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Latin America’s Dysfunctional Democracy

In Latin America, many people live with outstretched hands. Throughout the Hemisphere, paternalistic governments accustom people to receiving just enough to survive instead of participating in society. Across the region, politicians that writer Octavio Paz once referred to as “philanthropic ogres” create clients instead of citizens, people who expect instead of demand.

Democratic Latin America limps sideways because it can’t run ahead. There are too many entry barriers to the poor, the innovative, and those without access to credit. There are too many walls erected against social mobility, competition, and fairness in politics and business.

As a result, although Latin Americans can vote in a more democratic environment, they can’t compete in a globalized world. Standards of living fall, incomes stagnate, hopes are dampened. So people start to march in the streets in Bolivia. Or believe the promises of the populist President Hugo Chávez in Venezuela. Or think about a return to the one-party past in Mexico. Or yearn to toss all the bums out – a sentiment that now seems to be taking root in Brazil. Or to vote with their feet, as in Mexico, where one of every five men between the age of 26 and 35 lives in the United States.

The region is both more democratic and more unequal than it was ten years ago. United by the right to vote, Latin Americans remain divided by poverty. Latin America’s economies are organized in a way that concentrates wealth in a few hands, but then leaves it untaxed, depriving governments of the resources needed to invest in their citizens’ human capital.