There's a great article by John Lyons on the front page of today's Wall Street Journal, headlined "Populism Loses Appeal for Voters In Latin America." At this time last year, with elections looming in Bolivia, Chile, Costa Rica, Peru, Mexico, Brazil, Nicaragua, and Ecuador, many analysts were predicting victories for candidates of the left, and Venezuela's Hugo Chávez was salivating at the prospect of gaining numerous anti-American allies in the region. But the only Chávez-backed candidates to win were Evo Morales in backward Bolivia and Daniel Ortega in Nicaragua, and the latter claimed to be much more moderate than in his Sandinista days. Alan García and Felipe Calderón won in Peru and Mexico after running ads tying their opponents to Chávez. Lula da Silva, re-elected in Brazil, and Michele Bachelet, elected in Chile, are both center-leftists whose policies are not significantly out of line with the "Washington consensus" favoring free markets and free trade. I've written on this subject before.
Here are Lyons's paragraphs summarizing the results:
Although disappointment with free-market reforms still runs deep through the region, voters have been choosing presidential candidates who tap into a more powerful force: economic stability. Across Latin America, inflation has been on a steady decline for the past decade and has dropped to the low single digits for the first time in decades in Mexico, Peru, Ecuador, and Brazil. Economic growth, while far from spectacular, has been solid for the past five years.
With that stability, more working-class voters have been able to buy homes, take out loans, and obtain their first credit cards. As voters get a stake in the economic system, they become wary of risking it all on populist nostrums–debt repudiation, deficit spending, state ownership of industries–that in the past produced economic disasters and left them worse off.
It seems that people do learn from experience.
Much of Lyons's article is about Ecuador, which votes Sunday in a runoff between banana tycoon Alvaro Noboa and economics professor Rafael Correa. Correa led in most polls before the first round in October but finished second to Noboa. Since then, as Lyons points out, Correa has played down his radical policies (dissolve the Congress, rewrite the Constitution, renegotiate foreign debt) and his admiration for Chávez. Since 2000, Ecuador's currency has been the U.S. dollar, which has brought price stability; Correa hinted early in the campaign that he would reverse dollarization, but he now downplays the idea. According to Lyons, Correa's backtracking has put him about even with Noboa in the polls, and a Correa victory would not amount to a ratification of his radical policies.
Years ago, when I first started traveling to Latin America and I went to bookstores to find reading material on the region, I found that almost all the books on the shelves were written by leftists. Academics specializing in the region, both in Latin America and in the United States, took it for granted that the great mass of the people in Latin America hated the United States and capitalism and yearned for economic redistribution and socialism. There was some reason to believe that when many countries were ruled by dictators and when there was great economic inequality.
Latin America still has great economic inequality, but the dictators, except for Fidel Castro and (if you want to count him as such) Hugo Chávez, are gone, and elections are frequent. And it seems that Latin American voters are mostly less interested in government-mandated redistribution and more in government-provided monetary stability and civil peace. Sort of like voters in the United States.
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