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Playing by new rules

What makes some governments better than others?

Better politicians, of course. In democratic countries this explanation is appealing because it points to a solution if the current government falls short of the ideal. Voters can always "throw the bums out" in the next election, and hopefully the new bunch will be better.

This most basic referendum on the quality of government has been taking place with impressive regularity in Latin America. With few exceptions, the peaceful transfer of power through fair and open elections has become a point of civic pride in the region during the last 15 years.

Yet something is still amiss. Although opinion surveys indicate that Latin Americans prefer democracy to other forms of government, polls also reveal deep disillusionment with democracy as currently practiced. Incessant reports of corruption in the public sector, combined with the widespread failure to reduce poverty and inequality, have led many people to lose faith in politicians and political parties in general. Some are even questioning the usefulness of democracy as a whole.

Are politicians to blame for this disenchantment? Historically the answer might well have been yes. Strong personalities, in the form of caudillos, party bosses or military autocrats, have traditionally defined and controlled political life in Latin American countries. Even during the transitions from dictatorship to democracy that took place in the 1980s, charismatic party leaders dominated the political scene. These shrewd politicians set their parties’ agendas, forged coalitions with other party heads and brokered agreements with the military—all with relatively little input from the rank and file.

But in recent years, as elections have become more routine, the status of party leaders has gradually been diminished by the persistence of problems—such as corruption and influence-peddling—that seem to resurface with each new government. The media are devoting unprecedented energy to exposing abuses within public institutions such as legislatures, electoral commissions, courts, customs and the police.

In other words, while Latin Americans have won the right to punish bad governments by voting them out of office every five or six years, they have not gained the ability to control politicians’ behavior while in office. A major new IDB report, Development Beyond Economics, takes a close look at how this absence of accountability can prevent democracies from increasing economic growth and advancing social justice. One way to think about the relationship between political accountability and development, according to the authors, is in terms of a contract. Before an election, candidates and political parties pledge to provide certain services (i.e., better health care, honest and efficient administration, etc.) in exchange for votes. But after the election, voters find not only that the "contract" is often ignored, but that they have no way of enforcing it until the next election. At its worst, this sense of powerlessness generates a perverse cycle. Cynical and apathetic voters turn their backs on a political system they consider out of control; the absence of public scrutiny then gives corrupt politicians even more leeway for abuse.

Ironically, this situation has led many observers to conclude that politicians are not, in fact, the principal source of the problem. Instead, they blame the absence of rules, laws and institutions capable of restraining politicians and forcing them to account for their actions while still in office.

This shift in emphasis—from political personalities to the quality of laws and institutions—is apparent to some degree in virtually every Latin American and Caribbean country. In some cases is has taken the shape of general anti-corruption campaigns run by civic groups, the government, or both. In others the focus is on ending abuses in individual public services such as customs or the police. Several countries have undertaken large-scale programs to reform their judicial systems. Others are experimenting with ways to make their legislatures more transparent and responsive to the interests of citizens.

To illustrate how one country is attempting to improve the quality of government, this article profiles the Andean nation of Bolivia.

Stages of governability. In 1982, after decades of political instability and military dictatorships, Bolivia began what has since become one of Latin America’s longest uninterrupted periods of democratic rule. During a recent interview at his office in La Paz, current Bolivian Vice President Jorge Quiroga described that milestone as the first stage in his country’s evolution toward governability. "That year we restored democracy, but it was a completely ungovernable democracy," he recalled. Bolivia’s numerous political parties had little experience in the art of government, and the legislature turned into a chaotic free-for-all where each group tried to impose its agenda and few were willing to compromise. "There were no public budgets, and absolutely no laws were approved," Quiroga said.

The second stage of governability, according to Quiroga, emerged when the heads of the principal political parties agreed to form parliamentary alliances that would enable them to pass laws and carry out some "minimal programs to benefit the public." But these agreements involved almost no input from the party rank-and-file, according to Quiroga. They also tended to exclude any concessions to political parties or interest groups that were not part of the governing coalition. In fact, it was virtually impossible for legislators from the opposition to chair any significant legislative commissions or hold any other meaningful posts within the government coalition. "It was all or nothing," recalled Quiroga.

Despite their flaws, these agreements broke up the partisan logjam in the legislature and cleared the way for a series of crucial structural reforms. During the 1980s the legislature pushed through a massive privatization program, overhauled the tax system and closed money-losing state-owned banks, to name a few of the measures that would have been impossible without the coalitions.

Though Bolivian voters generally supported these reforms, the political system still had very little credibility. Because they were essentially shut out of the process, opposition parties tended to discredit every government policy and to promise a radically different agenda once they were in office. A bigger problem was posed by the electoral process itself. The institution that administered elections was controlled by the political parties and election results were routinely annulled or manipulated in closed-door negotiations. During presidential elections in 1989, abuses were so flagrant that the hierarchy of the local Catholic Church joined dozens of civic groups in calling for a radical reform of the electoral system.

New ground rules. That crisis led to what Quiroga describes as the third stage of Bolivia’s experience with governability. In a series of unprecedented summits in 1990 and 1991, leaders from the entire political spectrum agreed to forge a new set of ground rules for politics and public institutions. "These were global agreements between majority and minority parties, between government and opposition, to make permanent changes to the country’s institutions," says Quiroga.

The most immediate change was in the electoral system, where the political parties agreed to turn over the management of elections and all related issues to a new and fully independent electoral court (See sidebar, page 12). A key aspect of this new court was the requirement that each of its five directors foreswear any political affiliation and be confirmed by a two-thirds majority in the legislature. Because no political coalition has ever approached a two-thirds majority in Bolivia’s legislature, the latter provision essentially guaranteed that opposition support would always be needed to confirm these officials.

According to Carlos Toranzo, a political scientist based in La Paz who has written extensively about Bolivia’s institutional reforms, the notion of an explicitly depoliti-cized electoral court was so appealing that it quickly became "one of the most legitimate institutions Bolivia has ever had." Indeed, the electoral court was so successful, according to Toranzo, that it forced the legislature to overhaul the appointment procedure for the heads of nearly all of Bolivia’s public institutions. In the past, appointments to these posts were considered one of the spoils of victory enjoyed by the ruling coalition, and each new government would replace virtually all the upper echelons of the public sector with its allies.

Today, the two-thirds confirmation requirement is applied to justices of the Supreme Court and the directors of the Central Bank, Customs, and the regulatory bodies that oversee energy, banking and other vital sectors. It also applies to several recently created institutions, such as the Constitutional Tribunal, the National Judiciary Council (which appoints lower court judges) and the Public Ombudsman. Moreover, all the new appointments are designed to serve beyond the term in office of the current government, in order to ensure continuity and prevent political interference.

Vice President Quiroga said that the most singular aspect of this institution building process is the depth of support it enjoys in a political environment where no single party ever has more than 25 percent of the votes in Congress.

"Over the last two years we have installed 76 officials with this new procedure," he said. "On average, 85 percent of the votes were in favor of confirmation."

A congress that works. Monitoring the credentials and performance of senior public servants is a new role for Bolivia’s legislature, and it points to what Vice President Quiroga calls the pending "fourth stage" of governability in Bolivia. "Until recently, Congress was little more than a line of transmission for decisions made by the party leaders and laws drafted by the executive," Quiroga said. While this may have been acceptable during the period of urgent structural reforms in the 1980s, he believes voters now expect more from their representatives. "The challenges we face today are poverty, housing, education, health, and the need to reform institutions like the judiciary and our criminal, commercial and civil laws," he said. "These are issues that, according to our Constitution, should be worked out in the legislature. So the imperative now is to get our legislature to function fully, to give people a means of influencing legislation and enforcing accountability."

This imperative was also apparent to the government of Gonzalo Sánchez de Lozada, who was president prior to the election of Hugo Banzer Suárez in August 1997. As part of its reform program, the Sánchez government sought IDB financial support to create a National Governability Program. Launched in early 1997 with a $12 million IDB loan, the program is working to modernize the legislature and strengthen the administrative capacity of the National Electoral Court, among other activities. In a notable example of political continuity, the Banzer administration embraced the governability program and has aggressively promoted its goals. Vice President Quiroga, who is also president of Bolivia’s Congress, serves as chairman of the program’s executive committee and is an outspoken advocate of its goals. (See "A legislature with glass walls," at the top of the page).

According to Quiroga, the Banzer administration sees the governability program as part of a broader policy to combat corruption in the public sector. Known as the Integrity Plan, this initiative is targeting three areas: judicial reform, public administration systems, and so-called "vulnerable areas." The last category was based on a government survey in which people were asked to identify the public services they considered to be most corrupt. "The most frequent answers were customs, government procurement, tax administration and the police," said Quiroga. "So we have reform programs for each."

In the customs sector, for example, the legislature approved a new set of regulations and confirmed a new, highly professional leadership. "We have also overhauled our procurement system and have introduced controls and an appeals system that is very transparent," said Quiroga. Reforms of the police and the tax system are also progressing, although at a slower pace.

Will Bolivians interpret these measures as evidence that the quality of their government is improving? Quiroga said it is too early to make that judgement, but he suspects the question will ultimately be decided less at the central level of government than at the municipal one. Bolivia has been systematically transferring budget authority over infrastructure and social service spending to regional and local governments. "Ten years ago 70 percent of all public investment was controlled by the central government," he said. "Today, that same percentage is being transferred to departmental and municipal governments."

This is arguably the most radical aspect of Bolivia’s evolution toward a new conception of government, considering that it breaks with a centuries-old tradition of highly centralized administration. Bolivians both inside and outside of government say the results so far have been uneven. While municipalities have jumped at the chance to decide exactly how their budgets should be spent, many have made questionable use of public funds. Few public officials at the municipal level have the management skills required to plan and execute budgets properly. And the old specter of clientelist politics—once confined largely to the federal level—has now reared its head in small towns as political parties jockey for control of municipal finances.

"It won’t do us much good to have transparent procurements and a good civil service at the central level if the system doesn’t work at the municipal level," warned Quiroga. Carlos Toranzo, the political scientist, agreed, adding that "the biggest problem is the lack of citizen oversight and control in the municipalities." Although most local jurisdictions now have audit committees made up of local residents who are charged with monitoring the management of public funds, in practice many of these committees have become politicized and have been less than zealous in performing their watchdog role, according to Toranzo.

Better laws, better institutions, and better legislators will all help, but in the end Bolivia’s citizens are the only ones who can improve their government.

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