[Debate] (Fwd) Latin American economic growth: Populist v centrist regimes

[Patrick Bond]

Dean Baker's Beat the Press


      The Washington Post Doesn't Like Populist Governments in Latin America

In keeping with its new journalism model of eviscerating the distinction 
between news and editorial positions, the Washington Post told readers 
in a news article 
<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=KGz%2FD0oUvE5Z1v3A10lRsy2vC9MTH9sr> 
that "populism is running out of gas in Latin America," using the words 
of Arturo Porzecanski, a Uruguayan economist who teaches at American 
University in Washington. Mr. Porzecanski is one of several critical 
voices used as sources for the piece.  (The only statement from a 
supporter of the populist governments is a comment from Venezuela's oil 
minister, which appears to have been given at a press conference.)

The data do not seem to agree with Mr. Porzecanski. The piece mentions 
11 countries in Latin America, 5 of which (Argentina, Bolivia, Ecuador, 
Nicaragua, and Venezuela) it identifies as populist. The chart below 
shows per capita GDP growth in each country either from 2000-2011 or 
from the year when a populist government assumed power until 2011. 
(Argentina's growth is shown from 2000 because the economy was in a 
steep downturn in 2002 when the first Kirchner government took power.)

Real Per Capita GPD Growth: Populist Governments and WAPO Favorites
Source: International Monetary Fund 
<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=mGRl2bfj%2FSrIvm5AplGiri2vC9MTH9sr>

There is certainly no case here that the populist governments, as 
identified by the Post, are doing worse than the Post favorites. 
Argentina ranks second among the whole group with an average per capita 
growth rate that is more than 3.5 percentage points above WAPO favorite 
Mexico. Bolivia and Ecuador are very much in the middle of the pack, 
even though the relatively brief period of populist rule includes the 
years of the world economic crisis. (Ecuador's growth would put it above 
both Chile and Colombia for the period that overlaps with populist rule 
and Uruguay's growth puts it above Chile for the period of overlap.) 
Even relatively slow growing Venezuela has seen more rapid growth under 
populist rule 
<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=%2FIv2mxOnIgm%2FDF%2BVY9d9gC2vC9MTH9sr> 
than in the prior two decades when per capita GDP fell.

There has also been a substantial reduction in inequality 
<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=cXcNjRpd3DMAqecGJNVCFy2vC9MTH9sr> 
in the countries the Post identified as populist (as opposed to an 
increase in inequality in Mexico). This means that the typical person in 
these countries has likely seen a sharp improvement in living standards.

Ironically the context for this piece is the decision by Argentina's 
government to re-nationalize the largest oil company in the country. (It 
had been privatized in the 90s.) Several of the countries held up by the 
Post as models, notably Brazil and Mexico, already have state owned oil 
companies.
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