Competitiveness and Democracy

After reviewing progress in Latin America's economic stabilization and international competitiveness in the last two decades, this essay discusses the current post‐Washington Consensus “social democratic convergence” agenda, which aims to sharpen market efficiency, improve the quality of democratic governance, and advance equity goals by attacking the social deficit. Two illustrative examples, at opposite ends of the development spectrum, are Nicaragua's pro‐CAFTA agenda and Chile's Chile Compete program. More generally, pluralistic democracy can hamper progress by giving veto powers to recalcitrant vested interests; but enlightened political leadership can make gains by combining carefully crafted coalitions, international support, popular pressures, and an attractive ideological message.