An analysis of the current political, economic and social situation of Latin America shows that there are reasons for optimism but also for frustration.

The past two decades in Latin America witnessed the departure of authoritarian regimes in country after country. Today, democracy has failed to take hold in only one country in the region -- Cuba. Given Latin America’s turbulent political history, the spread of democracy is an extraordinary development that has brought tremendous benefits to citizens, including the guarantee of fundamental political freedoms, civil liberties and human rights.

As the new millennium begins, however, the celebration of universal democracy has been replaced by a more sober perspective focusing on the serious social, economic and political challenges confronting the countries of the region. Despite profound economic policy reforms along the lines of the liberal “Washington consensus,” economic growth across the region over the past decade was relatively slow and remained volatile. The high levels of poverty and inequality in most countries declined little, if at all. Progress in alleviating other significant social problems such as unemployment, crime and corruption was also minimal. Despite their importance to the region’s development prospects, investments to upgrade the quality and efficiency of health care, education and infrastructure were insufficient.

Some of the other problems facing Latin America are obvious: corruption, lack of transparency and accountability in politics and a disappearing middle class. All this under democracy. No wonder many Latin Americans are discontent with the performance of democracy. However, we need to keep in mind that although there are many common problems, there are also important differences among the Latin American countries.

Following is an analysis of some of the problems and their suggested solutions.

Problems:

1. The party system is becoming more fragmented and not well institutionalized, resulting in unstable and ever-changing political coalitions and no continuity in the policies followed by different governments.
2. There is no dialogue between the elected and the electorate. Voters often do not know what policies their prospective representatives stand for and political parties seem to be constituted around the personal charisma of one leader. Once elected, voters have no way of knowing which policies their elected representatives have supported or opposed because this information is either not kept or not made public. So there is no possibility of elected officials facing any censure or any way to judge how the government is performing.
3. Political parties are captured by special economic interests and not responsive to the needs of the general public. Campaign finance reform is needed. This can either take the form of full or partial funding by the state or having information about which party is supported by which special interest group.
4. The media could act as an important agent of change through investigative reporting and exposes but it is not doing this either because media ownership is concentrated in a few hands or these countries still haven’t enacted enabling laws such as the Freedom of Information Act.
5. Elected representatives often do not have the resources for proper policy analysis and thus the laws that are passed often fail to address the problems they’re supposed to solve. Capabilities similar to the U.S. Congressional Budget Office need to be developed. NGOs and local think tanks can play an important role both by in-depth public policy analysis and acting as watchdogs. They lack both the funds and the human resources.
6. NGOs and civil society are active in these regions. However, most of their work is at the grassroots level and there is no interaction with the elites and the people in power, to promote reforms effectively.
7. Even though democracy is widespread, the quality of democracy is low. Civic education is necessary to better enable citizens to engage in civil society movements and get the services they want from the government. NGOs can again play an important role here by forming the basis of an institutional mechanism that can act as a monitoring system that can forewarn when democracy is threatened. NGOs can help in deciding when to intervene and how to intervene.
8. The informal economy plays a very important role in these countries and acts as a safety net in many of these transition economies. Close to seven out of ten jobs are created in the informal sector. This informal sector should be provided with better support and access to credit.

Some of the solutions that can have multiplier effects are:

1. One of the priorities for the region should be the construction of national agendas for governance for the medium and the long term, to be agreed upon by governments, political parties, business groups and civil society.
2. We need to develop a party system that is effective and political parties that are internally democratic with well formed ideologies.
3. To have laws on funding of political parties and election campaigns in order to make the relation between politics and money transparent and to level the playing field.
4. Freedom of the press and the right to information are vital.
5. Vertical linkage between NGOs and the government is essential to bring about lasting change. Also a healthy relationship between civil society and political parties is essential.
6. A well functioning regime of property rights should be instituted so that the informal sector and entrepreneurs get access to capital, a pre-requisite fostering economic growth.
7. Last but not least, the biggest priority should be reducing poverty and income inequality.