1. —Diego Abente-Brun, June 7, 2007

2. Between a Rock and a Hard Place: Dilemmas of Democracy in Paraguay by Diego Abente-Brun Reagan-Fascell Democracy Fellow June 7, 2007 National Endowment for Democracy Please note that the views expressed in this presentation represent the opinions and analysis of the speaker and do not necessarily reflect those of the National Endowment of Democracy.

3. The Third Wave of Democracy (1978- ) and its Challenges  Electoral democracies, illiberal regimes.  Low quality democracies

4. The Emerging Literature on Quality of Democracy  O’Donnell, Vargas Cullel, Iazetta, The Quality of Democracy, 2004  Diamond & Morlino, Assessing the Quality of Democracy, 2005  Emphasis on:  Conceptual craftsmanship  Studies of comparative dyads  Missing:  A systematic inquiry into the causes

5. Defining Quality of Democracy The question to be addressed…  Distinguishes between nature and quality of democracy  … NOT how democratic a democracy is, or a polyarchy is … (Rule of law, participation, competition, Accountability, Freedom, Political Equality, Responsiveness) polyarchy  … but what is the quality of regimes that qualify as democratic (or polyarchic) in terms of their ability to address key issues.  Three variables taken into account: 1. Legitimacy (Ability to generate support) 2. Effectiveness (Ability to govern well/governance) 3. Efficacy (Ability to deliver)

6. Quality of Democracy in South America: 1) LEGITIMACY OVERALL INDEX DEMOCRACY 2000–20041995–2005SUPPORTFORSATISFACTIONWITH Paraguay38343217 Ecuador38344314 Bolivia40394013 Peru41394924 Colombia41414629 Brazil47433722 Venezuela53567656 Chile53565943 Argentina59576534 Uruguay66687763 Sources: Frances Hagopian, 2005 (Support & Satisfaction with Democracy, Importance of voting, Valid votes/VAP, Trust in Gov’t, Democracy is the Best System), Latinobarómetro 2005.

7. Quality of Democracy in South America: 2) GOVERNANCE COUNTRYAVERAGE Political Stability Government Effectiveness Regulatory Quality Control of Corruption Venezuela-0.88-0.92-0.68-0.91 Paraguay-0.83-0.76-1.06-0.44-1.08 Ecuador-0.77-0.89-0.92-0.39-0.87 Colombia-0.58-1.87-0.13 0.11 0.11-0.45 Bolivia-0.38-0.50-0.450.20-0.76 Perú-0.28-0.85-0.32 0.34 0.34-0.28 Argentina-0.17-0.14 0.01 0.01-0.13-0.43 Brazil-0.03-0.16-0.070.18-0.07 Uruguay0.610.640.560.590.64 Chile1.170.711.271.361.36 Source: World Bank, Kauffman, Kraay, & Mastruzzi, “Governance Matters.” Data averaged for the period 1996–2005.

8. Quality of Democracy in South America: 3) SOCIOECONOMIC PERFORMANCE COUNTRY POVERTY GAP POVERTY GDP GROWTH PC Bolivia34.4062.400.90 Paraguay30.3061.00-1.10 Colombia24.1050.600.30 Venezuela22.1048.600.90 Ecuador20.8049.001.10 Perú20.6054.701.60 Brazil17.8038.700.70 Argentina12.2029.401.40 Chile6.3018.703.00 Uruguay4.5015.401.00 Source: CEPAL. Data from most recent year available (ranges from 2001 to 2004).

9. The Quest for an Explanation Three hypotheses: 1.STRUCTURAL  Socioeconomic matrix  Stakeholders and nature of the political game 2.INSTITUTIONAL  Nature of the party system  Rules of the political game, constitutional and legal 3.SOCIO-CULTURAL  “Social capital” of the population  Associational predispositions; horizontal relations

10. 1) STRUCTURAL : Socioeconomic Matrix COUNTRY NON- AGRICULTURAL WORKFORCE PERCENTAGE OF EMPLOYEES WITH SOCIAL SECURITY Urban Agric. Workforce InformalFormalInformalFormalOverall Bolivia39.0%32.3%66.7%33.8%6.5%46.3%31.3% Ecuador48.0%30.3%57.6%42.4%14.2%63.4%47.1% Paraguay49.6%31.3%62.9%37.1%4.4%45.3%26.5% Peru55.2%37.5%58.0%42.0%14.9%63.9%48.3% Brazil58.4%19.6%44.6%55.4%34.2%83.8%69.2% Colombia59.2%20.9%59.9%40.1%27.5%83.9%65.2% Venezuela71.5%9.7%52.2%47.8%16.9%72.2%57.0% Chile72.1%13.3%35.8%61.2%48.9%83.3%76.4% Uruguay74.3%4.6%37.7%62.3%32.9%87.0%73.1% Argentina74.9%1.1%44.3%55.7%17.5%66.8%51.5% Sources: CEPAL, Int’l Labor Organization. Data from most recent available (2002–2004).

11. 1) STRUCTURAL (continued) : Effects of Invertebrate Society  Invertebrate society: Lack of collective actors with collective interests that can structure the political game along issue-based lines  This lack of social articulation favors the emergence of clientelistic politics  Prevents the development of horizontal ties and furthers vertical, hierarchical, and in essence, exploitative relationships.  Incorporates popular sectors as clients, but excludes them as citizens.

12. 2) INSTITUTIONAL: Clientelistic vs. Issue-Based Parties Types of Parties Correlates S ocial Base of Support Policy Bias Identity profile Issue-Based Parties Issue-Based Parties Constituencies Collectives Re- distributive UniversalisticProgressive pro-labor; or conservative, pro-business Clientelistic Parties Constituents Individuals Distributive Particularistic Populist, conservative, personalistic

13. Effects of Clientelistic Parties on Quality of Democracy 1. Favors particularistic policies that privilege individual party supporters. 2. Breeds dependence on small but organized groups—mainly public employees—that interact not with each other but with state. 3. Reinforces rent-seeking behavior of powerful socioeconomic actors. 4. Increases both the weakness and centrality of the state.

14. Types of parties Quality of policies Socioeconomic matrix

15. Effects of Low Quality of Democracy  GDP per-capita 1980: $1,441 1980: $1,441 1989: $1,442 1989: $1,442 2004: $1,382 2004: $1,382  30% of population is rural and has no access to land  10% of overall population owns 66% of the available land  Remaining 60% of population share 6% of the surface 1980–19881989–19992000–2005 Tax burden 7.7%10.5%10.9% Bureaucratic Burden 42.4%61.3%75.9%

16. Growth in Public-Sector Employees

17. Growth in Public-Sector Salaries

18. The Trap of Clientelism On the one hand….  80% of voters belong to one of two traditional parties On the other hand…  75% of the population considers political parties the least-trustworthy institution

19. 3) SOCIO-CULTURAL FACTORS: Associational Predispositions  Inspired by work of Tocqueville  Interpersonal trust and associational behavior key to quality of democracy  Interpersonal trust in Paraguay very low between 1996 and 2004 (Latinobarómetro)  In 2001, 56.9% of population didn’t belong to any intermediate organization; in 2005, 70.3%  Are these causes or consequences of low quality of democracy?

20. The Rock and Hard-Place Dilemma Low quality democracy vs. the neo-populist alternative  Neo-populism: No longer tied to specific social constituencies or economic policies (e.g. Peron, Vargas), but instead… No longer tied to specific social constituencies or economic policies (e.g. Peron, Vargas), but instead… …tied to a pattern of personalistic and anti-institutionalist politics rooted in the appeal and mobilization of marginalized masses by a charismatic, often authoritarian leader …tied to a pattern of personalistic and anti-institutionalist politics rooted in the appeal and mobilization of marginalized masses by a charismatic, often authoritarian leader  1996–2003: the neo-populist temptation; authoritarian formulas, Gen. Lino Oviedo.

21. The Unexpected  Social-science explanations can never rule out the unexpected  The unexpected came in March 2006 with a citizens’ demonstration led by Monsignor Fernando Lugo  This confirms the old adage, “There is no ill that lasts 100 years nor a Paraguayan willing to put up with it.”

22. Hope Beyond Hope The chiliastic upsurge of former Bishop Fernando Lugo

24. Lugo, Chavez, Morales  Lugo not a military leader, but a pastor who grew up in a tradition of horizontality, collective leadership, and anti-authoritarianism.  Lugo not a Marxist or a neo-populist but an exponent of Catholic social progressism.  Lugo not a leader of an ethnically divided society.  Lugo is a catalyst who gathers support from a wide range of parties, from right to left.  Lugo identifies himself as a centrist (“mbytetepe, poncho juruicha”); sees ‘left’ as a movement for change rather than as an ideological platform.

25. Implications Ecuador  Similar socioeconomic matrix, similar clientelistic parties (but not deeply rooted)  Instability, development of a new politics of identity (Pachacutik)  Emergence of populist-authoritarian alternatives  Lucio Gutiérrez and Rafael Correa Bolivia  Similar socioeconomic matrix, similar clientelistic parties (but not deeply rooted save MNR)  Development of new politics of identity  Emergence of radical alternatives  Evo Morales

26. Corollaries Bolivia:  If established political elites do not make reform possible, they make revolutions inevitable.  Evo Morales. Ecuador:  If established political elites do not make reform possible, they make instability inevitable.  Mahuad, Gutiérrez, Palacios, Correa … Paraguay  If opposition political elites do not make reforms possible, they make one-party rule inevitable.  Lugo?

27. Between a Rock and a Hard Place: Dilemmas of Democracy in Paraguay Diego Abente-Brun Reagan-Fascell Democracy Fellow THE END