The United States and Latin America: Individuals and Institutions

Ambassador McNamara contributes this article with the intention of launching discussion and debate on the topic. We cordially invite your comments and will publish them in upcoming issues. (ed.)

The United States and Latin America:
Individuals and Institutions
by Thomas E. McNamara

[A condensed version of this essay was given as a lecture at Virginia Commonwealth University, March 5, 2014.] Introduction
Twenty-five years ago a journalist, Alan Riding, wrote “Distant Neighbors,” an excellent book about Mexican-U.S. relations. It is still a valuable study of 1980s Mexico. Modern communications, increased migration, trade and industrial integration, and technological advances have reduced the distance dramatically. Although not as distant today, we still do not understand each other as well as we should. This hemisphere is our neighborhood, and unlike citizens, who move from neighborhood to neighborhood, a nation’s neighborhood is fixed, permanently. I want to highlight an important post-Cold War impetus for change in our neighborhood, which can reduce the distance even more, if we recognize and encourage it.

Two Paths
There are two paths in Lain American politics, which are not evident to most Americans. One path relies on personalism (personalismo) i.e. individual leaders, to maintain political order. The second relies on democratic institutionalism (institutionalismo democratico) i.e. civil institutions, as the foundation of political order. Every nation in the hemisphere, including the U.S., will be affected by which of these two paths dominates the future.  These two paths do not explain all of Latin politics or our regional relations. History is much more complicated. But, the struggle between democracy and dictatorship has been fundamental in Latin America for 200 years, and must be understood before “Distant Neighbors” can become closer.

“Personalismo” and “Caudillismo” in Latin America
Personalismo, and its variant, caudillismo, are deeply rooted in Latin American, Spanish, and Portuguese history, and have dominated Latin American politics since the conquistadors (Cortez, Pissarro, etc.) and colonial rule. It was the entrenched political culture during the independence struggles with Bolívar, San Martín, O’Higgins, and others. Yet, the phenomenon is not unique to Latin America.

Elsewhere, personalismo is identified by “the cult of personality,” dictators, or autocrats (e.g. Stalin, Hitler and lesser examples like Mobutu, Qaddafi, and Sukarno). In ages past it was manifest in “the divine right of kings,” and in imperial rulers. Personalismo probably originated in prehistory, maybe as far back as the original “alpha-male.” But, in modern industrial democracy, it is a plague on society.

It elevates one individual, a caudillo (leader), to supreme leadership, often with demi-god status. His words and actions are accepted totally. Policies, programs and ideologies are created (Peronismo, Fidelismo, Sandinismo). In the personalismo culture, the glorified, charismatic leader turns institutions into personal tools of power. Any that resist are subverted or destroyed — except a few, kept as control mechanisms.

Besides neutered institutions, corruption is endemic, beginning with corruption of the law. The rule of law cannot exist without strong, independent political, judicial, and social institutions because the law is never self-implementing. It requires agents to make, interpret and execute it. In successful modern societies, separate civil institutions perform the three functions. Dictators, however, usurp all three functions. The corruption continues until the caudillo is above the law.

Caudillos come in all shapes, sizes, and flavors. They are tactically smart, superficial thinkers, who borrow ideologies that reflect the temper of their times. Early in the 20th century, they adopted national-socialist, “right-of-center” ideologies (Peron, Trujillo, Somoza, Batista). With fascism discredited, later caudillos moved leftward and embraced Marxism (Castro, Ortega, Chavez, Morales; Pinochet is the exception). Caudillos practice populism and repression, no matter where on the spectrum they are. Most are initially elected, but as their popularity weakens, brute force predominates, until the next caudillo cycle. Peaceful transitions are possible, but unusual.

Believe it or not, a century ago Argentina was considered THE rising power of the hemisphere. But, personalismo has so dominated Argentine politics that institutions have never grown strong enough to stabilize and modernize the nation. “Peronismo” has been a populist political force in Argentina for 70 years; yet Peron has been dead for over 40 years. Successive Peronist leaders freely redefine Peronismo to suit their needs and the party dutifully follows.

“Bolivarianismo” espoused by Hugo Chavez and others, is named for a caudillo who has been dead almost 200 years. Imagine a U.S. president governing on a political platform of “George Washington-ism.” Chavez wrapped himself in reflected glory to gain his political ends, a recipe for instability and corruption. Caudillismo persists in Argentina, Venezuela, Ecuador, Bolivia, Cuba, and Nicaragua,

The Alternative: Democratic Institutionalism
The second path, democratic institutionalism, is less firmly rooted in Latin American history, although democratic ideals trace back to the independence period. Only after World War II did it gain traction. It still remains the weaker tradition with an uncertain future. In the last 20 years, however, a new impetus shows significant growth and success in several countries.

In modern democracies, independent governmental, public, and private institutions (aka: “civil society”) are the foundation of political and economic order, and of social conventions. They support relatively stable, predictable, fair, and peaceful processes. Laws and institutions take precedence over leaders, not vice-versa. Leaders are subject to political processes they cannot control (elections, courts, individual liberty) or can only partially control (legislation, regulations, appointments to office). Civil institutions are influenced in return, but they have independent interests, perspectives, and objectives. When developed, democratic institutionalism is stable and progressive because it creates “countervailing power” by distributing power widely.

It takes time to develop institutions, and more time to develop a tradition of relying on them. Eventually, a tradition alters attitudes and values, and becomes a culture. But, a strong, modern democratic culture takes decades to develop, sometimes generations, and with setbacks en route. Witness the progress and setbacks today in Central Europe, twenty-five years after communism ended. And, for a new-age caudillo, look at Vladimir Putin, who short-circuited Russia’s post-Soviet evolution towards democracy.

It is time for this “hemisphere of liberty,” as Germán Arciniegas called it, to re-examine what constitutes the true foundations of democracy. Free and fair elections are important and necessary, but are indicators, not proof, of democracy. A nation can organize fair elections while being fleetingly democratic, or undemocratic. Multiple, independent institutions are democracy’s anchors. They are accountable to, and respond to the needs of different sectors of society — and collectively are accountable to the nation. Primary among these are a strong, independent judiciary, an uncorrupted legislature, and free-market economic institutions. Without democratic institutionalism, democracy is an illusion or a short-lived phenomenon.

Latin America has these institutions, but their influence is limited. One problem is that many democratic leaders practice personalismo and not institutionalismo. In Argentina, not all presidents have been caudillos, but the democratic ones have never effectively countered the caudillo tradition. Likewise Venezuela’s Rómulo Betancourt was a democrat, but his personalismo lacked focus on institutions needed to build democracy. Democratic development in Latin nations has been undercut by a dominant caudillo culture.

Yet, institutionalism is stronger in some countries than in others. By identifying recent successes and supporting them, we increase the likelihood of nurturing and maturing democracy.  Here are some hopeful and not-so-hopeful examples.

The Institutional Approach — Colombia and Chile in the Lead
Colombia experienced the caudillismo of the colonial and independence periods, and throughout the19th C. with frequent partisan warfare over centralism vs. federalism. Cultural change came in the 1890s with a conservative oligarchy that ruled for 40 years. In 20th C. crises, instead of turning to “a man on horseback” Colombia has elected leaders who prioritize institutional primacy over personal power. Indeed, for a century, Colombia has had only one dictator, Gustavo Rojas Pinilla, who was given power in 1953 and had it taken away in 1957 – a unique occurrence in Latin America.

In the 1980s, the country was confused and demoralized by years of murderous guerrilla and mafia violence that caused some Colombians to support “peace at any price.”  President Virgilio Barco built a national capability that confronted both threats, convincing the nation that it could defeat them.  Then, he stepped down after one term. His three successors likewise served one constitutionally-limited term. The presidency of Colombia is held in greater esteem than any of its incumbents, and all recent incumbents, save one, have understood this.

Colombia has another strong anchor.  From the Great Depression in 1933 until 1999, Colombia had uninterrupted annual economic growth. Despite its civil conflicts, it has consistently averaged over 4% annual growth since the 1950s. This singular economic feat is due to Colombia’s respected, well-managed, government and private, economic institutions, which makes Colombia, today, Latin America’s fourth largest economy.

On the other hand, judicial institutions and the rule of law were weak after brutal assassinations and bribery by narcotraffickers in the 1980s. Constitutional reforms in 1991 created a prosecutorial system, thus strengthening institutions, not bending them to executive will. Today the narco-mafias are splintered, the narco-guerrillas are suing for peace, and a solid institutional base exists for long-term political, economic and social growth and stability.

Chile’s colonial and independence history was, also, predominantly caudillismo. It spent the 19th C. enlarging its territory at the expense of its neighbors, capping the century with a civil war among the oligarchs and military. Democratic institutions with a centralized national government developed in the 20th Century, twice interrupted by long military dictatorships. The second, Augusto Pinochet’s 1973 coup, crushed democracy, but built a strong, “Chicago-School” economy, which survived Pinochet’s overthrow in 1990.

The economic institutions built in the preceding 70 years were kept by the democratic leaders who followed Pinochet.  As in Colombia, the economic base supported Chile during its last, tumultuous 35 years, allowing it to become a strong institutionalized democracy with a free-market economic base.

A Transition Underway —Mexico
Mexico is a country moving toward democratic institutionalism. For 70 years, Mexico was governed by what Mario Vargas Llosa called “the perfect dictatorship:” uninterrupted single-party (PRI) rule; party goals equaled national goals; the PRI funded opposition parties; corruption weakened institutions; an educated elite was co-opted; and popular discontent was suppressed.  Mexico had an uninterrupted string of “six-year caudillos,” when each president served one term, and transferred power peacefully. Meanwhile, democratic nations dealt with this dictatorship as if it were not one.

In 1993-94, Presidents Carlos Salinas and Ernesto Zedillo, led Mexico into the North American Free Trade Agreement (NAFTA). After decades of political stagnation Zedillo addressed serious social problems and conducted the first free and fair election. NAFTA was a turning point as, unexpectedly, its benefits transcended economics. They gave new energy and confidence to Mexico, especially to the growing middle class and private sector.

Mexico’s traditional, anti-gringo, “victimization” ideology gave way to flexible realism. The new, Mexico understands that its future depends on a new path. It is no exaggeration to say that political pluralism and institutional development in Mexico grew from economic modernization. Mexico has a long way to go. The old, ingrained PRI culture resists modernization, and development varies from region to region and sector to sector.

President Peña Nieto must reassert sovereignty over the narco-mafias because these criminals operate with impunity. Re-establishing government control will be, difficult, long and bloody. Efforts by Mexico’s last three presidents to confront the mafias have been greatly complicated by remnants of the decrepit, old culture.

Like Colombians, Mexicans can take back their country, but the outcome will remain in question for years.

Brazil: A Hesitant Transition
Brazil spent most of the 20th Century ruled by civilian or military caudillos, who depended on one national institution, the army. The country stagnated under a weak constitution, regional conflicts, crony capitalism, and lack of institutional modernization. Getulio Vargas’s quarter century domination of politics, followed by a military dictatorship, is an excellent example of the curse of the caudillos.

The transition to democracy and institution-building in Brazil began in the 1990s under two presidents, Itamar Franco and, Fernando Henrique Cardoso, who led Brazilian democratic modernization by restructuring economic institutions. Cardoso in eight years put Brazil on the road to economic and political modernization, and turned over the presidency to Luiz Inácio Lula da Silva, his opponent in both previous elections. Despite a radically different background, Lula continued Cardoso’s institutionalization, and after eight years, handed off to Dilma Rousseff, the current incumbent. The transition is a work-in-progress, and shows signs of strain, as economic setbacks and protests call into question the reforms undertaken. The “country of the future” may become the “country of the present,” if it continues on the new path.

The Caudillo Culture — Venezuela’s Curse 
Caudillo politics in Venezuela have kept an otherwise wealthy country poor. Chavez and Maduro are the latest in a long line. Arguably, Venezuela’s first free, democratic election was in the 1950s. As noted, Betancourt, a democratic leader, and others practiced personalismo, rather than creating independent, democratic institutions.

Today, even with annual oil revenues of $100 billion Venezuela has an inflation rate of 50+%, and black market currency trades at 7-8 times the official rate. It is the lowest ranked nation in the hemisphere, by far, on Transparency International’s corruption list, and suffers from electrical blackouts, and horrendous street crime. This, in a country sitting atop the largest reserves of oil in the world. Yet, Chávez’s hapless successor, Nicolás Maduro, wants more power, which he says he needs to save Venezuela from external enemies — not internal failures.

The tragedy of Venezuela is that its citizens and leaders are addicted to oil, which causes national deliriums of non-existent wealth and power, and leads to distain for healthy institutions, discipline, and planning.  Venezuela should look to its neighbors, Colombia, Chile, Brazil, and Mexico which struggle mightily with their own demons, but are far better off.

The Maximum Caudillo – Cuba
Fidel Castro is a caudillo whose brutality, power and charisma are unmatched by other practitioners of the art. He began with a muddle-minded leftist ideology before swallowing Marxism-Leninism whole, and leading his disparate movement into an alliance with the Cuban Communist Party (PCC) and the Soviet Union – the only caudillo to do that. HIs subversion in the hemisphere and militarism in Africa assisted the U.S. in a relatively successful isolation of Cuba during the Cold War. After the USSR fell, most Latin nations ignored the embargo and normalized relations with a Cuba weakened and incapable of subversion or militarism.

Cold War containment was a global commitment to counter expansionist policies of the Soviet Union wherever possible. Containment of Cuba was, also, consistent with American diplomacy supporting the Monroe Doctrine. The Soviet challenge to that doctrine and the danger of Castro to the hemisphere was demonstrated early, when the 1962 Cuban Missile Crisis caused the most dangerous clash of the Cold War, reinforcing the value of the policy.

Containment made strategic sense during the Cold War, but not since.  It is futile to argue that Cuba must be isolated, when Russia is a shadow of the USSR and no threat to our neighbors.  When political reality changes; policy must adjust or become irrelevant. Our policy has become irrelevant. Ironically, it isolates us by preventing us from influencing the coming changes in Cuba. We might have adjusted Cuba policy as part of an overall strategic review at the end of the Cold War. Unfortunately, that review never happened — to our detriment. As the Post-9/11 Wars now end, we need a new strategic review, although, again, that is unlikely.

We know Cuba is in transition because the actuarial tables for the Castro brothers tell us so. Raul hopes for a China-like outcome, but fears a Russia-like outcome. Change is his enemy; the more rapid, the more dangerous for him. Hence, our policies should foment change to provide opportunities for democracy.  A wise policy will prepare by engaging with the weakened regime on the island. We dealt and prevailed with Stalin, Mao, and others.  Surely we can deal and prevail with Cuba.

We have, however, a peculiar problem in this regard. The United States has no foreign policies with two countries — Israel and Cuba. It has domestic policies. Relations with these nations are determined in the White House and Congress, overwhelmingly for domestic political reasons, which occasionally coincide with our national security interests. Therefore, even if we understand the forces at play in Cuba and attempt to influence them, we are unlikely to apply a coherent policy to achieve our goals. Nevertheless, our national interests demands that we re-examine Cuba policy, to foster change on the island, and to try to move Cuba towards a democratic future.

No one can predict the outcome. One big negative is the caudillo factor. Only one entity in Cuba is a strong, unitary, disciplined, ubiquitous, well-armed national institution — the Cuban Army. It has its hand in every aspect of Cuban society. The PCC is, of course, a unitary, ubiquitous national institution, but not disciplined or well-armed. The PCC, also, has the burden of having created a failed “fidelismo” ideology, a failed economy, and a corrupt society. In its current sclerotic condition it is not likely to find the energy and imagination to lead fundamental change. Therefore, the most likely outcome is an army-led continuation of caudillismo. Only a wise policy, supported by our neighbors and the Europeans can make a better outcome possible.

Conclusion: A New Approach to Latin America
Since the Cold War, we have failed to reassess our global position, and develop a national security strategy. Many of our difficulties are explained by this failure to set priorities and apply our resources strategically. We lurch from crisis to crisis guided, at best, by tactical objectives. Our hemispheric policies suffer from this underlying failure. We cannot follow coherent, consistent national security policies — meaning foreign, military, and economic — unless we develop a national strategy. Our leaders in the White House and the Congress owe this to the American public, lest we become a superpower in decline.

How we deal with our neighbors complicates hemispheric relations. Americans pay more attention to foreign affairs than others, but our attention to each region is partial, episodic, and crisis-centered. We are the only nation that treats its neighborhood as just another global region. We pay it sporadic attention because it is rarely in crisis. It is better governed, more stable and democratic, less crisis-ridden and poor, than Africa, Asia, or the Mideast. It would get more attention, ironically, were it more crisis-ridden. There are important lessons for us in this. With the right policies and the right leaders, Latin America can develop democratically. Latin Americans should understand that they are primary actors in determining their destiny. Conversely, the U.S. must learn that to play a constructive role, we need a stronger commitment and a deeper understanding of our neighborhood.

Caudillos will not disappear soon. We need to oppose caudillismo, but wherever possible, we should engage with them diplomatically, openly supporting an institutional path to democracy, even at some cost to those relationships. Also, millions in the hemisphere, who are excluded from political, social and economic opportunity by abject poverty and lack of education, need to be brought into the mainstream for long term stability and prosperity.

Hemispheric free trade and economic cooperation should be a cornerstone strategic goal of the United States. To succeed, we need to give the president fast-track authority to negotiate trade agreements. Not surprisingly, nations on the institutional path have, also, been hemispheric leaders in trade and economic cooperation inside the neighborhood, and beyond. Colombia, Mexico, Chile, and Peru are leaders in the Pacific Alliance along with Costa Rica, another nation practicing institutionalism. The Trans-Pacific Partnership has, among its 12 members Chile, Peru, and Mexico.

There is strong reasons for optimism. Four of the five most populous nations with 75% of the population; three of the five largest economies; and six of the top ten economies; have started, or are advanced on the path of democratic institutionalism. It is not an accident that economic institutions were the motive force behind democratic changes. Effective economic institutions have shown a capacity for beneficial spill-over effect on political and social developments in Latin America.  We should focus on supporting these changes.

The trends in our neighborhood are making us less distant neighbors. Yet, success is not easy or quickly achieved. Institutionalized democracy in Latin America has been, heretofore, the path less traveled by, and should we and our neighbors decide to take it, it will make all the difference.

American Diplomacy is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to American Diplomacy.