Success and Failure in the Southern Cone

Comparing Democratization in Chile and Bolivia

Will Freeman

4/1/2016

Why is it that Chile has become the success of Latin America, while its neighbor has not done so well? The answer to this question lies within the process of democratization. I am going to explore the detailed answer to this question by comparing the nature of democracy in the two states. In particular, I will look at the nature of transition, economic growth, and the national identities of the two states. According to Huntington, these are foundational issues that help to determine the success of the democratization process in a state. However, because many democracies of the third wave are products of colonialism they are faced with a host of additional ethnic issues that must also be resolved. Huntington found that institutionalization helped to prevent the rise of ethnic divides in these fledging democratic hopefuls. I will closely examine issues of divide that lead to cronyism and its ethnically centered variant that I call ethno-cronyism. By the end of this paper I hope to have found an explanation for why Bolivia has not been able to successfully democratize given that its developmental history seems to be quite similar to Chile’s.

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1 2

When talking about the process of democratization, scholars such as Samuel Huntington

observed three periods where there were big movements from non-democracy to democracy. The

first movement happened around the time of the American Revolution, and the second was after

the fall of fascism in 1945. He characterizes these as waves of democracy, hence the title of his

landmark book The Third Wave. This third wave of democratization, which began in the 1970s

with the fall of dictators in Southern Europe, will be the focus of my research. The third wave

affected much of the world and a lot of the newly decolonized states throughout Africa and

South America. In particular, I am going to closely examine the democratization processes in

Chile and Bolivia. These two countries have a history that is deeply intertwined but at a glance

1 "Map of South America." Map of South America. Accessed April 28, 2016. http://www.wineandvinesearch.com/south_america.php.2 "Southern Cone - Political Map." Mind Map Software, Drawing Tools. Accessed April 28, 2016. http://www.conceptdraw.com/examples/southern-cone-map.

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appear to have taken different routes in their pathways to development. Both have had a long

history of authoritarian leadership mixed with hybrid regime types.3 However, during the third

wave, Chile has managed to secure its place as a successful democracy with one of the largest

economies in Latin America. While Bolivia, on the other hand, has not enjoyed such successes.

In this paper, I will advance a multifaceted argument that demonstrates through the case

of Chile why Samuel Huntington’s theory on the democratization process holds true. I will

simultaneously explain how issues of exclusive political institutionalization, cronyism, and a

strong ethnic divide have hindered democratization in Bolivia. For Huntington the process of

democratization is closely tied to the process of economic development and political

institutionalization. Huntington found that there are certain thresholds regarding gross national

product and growth that help to best facilitate the condition which a non-democratic state would

need for a successful transition. However, with economic reform comes the potential for further

division. According to Walker Conner, when a state focuses too much on modernization it runs

the risk of creating an irreconcilable class divide that prevents democracy from taking hold.4 His

theory on the problem of modernization will serve as a standard for how a state can satisfy the

need for some economic growth without growing too rapidly and therefore preventing a

successful democratization. I argue that one of the key differences between Chile and Bolivia is

that that the pre-democratic Chilean government fostered a reasonable amount of economic

growth and had a longstanding tradition of inclusive political institutions which allowed for a

successful transition to democratic rule. In Bolivia leadership bought into a false promise of

success through populist economic policies and institutionalized a form of cronyism centered on

certain ethnic groups that has compromised democratization. This is in part why Chile has been 3 According to Larry Diamond of Stanford, democracy should be conceptualized as a spectrum ranging from liberal democracy to authoritarian regimes such as North Korea or China.4 Connor, Walker, “Nation Building or Nation Destroying.” World Politics. 1972 April, vol. 24. No. 3. 328.

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able to rise to one Latin Americas most successful democracies. On the other hand, Bolivia has

been plagued with a multitude of issues stemming from ethno-cronyism that has led to problems

of stability and a government which lacks legitimacy and in many cases popular support.

Both cases have some level of democratization as I will later show through their

comparison. The key differences between the two states lies in the relationship between the

variables of economic growth, nature of transition, and national identity. In Chile the government

has institutionalized a strong executive, widespread participation, and competition which helped

them have a more desirable transformative democratization process. This is known more broadly

as the nature of transition, and because transformations require inclusive political institutions in

order to take place, it appears that they positively influence long term democratization.

Economic growth is also an important factor because if it is done too quickly then cronyism

develops and democratization is hindered. Chile in the 1970s enacted widespread reform that

privatized most industry and created a free-market economy which helped to lessen income

inequality. The third variable of national identity is important because without a cohesive

identity ethnic groups would feel threatened and use the central government as a means to

safeguard their group against others. However, because Chile was successful in tackling the first

two variables, national identity was not an issue at the time of democratization in the 1980s. All

three of these variables came together allowing Chile to be the success of the Southern Cone and

a model for the democratization process.

I will also be looking for how these same variables have impacted the democratization

process in Bolivia. Economic growth in Bolivia has been stagnant or populist in nature

demonstrating the dangers of not meeting Huntington’s threshold for growth. This is

compounded by the nature of their democratic transition. Bolivia in the 1980s transplaced central

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leadership, and this did not require inclusive political institutions with equal amounts of

competition and participation. While most members of Bolivian society were not happy with the

dictators of the previous decades, slowed economic growth without institutionalization created a

system of ethno-cronyism. Lacking a distinct Bolivian identity, full democratization was brought

to a halt. In Bolivia the different nature of these three variables demonstrate further the utility of

Huntington’s theory of democratization.

Figure 1 Chile5 Figure 2 Bolivia

Methodology

In this paper, I will be employing the comparative case study method.6 The reason for

choosing this methodology is because a lot is known about what a state needs to do in order to

democratize and much has been written on the subject, but there seems to be less written about

why two seemingly similar cases had differing outcomes. However, as I will discuss later in my

paper, this is not what happened in these two neighboring states. The comparative case study

5 These charts are an illustration of how the relationship of the independent variables impacted the democratization process within the two cases.6 The comparative case study method is a method that was outlined by Arend Lijphart in 1971. It is a common alternative to the case study method that compares two or more similar cases looking for key variables that would explain why the outcomes differed.

Stable Institutionalized Democracy

Transformation

High Rate of Growth

Unified National Identity

Ethno-Crony Democracy

Transplacement

Slow Rate of growth

Multiple National Identities

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method will allow me to analyze both Chilean and Bolivian democratization processes, to

understand what variables contributed to Chile’s success that Bolivia lacks. Of course in

employing this method one must be aware that these are two different places and therefore what

worked for one may not work as well for the other. However, it is still a useful method because

it allows one to compare the situations to look for patterns where things were done differently. 7

For my research it allows me to look at two cases for variables that both help and hinder

the growth of legitimate democracy. The comparative method requires one to begin by

explaining the variables within the study. Lijphart says, the comparative method requires that we

examine a dependent variable that is influenced by independent variables.8 The other two

methods that he mentions are the experimental and statistical methods. The experimental method

has no real implications in political science as it is what we would traditionally conceptualize as

the laboratory method. That is to say that we take variables and set up trials to determine the

effect that one variable has on the other variable. This cannot be done ethically in a social

science where systems of government and entire states are concerned. The comparative method

is in part an adaption of this method. I explained above how the basis for comparison rests on

selecting cases with a certain variable or variables in mind; this is because of the influence of the

experimental method. The experimental method rests on two groups, the control group and the

treatment group. The treatment group is the one being tested, while the control is the unaltered

group. The results of the tests on the treatment group are compared to the control to determine

the effects of the various treatments.

7 Lijphart, Arend, “Comparative Politics and the Comparative Method.” American Political Science. 1971 September, vol. 65. No. 3. 682.8 Lijphart, 683.

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The comparative method borrows from both the experimental method and the statistical

method. The statistical method unlike the experimental method does work within the field of

political science. However, it relies on the synthesis of many variables and cases, boiling them

down to numbers in an equation or chart. One could use the statistical method for determining

the best path to democratization. However, this method is highly correlative.9 A comparative

study takes the best of both of these methods. It takes the idea of providing a more generalized

theory like a statistical method, but limits the cases and variables like the experimental method.

It too is correlative, but still provides good insights into the actual causal linkages and processes

between variables. Unlike the statistical method, the comparative method works quite well when

looking at just a few cases and is quite useful for my study because I am not interested in a

general prescriptive theory.

Lijphart says that a main drawback to the comparative method is the lack of depth of

study of the cases. Proponents of alternative methods, like the case study, champion it because it

allows one to do a highly detailed study of a particular case. However, as Bent Flyvbjerg points

out, a case study may be used as a preliminary method of analysis in order to draw out a

hypothesis.10 Take the example of Chile, my broader question deals with what Chile did that

Bolivia did not in order to successfully democratize. For me to even be able to do this

comparison, I must first look at the theoretical literature on the phenomenon. Thus, I am

employing a hybrid methodology commonly used in comparative studies, where I take already

available research on the two cases and put them side by side to look for similarities and

differences between them. I observed in my initial research that there is an abundance of

literature explaining the individual processes of democratization in the two countries. Thus, I 9 Lijphart, 684.10 Flyvbergj, Brent, “Five Misunderstandings About Case-Study Research.” Qualitative Inquiry. 2006, vol. 12. No. 2. 72.

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found that it would be more contributive to analyze what variables differed within the two states

that produced different results with a particular focus on political institutionalization, economic

growth, national identity, and cronyism. Ultimately my conclusions could be used to suggest

potential solutions to the issues preventing success from being obtained in Bolivia.

We come now to the final criticisms regarding the use of the comparative method. Often

those who oppose the use of the comparative method have concerns over case selection and

breadth of study. This is a two-fold criticism that stems from concerns over the utility of

comparison. The primary methodological opposition comes from those who champion the case

study like Flyvbergj. Researchers of that camp argue that because one is attempting a

comparison it is possible that what they find would hold true only for that specific case. Giovani

Sartori characterizes this with the model of apples and pears. He says, “With apples and pears the

issue is easily solved... Returning to pears and apples are they comparable or not? Yes, they are

with some respect to the properties they share…”11 What Sartori is observing is that often times

opponents of the comparative method ask how the researcher decided that the two cases were

comparable, when the question should really be are they more or less comparable. For example,

pears and apples are not identical but they are both fruit and therefore comparing them would

give us insight as to why a pear is not an apple, as well as what traits they do share. When it

comes to political research, this means that while it is true that Chile and Bolivia are two

different places with different cultures and histories, they are still both former Spanish colonies

that had similar political backgrounds. Therefore as Sartori points out, as long as one recognizes

the differences they may find some useful comparisons that could serve to improve the Bolivian

situation, or understand the process of democratization in general.

11 Sartori, Giovanni, “Comparing and Miscomparing.” Journal of Theoretical Politics. 1991, 245.

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Theory

After determining the method of study for a given research question, one must select a

theory or theories with which they mean to frame their research. It is not enough to simply take

two cases and decide that one is going to compare them. The meaningful research comes after

deciding to look at these cases through a certain lens or paradigm. For my research question, I

have chosen to look at democratization through Samuel Huntington’s theory. Huntington wrote a

groundwork book that deals exclusively with the most recent wave of democracies. He outlines

the process of democratization in a way that is still widely accepted as a large part of the road

map for state success. His theory is essentially that the democratization process is intertwined

with economic growth. For Huntington one of the key conditions for democracy to arise is being

part of what is coined as an economic transition zone. Countries that are at the middle levels of

economic development with gross national products between one-thousand and three-thousand

per capita GNP in dollars have a better chance of a successful democracy. While for obvious

reasons poorer countries are less successful. In order for a state to have transitioned

economically, that is to have a strong economy, they have most likely democratized.12

1976 Per Capita GNP (inUSD)

Democratic in 1974

Democratized/Liberalized 1974-89

Non Democratic TotalPercentage of Countries

that Democratized<250 1 2 31 34 6

250-1,0003 11 27 41 29

1,000-3,000 5 16 5 26 76>3,000 18 2 3 23 40Total 27 31 66 124 32

12 Huntington, Samuel P., The Third Wave. (University of Oklahoma Press 1991) 60-62. 13 Huntington, (1991)62.

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Economic growth alone is not enough, often states that transition to democracy also have

higher level of political participation a subset of what he coined in an earlier work as

institutionalization. Institutionalization, legitimacy, and state capacity are the three pillars of

stability.14 If a state faces outside pressure and has met the economic criteria, it is likely

according to Huntington that the process of democratization will begin to take hold. However,

the majority of the democratization process must happen internally through the

institutionalization of inclusive democratic processes. If a state has only favorable economic

growth they have not yet achieved the conditions to successfully democratize. In fact for

Huntington this situation hinders, not helps, democratization.15 A strong economy is useful, but

as I will outline later, states lacking institutionalization cannot tackle the important issue of

national identity. Because Chile is classified as a transformation democracy, it demonstrated that

it already had some inclusive political institutions and a unified national identity.16 If it had not

had these things then the nature of transition would have most likely been transplacement or

replacement.

Institutionalization is defined by Huntington as a process of acquiring value and stability.

States with higher institutionalization usually have widespread political participation and are

adaptable, meaning that the institutions can change to meet the needs of the citizens without

crumbling.17 Institutionalization is an important part of the democratization process because it is

what allows for successful turnovers of government. In a multi-party democracy without

14 Institutionalization is providing inclusive political institutions that allow for all ethnic groups to feel as though they have representation in the government. In addition, state capacity as Migdal defines is the ability of the state to enforce the laws and helps to break down situations where multiple national identities exist within a single state. The third pillar, legitimacy, is whether or not the citizens recognize the government and requires both state capacity and institutionalization. However, without all three of these it is unlikely that stability will be achievable. 15 Huntington, Samuel P., “Political Development and Political Decay.” (Cambridge University Press:1965) 386.16 Huntington in describes a transformation democracy as one where the turnover of power is popularly supported by all classes of political participants. 17 Huntington, 1965, 395.

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institutionalization the us-them divide is often perpetuated instead of proper political

participation.18 When this is continued it further embeds cronyism into the state making it that

much harder to move to a successful democracy. In multi-ethnic states such as Bolivia, inclusive

political institutionalization helps to strengthen a unified national identity. A lack of inclusive

political institutionalization can result in a special type of cronyism known as ethno-cronyism.

States that lack a unified national identity often have clearly defined ethnic groups. Usually

members of a particular group place their ethnic identity above their national identity. This is

known as having multiple national identities. In Bolivia and similar states this often strengthens

the us-them divide. It can be remedied by creating institutions that allow all ethnicities to be

represented in the government, thereby creating a strong national identity that supersedes ethnic

identity.

The above are conditions in which a state may have a good chance at democratization but

they do not ensure total success. For example, democratization in the Second Wave was entirely

because of external pressure. However the Third Wave has shown that democratization is most

successful when it is fostered internally.19 Thus, while it helps to have outside pressure along

with favorably amounts of modernization, something else must also be affecting the success of

democratization. After establishing these conditions Huntington begins to look at what the

catalysts for change are. Huntington observes that among the states that had the above or similar

criterion there were three ways in which democracy was introduced. He coins these as

transformation, replacement, or transplacement. Countries that undergo transformation, like

18 Us-Them divides are a result of improper institutionalization and cronyism. Instead of institutionalizing inclusive political competition and participation, crony governments institutionalize a fear that if the opposition takes office that they will enact targeted policies against the previous leadership. Thus the term us-them, the us being those currently in power and the them being the opposition. Institutionalization remedies this problem by making it the norm for both sides to work together to create policies strengthen the position of all citizens. 19 Huntington, 1991, 112.

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Chile, have a push for democratization from the political and economic elites within the country.

Whereas, in countries such as Bolivia, transplacement democratization is the norm, meaning that

pressure from the opposition and the elites brings a change in the status quo. When pressure to

democratize comes from the opposition replacement democratization is taking place.20 The

difference between these two alternative methods of transition is in which group is pushing for a

change of leadership. In a replacement transition the elites do not feel as though the current

leadership is doing their job well. However, transplacement leaves all groups with a feeling of

lack of confidence in the current leadership. Because of a lack of inclusive political institutions

both of these methods of transition result in a perpetuation of ethno-cronyism.

A common criticism of the Huntington model of development is that it will lead to

cronyism. The logic is that if a fledgling state rapidly develops economically it will not only

widen class divides, but provide an incentive for those who control the means of growth to run

the government with only their interests in mind. Cronyism is often a product of democratization

attempts because politically influential people within a country recognize that economic growth

is a viable way to keep the majority from becoming disenfranchised. However, once growth

commences it is difficult to convince those in charge not to line their own pockets. Leadership

becomes so happy with the strong rate of growth that they do not anticipate that the majority will

eventually become irreconcilably angry and likely blame it on democracy.21 While it is easy to be

tempted by the fast track to economic growth this only brings about a mistrust of democracy

from all parties involved. However, scholars since Huntington’s theory have found ways to

remedy the question of growth/modernization vs. legitimate political participation. Huntington

himself even provides a check through his concept of institutionalization discussed earlier, yet

20 Huntington, 1991, 114.21 Chu, Amy. World on Fire, (Doubleday:2003)147-48.

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his theory of democratization still leaves the very real potential for cronyism, particularly in

multi-ethnic states such as Bolivia.

The three main problems that arise out of Huntington’s democratization process are

cronyism, us-them divide, and building a national identity. I explicated earlier how

modernization can lead to cronyism and the host of issues that arise from cronyism. In this

section I will focus on the other two. However, in many ways the three are so intertwined that

they must all be solved in order to create a successful democracy. In addition to cronyism

developing out of rapid modernization, it is the case in states such as Bolivia that compounding

ethnic problems may develop. Not only is the state divided on economic lines, but also it is

increasingly the case that certain ethnicities hold more wealth and political power than others.

According to Walker Conner, “Modernization increases cultural awareness of minorities by

making their members more aware of the distinction between themselves and others...”22 This

quote explains why crony politics are often the norm in multi-ethnic states. If institutions are not

created to foster a Bolivian identity then the various ethnic groups use the government to protect

their group’s identity. Cronyism develops out of modernization in multi-ethnic states because

they lack the institutions that give the different ethnic groups representation in the political arena.

It is not necessarily the case that cronyism is the outcome of modernization, but rather

that this is a holdover from colonialism. In post-colonial states, one group usually descending

from the first colonists held the majority of the power and wealth. When states were decolonized,

especially resource rich ones, the wealth remained within this ethnic group. Thus, if they were

given the opportunity to gain prominent seats within the federal government, crony policies

would be likely. Conversely the same happens when the majority ethnic group gains control.

22 Connor, Walker, 1972, 329.

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However, this comes from the us-them problem that is created from years of colonial oppression.

I find that this type of cronyism is particularly hard to break out of and have coined it ethno-

cronyism. It differs from simple cronyism because it combines the issues of multiple national

identities with economic inequality. In order for this ethno-cronyism to be solved, it is necessary

for a state to create a unified national identity or integrated policy, as well as foster moderate

economic growth alongside institutionalization of political parties and participation.

In contrast to multi-ethnic us-them crony states like Bolivia, Huntington describes a

different subset of problems that arise out of a different type of cronyism. Chile, did not have the

same issues of multiple national identities in the 1980s, however they were not free from

cronyism. Augusto Pinochet, the nationalist military leader of Chile brought to power out of a

similarly tumultuous economic situation, engaged in what I reference as military/party cronyism.

This is similar to the ethno-cronyism, but is in some ways easier to break free from. Huntington

finds that an institutional problem with transition from military rule is the lack of transition of

wealth and power to the new political group.23 Furthermore, when power transition happens

through a coup it is always a possibility that the military could replicate this as needed. The same

can be said about single party systems, in that when they transition to a democracy they may

leave behind certain loopholes that allow for them to easily reassume power should they desire.

I find that military or single party cronyism is easier to combat because it in some ways is

helpful to institutionalizing the processes of democracy, growing the state capacity, and creating

a unified national identity. This form of cronyism did not leave Chile without its disenfranchised

groups. However, the us-them was not as strong because the them was a class distinction not of

an ethnic nature. When power transitioned from the military, they continued the common

23Huntington, Samuel P., 1991, 115.

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practice in these types of states transferring most of the wealth from the state to their class in an

attempt to maintain status as a political force.24 In a state with ethno-cronyism this would have

further strengthened the ethnic divide, but because the abuse of power was not committed against

a specific ethnic group this division did not occur. Instead the citizens at least were able to gain a

sense of democratic participation which ultimately led to the democratic overthrow of the

Pinochet administration in 1988. Thus I have concluded that it is better for a state to go through a

period of authoritarian rule with a pseudo-democracy than it is to have problems of ethno-

cronyism like Bolivia.

Historical Background

25 26

24 Huntington, Samuel P., 1991, 117.25 "Road Map of Chile and Chile Road Maps." Road Map of Chile and Chile Road Maps. Accessed April 27, 2016. http://www.ezilon.com/maps/south-america/chile-road-maps.html.26 "Bolivia Maps. Travel Map of Bolivia. Bolivian Geography. Facts about Bolivia." BoliviaBella. Accessed April 27, 2016. http://www.boliviabella.com/maps.html.

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Unlike their post-colonial counterparts in the rest of the world, the Spanish colonies of

Latin America were not granted independence through a political process. Most if not all of the

countries had to fight wars of independence. In Chile and Bolivia this was certainly the case,

with both countries achieving independence within a twenty year span of each other. Chile upon

achieving independence in 1818 was infatuated with the new Enlightenment ideals of

democracy, and her great Liberator Bernardo O’Higgins quickly began to set an independent

government up. This of course included an executive branch, a constitution, legislative branch,

and a judicial branch. However, as most fledgling democratic leaders do, he realized that giving

up his power was not in his personal interest.27 Thus, in 1823 the Great Liberator was ousted in a

coup and legitimate democracy in Chile was put on hold. Bolivia achieved her independence in

1828, and attempted to create a similar government, but was also met with a similar fate. In both

of these countries, we can retrospectively recognize that due to a whole host of issues that they

were likely unaware of, they simply were not at a point in political development where legitimate

democracy was possible. Up until the 1960s, this pattern of authoritarian leaders operating under

the guise of democracy was the norm. However, around this time the next big push for a true

liberal democracy began in both of these countries.

In Chile during the 1960s, the Allende family began to gain political clout just as the

people were looking for a new government. Salvador Allende was a member of the rising

socialist faction within Chilean politics. He came into contention with the military that since the

days of the great Liberator had been a key fixture in the political process of Chile. Traditionally

the military was made up of the wealthiest social classes and because they were instrumental in

securing independence they were able to secure the most important positions within society.

27 Drake, Paul W. “Historical Setting.” Chile a Country Study. Ed. Rex Hudson,(1994:Library of Congress Federal Research Division)14.

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Allende’s populist policies would have limited the political power of the military, yet he did

manage to win the election of 1970. However, the Chilean constitution at the time still gave the

military majority control of the legislative branch. This is a classic example of what Huntington

refers to as cronyism, meaning a government which has democratic institutions that are

frequently used by a certain section of the populous for personal gain. The election was short

lived, but it does serve some symbolic importance. The 1970 election in Chile demonstrated the

people did have the political institutions necessary to hold elections although they had not yet

resolved the issues of cronyism.

Comparison of Democratization Process

In 1973 Allende was ousted and replaced by General Augusto Pinochet. It is important to

understand that this was in many ways a major setback for the democratization process of Chile.

It looked as though he was just continuing the century’s long cycle of authoritarian leadership

that in Chile had been commonplace. However, this coup was different in that it was not brought

upon by the Chilean military alone. The Allende government came to power during a time when

the global political climate was divided between nations that championed ‘liberal-democratic,

free-market’ ideals, and those like the Soviet Union who took a socialist approach to

government. As a result of this ideological conflict, both the United States and Soviets had a

policy of sponsoring ideologically friendly governments throughout the developing world. The

CIA felt that a resource rich country such as Chile with a socialist leader was a bad idea.

Therefore, they created a plan to install the American educated General Pinochet into La

Moneda. In 1973 Pinochet was able to complete this task and while this may have seemed to be

bad for democratization it gave the executive enough power to enact the kind of economic

reforms Huntington says go hand in hand with stable democratization.

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It may seem a bit strange that a country with a supposed long history of democracy such

as Chile would have a military coup right after a successful transition of power through a

democratic process, especially considering that Allende had received popular support. However,

upon closer examination of the past one-hundred and fifty years one can see that this democracy

was not consistently legitimate. In fact in the 1930s, the military had again stepped in to

overthrow the elected government in an attempt to preserve the traditional political order.28

While on its surface this may seem like a characteristic of a broken political system and certainly

leaves plenty of opportunity for future coups, this is actually not all that uncommon in states

working towards institutionalized democracy. Scholars have come to characterize this as what is

known as a hybrid regime.29 When a state is characterized as a hybrid regime this is not

necessarily the worst outcome. Hybrid regimes, particularly those like Chile, do possess some of

the basic frameworks for democracy. Cronyism is often rampant, but, there is some semblance of

an electoral process. While elections are not “fair and free”, the citizens at least can learn what

the electoral process is. Diamond even goes on to say that this helps institutionalize competition

before participation rises.30 This accounts for why researchers characterize the regimes prior to

Pinochet as democratic even though they clearly are not liberally democratic. Fortunately for

Chile, the hybrid regime did not result in ethno-cronyism thanks to the strong institution of the

executive and a strong state capacity.31

28 Valenzuela, Arturo, “Government and Politics.” Chile a Country Study. Ed. Rex Hudson, (Library of Congress:1994) 201.29 See footnote 3. 30 Diamond, Larry, “Thinking About Hybrid Regimes.” Journal of Democracy, 2002 April, vol. 13. No. 2. 23.31 Alongside institutionalization and legitimacy through popular support, state capacity is an essential part in ensuring the success of democracy. State capacity is defined by Migdal in “Strong State, Weak Societies” as the ability of the government to enforce its laws on the populous usually through use of a military or police force to co-opt local dissenters and strongmen. Without it a single national identity cannot be promoted and proper institutionalization may not occur.

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The Pinochet coup was a setback for democratization in Chile but it provides some telling

insights into the state of Chilean democratization. As I said earlier, states that have one coup are

highly susceptible to future non-democratic action. Prior to the Allende regime, it can be said

that while political participation was rather limited, the institution of the executive was quite

strong. Even though the military occasionally overthrew the government, Chile at least had a

strong state capacity.32 However, in many ways the Pinochet coup helped the process of

democratization. In the period before Pinochet, Chile had proven that political competition was

institutionalized through a multi-party system. Not only were there a multitude of political

parties, but they were not ethnically centered like in a multi-ethnic state.

Pinochet was able to use his position as an executive to enact crucial economic reforms

that were enforced via his strong executive. Prior to 1973 the state had administered the economy

through some fifty executive agencies which were kept in check by a stronger yet oversight

department. 33 This was for a while a sustainable method of economic growth that rested on

institutionalized political competition. However, it was not sustainable long term, and through

the institution of the strong executive Pinochet was able to privatize and reform the economy

modelling it after the Chicago Boys.34

Chile during the 1970s set the stage in many ways for the democracy that they have

today. In addition to sweeping economic reform the Pinochet regime ushered in a new age of

consolidation of the existing political institutions. Traditionally Chile had four political parties

the communist party, the socialist party, and the Falange and Christian Democrats on the right. 35

32 Valenzuela, 203.33 Valenzuela, 218.34 The Chicago Boys were students of economics out of the University of Chicago who wrote a manual on how to practice perfect laissez-faire federal level economics. In their manual it is outlined that these policies are best implemented under a government of authoritarian nature. 35 Garraton, Manuel, Incomplete Democracy,(University of North Carolina Press:2003) 100.

Freeman 19

These parties represented most of the concerns of voter base in Chile and as a result they saw

fewer military coups in the first half of the century. However the Allende election was the first

election that saw widespread participation. As a result the institution of political parties was

stronger than the institution of participation and this contributed to the ineffectiveness of his

regime. This issue of institutionalization gave rise to the Pinochet coup in 1973. While Pinochet

was in office he finally had the means to enact the necessary economic reforms to solve the

current economic crisis. An additional probably unintended outcome was the solution of the

institutionalization problem. He did so by forgoing a popular election, this caused a solidification

of the opposition who wanted their right to a fair and free election back. Thus once the transition

to a market economy occurred, the opposition led by Ricardo Lagos campaigned for the

plebiscite of 1988. In a way the Pinochet regime was a test of the strength of democracy and its

institutions in Chile. The country emerged as a much stronger democracy because of this

necessary period of authoritarianism.

The Pinochet regime exemplifies the importance that a hybrid regime can have on the

transformative democratization process. It also explains why authoritarian regimes are the most

often to undergo a process of transformation. Ultimately the reforms of the economy and

institutionalization melded to create conditions which by 1988 caused Pinochet to lose the

constitutional plebiscite, and forced a turnover to truly democratic elections. It is evident that

transformation to democracy in Chile occurred primarily because of key long standing

institutionalized practices within the country. That being said, it would be inaccurate to

characterize the regime prior to 1990 as democratized. The regime was more like the hybrid

conception that Diamond laid out. This turned out to be extremely helpful in ensuring the

Freeman 20

successful transformation to liberal democracy because it gave the government enough power to

correct the remaining road blocks to democratization.

Bolivia’s path to democracy started in much the same way but has not seen the same

successes. Just a decade after Bernardo O’Higgins set up his government, Simon Bolivar

achieved his goal of liberating Bolivia from Spanish control. Unfortunately the Bolivian

revolution was, from the beginning, plagued by a distrusting division that was a holdover from

their especially divided colonial period. In 1826 Simon Bolivar, whom the country is named

after, drafted a constitution that would have institutionalized an authoritarian regime to prevent

what he thought would be infighting amongst the elites.36 While he was immediately

institutionalizing non democratic processes, he apparently had an understanding of how much of

a problem the class and ethnic divide would be for Bolivian stability. This short lived

constitution was replaced in five short years with a new one that institutionalized a yet stronger

executive, and for the next fifty years Bolivians faced military authoritarian rule.

The foundation for Bolivian democratization came in 1880 in which a constitution was

drafted that institutionalized oversight, political participation, and competition. It seemed as

though things were set to go well, however, participation was not widespread and included only

those of the elite.37 With the ethnic divide only getting stronger through institutionalized

marginalization, democratization as Huntington outlines could not take place. Having a system

of this nature however, highlights why democracy should be conceptualized as a spectrum rather

than one or the other. Bolivia prior to World War II certainly had the foundations of democracy

but it was obvious that there were road blocks preventing liberal democracy. Bolivar created his

36 Gammara, Eduardo A., “Government and Politics.” Bolivia: A country study. ed. Rex Hudson, (Library of Congress Federal Research Divison:1991) 163.37 Gammara, 164.

Freeman 21

constitution because he wanted to prevent what he called political infighting amongst the elites,

which today often leads to issues of cronyism. Even as far back as 1825 it was evident that multi-

ethnic national identities were going to be a problem for Bolivia. The combination of this and the

concentration of wealth and power in primarily the Spanish descendent mining elite, helped to

institutionalize ethno-cronyism. Ethno-cronyism as I will continue to highlight, has been a

persistent thorn in the democratization process of Bolivia.

In 1952 the indigenous people, tired of being dominated by the elites, formed the

Nationalist Revolutionary Movement. The MNR was comprised mostly of disgruntled students

and Chaco War38 veterans led by the exiled Victor Paz Estenssoro.39 This war was a tipping point

which served to demonstrate the ineffectiveness of the then current government. The Chaco War

was lost in large part because of the ineffectiveness of the central government plagued with the

traditional problems associated with illegitimacy.40 The traditional parties had advocated for the

war and were blamed for the loss. After the war they had banded together in an attempt to

consolidate and maintain power. The indigenous Bolivians realized that change would not come

peacefully and subsequently overthrew the existing oligarchy. However, this did not bring about

legitimate democracy, for the next thirty years the Bolivians had traded rule by mining elites for

indigenous ethno-cronyism.

In 1982 Bolivia finally transitioned into a popularly elected civilian president Hernán

Siles. However, because of the thirty years of corrupt, often authoritarian rule, he inherited a host

38 The Chaco War was a conflict between Paraguay and Bolivia over the disputed Chaco Desert territory. This territory had minor oil fields and was a chance for the Bolivian elite, who recently saw the collapse of their major export tin, to prove that the traditional (1880) way of governing Bolivia was still working. The loss of the war proved to be a catalyst for action from a growing discontented majority of middle-class, and poor, marginalized, Bolivian natives. This is what brings Bolivia onto the path towards reforming their democracy, but again shows just how large the multi-ethnic divide had become. 39 Waltraud K. Morales, “Bolivia.” Politics of Latin America: The Power Game. ed. Harry Vanden and Gary Prevost,(Oxford University Press:2015) 490.40 Waltraud, 489.

Freeman 22

of problems including a five billion dollar debt, and a poor disenfranchised population that had

turned towards the illegal drug trade for survival.41 The Siles government only lasted three years

as he found it increasingly hard to maintain stability through democratic means. His successor

was the organizer of the 1952 revolution Victor Paz. Paz inherited much of the problems of his

predecessor and feared a return to the oligarchies of old, thus he reverted to rule by executive

decree in order to maintain stability. For Bolivia this is a classic example of the type of divide

that comes from having economic inequality, but also multiple national identities. As a result of

colonization an us-them state was created. Walker Connor writes that in states that have a history

of ethnic divide, in this case Spanish descendants vs. indigenous Bolivians, developing a unified

national identity and having inclusive intuitions is crucial for establishing legitimate democracy.

Otherwise, a cycle much like what Bolivia is going through becomes the norm. In an us-them

state often one group resorts to cronyism and executive decree out of fear of being marginalized.

This is known as the us-them problem, which is to say that both sides fear the dominance of the

other and is common in post-colonial developing states.42 Bolivia has the added problem of

income inequality that stands as a road block to liberal-democracy.

41 Waltraud, 495.42 Connor, Walker, “Nation Building or Nation Destroying.” Cambridge University Press. 1972 April, vol. 24. No. 3. 341.

Freeman 23

Per Capita GDP Bolivia Chile1960 152.5 547.31970 225.7 939.31973 263.2 1,624.301977 616.7 1,243.101982 958.7 2,103.801988 697.4 1,937.701990 709.9 2,401.501994 806.2 3,943.002000 1,007.00 5,229.202014 3,124.10 14,528.30 43,44

Ethnic Groups Chile BoliviaWhite/ Non indigenous 88.90% 15%Other Indigenous Groups 11.10% 0Mestizo 0 30%Quechua 0 30%Ayamara 0 25%

,46

In many ways Bolivia is an excellent example of both rampant cronyism and the after

effects of what Huntington says happens when there is not simultaneous political

institutionalization alongside economic reform and growth. Bolivia like much of Latin America

has managed to become increasingly more inclusive eventually leading to the election of populist

president Evo Morales. Unfortunately this inclusiveness is not good for the process of

democratization. Bolivia has always struggled with a social divide between the poor indigenous

majority of the Altiplano and the rich land owning Spanish descendents.47 Fukuyama says that

this problem at its core has to deal with a combination of Huntington’s problems with rapid

modernization, and the lack of wide spread institutional stability. This prevents the government

from both satisfying the needs of the new political participants while not compromising on

democratization.48 While the participation of the indigenous poor is more than welcomed, it puts

43 “World Development Indicators.” World Bank. http://databank.worldbank.org/data/reports.aspx?source=2&country=BOL&series=&period= (April 8, 2016)44 This data replaces the Gross National Product data that Huntington references in his section on good levels of economic growth. GNP is no longer the most accurate model for determining growth and has since been replaced by Gross Domestic Product. The GDP data was selected based on politically impactful events in each of the countries. 45 "Chile vs. Bolivia." - Demographics Comparison. Accessed April 28, 2016. http://www.indexmundi.com/factbook/compare/chile.bolivia/demographics.46 Chart depicts the ethnic makeup of the two cases in a side-by-side comparison. This highlights the difference in ethnic makeup between the two cases, which has an impact on the strength of national identity within the two cases.47 Fukuyama, Francis, “The Latin America Experience.” Journal of Democracy. 2008 October, vol. 19. No. 4. 71.48 Fukuyama, 72.

Freeman 24

those within the government into a situation where they have to contend with maintaining the

support of their constituency while enacting policies that will benefit the whole. Often it is the

case that these policies provide more long-term stability and growth, which is why they are a

hard sell to those who want to see the most immediate benefit. This explains why it is common

for a popularly elected “peoples” leader to dismantle the institutions of democracy instead of

building them up. In Bolivia this is a cycle that recently has meant occasional coups by those in

the wealthy Altiplano followed by a popular election and then the process repeats.

Conclusions

As you can see from the analysis of Chile and Bolivia, there are a few variables that stand

out in helping and hindering democratization. These are the variables of institutionalization,

economic growth, ethno-cronyism, nature of transition, and national identity. Above all it is

evident that inclusive political institutions, transformative democratization, and a high rate of

economic growth helped Chile to successfully democratize. I saw through my research that Chile

at many times had authoritarian leaders, but they still managed to maintain some of the

institutions that strengthen democracy. Pinochet may have overthrown the government in 1973,

but he took the necessary steps to consolidate power allowing him to implement key economic

reforms that largely encouraged widespread economic participation. As a result of strong

inclusive institutions, in the 1988 plebiscite Ricardo Lagos was able to organize the opposition

and successful win a vote of no confidence causing a turn of government. The transformative

nature of transition was possible because Chileans have a long standing tradition of inclusive

political institutions. This has been a long term success for Chile because Pinochet was able to

keep the government from turning towards ethno-cronyism and institutionalizing an us-them

divide.

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Today, Chile is known as a major economic player in Latin America. Since the 1988

plebiscite Chile has not been entirely free from issues of economic inequality. However, they

have not had to deal with issues of military coup and have maintained a unified national identity.

Furthermore, political participation is widespread and a healthy amount of competition has been

the norm for Chilean democracy. It is safe to say that Chile has been a model for Huntington’s

theory of institutionalization and transformation democracy. If Chile wishes to continue on this

prosperous path they must focus their efforts on bridging the economic inequality gap and

bringing up the rate of education as educated voters make for better political participants.

Bolivia unfortunately, embodies most of the issues of exclusive institutionalization and

the issues of rapid modernization that Walker Connor advises against. While Bolivians have

always had a strong executive, until recently political participation was limited to only the land

owning elites. In addition to this, their economy is largely resource based and suffered greatly

after the tin bust of the 1930s. Things began to look better for Bolivia with the indigenous and

middle class movement for democracy that took place under Victor Paz in the 1950s. However,

this was short lived and helped institutionalize a cycle of fear that lead to ethno-cronyism. The

next roughly thirty years featured authoritarian rule by leaders that were fearful of the other

ethnic group ousting them and severely limiting their opportunities. The 1980s were a glimmer

of hope for Bolivia, with the same Victor Paz sponsoring a return to democracy which for the

most part has resulted in popular elections with peaceful turnover of leadership. Transition of

power no longer seems to be a major road block for Bolivia, but issues of ethno-cronyism are

rampant. It has been an increasing trend for the president to be elected from the indigenous

majority and out of the perpetuated, deep rooted, cycle of us-them has been a road block for

democratization.

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Frequently policies are enacted in La Paz which benefits one group over the other. It is

also becoming quite clear that economic growth is an issue as indigenous farmers have turned to

the highly profitable coca trade, as legitimate business remains in either the hands of the elites or

in foreign investment.49 The coca trade has become one of the main issues for La Paz since the

nineties. Policy decisions are often dependent upon what ethnic group holds the office of the

president at the time. Evo Morales, the current president and of indigenous descent has pushed

for a campaign titled Coca is not Cocaine. The coca trade is largely run by indigenous Bolivians

who have no other viable options for earning a living. The stance that the government takes on

the trade seems to be dependent on which ethnic group holds the office. For example President

Hugo Banzer a former dictator came to power in the late nineties and sponsored a major

eradication of the Cocalero.50 He was subsequently praised internationally by other ‘developed’

states, but internally these policies were known to be harsh and oppressive against the native

majority. President Morales has pushed to for an increase of rights of the ethnic majority.

However, he too has fallen prey to the us-them divide and does so without being incorporative of

the elite minority.

For Bolivia the issue of ethno-cronyism is not resolvable by increasing the rights of

oppressed groups alone. In fact, Bolivia has a systemic issue that dates back to the original 1826

constitution drafted by President Bolivar. The original constitution institutionalized an executive

that was far stronger than his legislative branch. The legislative branch in legitimate democracies

is supposed to serve as a check on the executive, but for Bolivia it serves as a rubber stamp. At

one point in their history all of the members of Bolivian parliament were from the elite party of

the president. Even if Morales manages to increase political inclusiveness he will need a strong

49 Waltraud 482.50 Waltraud, 496.

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legislative institution if he wants policies to be enacted that represent the diverse ethnic make-up

of Bolivia. As for the issues surrounding the coca trade and the elite control of business, in order

for the proper economic growth to take place that Huntington suggests, economic efforts must be

made to eradicate the coca trade, while offering viable alternatives to the poor indigenous

Cocaleros. These policies must also be sure to include the wealth controlling elites of Santa

Cruz, or else the institution of ethno-cronyism will continue into the foreseeable future.

Ultimately the state of affairs in Bolivia is not all doom and gloom. Since 1988 Bolivia

has not had any military coups. The office of the executive has successfully turned over between

political parties across the spectrum and political participation has been on the rise. Bolivia like

Chile, would do well to focus a good deal of effort on bringing up the education rate amongst

those not from the mestizo elite, as this too would help to alleviate the ethno-economic disparity.

Bolivia would also benefit from a stronger state capacity as this helped Chile immensely in the

1970s and 80s when crucial economic reforms were being implemented. With a stronger state

capacity Bolivia would also be better equipped to handle the Colombian Cartels that have made

their way into the Altiplano to purchase coca for processing into cocaine. In order for the

necessary economic opportunities to rise, Bolivians should work to bring in more foreign

investment as this helps to alleviate the dependence upon a resource economy which is too

dependent upon the volatile commodities market.

Overall, my analysis of the cases of Bolivia and Chile has shown me the importance of

institutionalization and nation-building. While the two cases have resulted in different outcomes,

the nature of transition, the nature of democracy, and economic growth, have proven to be key

components in the success of democracy. Initially I expected to find that Chile may have had

some key difference from Bolivia that greatly altered the success of democratization. What I

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ended up finding was that the two countries have or at one point, had dealt with a lot of similar

issues. Bolivia’s most immediate issue is institutional reform. As long as the executive is

stronger than the legislative democratization will remain incomplete. It would not surprise me

that after this is done the issue of ethno-cronyism may become much easier to solve. For now, it

would seem that Huntington and Walker Connor were correct in surmising that a strong national

identity helps to alleviate ethnic issues, and that institutionalization alongside moderate

economic growth helps governments transition from hybrid regimes to liberal democracies.