Culture Matters

Enero / Febrero de "Foreign Affairs".

Culture Matters

The Real Obstacles to Latin American Development

Oscar Arias

OSCAR ARIAS served as President of Costa Rica from 1986 to 1990 and 2006 to 2010. He won the Nobel Peace Prize in 1987.

Nearly two centuries after the countries of Latin America gained their independence from Spain and Portugal, not one of them is truly developed. Where have they gone wrong? Why have countries in other regions, once far behind, managed to achieve relatively quickly results that Latin American countries have aspired to for so long?

Many in the region respond to such questions with conspiracy theories or self-pitying excuses. They blame the Spanish empire, for making off with the region's riches in the past, or the American empire, which supposedly continues to bleed it dry today. They say that international financial institutions have schemed to hold the region back, that globalization was deliberately designed to keep it in the shadows. In short, they place the blame for underdevelopment anywhere but on Latin America itself.

The truth is that so much time has passed since independence that Latin Americans have lost the right to use others as the excuse for their own failures. Various outside powers have indeed affected the region's fate. But that is true for every region of the world. The countries of Latin America are not the only ones to have faced an uphill battle in history. Latin American nations began this race with conditions equal to, or even better than, those prevailing elsewhere. They -- we -- are the ones who fell behind.

When Harvard University opened its doors in 1636, there were already well-established universities in Argentina, Bolivia, Chile, Colombia, the Dominican Republic, Ecuador, Mexico, and Peru. In 1820, the GDP of Latin America as a whole was 12.5 percent greater than that of the United States. Today, with a population of about 560 million -- some 250 million more than the United States -- the region has a GDP that is only 29 percent of its northern neighbor's. Latin America won its independence 150 years before countries such as South Korea and Singapore did; today, despite their past as exploited colonies and their lack of significant natural resources, those countries' per capita income is several times greater.

One consequence of Latin America's reluctance to face such comparisons squarely has been a disconnect between discourse and reality. Tired of empty words and meaningless promises, people in the region are disillusioned with politics in general. Recognizing their own share of responsibility for the situation, however, could be the start of rewriting history. The key is accepting that four regional cultural traits are obstacles that need to be overcome for development to succeed: resistance to change, absence of confidence, fragile democratic norms, and a soft spot for militarism.

LOOKING BACKWARD

Latin Americans glorify their past so ceaselessly that they make it almost impossible to advocate change. Instead of a culture of improvement, they have promoted a culture of preservation of the status quo. Constant, patient reform -- the only kind of reform compatible with democratic stability -- is unsatisfying; the region accepts what exists, while occasionally pining for dramatic revolutions that promise abundant treasures only one insurrection away.

Such an attitude would be easier to understand in Canada or Norway, which have achieved enviable levels of human development. But what have Guatemala or Nicaragua to prize so highly in their pasts? In cases such as these, the conservative impulse probably springs not just from a desire to preserve the status quo but even more from a desire to protect established privileges and a general fear of the unknown. Latin Americans hold on tight even to pain and suffering, preferring a certain present to an uncertain future. Some of this is only natural, entirely human. But for us, the fear is paralyzing; it generates not only anxiety but also paralysis.

To make matters worse, the region's political leaders rarely have the patience or the skill to walk their people carefully through the processes of reform. In a democracy, a leader must be the head teacher, someone eager to respond to doubts and questions and explain the need for and the benefits of a new course. But too often in Latin America, leaders justify themselves with a simple "because I say so."

This dovetails neatly with the desire to protect established privileges -- a phenomenon visible not only among the rich and powerful but throughout society. Teachers' unions decide for themselves how much teachers should work and what they should teach. Something similar happens with business owners and contractors in the private sector, who have provided low-quality services for decades with no fear of competition, thanks to sinecures and illicit transactions. And public officials are also immobile: the civil services reward those who do no more than sit at their desks and say no.

This attitude has many consequences, particularly when it comes to entrepreneurship. Latin America has vastly more controllers than entrepreneurs. The region is suspicious of new ideas and lacks effective mechanisms to support innovative projects. Someone seeking to start a new business must begin by wading through waves of bureaucracy and arbitrary requirements. Entrepreneurs get minimal praise or cultural reinforcement, little legal protection, and scarce academic support.

The region's universities, meanwhile, are not turning out the kinds of professionals that development demands. Latin America graduates six professionals in the social sciences for every two in engineering and every one in the exact sciences. Visiting a Latin American university campus is like traveling to the past, to an era in which the Berlin Wall had yet to fall and Russia and China had yet to embrace capitalism. Instead of giving students practical tools -- such as technological and language skills -- to help them succeed in a globalized world, many schools devote themselves to teaching authors no one reads and repeating doctrines in which no one believes.

For development to occur, this has to change. Latin American countries must begin to reward innovators and creators. Their universities must reform their academic offerings and invest in science and technology. They must reduce burdensome regulations, attract investment, and promote the transfer of knowledge. In other words, they must understand that pragmatism is the new universal ideology -- that, as Deng Xiaoping once said, it does not matter whether a cat is black or yellow, as long as it catches mice.

DEVELOPING TRUST

The second obstacle is the absence of confidence. No development project can prosper in a place where suspicion reigns, the success of others is viewed with misgiving, and creativity and drive are met with wariness. Latin Americans are among the most distrustful people in the world. The World Values Survey asks the question, "Can most people be trusted?" In the year 2000, 55-65 percent of those people surveyed in four Nordic countries -- Denmark, Finland, Norway, and Sweden -- said yes; only 16 percent of those people surveyed in Latin America did, and only three percent did in Brazil.

Latin Americans doubt the true intentions of all those who cross their paths, from politicians to friends. We believe that everyone has a secret agenda and that it is better not to get too involved in collective efforts. We are captives to a gigantic prisoner's dilemma in which each person contributes as little as possible to the common interest.

In a globalized world, however, trust is indispensable. The countries most ready to trust are the countries most ready to develop, because their citizens can base their actions on a reasonable expectation of how others will behave. Legal insecurity is a special problem. With alarming frequency, citizens of Latin American countries do not know what the legal consequences of their actions will be or how the state will react to their projects. In some countries, businesses are expropriated without any justification, permits are revoked because of political pressure, judicial verdicts fly in the face of the law, and the legal situation is so volatile that it impedes the attainment of long-term goals. As former Ecuadorian President Osvaldo Hurtado recently noted in The American Interest,

Latin Americans do not trust legal institutions and actors . . . whether government courts or private lawyers. Indeed, the deep-rooted, centuries-old custom of flouting the law has been a more powerful influence on the continent than the countless laws passed over the centuries to regulate economic, social and political relations. Latin American legislatures have probably passed more laws over the past 175 years than their counterparts anywhere on the planet, yet never have so many laws been ignored by so many for so long.

It has been said that legal security is the protection of trust. For economic development to succeed, Latin Americans must be able to trust their states to act reasonably and predictably. They must be able to anticipate the legal consequences of their actions. And they must be able to trust that others, too, will act in accordance with the rules of the game.

COMMITMENT TO DEMOCRACY

The third obstacle blocking development is the fragility of the Latin American commitment to democracy. To be sure, with the sole exception of Cuba, by some measures the region would be counted as entirely democratic today. After centuries of civil wars, coups, and dictatorships, democracy has indeed made remarkable strides in recent decades. But the truth is that its victory is incomplete. Despite carefully crafted constitutions, grand proclamations, and high-minded treaties, Latin America still has a soft spot for authoritarianism.

Fidel and Raúl Castro in Cuba behave like traditional Latin American caudillos -- but so do Hugo Chávez in Venezuela and Daniel Ortega in Nicaragua, who have used democratic processes and structures to subvert their countries' own democratic systems. Once elected, they interpreted their mandates as carte blanche to do whatever they wanted, including persecuting their opponents, shackling the media, and trying to twist the system so as to stay in power at all costs. Too many of their countries' citizens, meanwhile, are content to allow these leaders to proceed, perhaps seeing their messianism and demagoguery as the exit from the prevailing regional labyrinth of underdevelopment.

If Latin American democracies do not live up to their political and economic promise, if their citizens' hopes remain a dream deferred, then authoritarianism will rise again. The way to prevent that is to show the public that democracy works, that it truly can build more prosperous and equitable societies. Moving beyond political sclerosis, becoming more responsive to citizens' demands, and generating fiscal resources by taxing the wealthy are all essential steps to take in moving toward a true culture of liberty and progress.

A CULTURE OF PEACE

Increasing public income is necessary, but it is not sufficient. Those funds must also be spent wisely, to promote human development. Latin American countries have spent a lot in the past, running up immense debts, but they have often squandered their resources on inappropriate priorities. They have lavished on their armies the money that they should have lavished on their children.

Aside from Colombia, no country in Latin America faces an ongoing or imminent armed conflict. And yet each year, the region spends $60 billion on arms and soldiers -- double what it spent just five years ago. Why? Who is going to attack whom? The enemies of the people in the region are hunger, ignorance, inequality, disease, crime, and environmental degradation. They are internal, and they can be defeated only through smart public policy, not a new arms race.

Costa Rica was the first country in history to abolish its army and declare peace with the world. Its children have never known military service. They have never seen the shadow of an armored helicopter or the tracks of a tank. And since the abolition of its armed forces 62 years ago, Costa Rica has never suffered a coup. I would like to think that all of Latin America might follow in Costa Rica's footsteps, but I know that this utopia will not be possible in my lifetime. I also know, however, that a responsible and gradual reduction of military spending is not only possible but also imperative. We owe it to the victims of dictatorships, who during the twentieth century wrote with their own blood the saddest pages in Latin American history. We owe it to the survivors of oppression and torture. We owe it to those who saw their worst fears realized in the presence of a soldier.

Abandoning this martial culture is also essential because the increased presence of soldiers in our towns and cities promotes a combative attitude that does not favor development. It suggests that problems are best solved by fighting an enemy, rather than building in solidarity with friends and neighbors. It teaches that conquests are attained with weapons, shouts, and threats, as opposed to words, respect, and tolerance. The militarism of the region's culture is a regressive and destructive force, one that needs to be replaced with a culture of peace.

Latin Americans must look in the mirror and confront the reality that many of our problems lie not in our stars but in ourselves. We must lose our fear of change. We must embrace entrepreneurship. We must learn to trust. We must strengthen our commitment to democracy and the rule of law. And we must abandon the military practices that continue to rub salt into the wounds of our past. Only then will the region finally attain the development it has so long sought.

Copyright © 2002-2010 by the Council on Foreign Relations, Inc.