Drastic times, drastic measures. (Book Review).

In fragile democracies, why do some leaders gain wide political support when implementing drastic and painful reforms while others do not? Why do some of these leaders triumph and are reelected while others don't make it past their first term or are forced from power?

To answer these questions, Kurt Weyland, associate professor of political science at the University of Texas in Austin, examines the political and economic events of the past 10 years in four Latin American countries: Argentina, Peru, Brazil and Venezuela. In these nations during the 1990s, presidents had the significant political will to impose "shock therapy" to stabilize the economies, reducing hyperinflation and opening domestic markets to international competition. These reforms were radical and increased social instability hut nonetheless received unexpected popular support.

The most conspicuous example is Argentina's Carlos Menem. When he assumed power, former President Menem broke away from the traditional path of the Peronist Party and applied daring measures that stemmed the rampant inflation that plagued the previous government of Raul Alfonsin. And it worked. Menem was reelected, but later recession and financial scandals surrounding privatizations and the opening to foreign capital weakened him in his second term. Thus the groundwork was laid for the collapse of the Argentine economy. Menem's deputy, Domingo Cavallo, established peso-dollar parity that was the country's saving grace at first but later turned out to be a double-edged sword. Vulnerable to speculation by highly mobile capital, and carrying a negative economic balance, the Argentine economy suffered the pangs of a Mexican-style currency crisis and later surrendered, dragged down by a global economic crisis.

Strangely, Menem today enjoys the support of more than 13% of voters surveyed for the upcoming elections, on the heels of leading presidential candidate Adolfo Rodriguez Sad. Many believe the leader that created the disaster is the only one capable of getting Argentina out of its fiscal jam. The moral, it seems, is that a devastating crisis resulting in the death of many children due to malnutrition is not reason enough to abandon market reforms, discard it as an exhausted option and look for a new road to development or, in the Argentine case, salvation.

In the four countries involved in the study voters have elected candidates from the left, or at least with a more moderate socioeconomic focus than their neo-liberal ancestors. But Weyland argues that not even Venezuela's Hugo Chavez has split from the market model as much as his rhetoric would indicate. The new president of Brazil, Luiz Inacio Lula da Silva, has also toned down his left-wing position and seems willing to push for increased social spending-- without breaking the rules of international capitalism.

Prospecting. The popularity of market reform in Latin America in the last decade, Weyland concludes, is a result of psychological factors, which form what he calls 'prospect theory." If society perceives that its economy is failing, the theory goes, it is inclined to take risks with a new model. Similarly, if the public perception is that things are going well, voters choose caution.

In Latin America, the failure of closed-economy self-sufficiency and the exhaustion of populism gave way to strong popular support for neoliberal reform. The apparent economic recovery (and in some cases, real recovery, as in Chile's case) is driving a perception of triumph. The leaders won with the support of the electorate, and the market model made for political stability. How the rest of Latin America emerges from the crisis will determine if that stability will last.

Andres Hernandez Alende

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