This book examines the relationship between free markets and democracy. It demonstrates how the implementation of even very painful free-market economic reforms in Chile and Mexico have helped to consolidate democratic politics without engendering a backlash against either reform or democratization. This national-level compatibility between free markets and democracy, however, is founded on their rural incompatibility. In the countryside, free-market reforms socially isolate peasants to such a degree that they become unable to organize independently, and are vulnerable to the pressures of local economic elites. This helps to create an electoral coalition behind free-market reforms that is critically based in some of the market's biggest victims: the peasantry. The book concludes that the comparatively stable free-market democracy in Latin America hinges critically on its defects in the countryside; conservative, free-market elites may consent to open politics only if they have a rural electoral redoubt.

Latin American Democratic Transformations explores the manner in which Latin American societies seek to consolidate and deepen their democracies in adverse domestic and international circumstances. The contributors engage recent debates on liberal and illiberal democracy and probe the complex connections between democratic politics and neoliberal, market-oriented reforms.

Through an in-depth analysis of the Chilean labour market, social welfare, and state reforms, this book reveals the manner in which neoliberal reform in Chile has undermined the urban poor's incentives and ability to hold public officials accountable, negatively affecting the quality of Chilean democracy.

Chile emerged from military rule in the 1990s as a leader of free market economic reform and democratic stability, and other countries now look to it for lessons in policy design, sequencing, and timing. Explanations for economic change in Chile generally focus on strong authoritarianism under General Augusto Pinochet and the insulation of policymakers from the influence of social groups, especially business and landowners. In this book Eduardo Silva argues that such a view underplays the role of entrepreneurs and landowners in Chile's neoliberal transformation and, hence, their potential effect on economic reform elsewhere. He shows how shifting coalitions of businesspeople and landowners with varying power resources influenced policy formulation and affected policy outcomes. He then examines the consequences of coalitional shifts for Chile's transition to democracy, arguing that the absence of a multiclass opposition that included captialists facilitated a political transition based on the authoritarian constitution of 1980 and inhibited its alternative. This situation helped to define the current style of consensual politics that, with respect to the question of social equity, has deepened a neoliberal model of welfare statism, rather than advanced a social democratic one.

What becomes clear throughout is that there is a paradox at the heart of Latin America's democracies. Despite decades of struggle to replace authoritarian dictatorships with electoral democracies, solid economic growth (leading up to the global credit crisis), and increased efforts by the state to extend the benefits of peace and prosperity to the poor, democracy - as a political system - is experiencing declining support, and support for authoritarianism is on the rise.

A historic shift has occurred in the organizational structures through which the lower classes in Latin America express voice and find political representation. With the political and economic reforms of the 1980s and 1990s, networks of community-based associations and nongovernmental organizations replaced party-affiliated labor unions as the predominant organizations to which the lower classes turned. This volume examines the new “interest regime” in Argentina, Chile, Peru, and Venezuela through two extensive surveys—one of individuals and one of associations—undertaken in those nations’ capital cities. Contrary to common perceptions, the new interest regime is neither a vibrant, autonomous civil society nor a set of weak, atomized organizations. Participation in associations is generally high, compared to “direct action” as a strategy for pursuing collective interests, and associations more frequently coordinate and engage the state than has sometimes been assumed. However, various forms of interaction with the state pose a classic trade-off between representation and state control, and the new interest regime is marked by representational distortion, in that the lower classes are less likely to use the new structures than the middle classes. Within these general patterns, distinct national models are emerging. This volume represents the most ambitious and systematic effort to date to examine individual participation and associational life in Latin America and to carry out a cross-national analysis of new forms of political representation.