The components of a political bomb

11 July 2005

On a recent count, the number of former presidents and prime ministers of Latin American countries who are either in jail or facing charges is thirteen. Most of them are accused of corruption or the abuse of power. Several of them were political leaders in the populist style.

Though there are quite a lot of countries in Latin America, thirteen is still an impressive number. Some of these ex-leaders were removed from power by elections. But most were forced to resign by massive public disapproval. In the last few months, Bolivia and Ecuador have provided examples.

The circumstances of each fall is different, but there is also a striking pattern. Most fall when corruption scandals coincide with a downturn in the economy.

Just one of these two factors on its own is not enough to provoke a crisis. If there is suspicion of massive corruption but the economy is still barrelling along, people will sigh about the greed of politicians but they won't rock the boat. If the economy tanks but there is no scandal to focus public anger, people will complain but they won't be provoked into political action. It's bringing the two elements together that makes a bomb.

But it's a bomb that does get put together and does go off so frequently because of the nature of populist governments.

These governments have four main features. First, the leader claims that he alone, rather than the democratic process, is the mechanism for translating the will of the people into government policies. Second, this claim justifies junking the checks and balances in the liberal-democratic model. Typically these governments suppress the media, by-pass monitoring institutions, corrupt the judiciary, and harass their opponents using defamation or security laws. Often they make deals with police, military, and godfathers to attack their enemies and defend themselves.

Third, they seek mass support by redistributing some resources to the little people in the society. Often this is through social welfare schemes like cheap healthcare and free education. Sometimes it also involves handouts of things like food and clothing. In addition, they make a priority of economic growth because that keeps people happy. Fourth, these governments keep themselves in the public eye, by dominating the national media, and by staging a constant series of public circuses.

Such governments are prone to corruption scandals for two main reasons. The first of these is very obvious. The concentration of power and destruction of checks and balances makes corruption seem easy and tempting. The corruption usually occurs at the top of the political pyramid, which is why so many of these leaders end up in court. But it may operate lower down or be very pervasive. If the government itself shows contempt for the rule of law, it provides a powerful example to others. When, for example, a prime minister can defy judicial process by a mix of intimidation and money, then others may easily believe that the law is not a barrier to ambition. When the cabinet includes someone whose only political qualification is his ability to ramp the stockmarket for the benefit of himself and his political friends, then others may feel that the pursuit of wealth by any means is quite legitimate.

The second reason why such governments are prone to corruption is a little more complex. These regimes are engaged on sabotaging the democratic process wholesale, and that can require a large and constant flow of funds. The details vary across different political cultures, but the pattern is the same. Money may be needed to secure support in parliament, to compromise judges, to buy the support of the media, to keep generals and godfathers happy, to persuade voters to make the right choice, to arrange for terrible things to happen to opponents, or to keep ambitious politicians in line. All these investments are made to undermine the fundamental idea that in a democracy each individual should have the same right to information, the same freedom of choice at elections, the same protection under the law.

Even in a country where the judiciary is weak and the electronic media is under state control, there can be major costs in keeping the politicians in line, especially if many of them are involved in politics largely in the hope of financial gain.

The funds for sabotaging democracy in these various ways are raised by several methods. Some can be generated almost legitimately by ensuring that government contracts and similar favours go to the right people. Some comes from the age-old practice of siphoning percentages from public spending, especially on massive projects like building airports where the sums involved are so large. Some comes from shaking down businessmen, especially those who make super-profits because of some government favour or because of some illegal activity.

Even in a situation where the government is a coalition of rich businessmen who can generate their own super-profits which would seem easily large enough to finance these political investments, they will always be tempted to cut their own costs by generating such alternative sources of funding. Elections can be expensive, especially if you have ambitions to buy a region wholesale.

Why do these governments appear prone to the economic crises which combine with corruption to build the bomb? Partly, this is almost unavoidable. These countries typically have rather open economies which are vulnerable to the upswings and downswings of the international economy. But partly, there is a tendency for such governments to magnify these swings. They punt too hard on the upswing in order to claim impressive achievements. They are reluctant to take the hard decisions on the downswing because they fear the impact on their popularity. Instead, they claim all the slumping data series are about to make a miraculous turnaround. They find evil people to blame. They say ‘trust me’, over and over again. Then they go to astrologer. And then it's all too late.

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