The Varying Impacts of Populist Rule on Liberal Democracy in Latin America

Abstract

Populist rule is one of the most symbolic features that have characterized modern politics in Latin America. In so far as the outcomes of populist rule in the region are studied, one of the main interests in the existing literature is its impact on the quality of liberal democracy. This thesis seeks to contribute to the existing literature on the relationship between the two variables by conducting empirical research based on a panel dataset covering 18 Latin American countries from 1991 to 2017. I find an overall negative relationship between populist rule and liberal democracy, which is a reflection of their inherent incompatibility and the populist project of maximizing the utility of the individuals forming a majority at the expense of the elite and minority. However, what has been observed across the countries in the region is that some populist presidents distort liberal democratic institutions with a high level of discretion, whereas others relatively conform to the constraints imposed by liberal democracy and have a limited impact on it. I argue that the capability of populist presidents to attack liberal democratic institutions is determined by the estimated costs of doing so incurred by a set of constraints arising from three groups in society: the informal working class; the formal working class; and the capitalist class. Each of these three groups, with class-specific socioeconomic demands, curtails populist incumbents room to maneuver by posing a probable threat to governability. The populist government is by nature constrained by the requirement to please the informal working class, who constitute a majority in a typical Latin American society and are willing to support the populist project only if their socioeconomic demands are met. Its policy choices are also constrained by the formal working class and the capitalist class, who possess disproportionate influences in the society and are interested in the protection of the existing political order. I identify three variables that are closely related to each of the three potential veto players to the populist project: natural resource rents, industrial employment, and financial development. Depending on the levels of these three variables, the extent to which populist presidents can actually pursue strengthening of executive power and radical institutional changes that are consistent with their populist discourse is determined. I find that the negative impact of populist rule on liberal democracy is exacerbated with a higher level of natural resource rents and lower levels of industrial employment and financial development. Finally, I complement my quantitative analysis with an examination of the experiences of a number of Latin American countries under populist rule. This study is one of the first systematic evaluations of the constraints that shape governing populists capability to damage liberal democratic institutions.