The Political Economy of Elections in Latin America, 1980–1991

The process of political democratization in Latin America during the 1980s created a rare opportunity to explore the political economy of elections outside of the North Atlantic basin. Using interrupted time-series analysis, I explore the impact of elections on macroeconomic performance in eight Latin American nations. The findings indicate that macroeconomic performance has fluctuated with the electoral calendar but that contrary to the traditional business cycle literature, as well as the conventional wisdom about Latin America, competitive elections have enhanced, rather than undermined, the capacity of political leaders to address outstanding problems of macroeconomic management. The analysis suggests that the relationship between democracy and economics is captured more adequately by a “political capital†model than by its traditional theoretical alternative.