Corruption undermines democratic governance and development in Latin America. Corrupt political and economic elites steal money from governments, distort elections, evade taxes and gain privileges through backroom deals. While aligning their bank accounts, they deprive society of resources that could go to health, education, welfare and development investments.
President Joe Biden has placed the fight against corruption at the center of his strategy for the Northern Triangle of Central America, positioning it as the basic policy for immigration, directing aid resources far from state institutions, and dispatching the vice-president Kamala harris, there are just a few days in Guatemala to sort out the problem.
However, the fight against corruption is not always what it seems. Across the region, populist, proto-fascist and anti-democratic actors have come to power claiming the anti-corruption mantle. Leaders who drift into authoritarianism use bogus accusations of corruption to sideline political opponents.
The fight against corruption is an important element in the democratization of politics and the creation of a more just society. However, it must be carried out with nuance and integrated into broader programs of democratic construction and development of the state.
Recently, Cristiana Chamorro, the main candidate of the conservative opposition in Nicaragua, was arrested for suspected money laundering, a few months before the November elections. The US government and establishment watchers condemned the actions of a judicial system controlled for years by a government perceived as hostile to American interests. Yet some of those same observers have remained silent – even applauded – when legal measures sidelined left-wing candidates in the run-up to elections in Ecuador, Argentina and Brazil.
In other cases, anti-corruption champions attack both left and right, as putative outsiders seek to delegitimize political elites and claim a path to power. In Peru, the former president was ousted by a much dirtier congress than him. In El Salvador, the president campaigned as an anti-corruption foreigner only to cancel the mission of the Organization of American States (OAS) to fight corruption. The UN mission in Guatemala followed a parallel path, canceled by former president television clown who campaigned as a foreigner after the mission helped jail his predecessor. A similar body of the OAS has been decommissioned in the third country of the Northern Triangle, Honduras, by a president appointed by the United States accomplice in drug trafficking.
These examples from the developed world offer a useful correction for those who think that corruption only exists in developing countries. Two aspects of the American experience offer additional perspectives. At the turn of the 20th century, American politics was riddled with corruption, with urban political machines exchanging favors for votes from otherwise marginalized immigrant populations and corrupt robber barons commanding the peaks of the economy. Civil service examinations, primaries, voting reforms, procurement regulations and tightened sanctions have sought to tackle corruption, but the efforts have only been partially successful. The elites behind the structures of political power have remained.
The reason institutional reforms are not enough is that the power of machines and bandits has come from the reality of a democratic system operating on top of a very unequal and late developing nation. The machines and robber barons vanished due to the breach of trust of the 1920s, the New Deal of the 1930s and the shared prosperity of the 1940s and beyond. Monopoly breaks have been ceded to diversified and competitive industries; the working classes have obtained the right to organize; national programs guarantee social welfare; and the elites paid their fair share of taxes.
American policy in Latin America must learn a lesson. The fight against corruption, when carried out naively, is easily distorted to attack political enemies.
In addition, institutional reforms must be accompanied by efforts to deal with the reality of late development in very unequal societies. Latin American countries should increase the incomes of the richest, meet the social needs of the poorest and build a political system resistant to populist calls that divide.
In addition, the United States must recognize that part of the weakness of political systems in the Global South has its roots in the Global North. US technology, industry and agriculture, often benefiting from government subsidies and protections, overwhelm weak sectors in Latin America. Companies too often survive it thanks to corruption like our thief barons of old. We support free trade agreements and tax adjustment policies that too often undermine state capacity. To get rid of corruption, we need to make room for Latin American exports in our markets; help nations build social contracts in which the rich pay their fair share and the poor have rights; and enable them to build capable states that can diversify the economy for the benefit of all.
Aaron Schneider is Leo Block Professor and Associate Dean for Academic Affairs at the Josef Korbel School of International Studies at the University of Denver. Mark L. Schneider is Senior Advisor at the Center for International Affairs and a former Deputy Administrator at the US Agency for International Development.