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Democratic and authoritarian responses to the debt issue: Argentina, Brazil, Mexico

Published online by Cambridge University Press:  22 May 2009

Robert R. Kaufman
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For Latin American governments, mediating between their national societies and the international economy, the contemporary debt issue poses some excruciating dilemmas. On the one side, these governments are under intense pressure to arrive at satisfactory formulas for settling their debts–satisfactory, that is, to the banks and creditor agencies that control access to international financial markets. Loss of such access would threaten vital capital and trade flows, and for this reason virtually every Latin American government has so far placed a high priority on meeting its external obligations. But governmental elites, if they are to remain in power, must also answer to (or repress) their own populations. And the price to be paid for external help with “liquidity problems” has typically involved politically dangerous stabilization measures (devaluations, wage and credit restrictions, and fiscal deficit reductions)–measures that often arouse the strong opposition of major social forces.

Type
The Political Economy of Debt
Information
International Organization , Volume 39 , Issue 3 , Summer 1985 , pp. 473 - 503
Copyright
Copyright © The IO Foundation 1985

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References

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33. It remains to be seen in this connection whether Venezuela might be an exception that proves the rule. The close articulation between urban and rural unions and the governing AD party might provide a more solid basis for gaining the cooperation of working-class organizations through social pact arrangements. For similar reasons, social pacts might conceivably be viable in a future Chilean democratic system, although the profound ideological divisions in the traditional Chilean party system would probably make this more problematic than in Venezuela.

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