Liberalization against Democracy: The Local Politics of Economic Reform in Tunisia

6. The Politics of Empowering the Winners of Economic Reform

❖ 6 ❖ THE POLITICS OF EMPOWERING THE WINNERS OF ECONOMIC REFORM As a consequence of neo-liberal reforms, the economies of many developing countries are currently undergoing major structural transformations that could profoundly and permanently alter the distribution of assets. Some of these policies (e.g., privatization in both rural and urban areas) often lead to a major worsening of asset inequality. The new market arrangements have important implications for political organization, yet much of current theorizing in the political development literature eschews economic variables while assuming that market reforms will enhance democratic prospects. Certainly there are many cases in which market reforms and democratization seem to have proceeded together: India—market reforms since 1984 with maintenance of democracy; Mexico—reforms since 1982 with slow loosening of single-party dominance; Turkey—reforms since 1983 and the institutionalization of a democratic process; Spain—democratization and market reforms; Portugal—democratization followed by market reforms; Argentina—reforms since 1983 with alternance of political parties in elections; Chile—market reform and democracy after Pinochet; Poland—the same after the Communist regime; Korea—market reforms followed by democratization. Yet in many of these countries, which are considered part of the third wave of democracy, democratic rule remains uncertain. Karl (1990) has emphasized that making pacts with the elite is especially conducive to democratization, with guarantees in particular for traditional ruling classes. Others emphasize that capital must be restructured with market reforms in order to establish its dominance economically and politically (O’Brien and Cammack 1985). The emerging democracies lose their promise as a route to social justice. Labor has been marginalized under the new democratic regimes (Collier 1999a, 197). In rural areas of many developing countries, economic liberalization seems to undermine democratic prospects. Frances Hagopian analyzed the persis- tence of traditional politics in Brazil’s new democracy. She argued that rural elites exploited a protracted process of democratization to transmit and enhance decades-old patterns of political in®uence. Ensconced within positions of power within the ruling party and the opposition, traditional elites “thwarted progressive reforms, bolstered pervasive clientelism, fought successfully to retain political institutions that favor conservative actors, and perpetuated non-democratic practices in the new democracy. A clientelistic partial regime subverted democracy in the countryside (quoted in Encarnacion 2000, 494). Kurtz (1996) argued that national democracy in Chile has been purchased at the cost of the political underdevelopment of the peasantry. Neo-liberalism disrupted rural social structure and gravely hindered associational life in the countryside. Political acquiescence in the rural sector helped sustain pluralism and elections nationally. In addition, the electoral regimes in some of these transitions seem to suggest the recon¤guration of authoritarianism as much as new democratic developments . Movements toward electoral democracy have often been combined with rampant violations of individual liberties. Larry Diamond writes that “to varying but alarming degrees human rights are ®agrantly abused, ethnic and other minorities suffer not only discrimination but murderous violence; power is heavily if not regally concentrated in the executive branch; and parties, legislators , executives and judicial systems are thoroughly corrupt”(quoted in Encarnacion 2000, 13). Fareed Zakaria (1997) used the term “illiberal democracy” to describe a growing number of countries that combine free and fair elections with a fusion of powers, a weak rule of law, and a lack of protection of basic liberties of speech, assembly, religion, and property. The spectrum of illiberal democracies ranged from modest offenders like Argentina to near-tyrannies like Kazakstan and Belarus, with countries like Romania and Bangladesh in between. In a similar vein, Clifford Geertz described the emerging political economy of the Arab world as the marriage of Smithian economics and Hobbesian politics (quoted in Vandewalle 1986, 13). The term “delegative democracy” also partially captures the political patterns associated with market reforms. Guillermo O’Donnell coined the term to depict a “new animal, a subtype of existing democracies, which has yet to be theorized” (O’Donnell 1994, 55). In a delegative democracy an elected president concentrates power in the executive branch, subordinates the legislature, and rules by decree. O’Donnell also points out that implementing democracy 134 ❖ Liberalization against Democracy ❖ under conditions of increasing inequality leads to a policy process further biased in favor of highly organized and economically powerful interests. In the end, authoritarian practices reassert themselves. The lexicon of terms to describe the numerous emerging regimes that are obviously not transitional democracies is shifting toward the authoritarian end of the spectrum. Martha...