Party system change during the transition from ISI to neoliberalism cannot be understood merely by analyzing political alignments and events during the critical juncture itself. Neither can it be understood by examining national cases in isolation from others. A comparative perspective suggests that different countries entered the transition period with distinct antecedent conditions that shaped their respective critical junctures. As such, the causal chains that produced the divergent political outcomes of neoliberal critical junctures can be traced back to development patterns during the ISI era – that is, to the institutional legacies of the earlier, labor – incorporating critical junctures that ushered in the era of mass politics in Latin America.

This chapter and the next explore the party system effects of these two critical junctures. They trace the development of elitist and labor-mobilizing (LM) party systems following the first critical juncture, locate them within their different political economies, and explain why the LM cases were susceptible to more severe political and economic crises during the transition to market liberalism. These two critical junctures demarcate three distinct eras of socioeconomic and political development in Latin America, each of which possessed an alignment of states, markets, and societal actors that shaped national party systems. The first of these alignments, the oligarchic order, was characterized by elite political domination, commodity-export development models, and exclusive, oligarchic party systems. This order prevailed from independence in the early 19th century until the early decades of the 20th century, when industrialization, labor mobilization, and eventually the Great Depression undermined oligarchic rule and launched a new era of mass politics. This critical juncture led to the emergence of what Cavarozzi (1994) calls the state-centric matrix, which was characterized by state-led industrialization, corporatist patterns of interest intermediation, and the formation – in part of the region – of mass parties with programmatic linkages to organized labor.

The process of market globalization – understood as the transnational integration of markets for goods, services, and capital – is inevitably shaped by the particularities of world regions (Katzenstein 2005; Stallings 1995), including their distinctive patterns of political development and their modes of insertion in the global economy. The realignment of states, markets, and social actors associated with globalization and market liberalization in late 20th-century Latin America occurred in a context of redemocratization that inevitably imposed major adjustment burdens on political parties. Although democratization restored parties to political prominence after extended periods of military rule, the “dual transitions” to democracy and economic liberalism were deeply unsettling to party systems in much of the region.

The economic crises of the early 1980s undermined military governments and helped trigger democratic transitions (see Remmer 1992–1993), but they also imposed political costs on incumbent parties after democracy had been installed. Although the ensuing process of market liberalization may have contributed to the stabilization of new democratic regimes by defeating hyperinflation and forging a technocratic consensus in key areas of public policy, it also eroded many of the social and programmatic linkages that bound parties to popular constituencies. Indeed, market liberalization inevitably clashed with modes of political representation that had been forged during a half-century of state-led capitalist development.

As shown in Chapter 5, antecedent structural and institutional conditions weighed heavily on the political dynamics of neoliberal critical junctures. The transition from ISI to market liberalism was associated with more severe economic crises, greater electoral volatility, and deeper electoral realignments in countries that developed LM party systems during the ISI era. If political outcomes were fully determined by antecedent conditions, however, there would be no reason to characterize the transition to neoliberalism as a critical juncture; political change would merely reflect the unfolding of earlier, path-dependent development trajectories beset by exogenous shocks. For this transition to constitute a critical juncture, political outcomes and their institutional legacies must also be conditioned by the competitive alignments and strategic choices of political actors who ultimately decide on policy and/or institutional change.

During neoliberal critical junctures, the most important strategic choice was the adoption of structural adjustment policies in response to the exhaustion of the ISI model and the exogenous shock of the debt crisis. Although every country in the region adopted market reforms, the political consequences of such reforms varied widely depending on the political orientation and partisan alignment of supporters and opponents of the reform process. These alignments enhanced the programmatic structuring of some party systems – in both elitist and LM cases – contributing to relatively stable forms of post-adjustment partisan competition. In others, however – a majority of cases – they undermined or failed to produce programmatic structuration, destabilizing party systems in the aftermath period. Indeed, reactive sequences in the aftermath period – driven largely by societal resistance to market liberalism – sometimes altered the institutional outcomes of the critical juncture itself; party systems that were relatively stable during the critical juncture encountered new disruptive forces in the aftermath period, while in a few cases inchoate and volatile party systems progressively consolidated.

Preface and Acknowledgments

This book began as a relatively straightforward attempt to understand why some party systems are more stable than others in Latin America, but it quickly evolved into a larger and more ambitious effort to identify the impact of economic crises and market reforms on democratic representation. Ultimately, it sought to explain how and why a transition from one economic era to another was also a major turning point in Latin America’s political development. I began, perhaps naively, to conceive of that economic transition as a critical juncture in political development long before I was able to identify the full range of its institutional effects, much less its longer-term political legacies. To put it in Gramsci’s more eloquent terms from the epigraph, I began this project in a moment of crisis in Latin America, an interregnum “when the old was dying and the new could not be born,” and a great variety of “morbid” (and often fleeting) symptoms appeared. Enough time has now passed for me to hazard a claim that new political orders were born during this watershed period, even if some of them veered off in unexpected directions or remain institutionally fluid (as the reader will quickly discover). The purpose of this book is to trace where these new orders came from, explain why some are more stable than others, and identify what makes them different, both from each other and from the political orders that preceded them.

Any research project this long in the making is bound to incur debts to individuals and institutions that are too numerous to mention. That is surely the case with this book. Although I cannot acknowledge everyone who deserves to be thanked, I want to at least recognize a number of individuals who made especially vital contributions. From the outset of this project, Ruth Berins Collier and David Collier provided intellectual inspiration and constructive feedback. They have been remarkably generous in supporting my efforts to build upon the intellectual foundation they laid in their study of earlier critical junctures in Latin America. I also learned a great deal from intensive workshops centered on earlier drafts of my book that were organized by Erik Wibbels and Margaret Levi at the University of Washington, Jorge Lanzaro at the Universidad de la República in Uruguay, and Juan Pablo Luna at the Universidad Católica in Chile.

More than thirty years after the onset of Latin America’s “third wave” of democratization, the fragility of partisanship in the region remains a major puzzle. This fragility is especially puzzling when new democratic regimes have proven to be far more durable than anyone could have imagined when the third wave began (Mainwaring and Pérez-Liñán 2005). Historically, the oscillation between democratic and authoritarian regimes interfered with the institutionalization of party systems in the region (Lupu and Stokes 2010). Authoritarian rule led to frequent proscriptions or repression of specific party organizations (especially populist or leftist parties with working-class constituencies), as well as prolonged interruptions in electoral competition that disrupted parties’ efforts to recruit members, organize local branches, and construct collective identities. Consequently, as new democratic regimes demonstrated a surprising ability to withstand the region-wide economic crisis of the 1980s, scholars expressed optimism that party systems would institutionalize alongside them (Dix 1992).

In much (though not all) of the region, this institutionalization did not occur. Democratic regimes gradually consolidated and economies eventually recovered from the debt crisis and hyperinflation, but party systems, on average, did not become more electorally stable. To the contrary, they actually became progressively less stable during the first three decades of the third wave. Simply put, regular electoral competition did not institutionalize party systems as representative bodies or intermediaries between citizens and states.

To understand variation in the stability of party systems during and after neoliberal critical junctures, it is essential to know how different party systems managed the transition from ISI to neoliberalism, and how they were transformed by that process. As Chapter 5 demonstrated, elitist party systems, on average, faced less-disruptive political and economic challenges during this period of transition and were less electorally volatile than their LM counterparts. As a theoretical first-cut, this generalization suggests that antecedent patterns of political and institutional development during the ISI era accounted for a significant portion of the variation in party system stability during the critical juncture. This generalization, however, masks significant variation in the stability of national party systems within each of the two categories, and it glosses over quite distinct patterns of change and continuity. It cannot explain why some parties thrived and others floundered in the same party system, or what adaptive strategies were more or less successful under certain conditions. Neither does it tell us whether electoral volatility reflected vote shifts among established parties or the rise of extra-systemic challengers. Most important, it does not identify the more contingent political processes and alignments within the critical juncture itself that shaped different outcomes.

Elitist party systems amply demonstrate how neoliberal critical junctures produced divergent political outcomes. Although the transition to market liberalism was less economically traumatic and politically destabilizing, on average, in countries with elitist party systems, they nonetheless experienced widely varying patterns of party system change and continuity during the critical juncture. Some party systems adapted to the new policy landscape with no change in their organizational composition and minimal shifts in their electoral balance of power; Honduras and Costa Rica (in the short term) are the obvious examples. Others, like Uruguay, kept the same organizational composition but experienced electoral realignment, with one party (on the left) growing at the expense of conservative rivals. Still other party systems, like that of Ecuador, were both organizationally and electorally fluid. Although no elitist case experienced party system decomposition during the critical juncture, several did in the aftermath period (i.e., Ecuador and Colombia). And while some elitist party systems were programmatically aligned by the process of market liberalization (namely Uruguay’s), others were de-aligned (such as those in Ecuador and Costa Rica).

Latin America’s crisis-induced transition from state-led development to market liberalism altered the social bases of political representation in fundamental ways. In so doing, it posed fundamental challenges to the ways in which parties had organized and represented popular interests and mediated between states and societies in the ISI era. In most countries, party systems at the beginning of the second decade of the 21st century looked strikingly different from those that were in place at the beginning of the democratic period in the early 1980s.

Party system change over the course of these three decades was indelibly marked by the dual transitions to democracy and market liberalism, but it was far from uniform in its character and effects. Although a handful of party systems were only lightly touched by the politics of crisis management and structural adjustment, most were realigned or partially reconstituted, and some broke down and decomposed along the way. Among the latter set of cases, the reconstruction of party systems proved to be a highly uncertain and asymmetrical process.

A political earthquake struck Venezuela when Hugo Chávez was elected president in December 1998. Chávez, a former lieutenant colonel in the Venezuelan army, launched his political career in 1992 by leading a bloody military revolt against a democratic regime that had long been considered among the most stable in Latin America. The coup attempt failed, landing Chávez in prison, but it catapulted the former paratrooper instructor into the public imagination as a symbol of rebellion against the political establishment and its mismanagement of the country’s oil wealth. Following a presidential pardon, Chávez founded a new political movement and launched a populist campaign for the presidency in frontal opposition to traditional parties and the free-market reforms they had supported for most of the past decade. Although Venezuela boasted one of the strongest and most highly institutionalized party systems in Latin America (Coppedge 1994; Mainwaring and Scully 1995: 17), the two dominant parties ultimately withdrew their own presidential candidates and threw their support to a less threatening independent figure in a desperate gambit to defeat Chávez’s “outsider” campaign. Nevertheless, Chávez won a landslide victory that not only signaled the eclipse of traditional parties, but a collapse of the collusive, patronage-ridden political order they had anchored since the founding of the democratic regime forty years before. Within a year, Chávez had bypassed congress and convoked a series of popular referendums to elect a constituent assembly, rewrite and ratify a new constitution, and refound regime institutions. For Venezuela, a new political era had dawned.

Several years later, neighboring Brazil also elected a new leftist president, former union leader Luiz Inácio “Lula” da Silva of the Workers’ Party (PT). Like Chávez, Lula had a track record of opposition to the “neoliberal” market reforms that swept across Latin America in the waning decades of the 20th century, although he had moderated his stance considerably by the time he captured the presidency in 2002 (on his fourth bid for the office). Unlike Chávez, Lula represented a party that had become a pillar of Brazil’s political establishment, despite its origins in a militant labor movement that spearheaded popular protests against Brazil’s military dictatorship in the late 1970s (Keck 1992; Hunter 2010).

Conventional wisdom suggests that LM party systems entered the 1980s with a series of attributes that should have enhanced their stability. Research on party systems in both the U.S. and Europe has found that aging electoral alignments are less stable than those forged in response to more contemporary issue cleavages (Maguire 1983: 83–85; Carmines, McIver, and Stimson 1987), and the European literature argues that the organization of class cleavages binds voters to parties and limits their mobility (Lipset and Rokkan 1967; Bartolini and Mair 1990). In comparison to their elitist counterparts, LM parties were more densely organized and had more encapsulating linkages to social groups. They encouraged competition that was more likely to be grounded in modern social cleavages and programmatic alternatives rather than disputes from the distant, oligarchic past. Whereas oligarchic party systems seemed anachronistic in the ISI era – the institutional residue of intra-elite conflicts that pre-dated the rise of mass politics – LM party systems were produced by more recent patterns of social mobilization and political competition.

A critical juncture approach suggests, however, that the modern organizational forms of LM party systems were embedded in a state-centric matrix of development that progressively unraveled in the waning decades of the 20th century. The collapse of ISI and the transition to market liberalism eroded the structural foundations of the societal linkage and cleavage patterns that had been spawned by the process of labor mobilization. As such, they exposed LM party systems to more severe exogenous shocks and deeper sociopolitical dislocations than in the elitist cases that experienced more moderate versions of the state-centric matrix.