The Power and the Money

Constitutional hardball in Peru

So, yesterday the President of Peru dissolved Congress and called for new legislative elections. The Congress called that illegal, and deposed the President. What’s going on?

Constitutionally, we have a bit of a mess. The reason, however, isn’t really that the Constitution is unclear. (In fact, the Peruvian constitution is a very nice document.) It is that all sides are playing hardball, sticking to the letter of the rules but without any informal norms to keep things on the rails.

Short version: Peru has a mixed Presidential-Parliamentary system with a President and a Prime Minister. The President, however, retains executive authority. Think France, not Germany.

The Congress, controlled by the Fujimorista opposition, tried to pack the Peruvian supreme court. The President said this was against the rules, and told the Prime Minister to send a “confidence vote” against the move directly to the floor. (Article 133.)

The first problem: does the confidence vote take priority over all other matters? Article 133 doesn’t explicitly say that confidence votes should take priority, but that appears to have been the intention of the 1993 authors of the document. (Weirdly, no one is asking them.)  The Congressional leadership, in a chaotic session, decided to vote on court packing before the confidence vote. (Chaotic means chaotic: fistfights, shouting, physically stopping the Prime Minister from taking the floor by locking the door. )  

The President took Congress’s decision to postpone the confidence vote to be the equivalent of having his government lose a confidence vote. According to him, this was the second vote lost during the current presidential term, and so he dissolved Congress and called new elections under Article 134 of the Constitution.

But this brings us to the second problem. Article 134 gives the president the power to call new congressional elections should the administration lose two confidence votes. But has President Martín Vizcarra lost any confidence votes? In point of fact, he has not lost any confidence votes since assuming office. 

But Vizcarra claims that since he is only finishing disgraced ex-President Pedro Kuczynski’s term, a lost confidence vote on education policy during Kuczynski’s term should count as a loss for him. Add in Congress’s failure to hold the second confidence vote, and he has the two failed votes he needs to call new elections. 

Well, once Vizcarra declared Congress dissolved, Congress counter-declared that the President was breaking the law and suspended him from office for a year. Mercedes Araoz then became president. Article 114 allows Congress to declare the president “temporarily incapacitated.” Once again, though, that is supposed to be an equivalent of the 25th Amendment, something to be used when the president is, well, temporarily incapacitated. Article 117 concerns removing the president, by trial.

But back in the bad days of Alberto Fujimori, in 2001, Congress did remove him from office after he fled the country. Fujimori tried to resign, a la Nixon, but Congress insisted on holding the vote. I don’t think anyone intended to establish a precedent, but they did, so now Congress has suspended the President for a year and elevated his Vice-president in his place.

I should mention here that the opposition tried to remove Vizcarra permanently, but they didn’t have the votes. I don’t know if that was because legislators couldn’t stomach the outright unconstitutionality and preferred to have the fig leaf of Article 114 or if it was for some more Machiavellian reason.

Politically, my sympathies are with the President. It’s clear that the opposition has been playing constitutional hardball. They haven’t been breaking rules and nor has the government; Peru isn’t Bolivia or Honduras, let alone Nicaragua or Venezuela. But they have been playing to the letter of the law in an extremely destructive way.

I don’t suppose it matters. Right now you have Peru with two people claiming to be the legitimate president and no clear-cut constitutional case. Nonetheless, this was not how the framers of Peru’s constitution expected things to go. They did expect that the confidence vote would get priority and they did not expect the Congress to be able to remove the President with a simple vote, even temporarily.  

This won’t lead to civil war or a military coup (the military backs Vizcarra). But it is sobering and it is ugly. And closer to home, it should remind us of where constitutional hardball could lead here in the United States. I am glad that Mitch McConnell recognizes that if the house votes to impeach then the Senate has to hold a trial, but he could have gone the other way. He did in the Merrick Garland case. Republicans have elsewhere, and Democrats are tempted to follow suit.

And that will, as Peru shows, inevitably end in tears. The only question is how many tears.

Observatorio argentino 38: Who needs checks and balances?

It is astounding to realize just how much power the President of the Argentine Republic possesses. 

This came home to me while I was checking over how President Macri recently tightened the immigration laws. Context: Argentina has a rather liberal immigration regime. (I am surprised even more Venezuelans have not shown up. I guess the limiting factor is that they need a job offer to get a work visa, although there are no limits on such offers.)

Last year, the Macri administration wanted to tighten the law. (See Observatorio Argentino 32.)  The changes were small, but they involved specific clauses in the legislation itself. You can find the original 2004 text here. So they could not be made via simple executive order.

In other presidential republics, the only option would be to go through Congress. Get the law changed. How hard that is depends on the country. 

An American president needs to be a hella politician. They need to convince a legislator to introduce the legislation; they then need to cajole the Speaker and Majority Leader to bring it to a vote. Even then, under the new 21st Century norms, they need at least 60 senators to vote yes. 

A Mexican president is a little more powerful, but only a little. Under the original wording of Article 71 of the constitution, they could introduce bills straight to the relevant committee. But by itself that gave them only a little more power than an American president. In 2012, however, a constitutional amendment changed Article 71 to give the president the ability to introduce two bills every session that go straight to the floor. Each house then gets 30 days to vote on them; if they don’t hold a vote, then the bill becomes the first item on the agenda in the next session. So congressional leaders can still delay things; and note that if they delay both initiatives the President cannot introduce any in the next session. So even with the additional post-2012 powers, they need to be good legislative politicians if they want to get anything done. 

A Colombian president is more powerful still. She or he can introduce bills and demand that Congress vote on them within 30 days, with no limits. But Colombian presidents are not legislators. They have no direct control over the amendment process. And, of course, Congress can just say no. 

But Argentina? Sweet Mary. Under a 1994 amendment to Article 99 of the constitution, the President can decree pretty much anything. The article is nuts. Read section 3 for yourself:

The Executive Power shall in no event issue provisions of legislative nature, in which case they shall be absolutely and irreparably null and void. Only when due to exceptional circumstances the ordinary procedures foreseen by this Constitution for the enactment of laws are impossible to be followed, and when rules do not refer to criminal issues, taxation, electoral matters, or the system of political parties, he shall issue decrees on grounds of necessity and urgency, which shall be decided by a general agreement of ministers who shall countersign them together with the Chief of Cabinet.

Within the term of ten days, the Chief of Cabinet shall personally submit the decision to the consideration of the Joint Standing Committee of Congress, which shall be composed according to the proportion of the political representation of the parties in each House. Within the term of ten days, this committee shall submit its report to the plenary meeting of each House for its specific consideration and it shall be immediately discussed by both Houses. A special law enacted with the absolute majority of all the members of each House shall regulate the procedure and scope of Congress’s participation.

Yes, that is as crazy as it sounds. Exceptional circumstances are not defined, and every president since 1994 has interpreted the clause to mean that they can make legislative changes to anything they want whenever they want. In theory, the joint standing committee has ten days to vote and then Congress can reject the decree. In practice, the committee often stonewalls or deadlocks and then the decree just goes ahead and becomes law, poof, just like that. 

How the hell did that happen? The 1853 drafters of the constitution did not set out to create an elected dictatorship. But they got an unelected dictatorship in 1930, when the military seized control. The Supreme Court remained in session, though, and it validated the decrees handed down by the junta. In 1947, the Court tried to block a presidential decree ... at which point President Juan Perón impeached all but one of the justices. You won’t be shocked to find that the restaffed Court ruled in Ziella v. Smiriglio:

The decree-laws issued by the de facto government are valued by reason of their origin and since they have the force of law they continue in force even though they have not been ratified by Congress as long as they are not repealed in the only manner in which they may be so, that it is to say, by other laws.

Still, only 15 decrees were issued between 1930 and 1982. When democracy returned for good in 1982, the new civilian presidents were loth to give up the power. Raúl Alfonsín used the power ten more times, mostly for small-bore stuff; his big decree replaced the peso with the austral. 

But Alfonsín was succeeded by Carlos Menem, a Trump before Trump, a Berlusconi before Berlusconi. Menem liked executive power. He started by increasing the size of the Supreme Court from five to nine. He then issued a decree that seized most bank accounts and replaced them with government bonds. People sued. 

But the packed court ruled that President Menem was entirely within his rights as long as Congress did not explicitly repeal the decree with another law. American legal scholars will be amused to know that the Argentine justices cited Home Bldg. & Loan Association v. Blaisdell (1934) as justification for a decision ratifying exactly the sort of thing that Hughes, Cardozo and Brandeis were trying to prevent.

The 1994 constitutional amendment creating the new Article 99 was an attempt to limit the decree power. As such it failed. Menem would go on to issue over 300 decrees. (Note again that before Menem there had been only 25 presidential decrees in the history of the Republic.) Congress would not even bother to create the joint standing committee until 2006. And it remains toothless. 

Consider the immigration reform that started this discussion. What happened after President Macri issued it? Well, the joint standing committee has only 16 members but it could not get everyone to attend. It voted 6-5 to support the decree on February 22, 2017 ... but because there was no majority its recommendation was never reported out. The decree continued as law. In October, a federal judge ruled that it was in fact law even though the whole Congress had never voted. (In this he had ample precedent, although Argentine judges are not formally bound by precedent the way they are in the Anglosphere.) He also ruled that the deportation of criminals was somehow not a criminal matter and thus the reform was kosher under Article 99. 

No matter how you slice it, it is unbelievable that a democratic president has the power to make law unless Congress actively says no. Giving Donald Trump the power of a Mexican or Colombian president would change little; GOP initiatives are hard to pass because they are unpopular. Allowing the President to force votes on them would not help. But giving Donald Trump the power of an Argentine president? Well, that is scary.

And that may be one of the prosaic reasons why Argentina is not particularly well governed. They really ought to do something about that Article 99, I think. 

What if America had been unpopulated in 1492?

The long Twitter debate between Pseudoerasmus and Gabe Mathy was triggered by an essay in Jacobin by my friend and colleague Suresh Naidu. He wrote a piece about what North America would have been like had the native population avoided decimation from infectious disease.

As a piece of counterfactual history, the essay has problems. The first is that we really do not know the pre-contact population of North America. Using his assumption of 0.5% population growth thereafter, we get a range of 26 million to 234 million native Americans today. Needless to say, those are radically different scenarios. The second is that the presence of large-settled native populations would have changed the dynamics of later immigration; would as many Europeans have arrived if North America had 45 million people in it around 1800? Finally, it seems likely that a large native population would have derailed the development of the institutions that sustained rapid North American economic growth. 

But as a polemic, the essay is quite successful. The latter two arguments unambiguously strengthen Suresh’s overall point, which is that there was nothing inherent in English culture that insured that its settler colonies would become rich and democratic places. The presence of an exploitable settled population would have permanently derailed the American experiment. Pseudoerasmus and Mathy were debating whether the English would have created an apartheid scenario (Mathy) or something more like Mexico (Pseudoerasmus). Neither seemed to doubt that the resulting society would be more oppressive and less democratic than what really emerged in the northern United States and Canada. Nor does Randy McDonald in his discussion of the piece. 

The essay raises an interesting question, however. If larger native American populations would have prompted the creation of a more extractive and generally nastier North American state, potentially with multiple rounds of civil war, what would have happened if there had been no native Americans when the Europeans first arrived in 1492? What would have been different?

It turns out that James Axtell was there in 1987.

First and foremost, Spanish colonization changes completely. Without the great civilizations in the highlands of Mexico and Peru, the Spaniards take much longer to move inland. Without the Taíno in the Caribbean, it is entirely plausible (albeit unlikely) that the Spaniards give up on the whole enterprise. Still, somebody would eventually set up Caribbean and Brazilian plantations based on African slavery but Mexico and Peru will remain backwaters. Nobody settles in the Río de la Plata until the 19th century. (And I suspect that it will be British settlers who land there, claiming it from a moribund Spanish empire.) With no silver fleets there is no Sir Walter Raleigh and his tropical adventures. So no British Guyana, just a vague area where Venezuela meets Brazil. Ditto, there is no French empire in Canada. No fur trade, no New France. 

Second, when the British finally do settle the eastern seaboard, later than in our world, their expansion is slower and messier. There are no American domesticated food crops. There are no native American agricultural techniques to learn. And with no seasonal burning by the native Americans, the forests are that much harder to clear. There is no native American medicine. No snowshoes. No toboggans. No longhouses. No canoes. And idiotic English hunters crashing around in bright colors and scaring off the game. In short, the colonists will have to invent a lot of wheels for themselves that in our world they got from the Native Americans and that is going to slow initial settlement by a lot, decades at the very least, possibly a century.

New York and Pennsylvania in particular will develop more slowly; without the profits from the Indian trade, it will be much harder to raise capital for settlement. North America will be even more skewed to the slave south.

Third, no independence until well after 1776. Once the eastern settlements are finally established, expansion is going to rocket westwards with no Indians, French, or Spanish to slow it down. Slaves will get sucked into the south even faster, but there will also be more escaped slaves lighting out to form colonies in the interior. Axtell postulates, plausibly but without a whole lot of solid evidence, that absent the Indian threat American society would be a lot less religious and lose its “garrison mentality.” In his words:  “The jeremiads of New England would certainly have been less shrill in the absence of the Pequot War and King Philip’s War, when the hostile natives seemed to be ‘scourges’ sent by God to punish a sinful people. Without the military and psychological threat of Indians within and without New England’s borders, the colonial fear of limitless and unpredictable social behavior would have been reduced.”

With much more evidence, he also postulates that with no wars, there is no need for Britain to raise colonial revenues. Nor is there any reason for Britain to restrict westward expansion. That is probably enough to head off the Revolution. And if later revolts should occur, the colonists will have two huge problems. First, they will be more separated from any martial habits. No militias, no real combat experience, just a vasty totalitarian infrastructure of slave catchers. Second, they will have no Indian opponents from which to learn guerrilla tactics. 

So by 1850 you have a British slave empire that sprawls over the entire continent, well into northern Mexico. (Who knows? Maybe it will British Americans heading south who discover the mines in Zacatecas and exploit them with slave labor.) The northern reaches will not have slavery, for the same reasons as in our world, but they may be less religious and less moralistic, more crassly commercial and more dominated by large landowners. 

You have a Caribbean and a Brazil that do not look entirely unlike our own ... but which have less European settlement. (With no natives to conquer and no native women to marry, Iberian migration will be slowed.) You have growing slave populations around the Mexican lowlands, parts of Central America, and possibly parts of the Peruvian coast ... but I would venture not much in the latter. There is no Panama Real or Camino de Cruces across Panama; those routes, primitive as they were, were constructed by native American slaves captured from Nicaragua.

American silver was less important to sustaining Spanish imperialism in Europe than many realize, but there will be no Price Revolution or Columbian Exchange ... and that will change Europe in unpredictable ways. 

But in America, well, things look ugly. If a Revolution does come, it looks likely to take the form of a Treasonous Slaveowner’s Rebellion against the Crown, but that assumes that a British government unexposed to the shock of the American Revolution will be as open to the movement of public opinion as our own. This British crown might not take any serious moves against the horror, and thus provoke no rebellion. The strain of New England moralism that produced abolitionism in our world might be weaker, or not there at all. 

Does small-scale bribery matter? An empirical puzzle

Transparency International has released its new report on corruption in Latin America. One of the things that I like about the survey is that it asked whether respondents have personally had to pay a bribe. 

Let’s call it “retail corruption,” as opposed to “wholesale corruption” paid by businesses or stolen from public coffers. In theory, that strikes me as a more accurate measure than simply asking about overall perceptions.

The problem is that the survey gives some unexpected results. Is Trinidad really that clean? If it is — and it very well might be, asking people I know reports very low levels of retail corruption — does that imply that the retail corruption does not matter? After all, Trinidad suffers from very high rates of wholesale corruption. So does Brazil. Conversely, Chileans and Uruguayans report levels of retail corruption on a par with their Paraguayan and Argentine neighbors ... but corruption appears to play a much smaller role in economic life in the former two.

Consider Uruguay. 22% is a very high number of people needing to pay a bribe for public services! (Albeit not to use the courts or public utilities.) But in overall corruption perceptions it is between Japan and Estonia, slightly less corrupt than France. The country certainly does not feel particularly corrupt on the ground. Of course, it is consistent with the survey that Uruguay should feel much less corrupt than Mexico; but it also feels much less corrupt than Brazil! In a brief trip to Brazil, I came directly in contact with venal officials several times; equally brief trips to Uruguay have yielded nothing. 

Anecdotes are dangerous, of course. But the disjunct between the data and broader survey results, as well as personal experience, makes me wonder. Either the survey cross-section fails to capture actual differences or small-scale bribery is less damaging than I would have thought.  

So many questions, so little answers. I wish somebody would take the bribery survey and include the United States and Canada, to give us a baseline. 

Thoughts on Turkey

 Turkey is in the middle of an old-fashioned military coup, in the same league as the 2014 one in Thailand. This is not at all like recent events in our hemisphere. Honduras in 2009 was a complex and confusing situation where the constitution failed to contain political disputes. Paraguay in 2012 was only a coup in the fever dreams of the Brazilian government; the impeachment likely violated the spirit of the constitution, but it adhered to the letter. A coup may happen in Venezuela, but it will be a result of a complete collapse of order. We do not do things this way in this hemisphere.

With the kids in bed (they are tired!) I am watching television. I think there is an interesting question about whether Erdogan’s ability to get out messages via the Internet has made a difference as to how the coup has unfolded. There is a research project there ... coup leaders always moved to seize the television and radio stations back in the day, but do we know whether such seizures mattered? Is there data?

There is another interesting question about conscript militaries. It is clear that conscript militaries can pull of coups; it has happened all the time. But do we know whether conscript militaries decrease or increase the likelihood of a successful coup given other factors, like education or the legitimacy of democracy (the latter being hard to measure).

Worth studying.

Oh, and Turkey is not the only Muslim-majority nation in NATO. (Sorry Rachel!) I spent a lot of time in the other and blogged far less about it than I should have. Ni modo, I was tired at that time in my life.

What’s the matter with Mexico?

 The Mexican state offers its citizens a surprisingly low level of social insurance given the country’s relative prosperity (hat tip: David Kaplan): 

Índice de protección social de México peor comparado con países con PIB per cápita similar https://t.co/hEncQo70ez pic.twitter.com/fYw6GV8oHO

— David Kaplan (@David_S_Kaplan) June 2, 2016

Brazil, Costa Rica and Uruguay are all outliers in the opposite direction, but for clear historical reasons. The latter two countries democratized early (even if Uruguay backslid) and enjoyed relatively homogenous populations. They established social insurance programs early on, unlike the rest of Latin America. Brazil, meanwhile, authorized a lot of social spending as part of its democratic settlement in 1986. Brazil has an extremely inefficient state, but it does provide social protection. For the details, see my friend Lee Alston and his coauthors. 

In the other direction, the fact that Guatemala and Honduras underperform really comes as no surprise.

But Mexico? That should be a surprise.

But only a partial surprise! Under the dictatorship of the PRI, Mexico deliberately neglected universal social insurance in favor of particularistic benefits designed to have maximum political benefit in a world where most political benefits were not delivered via popular votes. It is no surprise that Mexico reached the year 2000 behind the rest of Latin America, even countries that had experienced long bouts of military rule. For more on this, go read Mexico Since 1980.

What is more surprising is that after twelve years of democracy, the country has caught up so little. 

There is a word for “caucus” in Spanish

 The Clinton campaign appears to be trying to play down expectations for the Nevada caucuses. In part, that is because they are having trouble getting Latino voters to the caucuses. One Clinton staffer, Natalie Montelongo, went so far as to say, “There’s no way to translate ‘caucus’ in Spanish. At all.”

Uh, no. “Cónclave.” 

I find it irritating when people engage in this sort of pop linguistics to excuse failings. For example, when a bunch of Venezuelans (above) tried to convince me that there was no Spanish word for accountability. That is sort of true, but only for a pedant: “rendición de cuentas” works perfectly fine. As does, of course, “acountabilidad.” 

I won’t make any grand claims about all languages, because I am not a linguist. But for every official national language in Europe, Asia or the Americas, there is pretty much nothing that you can say in one which cannot be said in another. 

Syrians to South America?

 Here is a question for you: why aren’t flights from the Middle East to South America crowded with Syrian refugees?

On paper, most of the Southern Cone countries have remarkably liberal immigration regimes. Start with Argentina. Refugees are automatically accorded two years of residency and receive legal representation. (See the 2010 Migration Act.) Now, the law is not as liberal as American activists would have you believe: undocumented migrants can still be deported (page 17), but the Argentine government has explicitly opened its doors to Syrian migration. Uruguayan immigration law is even more liberal than Argentine. All you need to do to migrate to Uruguay is demonstrate an income stream of $500 per month. After that, naturalization comes within a few years. Brazil has a liberal new refugee law. 

The problem isn’t cost. A ticket costs around $800, rather less than the monetary cost of making it overseas to Europe. 

But in practice, all three countries are pretty much closed.

Start with the official Argentine program for Syrian refugees. The refugees need to have links to an Argentine sponsor either through family ties (out the fourth generation) or via a “pre-existing personal relationship based on whatever legal, reasonable, and justifiable reason: family, social, educational, work, etcetera.” 

Unless a Syrian in a camp somewhere can demonstrate a tangible documented link with somebody in the Argentine Republic, then they do not get a visa. This policy lets Buenos Aires claim that the doors are open while actually keeping them firmly shut. 

The policy may change, depending on how seriously Argentine authorities take the definition of a family link. Supposedly, 4 million Argentines trace some ancestry to Syria. In reality, no. In the peak years of 1897-1913, net migration from Syria came to about 103,000. To get from that to 4 million you have to assume almost total exogamy, which is not likely. (For the pedantic: if you assume the same birthrates as the general Argentine population, a generation of 35 years, and total exogamy, then about 3.4 million Argentines should have some “Syrian” ancestry by now.)

Moreover, a 1936 census registered only 11.2% of the Syrian-born residents of Buenos Aires as Muslim. (Page 17, once again.) Some of that is surely conversion, but it also implies that the “Syrians” came much more from Lebanon than from Syria.  

Nor is this policy in violation of Argentine refugee law. Article 10 exempts anyone under U.N. protection. Article 11 exempts anyone who has “voluntarily settled inside or outside the country which he left owing to fear of persecution.” Depending on the definition of “voluntarily settled,” that could include precisely every Syrian refugee. It certainly includes anyone in a UNHCR camp. Only a few hundred people have escaped under this not-so-generous regime. 

Uruguay is worse. After the country took in a whopping 42 refugee families, a counterreaction set in, and the door are now firmly shut. In theory, the country has pledged to admit ... wait for it ... 120. Now, Uruguayan law opens up an interesting way from European countries to send their unwanted refugees to Uruguay: give them an airplane ticket and a $500 per month stipend. That said, given what happened with the 42 refugees the law would be changed right quick if a European government tried to take advantage of it. 

Chile, meanwhile, has a liberal refugee law that only considers people who manage to make it to Chilean territory. So no visa for that plane ticket from Dubai. 

And then there is Brazil, which had settled 1,740 Syrian refugees as of March, and 2,077 as of this month. That is nice, but still a very small number. The Brazilian issue is that the bureaucracy is slow, so even without formal quotas few applications get processed. (The Brazilians also exempt anyone under U.N. protection.) It is probably the most open, but still not enough for a mass exodus.

The Brazilian case shows how much bureaucracy can turn an ostensibly open process into a closed one. The Mexican government is coming under a surprising amount of domestic pressure to accept 10,000 refugees. I bet there will even be a bill. And it will sound good.

But the devil will be in the details. Do not wait for Latin America to open its doors in any serious way.

Juan Linz was wrong

 I think I need to spell it out more clearly: Juan Linz was wrong.

(1) There are very few instances of democratic collapse in Latin America which involved partisan gridlock. The only one which clearly fits the bill is the Brazilian coup of 1964 ... except for the fact that Brazil tried a parliamentary system in 1960-63, which did nothing to resolve the country’s underlying political conflicts. Three others fit if you squint hard: the Argentine coup of 1966, the Honduran coup of 2009, and the Chilean coup of 1973. The latter, however, also involves a President who was in open defiance of the Supreme Court as well as Congress.

This is a small subset of the democratic collapses in Latin America. 

(2) Now, Latin America is all presidential regimes, save the 19th-century Brazilian Empire and that brief early-Sixties experiment. But Africa has a mix of presidential and parliamentary systems. And on that continent, both systems are equally-likely to break down.

(3) Postwar Europe has not had a lot of democratic collapses, but there have been a few close calls. They do not fit the Linz formula. Perhaps the coups in Czechoslovakia and Hungary should not count, because they both involved the Soviet Union ... but they nonetheless occurred in parliamentary systems. The collapse of the Fourth French Republic was not a coup per se but it was certainly a constitutional breakdown ... and the Fourth French Republic was a parliamentary system. The 1982 putschists in Spain launched their assault on a parliamentary government. Finally, the 1960, 1971, 1980, and 1997 coups in Turkey overthrew prime ministers, not elected presidents.

The U.S. may go into a crisis. We may develop a political culture most unsuited to our constitutional structure. Jonathan Chait explores that idea here. But if that causes us to go into crisis, it won’t be because of our constitution per se.

Long-ago history does not always matter

 There has been a recent spate of papers in the category of “history only happens once.” They generally take the form of showing that some long-ago historical event continues to reverberate in the present. Two of the best in the genre are Nathan Nunn’s (Harvard) work on the effect of the slave trade on Africa or Nico Voigtlaender (UCLA) and Hans-Joachim Voth’s (Zurich) work on the medieval origins of anti-semitic violence in Nazi Germany. I had the honor of criticizing an early version of the latter paper; the authors effectively dealt with all my complaints. Amazing work.

But sometimes it can go too far. For example, many have argued that Latin America’s extreme level of inequality has its roots in the colonial past, when my people (oh, my people, at least some of them) arrived and managed to botch everything up. Except here comes my friend and colleague Jeffrey Williamson (Harvard and UW-Madison) to point out that it isn’t true. From the abstract:

Most analysts of the modern Latin American economy have held the pessimistic belief in historical persistence — they believe that Latin America has always had very high levels of inequality, and that it’s the Iberian colonists’ fault. Thus, modern analysts see today a more unequal Latin America compared with Asia and most rich post-industrial nations and assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this fact supported rent-seeking and anti-growth institutions which help explain the disappointing growth performance we observe there even today. The recent leveling of inequality in the region since the 1990s seems to have done little to erode that pessimism. It is important, therefore, to stress that this alleged persistence is based on an historical literature which has made little or no effort to be comparative, and it matters. Compared with the rest of the world, inequality was not high in the century following 1492, and it was not even high in the post-independence decades just prior Latin America’s belle époque and start with industrialization. It only became high during the commodity boom 1870-1913, by the end of which it had joined the rich country unequal club that included the US and the UK. Latin America only became relatively high between 1913 and the 1970s when it missed the Great Egalitarian Leveling which took place almost everywhere else. That Latin American inequality has its roots in its colonial past is a myth.

In other words, something good happened in the North Atlantic during the 20th century. (Well, good in terms of inequality: there is evidence that it took a lot of depression and war to get there.) That good thing did not happen in Latin America. This is a very different view than one which dates the region’s inequality to the 16th century ... and a much more hopeful one, I think.

Three reasons to build the Red Canal

 I do not think the Canal Rojo will be built. It makes no commercial sense. Most independent observers concur. Here, for example, is an article from the South China Morning Post, in which Andy Lane arrives at the same conclusion using different data. Mr. Lane has another good analysis here which doesn’t quite pan the project, but certainly leads towards skepticism.

All that said, I would like it to be built! Simply because it would be cool. But that will only happen if the government of the People’s Republic of China wants it to happen.*

So why might the government of the People’s Republic of China want it to happen?

Well, consider what China might gain from a Nicaragua Canal. Right now, it is nearly a wash between using Panama and using Suez from the East Coast of the U.S. to southern Chinese ports. Using Suez, however, also means going through the South China Sea. Most scenarios in which the South China Sea was closed to shipping would likely also involve fighting around the First Island Chain ... but not all. (An Indonesian collapse? A war with India?) And there are multiple scenarios in which Suez might be closed. A Nicaraguan Canal would provide an insurance route for cargoes to and from the east coasts of North America and Brazil. 

The problem? An expanded Panama Canal would do the same thing at lower cost. Remember: there is no way on God’s green earth that China could use the Nicaragua Canal in a situation in which Panama was closed to it. In addition, there would be political benefits to financing a second Panama Canal expansion over building a Nicaragua Canal. Financing a fourth set of Panamanian locks would set off some huffing among the usual suspects here in America, but serious observers (e.g., most plausible U.S. administrations) would be reassured by the fact that a Panama expansion would fall under the rubric of the Neutrality Treaty. Which means a greatly reduced chance of antagonizing Washington. Moreover, another Panama Canal expansion would be uncontentious in Panama ... the same cannot be said of the Gran Canal project in Nicaragua. In other words, all the security gains at less financial cost and less political risk.

In fact, Chinese companies in August of last year broached the possibility of financing a new Panamanian expansion. 

There is a second possible reason to build a Nicaragua Canal. Note that Lane does not think that the new canal will lead to price competition with Panama. His logic, however, assumes that the Nicaragua Canal is run as a business. Perhaps China does not plan to run the Canal Rojo as a money-making operation at all. Rather, it could  run it as a piece of necessary public infrastructure, operating at cost. In that scenario, a price war with the Panama Canal leading to HKND’s  bankruptcy would be a feature, not a bug. 

The problem with the second reason? Well, for China to want to do that, it would need to believe that the rates charged by the Panama Canal are a significant drag on commerce. There is not a lot of evidence for that proposition. Would reducing canal tariffs really cause Chinese consumers to buy much more raw material from the east coast of South America or prompt Chinese producers to sell many more goods to the east coast of North America? I have my doubts.

Moreover, how would China insure that its commerce captured the lion’s share of the gains from the Nicaragua Canal? As Carlos Yu and I showed in our book, when the United States tried to give preference to its own ships in the Panama Canal in 1912, British pressure forced the country to change tack. The only reason that the benefits of the Panama Canal went overwhelmingly to the United States during its first 25 years was that the Panama Canal overwhelmingly carried domestic traffic. Maybe China will be able to get away with favoring its commerce over other nations, but I doubt that too. Or maybe geography implies that most of the ships using a low-cost Nicaragua Canal will be carrying Chinese commerce. Maybe ... it would be a hell of a $50 billion bet. 

That leaves you with a third possibility: the project would be the 2020s equivalent of the 1960s landing on the Moon. China would be metaphorically planting its flag on the American continent. Sure, the U.S. Navy would remain in complete control of the sea lanes and the People’s Republic would have no sovereignty. But the opening of the Canal Rojo would trumpet the end of America’s informal empire more than anything ...

... other than the actual end of America’s informal empire. Which will not (inasmuch as it survives) be altered in a any substantive way by this project. As stated above, the U.S. Navy will still control the Western Hemisphere. Moreover, I do not see how building this project would win China diplomatic gains in Latin America worth the $50 billion cost. Perhaps I underestimate the power of symbolism?

In short, the Chinese state would obtain at least three advantages from the construction of a money-losing Nicaragua Canal:** 

1. Insurance against disruptions in Suez, the Indian Ocean, the straits of Malacca, or the South China Sea (although this insurance could be obtained more cheaply using Panama);
2. The chance to drive transit rates down to their operating cost;
3. Prestige.

Are those advantages enough for the Chinese government to lend billions of billions of dollars to an entreprise that will likely go bankrupt? 

A review of the Empire Trap misses the big finding, with special attention to how Richard Nixon slapped around Peru

 Negative reviews are not disheartening. People get things wrong. Interpretations differ. These are discussions worth having. 

But it is disheartening when a reviewer you respect appears to have just plain missed one of the primary empirical findings of your work. I do not mean that the reviewer thinks my data is incorrect. I mean that the reviewer did not note that I provided any data at all!

Here is Elizabeth Cobbs Hoffman’s review of The Empire Trap. It is a well-written review that makes very cogent criticisms. I liked it, even if it is less than positive!

But there was one place in the review where I slapped my face with my palm and started to cry, “Where, dear Lord, did I go wrong in my writing?” 

Here is where I did the self-face-slapping. (It sounds better in Spanish: autobofetada.) In the 1970s, the Peruvian military government nationalized a swathe of American investments. The incoming Nixon administration put the screws in, yanking aid and making other dire threats. Regarding my account of the episode, she writes:

The military junta in control of Peru in the early seventies, for instance, nationalized a number of industries, from oil to copper to sugar. President Nixon, the State Department, and the CIA all trembled that retaliation might “lead to reprisals against other U.S. investments, alienate the Peruvian people and . . . perhaps push Peru further toward . . . relations with the Soviet bloc” (p. 372). American investors were effectively held hostage, lest the local government switch sides in the Cold War. In Peru as in countless other countries, what followed was essentially a long, drawn-out process of rescuing the hostages. Maurer calls these negotiations “imperial intervention,” though it’s hard to see how the horse-trading that achieved partial compensation for dispossessed investors was terribly different from any other bruising business transaction. Both sides sought the best deal possible — and peaceably came back to the table when they saw ways to advance their interests. 

I added the italics, because one of the big empirical findings of the book was that over the entire 20th Century the United States managed to extract rather more than market value for aggrieved American investors. Seriously! That was one of the big findings. If the Red Army was not involved, then the U.S. government helped American investors beat foreign governments again and again and again, across administrations and across continents. I tried to highlight it over and over throughout the book, including the first chapter. Right here on page 2:

The Empire Trap is about the shift from politicized confrontations like the imbroglio of 1900 to legalized disputes like the more orderly affair of 2007. It advances four basic findings. First, American government intervention on behalf of U.S. foreign investors was astoundingly successful at extracting compensation through the 1980s. [Italics in the original.]

I am not bothered that someone might disagree with the finding; I am saddened that someone would miss it altogether.

Specifically, the U.S. managed to obtain full compensation in Peru. My primary evidence comes from secret communications between the expropriated companies and the American negotiators. The companies listed the minimum valuation that they would accept as compensation. These numbers were not negotiated by the Nixon Administration: the companies laid them out. 

And the companies all in fact got more than those numbers! My argument largely stops there. But it is possible to check the result against market benchmarks for the two largest investments in Peru: the Cerro copper mining enterprise and the IPC oil company. (They together received 57% of the total compensation Peru paid.) 

The copper company, Cerro Corporation, was publicly traded. The market value of its Peruvian investments was $58 million in 1971. One might argue that fear of the Peruvian “Revolutionary Government of the Armed Forces” had pushed down that value, but Cerro’s p/e ratio matched that of other copper producers, including those geared towards domestic American production. Cerro told the Nixon Administration that it wanted $65 million; it got $68 million. (It publicly asked for $133 million, but it would, no?)

The International Petroleum Company (IPC) was not publicly traded, but it did provide data that lets us see if it received fair compensation. It privately told the Nixon Administration that it wanted $20 million. It publicly told Peru that it wanted $85 million, a palpably ridiculous number. Now, on paper Peru made like Michael Corleone.

The Peruvian government, however, paid compensation to the U.S. government, not the companies directly. The U.S. government diverted $22 million from the settlement to IPC. In practice, then, the Peruvian government agreed to overpay other American claimants (in the knowledge that the funds would be diverted to IPC) in order to be able to pretend that it paid nothing for the oilfields and refineries. 

Was $22 million a fair amount? Yes. Over the previous decade, IPC earned around $1.9 million per year at a time when U.S. oil companies traded at p/e ratios rather below five. Unless you believe that an investment in a country ruled by the Revolutionary Government of the Armed Forces was less than half as risky as an investment in a country ruled by Richard Nixon, then IPC got more than twice a market price.

(Hmm. Richard Nixon? Another day, another day.)

I am fine with saying that I am wrong in calling Nixon’s strong-arming of the Peruvians “imperialism.” I am also fine with saying that others have argued that covert intervention was not used to defend American investments ... although I believe that such a conclusion is incorrect, I am also well-aware that I may be placing too much weight upon a few internal communications and President Nixon’s taped offhand comments. And if you show me how, I am fine with saying that my numbers are wrong!

But please acknowledge that I brought some numbers to the table! (And not just for Peru; for every single expropriation of American natural-resource FDI from the 1890s through the 1980s.) Those numbers may well be wrong. But they took several years to gather! So even if the numbers are wrong, please acknowledge that the numbers are there? Or at least somebody tell me how my writing went so off the rails that a great historian could miss that I presented data to back my claims.

If you want to know more, a working paper about the Peruvian episode can be found here.

Thoughts and opinions are very welcome.

Does Russian expansion matter beyond the border regions of Russia?

Back in April 2012, we discussed the idea of the “1945 line” in comments. In October of the same year, we discussed it again in reference to the Falkland Islands. Key quote:

“Any planning for a war [with the U.K.] would need very careful diplomatic preparation these days, much more than in 1982. Back then, Argentina was following a long line of actions that held that the “1945 line” did not hold for European overseas territories. Morocco could invade the Spanish Sahara, India could fight a war with Portugal for Goa, Indonesia could march into East Timor and Dutch New Guinea. Given this history, it was not (completely) crazy for the Argentine generals to think that the world would accept their victory. (And to be honest, I suspect that they were right: if they had won, las Malvinas hubieran sido argentinas.)  But that is not the case today, even though plenty of countries support the Argentine claim [to the Malvinas].”

In short, there has been a remarkably effective taboo on unilateral annexations unless they involved European overseas territory. There is only one real exception: Israel after 1967. (Wikipedia adds Sikkim, which India annexed in 1975, but Sikkim had not been an independent state.)

How do we know that the taboo is effective? A case can be made that the taboo limited the extent of interstate wars in Latin America. For example, El Salvador and Honduras fought the Soccer War in 1969 over the status of Salvadoran settlers in Honduras. Since annexing the area settled by Salvadorans was not a possible outcome given the taboo, the OAS (and behind it, the United States) had the leverage to force Salvadoran troops to withdraw. In another example, Peru and Ecuador fought the Cenepa War in 1995. Neither side could reasonably expect to gain or lose any territory outside the disputed region, which made Peru more willing to accept a limited Ecuadorean victory even when Peru had military superiority. (See pages 2 and 3 at the link.) In short, one might believe that the taboo kept both wars from spiralling into protracted total conflicts.

OK ... but the taboo did nothing at all to stop Israel from annexing some border regions. Nor did it prevent the Eritrean-Ethiopian War from turning into a protracted total conflict. Similarly, Paul Collier made arguments that Africa might in theory be better off if governments feared that their states might be forcibly absorbed by neighboring states — but he rejected the implications of that idea by arguing that the lack of interstate conquest was overdetermined: the international taboo was just one of many obstacles to a would-be empire builder in modern Africa. (See pp. 184-85 of Wars, Guns, and Votes.) Considering those examples, perhaps other factors were at work in keeping Latin American wars from spiralling out of control.

The debate matters. If the taboo is key, then Putin’s actions matter beyond near-abroad of the Russian Federation. Successful expansion opens the door to similar actions all over the planet.

But if the taboo on conquest is just a reflection of some other deeper cause, then current Russian actions have implications only for future disputes that involve Russia. Interstate relations between other countries won’t change. David Weman is correct that this will be the only successful non-colonial annexation outside Israel, but maybe that does not matter.

So which is it? Does precedent matter? Will we see territorial aggrandizement that would not have happened absent current Russian actions?

Is American democracy doomed?

Juan Linz has gotten a lot of well-deserved attention in the blogosphere recently. Linz wrote that presidential regimes tend to break down because of irreconciliable conflicts between the executive and the legislature.

Many observers, not least Matt Yglesias, have interpreted Linz as stating that the problem is that presidential system allow for gridlock between the executive and the legislature, especially when the parties are ideologically coherent and commited. Kind of like, uh, the modern United States. So are we doomed now that our parties have become European-style organizations?

Well, maybe. The cross-country data is mildly supportive of the presidentialism = bad hypotesis, but is by no means a slam-dunk. Moreover, while presidential regimes are more likely to break down there is really rather little evidence that the reason was gridlock between the executive and the legislature.

The closest parallel to the current American situation is Chile in the early 1970s — but it is not very close. In the 1969 election, the People’s Union (Unidad Popular) got 60 out of 150 seats in the lower house. The Christian Democrats got 57 and the National Party received 33.  The next year, Salvador Allende (the People’s Union candidate) won a plurality of the presidential vote, throwing the election to Congress, where he won with Christian Democratic support. (The Nixon Administration tried to prevent his election but failed.) Allende started a program of widespread nationalizations using existing legal authority under a 1932 law that allowed for the temporary requisition of basic goods when in the public interest. (The law also allowed the executive to put companies into temporary receivership should they be closed by a strike.) In October 1972, the Supreme Court ordered the President to obey lower-court orders overturning some of the nationalizations; Allende refused.

In March 1973, the opposition won the Congressional elections. The Christian Democrats aligned with the National Party to form the Democratic Confederation, which took 55.6% of the popular vote and 87 out of 150 seats. (The People’s Union got the rest.) Congress first attempted to amend the constitution, which failed. It then tried to impeach Allende, but could not get the requisite ⅔ majority. In May, the Supreme Court again reprimanded the President. At this point, Congress went on record asking for a coup. The coup happened on September 11, and its leaders proceeded to disband Congress and jail or “disappear” many of the legislators who had called on the military.

In short, the Chilean crisis was caused by a President who overstepped his authority and disobeyed the Supreme Court and resolved by a military that believed itself above the law. Suffice it to say that this does not characterize America’s current situation.

What about Argentina? Well, Argentina has had a lot of coups since the first one in 1930. In 1930, President Hipólito Yrigoyen’s party had comfortable majorities in both houses. The 1943 coup was against a dictatorship. The 1955 coup overthrew the elected Juan Perón — but Perón’s party controlled Congress by overwhelming margins. As in 1930, gridlock was not the issue. In 1962, the miltary overthrew President Arturo Frondizi: in that case, the prompt was Frondizi’s loss of several governorships to the Peronists in the ’62 elections. Again, gridlock was not the issue. The 1966 coup kinda sorta maybe if you squint could be gridlock-related — but really had more to do with President Arturo Illia’s confrontation with American oil companies. And 1976? That one was against President Isabel Perón’s supposed inability to defeat Communist guerrillas. Her coalition controlled Congress; once again, gridlock was not the issue.

What about Brazil? Well, the Revolution of 1930 took down an oligarchical government with an extremely limited electorate. Not really comparable. The 1964 coup knocked out a left-wing government with American support. It is true that Congress did not support President João Goulart. It is also true, however, that for his first three years Goulart presided over a parliamentary system in which power resided with Prime Minister Tancredo Neves. In 1963, a referendum restored President Goulart’s executive power: the result was paralysis. In that sense, the ’64 democratic breakdown is consistent with the hypothesis that presidentialism causes gridlock causes democratic failure. The problem is that the parliamentary system tried beforehand was doing no better at resolving the country’s political conflicts.

Colombia? Well, the 1953 coup happened after President Laureano Gómez seized dictatorial power. Gómez, in turn, won the 1950 election because the opposition boycotted it. Again, gridlock not the problem.

Let’s turn then to Mexico. Uh … no, let’s not. The 1910 revolution got started against a dictatorship. Porfirio Díaz government was many things, but gridlocked was not one of them. (In fact, Congressional votes were all unanimous after 1893.)

I could go on around the other countries of the Western Hemisphere, but the pattern is similar. Divided government is not the cause of most democratic breakdowns in Latin America. Chile 1973 is the closest, but that is one event, with little resemblance to the government-by-crisis currently affecting the United States.

So breathe easy America! We will get through this. How, you ask? Well, if the GOP keeps this up, it will lose a lot of elections, even with our gerrymandered House of Representatives ... and there is a lot of ruin in the United States. The worst-case scenario on the debt ceiling is pretty bad, and I would certainly a 5-10% fall in GDP and the corresponding human suffering a failure of the United States. But in the unlikely event that the Republicans take us there, they will not be in a position to take us there again.

Argentines are still a little upset that Uruguay is a country

 A while back, Randy “Proud Canadian” McDonald expressed surprise at the terrible state of Uruguayan-Argentine relations. Well, now President Fernández has managed to add some fuel to the fire by saying this:

Transcript: “Esta bandera de Entre Ríos, cruzada por la franja roja que es el símbolo de Artigas, vivo en la tierra entrerriana, de ese Artigas que quería ser argentino y no lo dejamos, ¡carajo! ¿Cómo pudo haber sido posible? Ay, se me fue, disculpeme. Se me fue pero me da bronca cuando lee la historia y ve que desde Buenos Aires rechazaron a los delegados de la Banda Oriental. Por eso no somos una sola nación.”

Translation: “The flag of the [province of] Entre Ríos, crossed by the red stripe symbol of Artigas, alive in the land of Entre Ríos, of this Artigas who wanted to be Argentine and we didn’t let him, fuck! How could that happen? Ah, it just slipped out, apologies. It slipped out but I get annoyed when I read the history and see that Buenos Aires rejected the delegates from the Eastern Shore. This is why we aren’t one single nation.”

Hmm. As history, she has it sort-of-right. Perhaps I should say “not quite wrong”?

Artigas’ revolt against Spain was linked to the Argentine revolt (in more-or-less the same sense as the revolt against the British in Virginia was linked to the revolt in Massachusetts) but the leaders in Buenos Aires sold him out by signing a truce with the Spanish viceroy in Montevideo. Artigas fled to what is now Entre Ríos.

Uruguay might have then become the quite-literal Canada of South America, but Buenos Aires resumed the offensive and liberated the territory. (The government in Buenos Aires was hostile to Artigas, seeing him not as a secessionist but as a rival for the national leadership.) With the Spanish gone, Argentina now had to figure out how to organize its new government. Artigas was a federalist, and once it became clear that Buenos Aires was not willing to accept a federal system he organized the Federal League (which included several northern provinces) and went to war with the dictatorship in the capital.

He lost when the Portuguese allied with the Buenos Aires government. The Brazilians invaded and annexed Uruguay. Artigas fought on in what is now northern Argentina, but he was eventually defeated.

So, as history President Fernández is almost right. It wasn’t like Artigas went down to Buenos Aires and said,“Hey, great country there, let me in?” Rather, he fought and lost a civil war when Buenos Aires refused to allow for a federal system. But it is correct that he thought of himself as a citizen of the Provincias Unidas de Sudamérica. (Argentina, like America, had a lot of trouble deciding on a name for the country. The Argentines eventually picked one, however, while up in the United States the moniker “Columbia” never really caught on.) 

But as politics, well, ugh. Whatever the origin, Uruguay is in fact now a country. Moreover, it’s one whose citizens have (quite understandably, even absent nationalism) rather little interest in joining the Argentine Republic. Not only that, it’s a country that has a remarkably contentious relationship with the Argentine Republic. 

So having an Argentine president say, “Fuck, I get annoyed that we’re not one country” does not help. 

Colombia is not joining NATO, but it is an American ally

OK, I got some emails about Colombian membership in NATO. The rumors are true: President Santos did float a trial balloon about joining the organization. NATO, unsurprisingly, said no. NATO would have said no regardless, but it was useful that the North Atlantic Treaty states that new parties to the organization have to be in Europe. Article 10:

The Parties may, by unanimous agreement, invite any other European State in a position to further the principles of this Treaty and to contribute to the security of the North Atlantic area to accede to this Treaty. Any State so invited may become a Party to the Treaty by depositing its instrument of accession with the Government of the United States of America.

The country will sign a cooperation agreement with NATO, but it is still not clear what that means. NATO says, however, that all cooperation agreements are the same, and you can find out what the organization says about said cooperation here.

NATO member or not, Colombia and the U.S. are close allies. We have a free trade agreement. Small numbers of U.S. troops operate in-country. The Colombian supreme court overturned an agreement giving the U.S. access to Colombian bases (see page 39 of this CRS report) but the U.S. still builds facilities there. (The text of the agreement can be found here.)

And the U.S. is surprisingly popular. Here is Latinobarómetro’s 2009 results on the question, “Does the U.S. treat your country with respect?”

SIDE OBSERVATION #1: It is interesting that Venezuelans place themselves in a category with Uruguay and Brazil, and not with their Bolivarian comrades in Bolivia, Ecuador and Argentina. My hypothesis is that it reflects Venezuelan polarization: all Venezuelans know that relations between the U.S. and Venezuela are bad, but many more Venezuelans take the American side than do their compatriots in the other big Bolivarian countries.

Here are the results to a general question on the state of bilateral relations:

Colombians do not see their relationship with the U.S. to be as good as do members of America’s near-abroad (like the D.R. and Panama) but they do see it as very good.

SIDE OBSERVATION #2: The Venezuelan results are consistent with my hypothesis: everyone knows that relations with the U.S. are terrible, but many of them blame their own government. 

SIDE OBSERVATION #3: A large subset of Mexicans are uniquely suspiscious of the United States, and uniquely prickly about national sovereignty. In fact, the U.S. treats Mexico with at least as much respect as Colombia (likely more) and relations are at least as good as with Colombia (likely better). But for understandable historical reasons, Mexicans don’t see it that way.

Finally, the Colombian results appear to hold over time. It is not just a phenomenon of the Obama-Santos relationship.

In short, even though Colombia will not be joining NATO, it has a uniquely close relationship with the United States. Moreover, that special relationship is supported by Colombian public opinion, and thus likely to endure.

None of this is to say that the U.S.-Colombian relationship is necessarily good for Colombia. The jury is out on that one, although if there is demand I will present some evidence that it just might be bad.

How important are property rights?

It is a bit of a truism that property rights are key to economic development. An efficient system, runs the logic, needs to be transparent, transferable, excludable, and enforceable. In a bit more detail:

1. Transparent means that it is cheap and easy to find out who owns what.
2. Transferable means that it is cheap and easy to sell or transfer property rights from one entity to another.
3. Excludable means that if you own the rights to a piece of property, then the law allows you to exclude others from enjoying those rights.
4. Enforceable means what it says.

Without those characteristics, runs the logic, you get underinvestment and confusion and commons-tragedies and all that. And the logic has some empirical backing. For example, in 1986 the Buenos Aires provincial government offered a group of landowners compensation for land that had been seized by a group of squatters. Some landowners took the offer, and the province then transferred title to the squatters. Others did not. On the assumption that the squatters had no way to know whether the landowner from whom they had seized the land would take the provincial offer, Sebastian Galiani and Ernesto Schargrodsky found that the squatters who received titles invested more in their homes and the education of their children.

Here comes the New York Times with an article about terrible land titles in Greece:

“In this age of satellite imagery, digital records and the instantaneous exchange of information, most of Greece’s land transaction records are still handwritten in ledgers, logged in by last names. No lot numbers. No clarity on boundaries or zoning. No obvious way to tell whether two people, or 10, have registered ownership of the same property.”

The article goes on to say that even the former Yugoslav states have better land rights.

One reasonable conclusion would be that bad property rights are a drag on economic recovery. “Many experts cite the lack of a proper land registry as one of the biggest impediments to progress. It scares off foreign investors; makes it hard for the state to privatize its assets, as it has promised to do in exchange for bailout money; and makes it virtually impossible to collect property taxes.”

But another reasonable conclusion would be that the evidence about the importance of clear property rights is wrong ... or at least oversimplified.

There is no getting around that fact that Greece became a rich country despite terrible property rights. The above chart tracks GDP per worker in 2005 dollars (adjusted for purchasing power) for four countries from 1950 to 2011. (The data through 2010 is from the Penn World Tables 7.1; the 2011 data comes from the OECD.) In 1950, Greek workers produced as much as Colombian ones; they were significantly less productive than in Mexico. Over the next three decades, Greece far outdistanced its Latin American counterparts. The current depression has not eliminated that gap.

Greece, of course, had many advantages that Colombia and Mexico did not, but poor property rights did not stop the country from taking advantage of them.

It has to make you wonder. Despite the micro evidence from places like Argentina, are efficient property rights really as important as we think they are?

The Pacific Alliance is not a big deal

I am in Colombia — if things go well I will be spending more time here — and the news is full of the Pacific Alliance summit in Cali.

The Alliance has a very clever logo, combining the flags of the different countries.

But it is nothing more than a commitment to liberalize restricitions on the movement of goods, capital, and (eventually, maybe) people between Mexico, Chile, Colombia, and Peru. There is no secretariat, no courts, no bureaucracy. Its founding document is called simply the “Framework Agreement.” If you click the link, you can read it: it is just a list of objectives, with a few statements about intergovernmental cooperation.

In Cali this week, the leaders agreed to eliminate tariffs on 90% of products between them. That is nice, but the countries do not trade a lot between each other and barriers (except in agriculture) are already pretty low. (The link goes to WTO trade profiles for the four current members. You can specific tariff profiles for the four countries here.) Moreover, with no common external tariff, the countries will need to develop rules-of-origin. In addition, with no common bureaucracy or legislature, non-tariff barriers will continue to loom large. And with no dispute resolution mechanism, the countries will continue to rely on the WTO for enforcement.

In other words, there is not a whole lot of there there. If you are an exporter from one of the members looking at another, then it might matter (depending on which products are included in the 90% to be liberalized) but the macro impact will be tiny. If they liberalize labor flows, then I will change my tune, but call me skeptical.

The breathless declarations from the FT, the Miami Herald, and the Economist are really not warranted. In fact, at the end of the article the Economist called the Pacific Alliance “a brilliant piece of diplomatic marketing.” That sounds about right.

Spain’s population is dropping … but not by very much

There has been a lot of news lately about Spanish emigration, especially since the country’s population shrank in 2012 for the first time since the Civil War.

The thing is, net emigration is almost entirely driven by returning migrants. Net emigration of Spanish nationals is tiny. In absolute numbers, we are talking about a net emigration of 20,484 Spaniards in 2011 and approximately 34,000 in 2012. (Net emigration of foreigners ran about 149,000 in 2012.) Even the gross emigration is small: 62,611 in 2011 and approximately 73,000 in 2012.

The below chart presents the components of monthly population change (at annualized rates). They sum together for total population change. (That is the black line.) I have no idea why births are so lumpy in 2011. Since that was a census year, I suspect it represents some sort of adjustment to bring the vital statistics data in line with the census, but that is just a guess.

Until 2012, the biggest component was natural increase. It ran at 124,000 in 2009, 97,000 in 2010,  103,000 in 2011, and will come to 102,000 in 2012 at current rates.

(Data from here.)

Of course, even a small emigration could have profound social effects, depending on who they are. But these numbers mean that you should take stories about the wave of Spanish immigrants descending on Latin America with a giant grain of salt. Outside the wait staff at a few chic restaurants and perhaps some specialized trades, the Spanish second conquista is not big enough to be noticeable anywhere in Latin America. Setty already noticed the dearth of Spaniards in his examination of the Chilean census, but it looks like a generalizable result. Maybe the dam will break, but it hasn’t yet.

“This old lady is worse than the one-eyed man”

That is what President José Mujica of Uruguay accidently said about President Cristina Fernández of Argentina when he didn’t know the mike was live. The one-eyed man, by the way, is her late husband and former President of Argentina.

“Esta vieja es peor que el tuerto.” In Mexico, in this context, the use of vieja would not necessarily be an aspersion against President Fernández’s age, meaning instead something like “The wife is worse than the one-eye.” I am told, however, that in the Southern Cone it translates to something more like “hag.”

Uruguay is not happy with Argentina. The tension goes back a long way (Canadians should appreciate the psychology) but the recent imbroglios began with this. Short version: Argentine activists blockaded a bridge between Uruguay and Argentina in anger over a big paper mill a Finnish company was building in Uruguay.

President Mujica’s predecessor, Tabaré Vázquez, considered going to war over the blockade, but quickly realized ... well, take a listen:

So much for sending the Uruguayan army over the bridge. (Plus, well, even a successful action would have worked out about as well for Uruguay as Pearl Harbor did for Japan: you don’t get a country to reopen its roads to your commerce by attacking them.)

Ex-President Vázquez is telling the truth about the seriousness of the conflict over the Botnia paper mill. In 2006, the Uruguayans told the American government that the Argentines were “fascists” and asked the U.S. for help. “A brother slapping another in the face needs a big uncle to put a stop to it,” said the Uruguayans, although they feared that Argentina would cut off gas imports. (The U.S. tacitly supported Uruguay.) In April 2007, in the face of Argentine threats, Uruguayan newspapers revealed military contingency plans should the plant be attacked, although the Uruguayan military attache in Buenos Aires later contradicted those reports.

In November 2007, Vázquez ordered the mill to start operations, with the blockade still underway. But the Uruguayans feared the Argentine response, so they secretly asked for closer military relations with the U.S. and stepped up security around the plant.

Uruguayan fears notwithstanding, war was not going to happen — the U.S. embassy in Buenos Aires wrote: “There is absolutely no indication that GOA [Government of Argentina] is considering a military ‘solution’ to this dispute, and the GOA’s own military operational capacity is very limited. Any suggestions of a military ‘solution’ here actually brings about expressions of humor or disbelief. At the recent Embassy-hosted Veterans Day event, a military contact only barely jokingly said that as a matter of fact, right now, the GOU [Government of Uruguay] probably has more active and usable aircraft and other military assets than does the GOA.”

That said, it is ridiculous that Buenos Aires let the situation get so out of hand. With the plant running (and causing little pollution) the crisis passed, but the reverberations continued to mess up relations between the two countries. Argentina blocked Mercosur from funding a second frequency converter on the Uruguay-Brazil border. The converter would have let Uruguay import more electricity from Brazil ... freeing it from Argentine pressure. (As well as occasional power shortfalls: Uruguay wanted it for economic as well as political reasons. Tenders finally went out in 2011, without Mercosur money.)

Then the Argentines blocked joint dredging operations to maintain the Martín García canal, under the treaty governing the Rio de la Plata. The problem has kept big ships out of the Uruguayan port of Nueva Palmira. It looks like the dredging might finally happen, maybe.

Buenos Aires proceeded to add insult to injury by imposing import licenses on 6 percent of Uruguayan exports to Argentina. It also went after Uruguay as a putative tax haven and denied its national airline landing rights in Chubut. Then Argentina stalled on attempts to build a regasification plant to allow for LNG imports. (President Mujica announced on April 2 that a plant will go ahead “with or without Argentina.”)

The most recent insult was not aimed at Uruguay specifically, but angered Montevideo nonetheless: Argentina limited the amount of money that Argentines can take out of the country ... sucker-punching Uruguay’s tourism industry.

Uruguay tried to shoot back by delaying Néstor Kirchner’s attempt to become the first Secretary-General of the Union of South American Nations, but they failed. Kirchner took over the organization shortly before his death in 2010.

It has become about as dysfunctional a relationship as one can imagine between two democratic and culturally-similar neighboring states. Argentina fruitlessly and pointlessly bullies Uruguay; Uruguay impotently pokes back. Things will certainly not get any worse, but they also show no sign of getting better.

The next time a Canadian complains about relations with the U.S., point to the Southern Cone. It could be much much worse.

More on the legalization of marihuana in Uruguay

It seems that the Uruguayan government has decided to send a new legalization proposal to Parliament. It is considerably more detailed than the original, and its text can be found at this link.

The new bill establishes a National Cannabis Institute to regulate the drug (including sales) and allows for the creation of “membership clubs” of up to 15 people licensed to grow 7,200 grams per year for the use of the members. The institute will be able to fix the price of its licenses to grow or sell cannabis. I presume that the Parliament will also be able to impose taxes in excess of the license fees. I am a little surprised as to the budgetary autonomy that the legislation seems to grant the Institute.

It appears that the Broad Front legislators have abandoned the idea of having the state control the entire value chain in favor of a more ordinary regulatory approach.

The experiment will bear watching.

Legalizing marijuana in Uruguay

So Colorado and Washington have legalized marijuana! This is a big step, although it is going to be a problem that the federal government still bans the substance.

Now, it looks like Uruguay might be the first country on Earth to fully legalize marijuana. (Or “marihuana,” as they spell it.) The Netherlands tolerates it, but it is not fully legal.

It is pretty neat that a serious country may legalize marijuana, but to give away the punchline, I doubt very much that it will be a harbinger of much until the American or Canadian federal government moves. There is a lot of opposition to legalization in Latin America, and Uruguay is not considered a bellweather. (It is one in practice, but that is more because Uruguay gets to the future first and less because other nations deliberately emulate the Eastern Republic.)

The bill is pretty vague. Here is the complete text:

“The State will assume control and regulation over the importation, production, acquisition in any form, storage, commercialization and distribution of marihuana and its derivatives, under such terms and conditions as fixed by regulation.

“Likewise, the State will undertake such material activities as are necessary before, during and after to carry out the activities referred to in the previous paragraph, under such terms and conditions as fixed by regulation.

“The activities referred to in the previous paragraphs shall be realized exclusively under a policy of damage reduction that shall, therefore, alert the population to the consequences and adverse effects of marihuana consumption, as well as the effects of minimizing the risks and damages to the population of potential consumers under such conditions as fixed by regulation.”

It is worth noting here that the Uruguayan president is quite a bit more powerful than the American president. (At least inside the country. Outside Uruguay, I do not believe that Mr. Mujica has the ability to order flying robots to kill anyone.) As long as his cabinet concurs, the Uruguayan president can send bills directly to Parliament. (Officially, the “General Assembly,” but everyone calls it Parliament.) In fact, under Article 168 the president can designate bills as urgent. “Urgent” bills must be approved or disapproved with 85 days or they automatically become law. The catch is that the president can only submit one urgent bill at a time.

The marihuana bill is not urgent.

So it is taking its own sweet time through Parliament. Of the six security measures proposed by the President (the marihuana deal is considered a security measure) the legislature has approved only one, which reduced sentences for low-level drug dealing while increasing the penalties for corruption. Right now, the marihuana bill is in a dicey spot. It can pass, but only with support from the President’s Broad Front. So far, only one opposition legislator has come out in support.  President Mujica seems reluctant to pass such a significant bill on a party-line vote.

In order to get support, the administration has announced what the regulations might look like after the bill is passed. The drug will cost ₱700 per gram, around US$36. That is higher than the U.S. price of $14 per gram, but roughly the price in Uruguay. (Since marijuana is still illegal, it is hard to come up with a standardized price, even for tolerated medical marijuana.) If the law passes, Uruguayan consumers will receive a photo ID armed with a photo and bar code (that is high tech?) and be limited to 40 grams a month.

To sum, the bill looks likely to pass, but it is still generating controversy.

But I would also bet that the Mexican government is going to consider legalization but do nothing until the U.S. federal government moves. There is a great deal of conservative opposition in Mexico, deeper and wider than in Uruguay, and with a weaker president and a divided Congress everything is tougher.

In fact, contrary to popular belief, a great book by Isaac Campos shows that opposition to marijuana actually originated inside Mexico; it was not imposed by international norms. The reverse actually: had Mexicans been less anti-marijuana, then the world might not have gone prohibitionist.*

Around the Revolution again

Hugo Chávez just won re-election by a convincing margin in Venezuela. If I may, my friend Francisco Rodríguez at Bank of America called it correctly. To be honest, although Capriles did have a few good poll results, most of them showed a Chávez win. Anyway, the Bolivarian Revolution will go on until 2019 , even if the President passes away in office in the meantime. His successor probably won’t be Vice-president Elías Jaua. If something happens to Chávez between now and January 10, 2017, a new election will be held within 30 days. If he passes away after that date, then the vice-president will take over, but the Veep serves at the pleasure of the President and there is no guarantee that the person in the office will be the person in the office then.

In Ecuador, meanwhile, the big news concerns Assange and Occidental. With the former, not a whole lot is likely to happen. The Ecuadorians are settling in for the long haul: it is an easy way for Correa to take an anti-imperialist posture and distract attention from press measures at home. Correa is ahead in the polls for the 2013 election, but there is a while yet.

What I love is that Rafael Correa is going to advise Tunisia about dealing with debt! That is awesome.

Bolivia is having a rougher time. Two different groups are in conflict over the mining industry: unionized employees and cooperative independent miners. Until June, the government could play a conciliatory role, with Glencore as the foreign villian. But by nationalizing the mines, Evo has lost his cat’s paw. Now he is smack in the middle of a fight between the union and the small independent miners, which is a bad place to be. Moreover, his nationalization fights are starting to go bad. He just told a Canadian silver mining firm to go hang, no compensation. Legal recourse is not the problem, since the investment happened after Bolivia left ICSID (although there are other options, see next paragraph). Rather, the problem is that the nationalization, like earlier ones, has put the government smack in the middle of a conflict between different local interests. This is trouble.

President Morales has made a habit of nationalizing something every May Day, usually with compensation, but Rurelec has taken Bolivia to arbitration over a 2010 electricity nationalization. Since ICSID is no longer available, the arbitration will be held under looser U.N. rules. The nationalization beat the hell out of Rurelec: it lost 80% of its revenues and its share price crashed from 16p to 9p (U.K.). So it wants its money. It is less clear if it can collect, although the new nationalizations are making its life a little easier. The company sounds confident.

Finally, all-quiet on the Nicaraguan front, including a giant sigh of relief that President Chávez won re-election, what with this project getting underway. We think.

Ecuador is not a colony of China

Since its big default on its foreign debt (which I should really write about, it was ingenious) Ecuador has made a lot of oil-for-loans deals with China. The FT reported that Ecuador sold oil at $14-$15 per barrel. Felix Salmon wrote a post entitled “How Ecuador sold itself to China.” Neat stuff.

But exaggerated. The Bolivarians in Quito have not sold their sovereignty to China. Here’s the deal. The China Development Bank (CDB) loans money to Ecuador. Petroecuador repays by shipping oil to China. The Chinese pay for the oil at market prices. The money is deposited in the CDB, which withdraws 21% of the revenue to repay the loan. China has made three of these loans, at fairly cheap interest rates: 7.25% for the first , 6% for the second and 6.9% for the third, at a time when Ecuador basically could not borrow and paid 8.45% on its outstanding issues.

OK, so no Chinese empire ... but is China freeing Ecuador from dependence on the United States? (We will ignore that whole dollarization thing.) Not really. There are some reports that the country is now exporting all its crude to China and Latin America. The official figures for the first half of 2012, however, tell a different story. By value, 59% of oil exports went to the United States; another 11% went to Chile and 10% to Peru. Only 2% worth (or $137 million) went to China. Ditto, imports of refined products from the U.S. of A. came to 55% of Ecuadorian petroleum imports; an additional 8% came from Panama. Only 5% came from Venezuela and nothing from China. Ecuadorian crude isn’t the best quality, but it’s good enough for Chinese refineries ... except they do not seem to really want it.*

(A useful resume of different oil blends is here: scroll to Table 1.)

OK, then. Unless something drastically changes, Ecuador is going to pay Occidental. Maybe not for a while, but it will pay. And China does not have a colony across the Pacific, fun as it is to imagine such a thing.

I should mention that the international courts thing runs both ways. Maybe Ecuador will pay Occidental with assets taken from Chevron ...

* UPDATE: I imagine that Petroecuador is swapping its oil for oil from other sources to send to China. PDVSA does this all the time, so it would not be unprecedented, and it would explain why the Central Bank reports almost no crude exports to the PRC despite the loan deals.

Ethiopia, North Korea, and Some Half-Formed Thoughts on Dictatorship

North Korean dictator Kim Jong-Il died late last year. He was promptly succeeded by his twentysomething son. Some observers questioned whether the son would be able to take over and impose effective personal rule, but nearly a year has passed and he seems to be doing just fine.

Ethiopian dictator Meles Zenawi died last month. He hasn’t been succeeded by anyone yet. (Formally, officially, the Deputy Prime Minister has stepped up. But nobody seems to be taking him too seriously. He’s a mild-mannered guy, not a member of the revolutionary generation, and the wrong ethnicity to boot.) Zenawi was a “slash the tallest flowers” kind of guy; years of life on the run as a guerrilla in the bush seem to have rendered him permanently paranoid. Anyone who seemed too popular or too competent got demoted. At best demoted. So there’s no obvious successor.

I think the odds of Ethiopia staying a dictatorship are pretty good. It’s a country that has never known democratic rule or any sort of pluralism. Since the Emperor Haile Selassie consolidated his rule in the late 1920s, Ethiopia has had exactly three rulers: Selassie himself, Stalinist dictator Haile Meriam Mengistu, and the recently deceased Mr. Zenawi. That’s just three guys in almost 90 years, all of them absolute rulers with little or no tolerance for dissent. The country has almost no liberal traditions. Civil society does exist — there are NGOs and labor unions and even a few lawyers who are willing to sue the government — but it’s young and small and weak. It won’t be too surprising if a new strongman emerges. But it may take a while, and Ethiopia may go through a period of oligarchic rule and jockeying for power before things sort out.

Regimes with clear lines of succession are generally stronger regimes. Part of the reason is that they’re slightly harder targets — you not only have to take out the top guy, you have to get rid of his designated successors as well. But I think the bigger reason is that everyone knows what’s coming next after the dictator. Even if the successor is a dubious character, he’s likely to seem better than chaos and uncertainty.

Traditional monarchs have known this for millenia. But the lesson applies to dictatorships as well. We currently have at least five extant examples of non-royal dictatorships that have been successfully transferred to a son or brother of the dictator: Azerbaijan, Congo, Cuba, Syria, and North Korea (twice). Gabon and Togo are authoritarian regimes run by sons of former dictators; if we include them, the club expands to seven.

Examples of transfer to a non-relative are much much rarer. There have been a couple in the past. (Ataturk hand-picked his successor; Mexico in 1934-94 had an extremely powerful president who chose his successor from the party leadership, but they did not meet the definition of dictator. After all, they had to leave after six years in office.) But not a single extant dictatorship fits this pattern! (Burma’s dictator chose a successor who is still in power, but the successor seems to prefer being primus inter pares to being a true lone ruler.)

Now, it’s a long established principle that old age is a dangerous time for a dictator. All three of the dictators picked off by the Arab Spring were in their golden years. (Porfirio Díaz in Mexico and Juan Velasco in Peru also went down in their dotage.) More generally, an old dictator with no clear successor is pretty clearly putting himself at risk. That said, some dictators do run the course and die, more or less peacefully, in office.

So what happens when a dictator manages to pull this off — grows old and dies without first being overthrown or losing an election or whatever? Well, we can sketch out a tentative typology.

1. A son or other close relative steps up. (Several extant examples, see above.)
2. A hand-picked successor takes over. (Rare; no extant examples.)
3. There is a party or other system independent of the dictator that chooses a new dictator. (Rare outside of the Communist world; Mexico in 1934-94 comes closest. No extant examples, though we might see one soon in Cuba.)
4. After a period of uncertainty, brief or prolonged, a new dictator takes over. (A couple of extant examples — Turkmenistan, South Sudan.)
5. There’s a shift to authoritarian but non-dictatorial rule, either by a single ruler, an oligarchy or junta, or a party system. (China, Vietnam, Ivory Coast.)  This seems to be the single most common outcome in the last decade or two.
6. There’s a relatively rapid shift to relatively liberal or democratic rule. (Portugal, Spain. In the former, it took six years and revolution to get democracy.) This happens, but it’s less common than we might like to think. A shift in the direction of liberalism is much more likely when the dictator has been overthrown, or has voluntarily stepped down (Indonesia, Tanzania, Singapore), or agreed to elections (Chile, Zambia, Senegal). A system that lets the dictator die in office seems less likely to produce democracy at first go.

Numbers 2 through 6 include the possibility of foreign intervention; the United States, France and the Soviet Union have all intervened in this manner at one time or another. We may call these 3a (party picks a new dictator, foreign approval makes the difference: the Eastern European model, 1945-1990), 4a (new dictator takes power subject to foreign approval) and so forth. There aren’t really any extant examples of these at the moment — the U.S. seems to have lost interest in installing dictators in Central America and the Caribbean — but I would not be surprised if Russia’s “near abroad” in Central Asia were to throw up a 4a or 5a in the next little while.

6a is damnably rare, actually nonexistant: Panama would be one of the rather few cases since WW2 in which foreign intervention replaced a dictatorship with a democracy. Iraq sort of maybe kinda if you squint really hard. The jury is out (to be charitable) in Libya. And all of those interventions happened when the dictator in question was very much still alive and in power.

Anyway. There are enough elderly dictators out there that we should expect to see some more examples in the next few years. I expect that (5) “a shift to authoritarian but non-dictatorial rule,” will continue be the most common outcome. Which means that some countries that are currently dictatorships will drop off the list! If the number of dictatorships is to remain constant, then new ones will have to emerge. How likely this is ... well, this post is long enough. In a bit.

Play it again, Cristina!

 What will happen? Well, Setty pointed out that we have seen this movie before. In general, I think he is correct ... with a wrinkle. 

1. Nationalization;
2. Giant compensation claims from Repsol ... say, I dunno, $10.5 billion;
3. Long loud wait;
4. Long drawn-out arbitration;
5. Payment from Argentina ... well after Cristina’s term ends in 2016!

There is, however, a wrinkle. That wrinkle is that Argentina is the first country to try to stick it to ICSID. They have just said no. That has, shall we say, annoyed other countries. Consider that the Obama Administration has imposed sanctions on Argentina ... the first time that an American president has used the 1974 authority. The diplomatic reaction from Spain ... and Britain, and the European Union, and Mexico and Chile and (OMG!) Bolivia ... has been ferocious. This is looking much more like 1968 or 1938 than it is like more recent expropriation events.

It might play out quicker than we expect. The big if is the European Union. If it uses its muscle, regardless of legality, then Argentina is going to hurt. If it does not, then the Setty calendar will play itself out.

Either way, it will be a show.

America has been at war for a long long time

 Rachel Maddow has a new book, Drift. I’ve skimmed it; it isn’t bad. In it, her contention is that for a variety of institutional reasons, it has since the 1980s become far too easy for America to go to war. 

The book started a debate between Kevin Drum and Jonathan Bernstein. Bernstein suggested, “U.S.-sponsored interventions of one form or another are hardly unusual, even before Maddow’s apparent jumping off point in the Reagan Administration. Perhaps the idea is that there was a golden age of sorts after Vietnam, but if so it lasted less than a decade. I’m not really sure it’s become easier to deploy troops for controversial missions or to begin interventions in other nations.”

Bernstein was supported by Armando at TalkLeft, who wrote, “That is not historically accurate in my view. The times getting into war was not easy was after wars that had been very costly and not particularly successful from the US point of view. Think World War I and Vietnam. Otherwise, going to war has been one of the great American pasttimes. I’m all for making going to war hard, but the history does not demonstrate that, except for isolated periods, that was ever really the case in the United States.”

Drum conceded the point, but suggested that there was still a difference between then and now: “So what’s different? I’d say this: it’s one thing to periodically wage brief, smallish military actions. The Dominican Republic occupation of 1965 falls into that category. So do Grenada and Panama ... the last couple of decades seem quite different. The Gulf War, followed by Somalia, followed by Haiti, followed by Kosovo, followed by Afghanistan, followed by Iraq, followed by Libya and Yemen, and all against a background of drone warfare that now seems all but perpetual, feels very different. It feels like we’re simply in a constant state of military action. In the last 20 years, there have only been three or four in which the U.S. military wasn’t at war.” Matt Yglesias supported Drum, adding that there might be an economic element: technology has made it cheaper and easier to project conventional military force, and therefore we do it more.

Bernstein is right. Everyone else, including Armando, is wrong. And none of it relevant to the argument in Drift.

In 1898, the United States went to war with Spain. Between 1898 and 1902, American troops battled Philippine insurgents. Peace came to Luzon in 1901-02, but fighting continued on Mindanao until 1912. In 1904, the U.S. navy bombarded rebel positions in the Dominican Republic; eventually U.S. Marines wound up (with the permission of the local government) occupying the customhouses. In 1906-09, we occupied Cuba, although there was (to be fair) not much fighting. In 1907 and 1911, we deployed to Honduras to halt Nicaraguan invasions. Between 1912 and 1925, U.S. Marines actively hunted insurgents (the original Sandinistas) in Nicaragua. In 1914, we once again bombarded Dominican rebels; we also occupied Veracruz to prevent arms from getting to the government. Between 1914 and 1934, we occupied Haiti: unlike Cuba in 1906-09, that one did involve quite a bit of fighting. We did the same on the other side of Hispaniola in 1916-24. In 1916-17, we invaded northern Mexico after Pancho Villa attacked Columbus.

Then there was World War 1. After which ... 

In 1917-19, U.S. troops again garrisoned Cuba. In 1919, we landed in Honduras to protect a neutral zone during a civil war. Between 1918 and 1920, American forces blundered pointlessly around Siberia doing something or other, and sustaining a lot of casualties. For a few days in Guatemala, Marines saw combat during a civil war in that country. In 1925, we invaded both Honduras and Panama during periods of unrest.  In 1933 and 1934, we waved gunboats around Cuba, but no war was necessary, since we succeeded in overthrowing the government by what would today be called covert action.

And then, peace until 1941.

Counting ... between 1898 and 1934, the United States was at peace for all of ... well, never, actually.

It is true that only the Philippine War rivalled the Iraq conflict in terms of intensity. (World War One, obviously, was hugely worse.) U.S. force levels rapidly grew from 12,000 in 1899 to 70,000 in 1900, by which point U.S. combat deaths approached two soldiers every day. By most metrics, the war (fought by a small all-volunteer army) was as intense as the Iraq War — proportional to the U.S. population, the peak force of 70,000 represented a per-capita commitment twice as large as the peak Iraq deployments in 2008. 

Because the Philippine War lasted 28 months, as opposed to the 102 months of the Iraq War, the total proportion of Americans who served in the conflict was about a third of the recent level. The 126,000 soldiers who served in  the Philippines over the entire course of combat operations amounted to 0.2% of the U.S. population, compared to the roughly 0.6% of the U.S. population who served at least one tour of duty in Iraq between March 20, 2003, and the official end of combat operations on August 31, 2010. The combat casualty rate, meanwhile (excluding deaths from disease) ran at 596 per 100,000 troops in 1900, almost exactly matching the 2004-07 rate of 608 in Iraq. (Iraq casualty rates per 100,000 ran at 718 in 2003, 650 in 2004, 588 in 2005, 583 in 2006, and 610 in 2007. They then plunged to 199 in 2008, 135 in 2009, and 121 in 2010.)

But ... that is fine. The Drum argument does not hinge on the big wars of the past decade; rather it hinges on the continual small wars since 1989. In that respect, 1989-2012 looks pretty much the same as 1898-34: lots of small wars punctuated by two big ones. Nor does Armando’s argument hold up. World War 1 had little effect on the American government’s propensity for military intervention. It is true that the U.S. avoided a potential big war during the Mexican Revolution, but that decision was made before we entered WW1; before, in fact, it was clear that we would.

The history is both worse and better for Matt Yglesias’s argument, depending on how you interpret it. In the Dominican Republic, for example, early insurgencies depended upon the seizure of customshouses to gain resources: naval bombardment, therefore, presented a cheap means of intervention. In general, I would venture to say that Yglesias’s hypothesis is correct: cheaper war probably means more war. (Someone should test that!) What the history does not support, however, is the rather specifc hypothesis that military intervention is cheaper today than it was in 1898-1934.

Let me add that this has little bearing on Rachel Maddow’s overall argument. She wants to explain why the post-Vietnam reforms designed to make intervention difficult failed. She does not claim that 1989-2012 (actually, 1983-2012 for her purposes) is unprecedented or novel. Other readers in the blogosphere have extended her argument, however, and I think it is probably worth adding a little historical corrective.

The Nicaraguan exception?

 One story that doesn’t get enough attention has been the collapse of public order in Central America. Why has that happened? Well, there are several possible hypotheses, including the U.S. decision to begin deporting violent felons at the end of their sentences ... but the clear problem is drug trafficking.

Why would drug trafficking suddenly become much worse? The above maps present a suggestion. In 2003, “suspect air activity” was a jumble, mostly over Colombia. As of three years later, in 2006, a lot of “suspect maritime activity” still went directly to Mexico. Over time, that changed. By 2010, Honduras had captured most of the air traffic, while sea traffic migrated to Guatemala, Costa Rica, and Panama. In essence, interdiction efforts by the Mexican government worked, sort of: fully-loaded 727s no longer landed in Sinaloa, and for all the hype over long-distance submarines, boats also stopped coming. Instead, planes diverted to Honduras, and maritime traffic to Panama and Costa Rica (mostly to supply local markets) or Guatemala (where the stuff was then moved overland to Mexico).

Activity in 2011 (see left) shows the pattern even more clearly, but with an interesting gap. Planes fly over Venezuela and land in Honduras, with a few stragglers heading on to Hispaniola or the USVI. Ships head into violence-torn Guatemala and Honduras, where whole tracts are outside the remit of the state.

Also in 2011, lots of maritime traffic heads directly into Costa Rica and Panama. (See right.) 

But where doesn’t it go? Nicaragua. For all his faults, and there are many, Danny Ortega seems to have kept his country from being overrun by drug traffickers. The maps are revealing. (Click on the maps to enlarge.)

Flip the question. Why are ships headed into Costa Rica and Panama? The two countries don’t seem to be a source of transshipments elsewhere. There is nothing flying out, and there is little reason to go to either country if you want to move drugs overland into Mexico, given how easy it is to get to Guatemala and Honduras. But there is a lot of sea traffic into both countries directly from Colombia. If drugs from Guatemala and Honduras could easily pass through Nicaragua, then there wouldn’t be much traffic into the Costa Rica-Panama pair. Back in 2006 neither place showed much direct traffic; the implication being either that a Nicaraguan supply source was cut off, for which there is no evidence, or that as the cocaine markets in those countries grew over the last five years the suppliers were unable to send much through Nicaragua.
 
The question is why Nicaragua is aloof. Is Danny Ortega less corrupt than Laura Chinchilla of Costa Rica? That seems unlikely in the extreme. His fellow Bolivarians (and patrons) in Venezuela have no problem with overflights from cocaine-producing regions. Is the Nicaraguan state stronger than the ones in Guatemala and Honduras? That seems possible, but anybody who’s been to Nicaragua will report that generalized public order is little greater than in the countries to its north (in fact, at first glance, it seems rather worse) and quite a bit less than in Costa Rica or Panama. Nonetheless, Nicaragua not only is bypassed by the drug traffic, it seems exempt from the inexorable rise in violent crime that’s plagued the rest of the Isthmus.  The homicide rate in Nicaragua has been bouncing around 13 per 100,000 for several years, up from the early part of the decade, but little different from the 1990s.  It is, in short, a mystery.

Is it just luck, or is Managua doing someting right? Here is a suggestion that it is the country’s socialist legacy what’s to credit. The idea is that community policing and greater community-police connections (established by the Sandinistas during the 1980s) have kept crime low. Here is a suggestion that it might be because Nicaragua sent immigrants to Florida instead of California, where they putatively became less exposed to organized crime. As someone with a lot of family (and time spent) in South Florida, I doubt this. The same article also suggests that it may simply be that the Zetas haven’t gotten to Nicaragua yet. That is possible: some in Nicaragua have the same fear. But it seems unsatisfying, what with trafficking and violence increasing to both the north and the south.

Nicaragua’s non-participation in the drug trade is striking, as is its (relative!) non-violence. But in order to predict whether it will last, we need to know more Any ideas?

Bolivian energy and the neighbors

 The New York Times has an article today entitled, “Neighbors Challenge Energy Aims in Bolivia.”  It is quite informative.  But it gives the wrong impression about the effects of Bolivia’s energy policy under Evo Morales.  The article makes it seem as though Bolivia shot itself in the foot by nationalizing the gas.  That is probably not true.  Rather, Bolivia has shot itself in the foot by refusing to build a pipeline to Chile.

Argentina’s energy policy has nothing to do with Evo.  In fact, inasmuch as Argentina has a coherent energy policy, it currently revolves around importing more Bolivian natural gas. Its roots lie in the peso devaluation of January 2002.  The government froze the peso-price of natural gas, in order to protect Argentine consumers who were already suffering an economic downturn considerably worse than the Great Depression.  The effect was to knock down the residential gas price from $1.88 to 66¢ per MMBTU. 

That wasn’t a problem until the southern hemisphere winter of 2004, when gas companies cut supplies to large industrial customers. After all, they could get much higher prices from exporting the gas to Chile.  Well, the Kirchner administration reacted much as you’d expect:  they banned gas exports. The Interior Minister of Argentina apologized to the Chilean government for the interruptions — but in May 2005 the Argentines once again slashed exports to Chile. The story repeated itself in 2006, when Argentina cut exports altogether for two weeks.  In fact, Buenos Aires added insult to injury when the government raised export taxes from 20% to 45%.  

Eventually, however, as the economy recovered, Argentina stopped being an exporter.  So the Fernández administration began to walk back the policy.  First, she allowed prices to rise to around $2.50 per MMBTU. Second, she created incentives to increase the domestic supply.  Finally, she moved to try to lock-in relatively low gas prices from Bolivia. Argentina imports LNG, but it costs twice as much as Bolivian gas.  The country’s LNG terminal offers a useful hedge against any Bolivian attempts to renegotiate the contract, but both parties would prefer to buy Bolivian gas for $5 instead of Trinidadian gas at $10.  (In fact, the terminal goes unused for long periods.)  

What about Brazil?  Well, what about Brazil?  It is true that the nationalization provided some impetus for the country to become self-sufficient, but less than you might think.  First, the Brazilians pushed back hard, even threatening to dismember Bolivia if it messed with the price or volume terms of the contract.  And Brazil won.  So while Petrobras may have been disillusioned, the situation worked out well from Brazil’s point of view. 

In fact, Brasilia had a good reason to want to allow Bolivia to retain more of the rents from resources, as long as Brazilian consumers weren’t affected.  Simply put, the bet was that a wealthier Bolivian government would result in a more stable Bolivia, and it’s politically easier for Brasilia to aid La Paz by resisting pressure to defend Petrobras profits than it would be to write checks.  The logic is identical to that behind the 2009 renegotiation of the Paraguayan hydropower contract — the primary difference being that since Brazil initiated the hydropower deal, it has been able to extract more political benefits from Asunción than it has been able to receive from La Paz.

Now, many people in Brazil say that Petrobras is upping domestic production in response to Bolivia’s tax hike. It may even be true.  But we don’t know!  Domestic exploration was good business with or without  Evo Morales.  The increase in Bolivia’s government take made it more so, but we don’t have the numbers to say that domestic supply would not have increased regardless.  I’m not faulting the article;  it’s a subtle point. I am faulting them for getting Argentina backwards ... but with Brazil, we just don’t know if Evo really mattered.

Chile is where the article is spot on.  After Argentina cut the taps, the Chilean government attempted to strike an agreement to build a pipeline from Bolivia, but the negotiations ignited a firestorm in Bolivia.  The anger surged over the fact that the pipeline would pass through territory that Chile had seized from Bolivia in 1878.  Horrors!  The Chilean government periodically floated a trial balloon of transferring a strip of land along the Peruvian border to Bolivia, but Lima protested, since Chile’s far far north had been originally seized from Peru. 

Nobody in Peru seriously contested the border ... but accepting a century-old annexation and allowing the annexed land to be transferred to a third country were very different things.  After a brief and goofy Bolivian flirtation with the idea of building an underground pipeline that would surface far out to sea, the idea died. And thus Bolivia lost a natural market, and whatever possibility it had of producing LNG. 

The article makes no effort — not that it should! — to produce a cost-benefit analysis of Bolivan policy for Bolivia. The country lost opportunities in Chile and it may have lost opportunities in Brazil ... but it got a lot more revenue at a politically-dicey time. That, I have to say, is not nothing. 

What should Evo do now?

Aliens attack Montevideo!

  I always said that if you were piloting a spaceship to Earth and had to choose a place to settle, you'd pick the River Plate.  Fertile soil, easily extractable oil, great climate, nearby resources when you'll need them.  So it makes sense that's where the giant alien robots would invade!

Man, I hope Sam Raimi makes that movie.  Won't the Argentines be annoyed that the aliens didn't go for Buenos Aires first!

Hat tip:  Will Baird.  It sent me right into a coughing fit that still hasn't abated, so maybe I should be annoyed.

Honduran crisis over?

 It seems as though we may have an agreement to allow Zelaya back into office until the election.  Emphasis on “may.”  Congress and the Supreme Court need to approve it, and we still don’t know what limits it will place on Zelaya’s executive authority.  That said, the crisis may be over.

Once the Brazilians signed on to the Secretary General’s declaration that the clock won’t run out with the November 29th presidential election, some sort of resolution became imperative.  Yesterday the U.S. declared that it backed the Brazilian position, and a resolution become inevitable. 

One of the most striking things about the entire imbroglio has been the utter political incompetence of Roberto Micheletti.  Maybe he wasn’t responsible for the idiot decision to put Zelaya on an airplane out of the country instead of placing him under house arrest, but every dumb move after that lands on his desk.  He tried to justify the ouster with a fake letter of resignation from Zelaya.  He imposed and removed and imposed and removed restrictions of civil liberties that he had to know would neither stick nor intimidate the opposition.  He went head-to-head with Brazil for God’s sake, with an empty threat to storm their embassy. 

Honduran politics ain’t beanbag.  How did such a political incompetent ever get anywhere?  I mean, one usually expects politicians to be good at politics, right?

Not that the OAS (or even Brazil) showed itself to be particularly slick.  We’ll know more details later.  Still, I understand why the Brazilian government chose not to be slick.  The OAS, well, I have less sympathy for Insulza. 

Anyway, it does look as though the United States may have brought this mess to an end.  Of course, some idiots seem to think that we should have angrily backed Micheletti, regardless of the whole plane-packing  and opposition-from-rest-of-hemisphere issues.  Thank God that didn’t happen. 

Passing the buck

  Most of you probably know by now that Manuel Zelaya has returned to Honduras and taken up residence in the Honduran embassy.  That is unexpected, but neither good nor bad.  What is both unexpected and bad is the reaction from the United Nations:  Secretary-General Ban Ki Moon just declared that the U.N. “does not believe that the conditions exist to organize credible elections that will bring peace and stability.” 

The good thing is that Lula is going to meet with President Obama in Pittsburgh to discuss the crisis.  If the U.S. is smart about this, and I have every reason to believe that our government will be, then we will defer to Brasilia.  It is probably true that our beloved hemisphere still needs a hegemon to preserve stability and insure prosperity.  It is also true that it would be better for my beloved country that said hegemon (a) not be the United States; (b) be a country a lot like the United States; and (c) be at the end of the day somewhat less powerful than the United States. 

Considering the low import of this crisis, I would once again recommend exactly the opinion what probably cost me my shot at a State job that I would not have accepted:  the United States does not need a Latin America policy ... as long as Brazil has one.

Then again, I have been blindsided by the possibility that this crisis might outlast the Honduran election.  So I ask you, gentle readers, what should Washington do about the situation in Honduras?  What should Brasilia do?

This movie looks really bad

  Well, I guess I'm not really all that much of a lefty, all things considered.  This movie looks really really bad.  Although what Raúl Castro says in the below clip is true.

Caray.  I am not sure that Stone is doing Lula or Lugo any favors with this film.  And I find it sort of amusing that he lumps President Fernández in as a Venezuelan ally.  Very ironic portrayal, considering her government's reaction to Venezuela's nationalization of Argentine-owned assets. 

Revolutionary comrades-in-arms they are not.

This blog’s intellectual foundations

  A friend in the Philippines, looking over the blog, concluded that it seemed all over the map.  And that’s true!  I put up plenty of personal stuff and random musings.  But there is a core set of interests that parallels the evolution of my academic work over the past few years.  The geographic focus is on Latin America, of course, but it goes beyond that.

(1)  Instability.  This is what I started out studying.  I was intrigued that Mexico had a pretty well-developed banking system by the 1930s, despite having gone from a dictatorship to bodies-bloating-in-the-sun chaos and back to dictatorship.  It also had steel mills and copper mines and produced a boatload of oil.  How did that happen?  You might say that most historians who get interested in Latin America start by asking the following:  “This place is much poorer than the United States!  Let’s look for the malfunctioning institutions and ask why they’re malfunctioning.”  I took the opposite approach.  “Man, stuff doesn’t work well here at all.  Property rights are all messed up. Why then is it so much richer than the DRC?”  In other words, how did businesses work around the lack of functioning political institutions?

(2)  Empire.  Now that’s a loaded word!  Let’s just define as the violation of one state’s Westphalian sovereignty by another.  In extremis, the violating state can end the sovereignty of the other. If it doesn’t then proceed to make the conquered population full citizens and create a legitimate shared political community, then you’ve got an empire.  In the other extremis, one government can tell key political actors in another, “Do this thing here and we’ll bribe you, otherwise we’ll sanction you.”  My interest in empire, thus defined, grew right out of the aforementioned interest in political instability.  The U.S. mucked around in Mexico for some time.  In some industries, U.S. mucking was key to compensating for the negative effects of domestic instability and political violence.  The general questions, then, became impossible to avoid.  Can foreign governments (or other supranational authorities) substitute for poorly-functioning domestic institutions?  When and why will they try?  What effects will they have?   Others have developed interest in empires and imperialism from a very different direction, of course.  The serious ones write good books about the rise and decline and collapse of empires.  The unserious ones wind up writing strange novels about worlds where meteor showers wiped out civilization in the 1870s, or some such.   Me, I come at the same interest from another direction:  curiousity about the economic causes and economic effects of the widespread phenomenon of strong states violating the sovereignty of weaker states. 

(3)  Energy.  Whaa? you may ask.  Well, what industries are most affected by political instability?  Oil and gas:  the resources are where they are.  When institutions fall apart, they remain viable.  (This applies to other hard-rock mineral resources as well, of course, but they tend to be less profitable.)  What industry has prompted (over the last century, at least) the most violations of sovereignty?  Once again, oil and gas.  (No, I am not suggesting that most such violations are over resources.  They are clearly not.  But if you limit yourself to economic motivations, you wind up again and again looking at the energy business.)  In the course of writing about issues (1) and (2), I got more and more interested in (3) ... and not just how it related to questions of instability or empire.  It is a fascinating business!  The economics of energy are just so weird, the politics are weirder, and it affects everyone’s life.  Moreover, the future of the planet is tied up in the future of the energy business.  Can we move away from fossil fuels?  What will we need to do?  Can it be done politically?   In short, my growing interest in the energy business came naturally, ever since that article on Mexico in the 1920s. 

Thus the progression:  Latin America --> Instability --> Empire --> Energy.  And thus the big theme tying together much, if not all, of this blog.  Even much of the random travelblogging falls into those categories.  Not all, of course.  I enjoy posting random political blather, talking about New York or Miami or elsewhere, and putting up pictures of my wonderful wife.  But here, at least, you have the three big themes of the blog, and why I believe that they fit together.

Brazilian magnaminity explained

  A while back, we discussed Brazil's decision to grant Paraguay a greater share in the rents from their joint hydroelectric project.  There were a number of excellent hard-headed reasons for the Brazilian government to do this, but we've just discovered another:  persuading the Peruvian government that it is worth getting into bed with Brasilia. 

Brazil is contemplating five hydroelectric projects in Peru that would cost about $15 billion and generate 6 gigawatts of power, 80 percent of which would go to Brazil.  That represents about 4½ percent of the country's current installed capacity.  The expansion will involve Electrobras purchasing Peruvian energy companies, something the Peruvian government won't accept lightly unless it trusts that it can negotiate with Brasilia.   After all, as things stand now, Brazil approaches its neighbors much as Teddy Roosevelt did:  it speaks softly, but it carries a big stick.  That makes people nervous.

By showing grace towards Paraguay, the Brazilian government showed Peruvians that it would be a reliable partner and take their interests into account, rather than using its power to take up all of the surplus.  We'll see if that attitude lasts (power corrupts and all that) but for now Brazil is managing the sudden and surprising emergence of its informal empire in South America with grace, aplomb, and plausible deniability. 

Waterloo on the Choluteca?

  This is not helpful.  It isn't that I'd expect thoughtful foreign policy analysis from Senator DeMint, but holding up our ambassador to Brazil in order to try to get the Administration to oppose the policy supported by entire rest of the hemisphere does nothing for anybody.  Is there really a domestic return to this sort of posturing?

In my own fair and balanced way, however, I'll add that the absolutist stance recently taken by the Brazilian foreign minister is also not helpful.  Like Senator DeMint's calls to have the U.S. back Micheletti, Celso Amorim's demand for “the unconditional return of the deposed Honduran to the presidency” is also aimed at some domestic audience.  I suppose that the Brazilians should enjoy their ability to make such statements unworried about their international consequences; with the country's relative power growing, and the U.S. slowly withdrawing, they won't have that freedom much longer.

The Honduran government just expelled Venezuelan diplomats.  It's sort of funny, in a way, since those diplomats didn't recognize the Honduran government to begin with.  That, at least, is comic opera.  What is more worrisome is the recent statement by said diplomats that they aren't leaving.  Meanwhile, Zelaya is in Nicaragua making vague threats and stirring up some anger on the part of that country's beleaguered opposition. 

I think the pressure is going to get ratcheted up.  One possible sanction that the U.S. could quietly impose without tanking the Honduran economy would be to suspend business and tourist visas.  Of course, what we don't know is whether the block to a compromise is on Micheletti's side or on Zelaya's ... and without that knowledge, it's hard to figure out the best way forward.

UPDATE, JULY 22:  The recent compromise talks have collapsed.  The Supreme Court appears to have rejected a proposal put forward by a representative of the Micheletti government.  Then again, the attorney-general has issued a 16-page indictment against Manuel “Mel” Zelaya.  Congress has approved a budget of $5.9 billion, eight percent lower than last year.  It counts on $554 million in foreign financing; it isn't clear how the sanctions on Honduras by multilateral lending institutions will affect that, since they seem to be counting on around $100 million in such financing, and access to other private funds is often contingent on lending by the multilaterals. 

For those of you who want a run-down on what to read:  El Heraldo is the conservative newspaper.  Consider these two simultaneous headlines:    “People’s bloc opts for neighborhood protests” versus “Today, great march for patriotism and valor.”  No points for guessing which favors what.  La Tribuna is a little more fair and balanced, although it is also fairly conservative by American standards.  El Tiempo is okay, I'm not thrilled by its coverage. 

An admonition to Micheletti supporters and an admonition to his opponents

  In a previous post, I mentioned Mexico in 1936 and Argentina in 1945 as possible parallels for what the Honduran military was thinking when it exiled President Zelaya instead of simply arresting him.  Steven Taylor mentions a third parallel, a cautionary tale:  Colombia in 1953. 

He raises a good point:  breaking the law in order to save it is always risky and often stupid.  But the specific parallel doesn't apply.  General Gustavo Rojas Pinilla took power in 1953 and established a dictatorship that lasted four years; Roberto Micheletti ascended to the interim presidency with a vote of Congress and seems to be waiting until the November election to hand over power to either Elvin Santos or Porfirio Lobo. 

In other words, the typical historical parallels really don't apply in this situation.  An inability to recognize that is the main reason why the OAS is botching the diplomacy.  (As opposed to the U.S., which is playing it very well ...  but very much in the national interests of the United States and nothing else.)  They keep seeing Pinochet when what they've really got is an unelected Liberal government marking time until they can hand over to an elected government ... preferably also Liberal.  If the OAS diplomats can recognize that, then they can get inside the other guy's head (and his decision loop) and start brokering compromises that will allow everyone to win.

But I have my doubts that insisting on constitutional purity and making absolute demands will accomplish anything.  Demanding that some soldiers be punished, or agreeing that Zelaya should be tried while remaining titular president, those could get somewhere.  But so far that isn't the tack the OAS is taking. 

See also my comment and Steven's response here.  The short version below the fold.

Bad politics at the OAS, updated

  It strikes me that the diplomats trying to reinstall President Zelaya, particularly Secretary General José Miguel Insulza of the Organization of American States, are employing a lousy strategy.  The problem is that Honduras is a still a democracy.  The new government is conducting everything with an eye to the November elections, and unless the diplomats recognize that, they won't succeed.

You can't understand the coup in the context of a military takeover, because the military has not taken over and does not appear to be calling the shots.

The interim government needs to be persuaded that any compromise or backdown on their part will be a vote-winner.  There are a number of ways that could be accomplished.  The government could agree that Zelaya's expulsion was unconstitutional, give one of the military leaders a slap-on-the-wrist, and invite Zelaya back to reassume the presidency while facing trial.  (The same way, say, President Clinton faced trial.)  They could have Zelaya reassume the presidency after issuing a public apology for violating the Supreme Court order.  They could sit down and hammer out a third compromise.

The problem right now is that the OAS seems to have only sticks.  Getting hit with sticks, however, might just increase Liberal support at the polls in November; nationalist sentiment tends to work that way.  Delegitimization is a good prod, but Micheletti can't only be offered a choice between admitting his party is undemocratic and running out the clock, because he'll choose the latter.

Instead, we have Insulza in Tegucigalpa refusing to negotiate with anyone.  The military has admitted that it screwed up in banishing the President, and the OAS can't figure out a way to broker a compromise.  Instead, we've got a tragedy:  the death of an innocent. 

Anatomy of a coup

  The op-ed for Forbes is up. 

 I co-authored it with Steve Haber of Stanford University.  When I say we co-authored, I really mean co-authored:  Steve and I write by continuously tossing ideas past each other, dissecting them to death (and usually rejecting them) scribbling and re-scribbling versions, reading out loud to each other, and then finally finishing.  It's a lot of fun.  

The more expanded analysis is below the fold.  It takes into account some (surprisingly heated!) discussions with colleagues, Steven Taylor's blogging, and several of the comments on this blog.  I don't think I'll be dropping this issue anytime soon, so more comments and questions are highly welcome.

Zelaya’s ouster was legal.  Zelaya broke the constitution by insisting on a referendum.  The legal logic is simple.  Article 5 prohibits consultative referenda that would change Article 374.  Article 374 prohibits any change to Article 373.  Article 373 states that the only way to change the Constitution is to have Congress pass an amendment twice by a 2/3rds vote.  Zelaya’s referendum called for a constitutional convention to rewrite the constitution, which means changing Article 373, which can only be done by changing Article 374, which in turn violates Article 5. 

Article 313, in turn, gives the Supreme Court the right to arrest the president and bring him to trial if he commits a crime.  Violating an order of the Supreme Court is, by definition, a crime.  Zelaya refused an order to desist with the referendum.  He disobeyed that, going so far as have supporters break into a warehouse where the ballots were stored.  A Supreme Court justice, therefore, issued an arrest warrant on June 26th and ordered the military to carry it out.

Zelaya’s expulsion was illegal.  According to the New York Times, the military team charged with arresting the President decided at the last minute to bundle him off to Costa Rica instead of holding him under house arrest.  Zelaya should have been suspended from the presidency and detained pending trial by the Supreme Court.  There are no provisions for banishment in the Honduran constitutiton, and even if Congress decided to institute it as a penalty, it could not be applied without due process.   

Zelaya’s ouster was a mistake.  The Supreme Court and the military made three miscalculations.  First, the Supreme Court overestimated the threat from Zelaya’s referendum.  They had already pronounced it unconstitutional and the state had withdrawn most of its support.  The referendum, therefore, would have been a mess, dependent on volunteers, covering only part of the country.  It seems unlikely in the extreme that it would have added to Zelaya’s prestige, even had it passed.  In fact, a case can be made that the referendum would have been so disorganized that Zelaya’s opposition could have used it to further paint him as an authoritarian. 

It would have taken an unprecedented electoral earthquake for another self-proclaimed radical Bolivarian to win the upcoming November election.   The Liberal Party primary in December 2008 elected Elvin Santos as the nominee — and Santos had angrily resigned as Zelaya’s veep in protest against his policies.  Meanwhile, the chief opposition comes from Porfirio Lobo, the candidate of the conservative National Party.  A mismanaged, badly-organized, and illegitimate referendum was unlikely to produce such an earthquake. 

That said, I understand why the Supreme Court decided to enforce the letter of the law.  They waited until it became absolutely clear that Zelaya would defy the court’s order — in the two days before his arrest, Zelaya declared he had no intention of obeying the court and had supporters break into sealed warehouses.  That said, the Supreme Court had no duty to order Zelaya’s arrest.  They could have punted and let him sink himself by holding a wreck of a referendum. 

Zelaya’s expulsion was a bigger (but more understandable) mistake.   The Army worried that if they simply held Zelaya under house arrest, his presence could serve as a lightning rod for the opposition.  The best historical example of what the Army probably had in mind would be Juan Perón in 1945.  The Argentine government arrested Perón on October 9th — the subsequent mass demonstrations provoked when Perón addressed the public from jail (and organized by his wife) forced the government to release him on October 17th.     The Honduran Army had no desire to give Zelaya any chance to emulate Perón and mobilize the street.  They calculated that if they whisked Zelaya out of the country, he would be unable to organize an effective opposition and go quietly into that vast night.  A good historical parallel would be Mexico in 1936.  When Lázaro Cárdenas packed El Jefe Máximo Plutarco Calles off to Los Angeles, that was the end of Calles’s ability to organize against the Mexican government. 

The problem is obvious.  It isn’t 1936 or 1945; it’s 2009.  Modern communications and the platform provided by the OAS and U.N. mean that Zelaya doesn’t need to be in the country to organize opposition.  All he needs to do is show up on television at the United Nations.  Meanwhile, there is no effective way in a country as open as Honduras to prevent Hondurans from receiving his messages.  The fact that the new government appears to be (quite constitutionally, I have to add) in the process of declaring a state of emergency is a sign that bundling Zelaya off is not having the desired effect of limiting the ability of Zelayistas to mobilize.  The streets mobilized despite his expulsion, leaving the new Honduran government with a worst of all worlds:  the expulsion has undercut its legitimacy and prompted international opprobrium, while the domestic opposition is proceeding regardless.  That’s why the interim government has begun to suspend civil liberties.

The Honduran constitution, I have to add, allows Congress to temporarily suspend such liberties.  Thus far, the only legal breach appears to have been Zelaya’s expulsion. 

International opposition was inevitable.  The elected presidents of countries like Brazil and Mexico could not afford to let Hugo Chávez get out in front of the Honduran issue, given the optics of shoving the President into an airplane and exiling him.  They have leftist constituents at home, and they want to keep Chávez looking as illegitimate and silly as possible in the eyes of those constituents.  Opposing the coup for them is good domestic politics.  The presidents of other countries, like Chile and Panama, probably don’t have to worry about Chavista sentiment within their electorates, but considering the history of both places it was unlikely in the extreme that their leaders would stop to parse the legal fine print.  They look at the situation and think “Pinochet!” or “Noriega!”  I find that completely understandable.

In addition, the leaders of much of Latin America have foreign policy reasons to undercut the Bolivarian Republic.  So far, Chávez’s meddling has been rather confused, but he retains the capacity to cause trouble … and with the possibility of oil prices going back up in the next few years, that capacity runs a strong risk of growing.  Hugo wasn’t going to invade Honduras from Nicaragua or anything like that (much as I suspect that he would like to be able to do that) but it is good foreign policy to keep his Bolivarian Alternative from gaining legitimacy as the hemisphere’s voice of democracy.

It is pretty clear that Acting President Roberto Micheletti didn’t expect the international opposition.  Thus the ham-handed declarations that Zelaya had “resigned” or was involved with drugs.  The declarations were so ham-fisted that they wound up making the government look illegitimate, even though Zelaya’s removal and Micheletti’s appointment have taken place within the Constitution. 

Barack Obama is very good at realpolitik.  The Administration got out in front of hemispheric opinion, isolated Hugo Chávez, and bolstered the prestige of the presidents of Brazil, Chile, and Mexico.  At the same time, they’ve left the door open to a negotiated solution, and refrained from using hard sanctions.  U.S. aid to Honduras makes up only 4% of the Honduran government budget, and the military aid that’s been suspended makes up only 4% of that 4%.  Meanwhile, it will take a long time for the suspension of new World Bank loans to effect the situation on the ground — nobody in Honduras is being thrown out of work because a bridge-building project is being discontinued.  Now, the United States could reinstall Zelaya whenever it wanted to by imposing serious trade sanctions (or threatening to invade) but those actions would run the risk of wrecking the Honduran economy and prompting a civil war when angry unemployed people took to the streets.  In short, the Administration is pursuing a supremely cynical policy in the guise of idealism, one designed to bolster the interests of the United States and its citizens. 

Suspending Honduras from the OAS is an effective sanction.    The economic sanctions so far have been small beer.  The border closings by the neighbors are the most serious.  How long can the neighbors keep the border closed?  Honduran imports from the rest of Central America are valued around 10 percent of its GDP, which is high — but none of them are irreplaceable.  In fact, exporters in the rest of the Isthmus are already complaining to their governments.  Conversely, Honduran exports to the rest of Central America come to about 4 percent of GDP.  That is a hit (although new markets can be found for some of the exports) but Micheletti would need to conclude that their economic impact would swing more votes to the National Party than would allowing Zelaya back in. 

In fact, stronger sanctions could backfire in two ways.  One, they could box the Liberals into a corner.  Voters generally don’t like weak governments, and it looks weak to back down in the face of economic pressure.  Two, if strong enough they could cause the government to collapse, as unemployed people take to the streets.  This is why sanctions are often ineffective, and, I would argue, more so against electoral democracies ... which Honduras still is, even with the events of the past week.

Nevertheless, international opposition is a powerful tool.  It acts via three mechanisms.  The first is that denouncing the government at the U.N. and suspending it from the OAS delegitimizes the government.  Delegitimization will create problems for the Liberal Party, which so far has completely “owned” the coup.  That will cost them votes.  It also bolsters the Zelayistas and contributes to the aura of instability, further giving the government an incentive to compromise.  Finally, delegitimization increases investor perceptions of risk, which drives up bond spreads and makes Honduras’s debt more costly to service.  That latter is a sanction, but one that governments can take into account without seeming as weak, simply because they aren’t caving to a personalized outsider but an impersonal economic force. 

The Honduran government will probably hang on.  All Micheletti needs to do is run out the clock until November’s election.  The chances of a Bolivarian resurgence are fairly low.   The seemingly symbolic sanction of suspending the seat at the OAS does in fact impose pain on the Honduran government, but it probably doesn’t impose enough pain to prompt Acting President Roberto Micheletti to reinstate Zelaya.  The only thing that could do that would be a street rebellion inside Honduras — the Honduran security forces are less than a tenth of Iran’s relative to the size of the population, and far less ideologically motivated.  So far, however, a full-scale people power protest seems unlikely.

Micheletti might agree to allow Zelaya to return if the elections are accelerated.  Congress could change the date of the election, which the Constitution doesn’t specify.  All the Constitution specifies is that the president will be inaugurated in January after the election and serve no more than four years.  If Micheletti thinks that the Liberals have a better shot at an early election than they do from toughing it out to November, then they could allow Zelaya back.  Otherwise, it would take a resurgence of street violence, which thus far looks unlikely.  

The importance of form

  The heat is turning up on Honduras’s new government.  Ambassadors are leaving, the borders are closed, World Bank money is gone, as are the U.S. military’s training programs.  Meanwhile, the hemisphere is united against the new government.

There would seem to be three lessons here.  (Note my weasel phrasing!  It isn’t accidental, as all three regular readers know by now.)  First, form matters.  Steven Taylor alluded to this point, and I think he’s correct.  Now, I don’t think that he’s correct about the underlying legality.  The Honduran constitution makes no provision for calling a second constitutional convention.  The Supreme Court, therefore, was completely within reason to tell Zelaya to knock it off with the referendum. 

Nor (given the facts so far) am I sure that Taylor is right as a matter of domestic political strategy.  If it was simply a matter of domestic calculus, a Supreme Court order followed by a quick bundling of the president out of the country might have been the best way to avoid worse conflict.

But Professor Taylor is completely right that hustling the President out of bed at 3am looks terrible. In retrospect, it was certain to produce a bad international reaction, even though I wouldn’t’ve predicted how bad beforehand.  (Hey, I was wrong.  Yes Bernard, I’ll get to Ecuador one of these days.) 

What the Honduran military and Supreme Court and I missed was the reverse Chávez effect.  Once Hugo (inevitably) started tub-thumping and threatening war, the best way for the United States to undercut him was to walk back its initial position and bandwagon on the international opprobrium.  And man, has the United States been successful.  Nobody seems to note that Washington was behind the international curve. 

In short, Honduras has gotten itself into a pickle.  The Supreme Court and military should have thought more about the politics.  The confused messages about resignations and drug-dealing and all the rest did not help; it was propaganda aimed at five-year olds, people who watch Glen Beck, not serious observers.  Now, it would have been damned risky for the Court to issue an order removing and arresting the President, but it would have been much better to have done that (preferably with a concurring Congressional vote ) and hope that Zelaya would be a little slow in mobilizing support, giving you time to bundle him off to Costa Rica after having crossed all the constitutional T’s ... or at least having seemed to. 

Form matters, even when the substance is uncertain and impossible to determine.  Perhaps especially so.  And that goes double in a hemisphere where electoral democracy enjoys the contradictory status of being simultaneously hegemonic and fragile. 

A lack of leverage

  The U.S. really doesn't give a whole lot of aid to Honduras.  Look at the figures, including military aid, from the USAID Greenbook:

That isn't a whole lot of leverage.  Of course, small amounts of aid may make it more likely that they'll be yanked, since such yanking won't wreck the national economy.  But that is the problem with using aid as an instrument of empire.  Contingent bribes — e.g., do good and we will give you more money — are fairly easy to administer.  Contingent threats — do what we want or the cookie jar will be taken away — are a lot harder.  You need to be giving enough money for the recipient to care, but not so much that withdrawing it would cause drastic adjustments that would reverberate back upon the donor. 

To put the above figures in perspective, remittances from the U.S. averaged 16% of GDP over the same period, peaking at 21% in 2006. 

In short, the U.S. didn't have a whole lot of leverage to keep the military-Court combo from ousting President Zelaya, even if the Obama Administration had wanted to.

(Say, should I add a “Honduras” tag to the blog?) 

A dog not barking in Honduras

  The fact that none of my posts about the Honduran coup carry the “Empire” tag is remarkable, considering the history of U.S. involvement in Latin American politics.  Even more remarkable is the idea that should events evolve in such a way as to warrant such a tag (which I consider unlikely), it will probably be either due to either direct meddling by the Alba countries or pressure from Unasur/Río Group/Brazil, not the interference of the United States.  That is quite a shift. 

Of course, the U.S. is still quite hip-joined to Honduras.  There is Soto Cano Air Base.  There is CAFTA.  There is the Millenium Challenge Account.  There are remittances.  Honduras isn’t dollarized, but it is a great case for dollarization, what with remittances above 14% of GDP, a fixed exchange rate and about 24% of all loans denominated in U.S. currency.  And we train its military. 

But Washington isn't leading events.  Sure, maybe it could, but it’s resisting temptation.  (Thank God!)  And that is a very big change. 

More on the Honduran constitution

  Hmm.  My opinion of the coup is moving back towards legal. 

In November 2003, the Honduran government (still under President Maduro) amended the constitution.  (You can find a history of all Honduran constitutional reforms here.)  The reason, ironically, was that they wanted to repeal the traditional absolute immunity held by high government officials in both the executive and legislative branch.  Thus, they repealed Article 205, clause 15, which had read: 

[Congress has the power] To declare if there is cause against the President, presidential delegates, Congressional deputies, Supreme Court justices, members of the National Electoral Tribunal, Chief of the Armed Forces ... and Subdirector of Administrative Probity.

They also altered Article 313, clause 2, as follows:

Original:  [The Supreme Court of Justice has the power] To begin initial proceedings against high state officials, when the National Congress has declared cause.

New:  [The Supreme Court of Justice has the power] To begin initial proceedings against high state officials and deputies.

The implication, I think, is that the Supreme Court has the power to remove officials from office when it determines that they have broken the law.  President Zelaya pretty clearly broke the law when he refused to obey an order from the Supreme Court to call off the referendum, and as I pointed out earlier, the Honduran constitution clearly (if stupidly) bans any consultatory referenda touching on presidential term limits. 

So my new version is:  Zelaya broke the law, the Supreme Court called him on it, and the military took the initiative in enforcing the Court's order.  (Maybe too much initiative.)  That interpretation will depend on how closely the armed forces and the Supreme Court cooperated in the ouster.  (The more it looks like the Court got the ball rolling, the more legal the coup will seem.)  Given the legal fog, the Obama Administration seems to be taking a pitch-perfect tone here.  Some other governments, like Brazil and Colombia, may have walked themselves into positions that they are going to regret. 

Be sure, though, to take my positions with a grain of salt.  I change them as the facts change, and as radically as necessary.  For a subtler discussion of the implications of the coup, go here.                            _{(Photo courtesy of Steven Taylor.)}

UPDATE:  The whole mess is filled with judgment calls.  Zelaya wanted to call a constitutional convention, which he publicly admitted would be intended to change the constitution to allow for re-election.  The referendum question that the Supremes kiboshed, however, only called for a convention, with no other stipulations.  So ... were the Supremes justified?

It all comes back to the problem that a constitution which declares procedural matters to be forever inalterable is a badly-written constitution.

An Andrew Jackson moment

  “The decision of the Supreme Court has fell still born, and they find that they cannot coerce Georgia to yield to its mandate.”
                                                                        —President Andrew Jackson

 

The common misquote of the above is much sexier:  “John Marshall has made his decision; now let him enforce it!”  Which is not a bad summary of Manuel Zelaya’s throwdown when his country’s Supreme Court told him that he could not go ahead with his planned referendum on repealing term limits.  Zelaya’s “No one will stop Sunday’s vote!” is on a par with Jackson’s aphorism.

In fact, it is worth considering what was in Zelaya’s televised speech on Sunday, after the Honduran Supremes slapped him down.  “The Court of Justice, which makes justice only for the powerful, the bankers and the rich of this country, has declared illegal the people’s participation in a legitimate and constitutional poll ... What a shame for all Hondurans, this Court of Justice!  We’re in the presence of a technical coup d’état.  It’s a swipe at Honduran democracy.  I want to appeal to the commanders of the Armed Forces, the officers and the soldiers.  They are part of the people, they should not play this game of the media elite and economic oligarchy, of a deviant bourgeoisie.”

Why is this significant?  Because Honduras could have avoided this crisis with a better constitution.  The Honduran constitution had two major flaws.  First, it took re-election off the table forever.  I mean that quite literally.  Read: 

Article 5:  Voting in advisory plebiscites is mandatory.  Projects intended to reform Article 374 of this constitution will not be objects of referenda or plebiscites.

Article 373:  The National Congress can alter this Constitution in ordinary session with two-thirds of the votes of all members. 

Article 374:  In no case can be reformed the previous article, this article, the constitutional articles that refer to the form of government, the national territory, the presidential term, the prohibition that no citizen can again be president who has carried out the role under whatever title, and the one referring to those who cannot become president of the republic for the subsequent period.

It is a bad bad idea to declare any procedural part of a constitution to be forever inviolable.  The U.S. constitution does this in respect to the apportionment of the Senate, and that is a bad idea that may yet come back to haunt us. 

The Honduran constitution then added insult to injury with its second flaw:  a complete lack of procedures by which the courts, legislature, or popular opinion could remove a sitting president for breaking the law.  The closest is Articles 321-327, which lay out the responsibility of public servants and organisms that break the law and cause civil damages to individuals, or Article 233, which lays a pretty draconian anticorruption law.  But neither really apply in this situation. 

In short:  Zelaya broke a stupid constitutional clause.  Twice, in fact, first by firing an officer who refused to administer an unconstitutional referendum and second by proceeding with the referendum anyway.  Congress could not do anything.  At that point the increasingly-angry military, acting in concert with the Supreme Court, decided to extraconstitutionally remove the president from office. 

I do not like it.  But I am also not sure that this is an abrogation of democracy either.  Judging by their statements, the Obama Administration is equally torn:  they would like Zelaya back, but they aren’t going to wade into another country’s Andrew Jackson moment. 

What do you think?

P.S.  I am not a fan of Andrew Jackson.

Coup in Honduras, updated

  It seems as though the Honduran military just deposed President Manuel Zelaya.   That said, this is not a stereotypical South American coup:  Congress appears to have ratified the Army's action, and a civilian is taking control. 

In an unsurprisingly pointless move, Hugo Chávez put his military on alert.  (Or at least he says that he did; it would not surprise me to find that no official orders have been given.)  He went on to declare, “The people of Alba are in combat, because this does not end today.”  The leaders of the Alternative Bolivariana have condemned the “coup” and its leaders will hold a summit in Nicaragua today. 

But Alba's declaration is less political than it sounds.  Unasur, the OAS, and the United States have all condemned the ouster, although the U.S. is not calling for Zelaya to be reinstated.   

I don't know why the military moved before Congress did, or why the new leaders are going through this charade of pretending that Zelaya resigned before he actually resigned.  But I do know that Zelaya ignored a Supreme Court ruling on June 25th that ordered him to reinstate the general that he had fired because the general refused to use to the Army to organize an unofficial referendum on abolishing term limits.  (I met Zelaya's predecessor about a year ago;  he didn't have a lot of good to say about his successor.)   I'll add here that Article 374 of the Honduran constitution, stupidly, declares that the ban on re-election can not be reformed in any way, no how, forever and ever.  A dumb provision, however, is still a provision. 

For what it's worth, my guess is that the coup will stand.  There is enough of a fig leaf of legality about it to allow OAS governments to walk back their condemnation.  Now, escalating street protests could force the U.S. to pressure the Honduran congress into reversing its vote.  But if I had to bet right now, based on what I've heard from Tegucigalpa, Zelaya will remain out of power.

UPDATE:  The legality of the situation is shakier than the above implies.  Hell, it seems to be blatantly illegal, a good old-fashioned coup.  Why have I changed my mind?  Well, as far as I can figure, the Honduran constitution has no provision for the congressional removal of the president.  The closest provisions are as follows:

Article 205, Section 12:  [Congress has the power to] accept the constitutional oath of office of the elected President and Vice-president of the republic, and other appointees they select; grant them permissions and accept or reject thier resignations and fill vacancies in the case of the complete absence of one of them;

Article 205, Section 20:  [Congress has the power to] approve or disapprove the admistrative conduct of the executive branch;

Article 242:  In the case of a temporary absence of the the President of the Republic, the Vice-president will carry out the functions of the President.  Should the Presidency be permanently vacant, the Vice-president will exercise the powers of the executive branch for the remainder of the constitutional term.  Should the Vice-presidency also be vacant, the powers of the executive branch will be exercised by the president of the National Congress.

Thus, the need to declare that President Zelaya had “resigned” before giving the executive powers over to Roberto Micheletti.  (The office of Vice-president is currently vacant, so having the power pass to Micheletti is kosher ... it's the whole removing of Zelaya what appears to be illegal.)  Note that while Micheletti says that everything is constitutional, this article from the Honduran press cites no clauses or precedents. 

The whole thing looks much shakier upon skimming the text of the constitution in the light of day, or least what passes for it in this, the fourth straight week of rain in New England.  I'll go ahead and call it a “coup.”  It's chances of standing are less than I originally believed.

Great debate attempt #4: There may be hooptie politics in the U.S. of A., but functioning machines there are not

  Some time ago, I took issue with the use of the word “machine” by two commentators on this blog. Short version: They talked about the role of machines in the election.  I said, “There are no more machines.” They said:  “You’re wrong. Patronage politics lives.”

I now believe that it is time to reassert my contention. There is no more Chicago machine. There may, in fact, be no more political machines in America.

What’s a machine, you ask? Simple. Machine politics happens when politicians make promises and levy punishments on voters at an individual level, and not merely as members of an ascribed group. It isn’t machine politics to support EFCA in return for a union endorsement or union contributions. It is machine politics to tell Joe the Union Leader if he gets his local gets out a certain number of votes, he’s gonna get federal contracts steered his way. 

Obviously, the boundaries are grey. They usually are. (C’mon. This blog has an “empire” tag.) But you can make a strong case that machine politics is dead unless you choose to draw the line so broadly as to make everything into machine politics. 

Consider the Board of Revision of Taxes, in Philadelphia, where I write this. 

In theory, its an independent organization, appointed by elected judges and funded by the school district. In practice, Republican and Democratic Party leaders give jobs away to people who work hard on election day. Machine politics!  Except … uh …. the BRT was originally part of a Republican machine. (Hard as it is to imagine, many northeastern cities, like Philly and Jersey City, were once controlled by left-leaning GOP machines.) As the city became more Democratic, Democrats got control of more of the posts. A real machine shouldn’t let that happen — why would its constituents have an incentive to switch? But the Republican Party has managed to retain control over 20 of the 78 seats on the BRT and give them to the people who get out its votes despite a complete collapse in the ability of the Philadelphia GOP to, you know, get votes out. If one machine replaced another, that shouldn’t happen either. What’s going on in Philadelphia seems more like straight-up corruption rather than machine politics, conventionally conceived.
 
Or consider what a real machine did back in 1972, and try to imagine it happening today. 

In 1972, Richard Daley the Elder could already see the writing on the wall: the days of the classic machine were coming to an end. Royko’s Boss came out in ’71. Michael Shakman began his famous suit arguing that patronage politics violated the 14th Amendment. Ralph Metcalfe defected from the machine with the wonderful quote, “It’s never too late to be black,” and managed to stay in office. His candidate for governor lost. So when a bunch of goo-goos challenged his control over the selection of candidates to the Democratic National Convention, he showed what a real machine does. They attacked the churches where the reformers organized and destroyed their records. Attacked, as in mobs and beatings. The Partido Nacional Revolucionario would have called that a porra. Richard Daley the Younger, I should add, led the porra that assaulted a Catholic Church in the 5th District. They then disrupted the election of the at-large delegates from Cook County. 

Daley lost anyway, save for the at-large. He sued, and when the U.S. Supreme Court punted, he got a machine judge to seat his hand-picked slate over the elected delegates. Except that the judge couldn’t do anything, because, well, the Supreme Court had kicked the problem back into the hands of the Democratic National Committee. Daley’s case wasn’t helped by the fact that in a massive failure of vision his slate contained only one Italian last name and three Polish ones. That’d be like, well, uh … you know, lots of Irish political machines shot themselves in the head over this sort of oversight, be it Chicago’s failure to integrate Italian and Poles and African-Americans, or Boss Flynn of the Bronx trying to pretend for a stupidly long time that all these Jews and Puerto Ricans would just go away. (The Jews did. The Puerto Ricans are. But the machine went away first.) 

Wrap your head around that happening in the 2012 . You can’t. It wouldn’t. Not even in places like San Antonio, where machine-like organizations still exist in a way that they’ve faded in Chicago and Philadelphia. Those cities have a problem with corruption, but I’m just not seeing the machines. (Michael Nutter is many things, including a plausible future President of the United States, but a machine politician is not one of them.) Boston, well, Boston kinda sort has a machine, sorta, but it’s weak, and survived because the Irish were smart enough to turn things over to the Italians. Cambridge has one that survives only out of apathy and indirect elections.

New York City could have replicated machine politics. It had an ethnic base and plenty corruption, while Jews and Italians were replaced by Puerto Ricans and African Americans, who were in turn displaced by West Indians, Dominicans, and Chinese. 

Yeah, I know, hugely diverse immigration stream and all that. But a political entrepreneur could have built a machine on a simple West Indian-Dominican-Chinese tripod … heck, they could have built on West Indians alone.

Only they didn’t. And if you tell me that’s because West Indians don’t make good American politicians or don’t become citizens or otherwise lack the necessary chops I will be unable to contain my laughter. It’s because, I think, American institutions and political culture currently make machine politics impossible. The combination of law, free elections, and prosperity has destroyed the great American political machine. 

In fact, the same combination — or at least two of the three — has also wounded the great Mexican political machine. They hang on in parts of Mexico, but generally the country’s politics resemble U.S.-style interest group politics, not the machine politics of yore. “Porras” cause riots after university soccer games; they don’t assault polling places and beat up opposition politicians. They’re also weakened in Panama. I’m not sure that I’m particularly happy about Martinelli’s victory, but it isn’t a victory for machine politics. 

Now, machine politics isn’t dead in Latin America, despite some bruising. Consider “Daleyismo” in Venezuela. ¡Viva la maquina! The Nestor-Cristina team in Argentina is very good at this sort of thing. Danny Ortega is less good at it, as his need to resort to vote-stealing shows, but even the great Daley had to do that on occasion. Correa and Morales, in different ways, are trying to build machines. Dominican politics is dominated by machines, albeit not hegemonic ones … and I think you could say that Mr. Uribe’s conservatives have built there own odd sui generis electoral machine. 

So machine politics lives on in América, but in America it is almost impossible for me to imagine the kind of tactics used by the Socialists-Peronists-Sandinistas-MAS-Conservatives achieving anything other than a wave of negative news stories followed by indictments.

I know less about the Old Continent. There are some machine-like things in Italy these days, although I think a new word is needed for Berlusconi’s very 21st-century political strategy. But to repeat myself, electoral machines no longer seem to exist in America.

Am I wrong? As always, I’m happy to change my mind. And just to be sure that we’re on the same wavelength, a “machine” doesn’t need to be as powerful as the Cook County Democratic Party under Richard Daley to qualify. It just needs to be able to win elections on the basis of personalistic relationship and individual patronage. 

Bolivarianism and Mercosur

 The Bolivarian Republic is seeking to join Mercosur. Brazil's government supports the idea, but the Congress is a bit wary. Foreign secretary Celso Amorim defended Venezuela's accession in a stormy committee meeting the day before yesterday. In it, Amorim had to point out, loudly, that there is no evidence that the Venezuelan government stole elections. A few days earlier Amorim was in Caracas attempting to persuade President Chávez to eliminate Venezuelan tariffs on 500-odd products before the Brazilian senate votes on the accession treaty, so as to reduce opposition. 

The thing is, I'm having trouble understanding how any of this matters. Mercosur has a parliament, with members appointed from national Congresses, but it doesn't do anything. (Which isn't surprising, but Brazil hedged its bets anyway:  as of 2011, Brazil will appoint 75 of the parliament's 154 members.  That kinda makes it unlikely that the other members will want to give it any serious power.) Mercosur has a tribunal, but it doesn't do anything either. Private individuals, unlike in Europe, can only bring suits by acting through their national governments.    Anyway, its decisions are regularly ignored. In fact, its first decision was ignored. And it failed its really big test, the Argentine blockades against an Uruguayan paper mill. There's really nothing about investor protection or property rights in the founding treaties; the decision against Argentina rested on the fact that the blockades were in fact blocking trade.

In short, Mercosur is neither much of a confederation nor an effective tool for an informal Brazilian empire. Which explains why Chávez wants in. Why not? But does not fully explain why Brazil wants him in, or why Brasilia insists on effective control over a powerless parliament. 

There is something going on here that I don't understand.

UPDATE:  The picture comes from Jussi in comments. It had to be posted.

Oh no he di’n’t

  Well.  One of the leaders of the Republican party, a former Speaker of the House, and a plausible presidential candidate, goes to the Bronx and calls Cristina Fernández a “semi-dictator.”   

No, seriously.  Chávez, though, got to be a full dictator, while poor Danny Ortega got lumped in with Cristina among the “semis.” 

Now that is funny.  Ortega, who unlike the other two has in fact engaged in election fraud, becomes the same as Fernández.  Now, it is true that about a year ago she tried and failed to make an end-run around Congress in order to impose an agricultural export tax.  But our last president tried and succeeded to make an end-run around Congress in order to detain suspects indefinitely and monitor all communications crossing the country's border ... and while George Bush the Younger was many things, a “semi-dictator” was not one of them. 

Meanwhile, I really do need to repeat that Venezuela is not a dictatorship.  Most of the anti-Chavista opposition recognizes that.  And even should Chávez turn it into one, Venezuela poses no threat to the United States.  Let him slosh money around!  He gets nothing for it.   

Still, I can understand how he makes a useful foil for American conservatives.  I've heard lefties say stupider things about President Uribe ... although never anyone as prominent as Newt Gingrich.  But making Argentina into an enemy of the United States?  Huh?  Argentina??

So I've really got to wonder.  Can somebody explain what's going on with the GOP and the crazy pills?  I'm at a loss.

I guess I must reluctantly come around to the position that it is time to eliminate the filibuster. 

Another senate

  One rather strange thing, when you think about it, is the incredible influence that the United States Constitution has had over political structures in Latin America.  None of those polities developed under similar circumstances — the Argentine Republic comes closest, and it's not very close — and none of them had similar political traditions.  So its rather strange when you realize both how universal the American presidential-bicameral model has become and how durable it's proved.

It turns out that Bolivia also has a U.S.-style senate. Before the recent constitutional reform, each province enjoyed three senators. Now each one has four. Not much of a change there, unless the system for electing those senators (still undetermined) has the result of dividing the delegations from the other provinces while united the Media Luna ones, or vice versa. That's remotely possible: the old system worked like Argentina, giving the election winner two senators and the runner-up one, while the new system is proportional. Depending on the election rule chosen, the effect would be to strengthen parties with overwhelming support within their province and split delegations from provinces with more divided electorates. But we'll need to see both what proportional rules is chosen (the constitution seems unclear on whether the provinces or the legislature will set the rules) in order to know the actual effect.

In short, in terms of the Bolivian legislature, the new and awfully-named “Plurinational Legislative Assembly” doesn't change much. Not only is equal representation preserved in the Senate; the new reserved “indigenous” seats in the lower house are designed to insure that the Media Luna's current representation will not change. 

My opinion of the Bolivian senate, however, is very different from my opinion of the Argentine, American, and Brazilian senates.  Those are undemocratic travesties that need to be reformed. (Here's a much more democratic way of apportioning the U.S. senate among the states.) Inertia and the power of special interests are the only reasons to keep them. 

The Bolivian senate, on the other hand, is a necessary compromise to hold a deeply-divided country together. President Morales's original proposal for a single-house FTFP legislature with a block of reserved “indigenous” seats would most likely have served only to keep fueling the political violence that wracked Bolivia last year. Given that it's hard to see anyone benefitting from a breakup of the nation, the undemocracy of a senate is a price worth paying. 

Wisdom

  I had a post about the Cristina-Hugo summit and all that good stuff, with two pretty cool pictures, but the damned Typepad editor crashed and the autosave appears to have failed.  Since I have two books and one case to finish, that's the end of that.  Apologies!

But here is some very sage advice about Latin America policy for the Obama Administration.  Short version:  be wary of having a Latin America policy.  My instinct tells me that the Obama-Clinton team will heed this advice.