9 percent of

all mayoral races. 1997 figures are somewhat misleading, since they count offices won

by coalitions where the PL or PC were important players as non-PL or PC wins. Even so,

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the table shows that lone PL and PC candidates won over 70 percent of all municipal

executive races.

The strong performance by PL and PC candidates in 1998 occurred amidst

increasing guerrilla and paramilitary violence, major corruption scandals and, most

notably, accusations that traditional parties were in league with narco-traffickers. Drug-

trafficking has presented a growing problem for Colombian presidents since the 1980s.

Mostly trading in cocaine, drug lords have amassed considerable fortunes over the past

20 years (The Economist Intelligence Unit 2000, 6). In some cases, drug lords have used

their wealth to usurp the roll of local government, either through intimidation or by

funding local infrastructure and investment projects. Drug cartels are also known for

their ties to the country’s guerrilla movements and paramilitary vigilantes. During the

Barco administration (1986-90), drug lords even went so far as to declare war against the

Colombian state (The Economist Intelligence Unit 2000, 6). Drug cartels have also

dabbled in national politics directly, resulting in numerous political scandals. Drug

bosses reportedly influenced the wording of the 1991 Constitution (The Economist

Intelligence Unit 2000, 6).

During the late 1990s, evidence came to light that contributions had been made by

the notorious Cali drug cartel to President Ernesto Samper Pizano’s (PL) (1994-98) 1994

presidential campaign. The discovery of the so-called “narcocassettes” recording

telephone conversations between PL officials and members of the Cali group led to an

investigation by the prosecutor-general and the conviction of several members of

Samper’s campaign team and one government minister. Though measures were initiated

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to remove President Samper from office, congress’s refusal to follow through with

impeachment proceedings against him damaged the PL’s credibility with Colombian

citizens. President Samper finished his term, but this scandal weakened PL popularity

and led to its defeat in the June 1998 presidential race.

Even though the PL and PC each lost about 10 percent of their former vote shares

in presidential elections that year, as shown above, they were able to increase voter

support in congressional elections and hold onto most local governments. The strong

performance of PL and PC party lists in congressional and local elections attests to the

enduring strength of their political machines. Indeed, when taking into account the drop

in abstention that year, it appears that the PL and PC party vote remained largely the

same. The rise in electoral participation by citizens fed up with the traditional parties

accounts for most of the shift in votes to new parties in the 1998 presidential elections

(see Table 5.16). Many new voters, particularly in urban areas, threw their support

behind Noemí Sanín, a former governmental minister and ambassador, and her political

movement, Opción Vida.191

The new constitution and institutional restructuring, and even corruption scandals

and minor economic reforms, did little to undermine the traditional hold of the PL and PC

political machines on politics at all levels of Colombian government. Despite the

presence of new political groups seeking to take advantage of new electoral rules and

191 This is supported by the fact that the PL and PC were able to increase their support in congressional elections where abstention remained high at 66 percent of registered voters. See Bejarano and Dávila (1998, 210) for abstention rates in congressional elections that year and throughout the 1990s.

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growing numbers of disaffected voters, most PL and PC politicians chose to remain

within their established party organizations. Indeed, in a surprising turn of events, many

PL politicians hoping to disassociate themselves from the scandal-ridden Samper

Table 5.16: Rates of Voter Abstention in Colombian Presidential Elections, 1970-98 (Percent)

Year Rate of Abstention* 1970 47.4 1974 40.9 1978 59.8 1982 41.2 1986 55.2 1990 56.5 1994 (First Round) 66.0 1994 (Second Round) 56.7 1998 (First Round) 48.2 1998 (Second Round) 40.7 Source: Bejarano and Dávila (1998). Note: The rate of abstention is measured as votes cast out of total registered voters.

administration allied themselves with Andrés Pastrana Arango, the PC presidential

candidate. Rather than striking out on their own, politicians from both the PL and PC

found it politically expedient to retain ties to one of the two traditional party machines

capable of providing them with the benefits needed to retain the support of power

brokers, party activists, and constituents.

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Colombia’s Political Challenge During the 21st Century

Though Colombian parties have managed to weather the Latin American debt

crisis, institutional restructuring, and minor economic reforms during the 1980s and

1990s, these parties will face considerable challenges during the 21st century, particularly

during elections scheduled for 2002. Transfers to departmental and municipal

governments, accounting for nearly 10 percent of annual GDP in the late 1990s, had

placed growing pressure on governmental resources. The non-financial public sector

accumulated a yearly deficit of about six percent of GDP, placing added pressure on the

beleaguered economy (The Economist Intelligence Unit 2000, 21). Years of large capital

expenditures as a part of an ambitious development program also contributed to the

country’s growing economic problems. Tight monetary policy, combined with an

economic slowdown and an exchange rate adjustment, left many financial institutions

exposed (The Economist Intelligence Unit 2000, 23). By the end of 1998, the Colombian

economy was in recession, contracting at a rate of about 3.2 percent per year (The

Economist Intelligence Unit 2000, 22). Unemployment reached 15.7 percent in 1998,

and GDP per capita was shrinking by about 1.2 percent per year (see Table 5.12).

Soon after assuming the presidential mantle in August 1998, Andrés Pastrana

Arango (PC) was forced to implement emergency measures to resolve the country’s

financial crisis, as well as introduce an extensive economic adjustment package to

address growing economic troubles. Pastrana’s economic reform package, introduced in

December 1998, included large cuts in governmental spending and an overhaul of the

country’s tax system to improve receipts. Although Pastrana’s reforms appeared to be a

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step in the direction toward economic recovery, a major earthquake and slow economic

growth made it difficult for the president to achieve his target governmental expenditures

of 2.1 percent of GDP. The economic recession, high construction costs after the

earthquake, and the financial crisis placed the Colombian economy in crisis. In fact, the

once vibrant manufacturing sector had been stagnating since 1995. Moreover, passage of

a 40 billion dollar, four-year development program by the Congress in May placed added

pressure on limited governmental resources. In 1999, unemployment reached 19.5

percent and GDP per capita was shrunk by 6.1 percent. In December 1999, Colombia

reached a 2.7 billion dollar Extended Fund Facility agreement with the International

Monetary Fund (IMF). The agreement, however, required a substantial reduction in

government spending, including transfers to regional governments, with a target deficit of

1.5 percent of GDP (The Economist Intelligence Unit 2000, 21).

These reductions in governmental spending required by the new IMF agreement

will most likely threaten the resources used by traditional politicians to build support,

leading to uncharacteristic party system instability. Moreover, these economic reforms

are being implemented in a context of growing civil unrest, guerrilla warfare,

paramilitary violence, and narco-trafficking. Indeed, Colombia’s mounting social, civil,

and economic troubles have led to general apprehension among international investors

about the safety of Colombian investments. As a result, international investment and

capital flows have declined notably in recent years, something that has only served to

amplify Colombia’s economic problems.

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Amidst growing civil unrest, social inequalities, and economic instability,

Colombians will go to the polls in 2002 to elect national and local leaders. In a context

of reduced government spending and changes to the traditional distribution of benefits

and policy programs, it is unlikely that patronage politics will suffice to keep the PL and

PC in power. Many political entrepreneurs will have the chance to challenge the historic

stranglehold that the PL and PC organizations have had on Colombian politics at all

levels of government. In the end, increasing economic hardship alongside painful reform

measures, in the context of recently revamped institutional arrangements, should lead to a

transformation in Colombian politics, causing this country’s party system to undergo

changes similar to those found lately in Argentina, Mexico, and Venezuela.

Economic Crisis and Adjustment Amidst Electoral Reform: Explaining the

Breakdown of Longtime Party Stability in Venezuela

Economic policy stability and the distribution of customary benefits, even in a

context of major political institutional restructuring, enables dominant party organizations

to protect their privileged political positions, as seen in Colombia. It is only when

institutional reforms are coupled with major shifts in customary economic policy-making

that the political position of dominant parties is weakened. This section shows that

electoral reforms implemented in Venezuela between 1989 and 1993 were not the

principal cause of subsequent party system instability. Instead, though institutional

change decreased the advantages of AD and COPEI over their competitors at election

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time, economic crisis and reform weakened their electoral support by reducing their

ability to distribute customary benefits.

The Road to Economic Crisis and Adjustment

As discussed in Chapter Four, during the 1970s soaring oil revenues encouraged

President Carlos Andrés Pérez (AD) (1974-79) to undertake large-scale social spending

programs, infrastructure development projects, and industrial expansion. Pérez also

scored major political points when he nationalized both the petroleum and iron-ore

industries (Latin American Regional Report: Andean Group, January 26, 1989). Oil

revenues thus enabled the state to promote rapid economic development, and act as the

conduit for most economic transactions and relationships. As shown in Table 5.11, GDP

grew at an average rate of 5.2 per year in the late 1970s, reaching 8.8 percent in 1976.

International reserves broke the $9 billion barrier in 1976 and increased to $11 billion

over the next five years (Naím 1993b, 21). Despite abundant petrodollars, inflation

remained remarkably low, particularly compared to other countries in the region. As

shown in Table 5.10, inflation averaged just below 9 percent per year during the late

1970s, much lower than in Argentina, Colombia, and Mexico.

Counting on a future flush with funds, Pérez and subsequent presidents were

encouraged to undertake large-scale public investment to speed up the pace of

development and economic growth. No project, no matter how costly, was too big (Karl

1997). Oil revenues, however, were not sufficient to cover the government’s increasingly

extravagant development projects and spending obligations. Most industrial and

infrastructure projects were multi-year endeavors, forcing later administrations to write

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them into annual budgets. As shown in Table 5.8, beginning with Pérez, public sector

deficits grew at a rapid pace, going from an average of 4.0 percent per year during the

early 1970s to 9.8 percent between 1974 and 1979. In 1979, the deficit reached 16.5

percent of GDP. To cover growing expenditures, Pérez and subsequent governments

borrowed abroad. When the government was unwilling to cover deficits incurred by is

growing cadre of public enterprises, these agencies were empowered to seek loans abroad

without the approval of congress. As shown in Table 5.9, total external debt as a percent

of GDP rose considerably, beginning in the late 1970s, going from 7.0 percent of GDP to

nearly 50 percent of GDP during the Pérez administration alone. The swift pace of

foreign borrowing continued well into the 1990s.

Despite seemingly limitless petrodollar earnings, the Venezuela economy began

experiencing problems in the 1980s. Most governmental income was generated from oil

exports, tying the stability of the domestic economy to the international price of oil. In

the 1980s, the price of oil dropped dramatically, going from 30 U.S. dollars per barrel

(1981) to 9 U.S. dollars per barrel (1992) (Naím 1993b, 37). Moreover, OPEC’s

increasingly smaller export allocations given to Venezuelan oil further eroded

governmental oil revenues (Naím 1993b, 37). Rather than force public spending in line

with fluctuating oil prices, successive governments chose to run public sector deficits and

borrow abroad. There was always the hope that oil prices would rise once again,

encouraging presidents to put off politically difficult spending and policy reforms that

only stood to hurt their parties at the polls.

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Fluctuating governmental income, overspending, and rising foreign debt

obligations placed the Venezuelan economy on the brink of bankruptcy by the late 1980s.

Massive state subsidy programs to promote industrial and agricultural development,

discussed in Chapter Four, as well as price controls covering a vast array of goods and

services, accounted for large parts of unpredictable governmental income.192 Further,

years of subsidies and tariff protection left most agricultural and industrial enterprises

inefficient, decreasing productivity levels across Venezuela. In the industrial sector, for

example, where state-owned enterprises were dominant, productivity decreased by 9.2

percent per year during the late 1970s, and by 1.4 percent per year between 1983 and

1988 (Naím 1993b, 22-23). Most goods produced in the Venezuelan economy were

uncompetitive abroad and thus could not be exported to earn foreign exchange.

Governmental resources flowed into these industries to keep them afloat, with the

government unable to tax them or encourage exports to recoup expenditures.

The state’s economic development strategy undermined the country’s economic

stability in other ways. The overvalued and multi-tiered exchange rate system, used to

help industries acquire cheap inputs, depleted foreign reserves. Financial controls and

state mandated interest rates that were far below inflation had been used to promote

192 Price controls covered 43 broad categories, with the prices of any goods and services falling within these categories fixed by the Ministries of Development and Industry. Items under price control included staples, such as bread, milk, and medicines, as well as movie tickets, ice, funeral services, toothpaste, batteries, spaghetti, mattress foam, soft drinks, toilet paper, auto parts, and beer. Even the price of a cup of coffee at cafés was regulated, with one price for standing at the counter and another for sitting at a table, as were restaurant menus (Naím 1993a, 90). For goods not in any of these categories, any price increase had to be reported to the ministry in charge, with the possibility that it would invalidate the increase.

284

industrial and agricultural development throughout the 1960s, 1970s, 1980s. These

controls, however, also led to banking crises, capital flight, and corruption (Naím 1993b,

25-27). The government had to cover the losses of failed banks, capital flight, and even

monies lost to rent-seeking and corruption, lest it allow banks and firms to fail en masse.

Years of foreign borrowing to cover growing expenditures led to large debt servicing

obligations, accounting for larger and larger portions of the government’s budget each

year.

Increasing economic problems caused average GDP per capita and real incomes

to decline dramatically during the 1980s (see Figures 4.4 and 4.5 in the previous chapter).

Domestic and foreign private investment grew scarce as the economic situation

worsened, only exacerbating the country’s economic problems. As the government’s

resources grew tighter, social services deteriorated due to inadequate financial support.

By the late 1980s, the Venezuelan economy had begun to shrink (see Table 5.11).

Despite growing economic instability, AD and COPEI presidents were reluctant

to move away from its state-led economic development strategy, particularly as long as

international loans were available to cover shortfalls. Years of using state resources and

policy-making to distribute benefits to supporters and build party organizations,

combined with the hope that oil revenues would rise once again, encouraged all

presidents to put off politically painful and potentially unnecessary reforms. As a result,

only minor economic policy changes were introduced during the 1980s to deal with the

most immediate problems of rising inflation and temporary balance of payments crises.

Massive state spending and investment projects continued unabated, and even grew in

285

size during the 1980s. Public sector employment increased during these years, partly as a

means of offsetting growing economic instability (see Tables 4.10 and 4.11). The

number of public enterprises increased as well (see Table 4.9). Continued governmental

spending sprees, particularly leading up to presidential and congressional elections in

1988, placed the economy on the brink of collapse when Carlos Andrés Pérez (AD) took

office for the second time in 1989.

Venezuela’s Short-Lived Economic Adjustment Program

Carlos Andrés Pérez (AD) emerged once again as his party’s presidential nominee

in 1988. Venezuelans had fond memories of these "heady" years of high economic

growth and massive state spending when he was last president (1974-79) (Latin American

Regional Report: Andean Group, January 26, 1989).193 During his campaign, Pérez

made great efforts to reassure influential business sectors that he intended to privatize

many state activities, to unify exchange rates, and to implement numerous reforms

needed to reduce state intervention in the economy (Latin American Regional Report:

Andean Group, July 28, 1988).194 Despite this effort to cultivate the support of the

country’s private business sectors, the campaign heard by most citizens was less specific.

To the majority of Venezuelans, Pérez declared that profound changes were needed to

reform the economy, keeping the precise details of how he intended to "modernize" the

193 Conveniently for Pérez, the public had forgotten the problems that had beset his former government. At one point in the 1970s, "Pérez even received a public vote of censure from congress for allegedly allowing corrupt practices during his government” (Latin American Regional Report: Andean Group, January 26, 1989. 194 The COPEI candidate also promoted free market policies, as well as publicized the need for significant economic reform.

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economy vague (Naím 1993a, 53). Pérez easily defeated COPEI by about 13 percent of

total national votes, winning 53 percent of total national votes compared to COPEI’s 40.4

percent (see Table 4.1).

The Venezuelan public did not expect Pérez's second term in office to be different

from his first, nor from his predecessor Jaime Lusinchi’s government (AD) (1984-89).

Upon taking office, however, Pérez began to initiate reforms to deal with pressing macro-

economic problems, and the economy’s fundamental structural problems. To the surprise

of even his own party, Pérez appointed a group of relatively young, foreign trained and

politically inexperienced professionals with no party affiliations to many key posts within

his cabinet and governmental ministries. “This was a sharp departure from the established

practice of having political activists occupying the main government jobs” (Naím 1993a,

53).

By February 1989, Pérez and his team of economic advisors unveiled an austerity

package that included a phased liberalization of domestic interest rates, the lifting of

official controls on the prices of all goods and services, except a small group of basic

mass consumption items, the introduction of a free-floating exchange rate, as opposed to

the government controlled two-tier system, the reduction of public spending, and the

increase of the prices of public-sector goods and services. Pérez stated that a reduction in

the government's annual budget deficit would be achieved through increases in domestic

fuel prices, which had always been heavily subsidized, an overhaul of the tax system,

including the introduction of the value-added tax (VAT), and the introduction of a

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national sales tax (Latin American Regional Report: Andean Group, April 13, 1989).195

Structural adjustment of the economy would be achieved through “trade liberalization;

deregulation of the capital, goods, and labor markets; reform of the agricultural, industrial

and financial sectors; foreign investment promotion; and an ambitious privatization

program” (Naím 1993b, 50). Pérez also announced political and governmental reforms,

“public sector restructuring, and general institutional modernization as part of his

government’s goals” (Naím 1993b, 50). The president’s extensive reform program was

backed by a seven billion U.S. dollar Extended Fund Facility agreement with the IMF,

and a series of policy loans from the World Bank (The Economist Intelligence Unit

1997).

The government’s new policy program represented a significant departure from

the past. More importantly, the removal of economic relationships from political control

threatened politicians from the historic AD and COPEI party machines. As explained in

Chapter Four, state economic policy-making was used to distribute benefits and transfer

resources to groups chosen for political reasons. Politicians from both AD and COPEI

had spent the past 30 years using their ability to serve as broker between society and state

to build party organizations and cultivate political support. When Pérez liberalized

exchange rates and removed price controls, for example, a valuable political tool was

taken from politicians. Not only had politicians used their ability to manipulate prices to

confer benefits on particular groups, the elimination of price controls also meant the

redundancy of many public sector workers whose job it had been to spot check local

195 In March 1996, for example, one liter of gasoline costs three cents.

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businesses and stores for price violations. The elimination of tariffs and governmental

subsidies going to industrial and agricultural enterprises threatened businesses and

workers. As jobs were put in jeopardy, so was public support for the country’s leading

politicians and their party organizations who had been responsible for creating them. The

reduction in public spending and public sector enterprises, through governmental

restructuring and privatization, threatened to remove important financial and patronage

resources used by politicians to reward party activists and build support.

Pérez’s reforms, and the speed with which they were implemented, came as a

shock to most citizens. The announcement of the unification of the exchange rate and its

implied devaluation, for example, led to a run on shops to purchase goods before the

bolivar's value fell. Shortages ensued, due to mass purchasing and hoarding. An

announced rise in gasoline prices was accompanied by a rise in bus fares, triggering riots

on Monday, February 27, 1989. Rioting and looting in Caracas and other major cities left

300 Venezuelans dead. Strikes and demonstrations accompanied state efforts to reduce

subsidies, freeze workers' wages, and initiate privatization programs throughout Pérez's

term in office. Growing civil unrest inspired two failed coup attempts against the

government, one on February 4, 1992, led by Lt. Colonel Hugo Chávez Frías, and the

other on November 27, 1992, led by General Francisco Visconti (Naím 1993a; Naím

1993b).

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Pérez’s reform program also came as a shock to most politicians. Within

congress, both AD and COPEI blocked all bills needed to further reform.196 COPEI

repeatedly called for votes of censure against Pérez, as well as tried to shorten his

presidential mandate, claiming that his policies were causing democratic instability and

that he was incapable of governing effectively (Latin American Weekly Report,

November 19, 1992). The most debilitating opposition, however, came from Pérez’s own

party. AD politicians joined COPEI in calling for votes of censure against governmental

ministers and shortening the presidential mandate (Latin American Weekly Report, April

2, 1992). Although the bulk of AD congressmen never voted to censure Pérez or his

ministers, their vocal criticism of his government is an indication of how unpopular the

economic reforms were among AD party members. Moreover, after AD's poor showing

in the December 1992 gubernatorial elections, AD party president Humberto Celli

threatened to withdraw support for the government. AD party leaders forced Pérez to

replace several ministers with politicians favoring more state-oriented economic policies

on numerous occasions (Latin American Regional Report: Andean Group, December 19,

1991; Latin American Weekly Report, March 12, 1992 and April 2, 1992). Such

replacements made managing economic reform difficult and undermined policy

coherence.

196 In 1992, for example, AD congressional leaders refused to give Pérez the congressional support needed to pass important tax legislation. These measures were critical for the success of Pérez's reforms, as the lack of adequate tax bases threatened to leave the government with a deficit of an estimated three billion U.S. dollars the following year (Latin American Weekly Report, October 29, 1992).

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Despite social and political opposition, Pérez’s economic reforms combined with

a short-term rise in oil prices set the Venezuelan economy back on the path toward

recovery in 1990 and 1991. However, by 1992, serious economic problems began to

arise once again. The economy moved toward recession as high interests rates and

political uncertainty slowed economic production and consumer confidence. Declining

oil prices put additional pressure on the economy, and when congress refused to pass

unpopular tax and financial reforms suggested by Pérez, it became apparent that

Venezuela was heading for a serious crisis (The Economist Intelligence Unit 1997, 11).

By 1992, Pérez had gone from one of the most popular figures in Venezuelan

politics to the most unpopular, with politicians from both parties seeking a means to

remove him from office. Despite opposition from most citizens, the military, and both

AD and COPEI party politicians, Pérez and his core team of ministers did not deviate

from their reformist agenda. Pérez’s reforms, however, threatened to undermine the basis

of political support and party building, and politicians soon found the grounds to remove

him from office and stop his reforms when corruption charges were filed in 1992.

COPEI claimed that Pérez had benefited illegally from the government’s exchange rate

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unification and AD made little attempt to defend their president.197 Though the Supreme

Court initially threw out the case due to insufficient evidence, Pérez's continued refusals

to answer questions during senate investigations led the attorney general to reintroduce

charges (Latin American Weekly Report, April 1, 1993, p. 146). In May 1993, the

Supreme Court ruled that the charges merited investigation, the senate voted to lift his

presidential immunity, and he was sent to trial. Although not yet formally impeached, he

was removed him from active duty and the most senior officer in congress, Senator

Octavio Lepage, replaced him temporarily until congress could elect a successor,

independent senator Ramón Velásquez. To the relief of both AD and COPEI and most

citizens, economic reforms ground to a halt. Pérez faced two and a half years of house

arrest.

Economic Decline, Electoral Reform, and Party System Instability

During Velásquez’s interim presidency (June 1993 to January 1994), congress

passed a series of reforms that had been held up throughout the Pérez administration (The

197 Claims of rampant corruption in the Pérez government were being made as early as March 1992 (Latin American Regional Report: Andean Group, March 5, 1992). Pérez was accused of allegedly irregular use of three million U.S. dollars from secret governmental funds (Latin American Regional Report: Andean Group, December 17, 1992). The supposed irregularity involved the use of the preferential exchange rate just before it was abolished. Pérez responded that the "funds were legitimately used for security outlays abroad, and that the preferential exchange system was in force at the time." He then refused to respond to questions put to him by the Senate (Latin American Weekly Report, December 3, 1992). It was also discovered that Cecilia Matos, Pérez's mistress and mother of his two children, had made a transfer of U.S. $400,000 to an account in the U.S. (Latin American Weekly Report, October 15, 1992). The Congress then handed the matter over to the Tribunal Superior de Salvaguarda del Patrimonio Público, whose jurisdiction includes cases of the misuse of public funds, to decide whether or not he should be formally charged (Latin American Regional Report: Andean Group, December 17, 1992).

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Economist Intelligence Unit 1997, 11). Even though both COPEI and AD had publicly

rejected these measures during Pérez’s tenure in office, these parties understood the

importance of reforms for reducing inflation and returning macroeconomic stability.

COPEI and AD party leaders promised the interim president that they would pass the Ley

Habilitante. This law allowed the acting president to introduce a VAT, a tax on company

assets, banking law reform, reform of privatization laws that had been restricting the

government’s ability to sell public assets, and a foreign trade bank by decree (Latin

American Weekly Report, July 22, 1993). These policies had all been part of Pérez's

proposed economic programs but had been defeated by congress. Not only were such

reforms important for stabilizing the economy, they were needed to reassure the IMF of

Venezuela's intention to maintain sound fiscal policies.

President Velásquez was granted the authority to enact policy reforms in August

1993, 33 days after the Ley Habilitante was introduced, thanks to the support of both AD

and COPEI congressmen (Latin American Weekly Report, August 26, 1993). Even

though the reforms were limited in scope and did little to redress the country’s growing

economic problems, AD and COPEI politicians were unwilling to entertain larger-scale

structural reforms. As a result, by the end of 1993 the Venezuelan economy was

returning to a state of crisis. Although the country had not formally abandoned its

import-substitution industrialization development strategy, the severity of the country’s

fiscal problems impeded politicians from using public policy as a means of delivering

benefits to supporters. Moreover, what minimal reforms were allowed by AD and

COPEI party leaders sent a clear signal to Venezuelans that these parties could not

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credibly promise a return to the old days of big state spending, plentiful patronage jobs,

and subsidized goods and services.

Amidst growing economic instability, Venezuelans went to the polls to elect a

new president and national legislature in 1993. Economic troubles and limited reforms,

combined with recent institutional restructuring, created numerous opportunities for

political entrepreneurs to challenge the historic AD and COPEI party machines. In

addition to the usual AD and COPEI presidential candidates, acting president Ramón

Velásquez announced his decision to run under the Causa Radical (CR) umbrella, while

former president and founder of COPEI, Rafael Caldera, announced his decision to run as

the leader of a new coalition of 19 parties, Convergencia Nacional (CN).198 AD and

COPEI candidates would be no match for these new contenders, especially without their

usual capacity to service political machines. That both AD and COPEI candidates ran on

pro-reform platforms certainly did not help these parties generate support.

Caldera won the presidency in 1993 for the second time with 30.5 percent of the

total popular votes. During his campaign, Caldera promised to abolish neo-liberal

reforms, thus gaining him considerable public support. When asked, he was strategically

198 Caldera had tried to gain the presidential nomination within his own party, COPEI, but had been turned down after losing an internal party squabble over the party leadership. In particular in 1988 an internal party rivalry emerged between COPEI’s founder, Rafael Caldera, and his former protégé, Eduardo Fernández, over control of the party. Coppedge (1994) reasons that the intra-party rivalry was caused by inability of any one faction to assert control over the party leadership. COPEI had been divided internally for several years between those supporting Caldera, and a myriad of factions opposed to his continued leadership of the party he founded, with no once group able to eclipse the other. When Caldera voiced his desire to run as the party’s presidential candidate, those opposed to the aging politician (he was in his 70s) coalesced around Fernánadez, enabling this group to gain control over the party and thus the presidential nomination. Caldera was later expelled from the party.

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vague about what policies he would enact in the place of neo-liberal measures. His

criticisms of the government and its efforts at market-oriented reforms were credible; he

was, like Pérez, associated with the oil boom years and the era of big state spending, low

inflation, and economic stability. Velásquez too won sizeable support, capturing 21.2

percent of total popular votes.

AD and COPEI, however, went from an average of 90.2 percent of total popular

votes during the 1970s and 1980s, to 46.3 percent of total popular votes in 1993 (see

Table 4.1). AD and COPEI lost over 47 percent of the votes they had won just five years

before. In congressional elections, AD and COPEI had traditionally won, on average,

76.8 percent total national votes during the 1970s and 1980s. In 1993, however, these

parties only won 46.7 percent of total national votes, a loss of about 20 percent of their

customary support. Public discontent with reduced governmental spending, bad

economic times, and incoherent and unpredictable economic policy stances, left voters

ready for an alternative to those parties blamed for current economic troubles and the

failure to distribute customary benefits.

Electoral Reform, Economic Decline, and Party System Breakdown: Explaining the Rise

of Hugo Chávez Frías

Upon taking office, President Caldera (CN) (1994-99) inherited a financial sector

crisis and increased economic instability caused by heavy public spending. Nevertheless,

his first official act was to put an end to the country’s efforts at economic stabilization

and market-oriented reforms. To resolve the banking crisis, Caldera nationalized many

banks and pumped funds into the overextended financial sector in order to keep the

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situation form pushing the country into an even more serious economic crisis. The

bailout is estimated to have cost around 12 percent of GDP and, rather than helping the

faltering economy, it and Caldera’s other interventionist policies only served to push the

economy closer toward collapse.

In the end, Caldera was forced to renege on his populist campaign platform and

seek help from the IMF in April 1996. Caldera’s turn toward neoliberal adjustment,

however, led to the collapse of his political coalition and, ironically, forced him to rely on

AD political support to see through reforms. Despite his willingness to adopt the IMF

adjustment package and its initial success, Caldera refused to cut government spending or

undertake more profound structural reforms. The collapse of oil prices in 1997, which

had given the floundering government some temporary relief, plunged the economy once

again into crisis and reduced investor confidence. Soon after, Caldera was forced to

introduce budget cuts and seek help once again from the IMF just prior to the 1998

elections.

The electoral opportunities created by institutional reforms, combined with the

inability of Caldera, AD, and COPEI to deliver coherent economic policies or benefits to

constituents, left traditional politicians scrambling for new ways to build support.

Moreover, the political and economic instability caused by institutional reforms and

economic crisis created a political vacuum where those political aspirants best able to

distance themselves from the traditional AD and COPEI political machines had the best

chance of winning elections. On the eve of 1998 national elections, the political-

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economic environment was ripe for the entry of a former military officer and coup leader,

Hugo Chávez Frías, on the national political scene.

Hugo Chávez Frías first came to national attention as the leader of one of the two

failed coup attempts against the beleaguered Pérez administration in 1992. Though he

was jailed, he attained folk hero status for his effort to depose what was widely perceived

as a corrupt and inefficient government. After his release from prison, Chávez entered

politics. In 1998, his party, the Movimiento V Repúblicano (MVR), formed a national

alliance with several other political forces, including the Patria Para Todos (PPT), an

offshoot of the CR, and the Moviemiento as Socialismo (MAS), calling themselves Polo

Patriótico (PP). Chávez’s campaign platform called for radical electoral and

constitutional reform, income redistribution, and export diversification to help deliver the

country from dependence on oil exports.

In addition to the candidacy of Chávez, Irene Sáez, a former Miss Universe and

mayor of a suburb of Caracas, entered the ring. Sáez led most public opinion polls

throughout 1996 and 1997, but her campaign fell apart when she accepted the support of

the discredited COPEI (The Economist Intelligence Unit 2000). AD, in the meantime,

supported independent Luis Alfaro Ucero. Increasingly negative public opinion polls,

however, led AD and COPEI to join forces and supported a single candidate, Henrique

Salas Römer, an independent who had a successful record in local government, and his

Proyecto Venezuela (PRVZL) movement. As with their former candidates, Sáez and

Ucero, the support of both AD and COPEI damaged Salas’ credibility as an independent

politician, while simultaneously boosting Chávez’s popularity (The Economist

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Intelligence Unit 2000). Claims by AD and COPEI politicians that Chávez was a violent

and authoritarian figure did little to undermine his campaign and, instead, only served to

help him in the public eye.

Chávez’s PP coalition won 52.6 percent of the total popular vote, with his MVR

receiving 40.2 percent of the total popular vote. AD and COPEI received 11.2 percent of

total national votes (see Table 4.1). At the congressional level, AD and COPEI received

20.7 and 10.7 percent total national votes, respectively (see Table 4.2). In contrast, the

MVR won 21.3 percent of total national votes, with a myriad of other parties capturing

the remainder (see Table 4.2). In gubernatorial elections, AD and COPEI candidates

performed badly as well, receiving, on average, 44.4 percent of total state-level votes (see

Table 5.6). The political opportunities created by institutional restructuring and

economic decline, alongside the general public animosity toward the traditional AD and

COPEI political machines blamed for squandering the country’s oil wealth, enabled

numerous new political hopefuls to enter public office for the first time, leading to

wholesale party system breakdown.

Venezuelan Political and Economic Instability Today

In “the aftermath of Mr. Chávez’s electoral victory, mutual recriminations began

within AD and COPEI and both parties suffered” an exodus of talented and younger

members (The Economist Intelligence Unit 2000, 12). The disarray of the country’s

political opposition, along with the defection of many AD and COPEI party members to

the Chávez coalition, enabled the new president to undertake a program of radical

institutional restructuring, as well as return the country to populist economic policies of

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the past. A referendum on constitutional reform received widespread public support (88

percent of votes), and a constituent assembly was elected in 1999 dominated by Chávez’s

MVR (94 percent) (The Economist Intelligence Unit 2000, 7). The Constitution of 1999

was approved in a national referendum in December that year with 71 percent national

approval.

Under the Constitution of 1999, the executive is elected for a six-year term, with

one immediate reelection possible. Presidential powers and prerogatives were greatly

strengthened. In particular, the president has the power to name and remove cabinet

members, the authority to call special sessions of the new unicameral congress, the

authority to dissolve the congress is it rejects the president’s nominee to the vice-

presidency three times, sole control over foreign policy-making, position of commander-

in-chief of the armed forces, the authority to invoke emergency decrees, and the power to

revoke citizens’ constitutional rights temporarily under a state of emergency (The

Economist Intelligence Unit 2000, 8). The position of vice-president has never existed.

A unicameral congress replaced the bi-cameral legislature. This new body is elected by

proportional representation from the country’s 22 states and federal district.

Congressional terms are five years. In addition, the role and function of the national

legislature was changed, the judicial system was radically reformed, with many judges

replaced, a new electoral body was formed to oversee elections, and a moral council,

called the Consejo Moral Republicano, was created which combined the roles of the

comptroller-general and the attorney general into one branch. As a part of the Consejo

Moral Republicano, an ombudsman was empowered to act in citizens’ defense. It

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remains to be seen how these institutional changes will affect Venezuelan politics and

government. Most likely, the president’s enlarged emergency and decree powers, his

longer term, and ability to run for immediate reelection will strengthen this office relative

to the national congress, a body that had already been somewhat weak.

Riding on positive public sentiment toward the new constitution and general

political reforms, Chávez’s MVR won 48.1 percent of total national votes in the 2000

presidential elections, the first held under the new constitution (see Table 4.1). His

coalition received an even higher 60.3 percent of total national votes (see Table 4.1). The

poor showing of AD and COPEI in 1998, combined with general public hostility toward

these parties, led them not to field any candidates that year. A myriad of new contenders

received the remaining votes.

The decision of AD and COPEI not to field candidates in 2000 represented the

complete dissolution of the once stable two-party system. Years of economic crisis,

aborted reform efforts, and institutional restructuring had weakened these political

machines beyond repair. Though some AD and COPEI politicians are still managing to

win local elections, it is clear that these parties will no longer claim the same national

prestige or support they once did. For this reason, the Venezuelan party system has

undergone a complete transformation, though it remains to be seen what shape it will

ultimately take in the future. Most likely, as long as the economy remains in crisis and

successive governments refuse to undertake painful economic reforms, Venezuelan

politics will see a continuous rise and fall of political players and party organizations

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whose political fortunes are tied to fluctuating oil prices and the stability of the country’s

faltering economic system.

Economic Policy-Making and the Structure of Party Systems in Latin America

This chapter demonstrates how political institutional arrangements and economic

policy-making interact to affect the stability of party systems in Latin America. Analysis

of Colombian institutional reforms in a context of economic stability shows how parties

with continuous access to patronage resources are also the most politically stable amidst

political institutional restructuring. In contrast, as shown in the discussion of Venezuela,

traditional parties that are no longer able to rely on distribution of state largesse to

building party organizations and cultivate support are also the most vulnerable to new

and small party organizations in the face of institutional reform.

By highlighting the critical role of economic crisis and reform for the stability of

party systems in Colombia and Venezuela amidst institutional restructuring, this chapter

demonstrates that theories about the effect of institutional arrangements on the structure

of party systems need to be analyzed and understood within the larger economic context.

Since parties and politicians in Latin America have relied on state policy-making to

deliver benefits to supporters and build party organizations, any changes to state-led

economic development strategies also affected the ability of parties to cultivate support.

This chapter shows how traditional parties are most threatened when declining state

resources are coupled with political institutional arrangements that reduce the barriers to

the entry of new parties in the system.

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CHAPTER SIX

The Critical Contribution of Political Institutional Arrangements

to Recent Party Instability in Latin America:

The Argentine, Costa Rican, and Mexican Experiences Compared

Introduction

The recent poor showing of many incumbent parties in Latin America has been

blamed on increasing economic troubles caused by economic crisis or painful economic

adjustment undertaken since the 1980s. Voters facing hard economic times punish

incumbent parties at the polls. As discussed in Chapter One, however, even though

voters may have been willing to hold incumbent parties responsible for any deterioration

of living standards, there has been considerable variation in the ability for these parties to

survive such change. In a few countries, parties in power during economic downturns

have been returned to office, while in other countries they have been pushed out. Some

presidents overseeing difficult economic adjustment programs have been reelected, while

in other countries reforming parties have been punished at the polls. More importantly,

in some countries voters have chosen to abandon both incumbent and well-established

non-incumbent parties altogether, throwing their support behind new and untried political

alternatives. In other countries, however, traditional parties have remained remarkably

stable, despite growing voter dissatisfaction with the direction of governmental economic

policy-making. The variety of political responses to economic crisis and reform in recent

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years suggest that retrospective voting theories alone cannot explain the effects of

economic policy change on Latin American party politics.

Rather than focusing on the fate of incumbent parties, this chapter builds on the

analysis of party building in Chapters Four and Five to explain how economic crisis and

reform affect the stability of established parties and party systems in Latin America more

generally. Whereas Chapter Five emphasizes the economic context of political

institutional restructuring to explain current cross-country variation in party system

stability, this chapter highlights the political institutional context of economic policy

reform to explain recent political change. To this end, the chapter compares party politics

in Argentina, Costa Rica, and Mexico, three countries undergoing notable economic

policy change since the 1980s, but experiencing surprisingly different levels of party

system instability in its wake. Since the beginning of economic crisis and reform in the

1980s, new parties in Argentina have been threatening the historic Partido Justicialista

(PJ) and Unión Cívica Radical (UCR) for power. Likewise, the Partido Acción Nacional

(PAN) defeated Mexico’s longtime hegemon, the Partido Revolucionario Institucional

(PRI), in the 2000 presidential race, signaling the end to single-party rule. In contrast,

traditional parties in Costa Rica have remained firmly in control of all levels of

government, despite problems associated with economic crisis and programs to reform

this country’s welfare state since the 1980s.

To explain recent cross-country variation in party stability, this chapter shows

how differences in political institutional arrangements determine when established parties

will be more vulnerable to the political effects of economic crisis and reform. Radical

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economic restructuring undertaken in a context of permissive political institutions enables

small and new parties to challenge historic parties for power, as seen in Argentina.

Likewise, economic adjustment introduced during periods of political liberalization

enables new parties to challenge hegemonic ones, leading to the rise of opposition

groups, as seen in Mexico. More restrictive political systems, in contrast, reduce the

electoral opportunities available to small and new parties, even during periods of severe

economic crisis and reform, as seen in Costa Rica.

Understanding the political institutional context of recent Latin American party

system change also helps to explain when voters will be more likely to punish incumbent

parties by voting for established non-incumbents, or when they will be more likely to

punish incumbents by throwing their support behind new parties altogether. As noted in

the introduction to this dissertation, although retrospective voting theories might tell us

when voters will punish incumbents, they do not adequately predict whom voters will

support instead. This is particularly apparent in party systems allowing the entry and

survival of small and new parties. The analysis in the chapter helps explain who voters

will support and why. In Costa Rica, the institutional impracticality of fielding new

parties has reduced the incentive for citizens to throw their support behind them, leading

voters to punish incumbents during economic crisis and adjustment by voting for

established non-incumbents.

The more permissive institutional context of Argentine politics, in contrast,

supports the entry and survival of numerous political groups. In the context of economic

crisis and reform where traditional parties are no longer delivering customary benefits,

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citizens are likely to punish old parties by casting their lot with new ones, leading to party

system change. In the end, this chapter demonstrates how the effects of economic crisis

and reform on Latin American party systems must be analyzed within each country’s

particular political institutional context.

Organization of the Chapter

This chapter shows how economic policy change must be analyzed within the

context of political institutional arrangements if we are to understand its effects on party

politics and party stability in Latin America. To build this argument, the chapter

proceeds as follows: First, the chapter discusses the political economy of party stability

in Argentina, Costa Rica, and Mexico. Throughout the 20th century, political institutional

arrangements and economic policy-making worked together to enable the emergence and

survival of large, stable parties in these countries. That is, large parties, already favored

by institutional arrangements, relied on their control over economic policy-making to

build party organizations and cultivate support. Political institutional arrangements and

economic policy-making thus helped large parties reinforce their privileged political

positions, creating the basis for party stability in these countries.

Next, the chapter discusses recent economic crisis and reform in Argentina, Costa

Rica, and Mexico, demonstrating that such radical economic change undercut the ability

of traditional parties in these countries to deliver customary benefits and policies to

supporters. Even so, the effects of economic crisis and reform on party building and

party stability more generally must be understood within each country’s particular

political institutional context. Comparison of Argentina and Mexico demonstrates that

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when economic crisis and reform occur within relatively permissive (or liberalizing)

political systems, they are usually accompanied by notable party system change.

More specifically, since the introduction of radical economic reforms in the late

1980s and early 1990s in Argentina, traditional parties have no longer been able to

deliver customary benefits and policies to supporters. Economic crisis and reform in a

context of permissive political institutional arrangements allowed political entrepreneurs

in Argentina to strike out against the traditional UCR and PJ to win support. A coalition

of small parties, the Frente del País Solidario (FREPASO), has emerged onto the

Argentine political scene and is challenging the historic Partido Justicialista (PJ) and

Unión Cívica Radical (UCR) for power.

Analysis of Mexico shows how economic reform amidst political liberalization

leads to party system instability as well. Since the beginning of the debt crisis in 1982,

the PRI has no longer been able to legitimize single-party rule through economic

prosperity and the regular delivery of economic and social benefits to citizens. Though

the PRI faced economic crisis in the past, economic restructuring in the 1980s occurred

within a new political institutional context that reduced traditional barriers against

opposition political participation. As a result, two parties, the Partido de la Revolución

Democrática (PRD) and the Partido Acción Nacional (PAN), have successfully

challenged PRI hegemony. In 1988, a former PRI politician, Cuauhtémoc Cárdenas

Solórzano (PRD), fought his former party for control of national government. Many

political analysts believe that he really won the presidential race. In 2000, Vicente Fox

Quesada (PAN) won the presidency, signaling the end to longtime PRI domination.

306

Comparison of Argentina and Mexico to Costa Rica in the final section

demonstrates how economic reforms undertaken in more restrictive institutional settings

reduce the opportunities for new and small parties to challenge historic ones, even parties

no longer able to deliver customary benefits. Although Costa Rica experienced economic

crisis and adjustment during the 1980s, these reforms have been undertaken in a

comparatively more restrictive political institutional environment. As a result, though no

longer able to support former public spending and social welfare programs, the

established Partido Liberación Nacional (PLN) and Partido Unión Nacional (PUN)199

have remained firmly in control of all levels of government. Instead, voters have turned

to punishing incumbents by voting for established non-incumbents at election time.

Understanding the institutional context of economic downturns thus helps to explain

when citizens punishing incumbents for economic hardship will be more likely to vote

for historic non-incumbents, or new parties instead. To conclude, the final section

reiterates the importance of examining economic policy change and its effects on party

systems within each country’s political institutional context.

199 In 1998, the PUN was renamed as the Partido Unidad Social Cristiana (PUSC).

307

Political Institutions, Economic Development, and Party Stability in Argentina

Since the mid-1940s and until only recently, the Partido Justicialista (PJ) and