Reaganomics-in-the-Tropics Falters : Latin America: Voters are rejecting economic shock treatments and rigid two-party divisions.

MEXICO CITY â€”  It has been a long time coming, but a Latin American electorate has finally rejected the Reaganomics-in-the-Tropics scheme of economic and social policy that has reigned supreme across the hemisphere since the late 1980s. In Venezuela, the region’s oldest standing two-party system provided voters with a substantive choice on Dec. 5: more of the same policies that had been implemented by President Carlos Andres Perez before he was impeached, such as trade liberalization, privatizations, wage freezes, subsidy cuts and higher prices for public goods and services, or a rejection of those options in favor of a so-called adjustment with a human face and a social conscience. Venezuelans decisively chose the latter approach.

In Peru in 1990, voters thought they were rejecting the option of an economic shock treatment, as proposed by writer Mario Vargas Llosa. In fact, that’s what they got, in spades, through the ideological about-face of Vargas Llosa’s rival, Alberto Fujimori. In Argentina, last October’s congressional vote was an endorsement of President Carlos Menem’s policies, although the voters may have been swayed by false premises. And in Chile, on Dec. 12, voters overwhelmingly elected Eduardo Frei to the presidency, but as head of a coalition in which everyone could find something to like: Some thought they were voting for a partial continuation of the radical free-market policies of the Pinochet years; others expected repayment of the “social debt,� a keystone of the outgoing Christian Democratic administration of Patricio Aylwin.

But in Venezuela, the electorate expressed itself clearly and knowingly by giving 28% of the vote to old-timer Rafael Caldera, who won the presidency, and 27% to center-leftist Andres Velazquez. Both ran against neo-liberalism’s radical free-market policies. For the first time, the fashionable and supposedly inevitable trend was voted down, the supposedly archaic and not viable was voted in.

Matters are, of course, more complicated than this brief assessment suggests. To begin with, the corruption and discredit of Perez explains much of his party’s debacle. The entire political elite has been tainted by scandal, largely because the two-party system in Venezuela is more a formalistic facade than a forum for exercising apposite ideological tensions.

As Terry Karl, one scholar of the country’s 1959-60 transition from dictatorship, put it, “Regardless of who won the elections, each party was promised participation in the political and economic pie.� The two military coup attempts of 1992 were largely directed against this cozy arrangement. Either the pie had to be split differently, or those gorging on it would have to go.

Indeed, the sea change symbolized by the Venezuelan elections may consist in the end of these types of political systems, where ideological, social, ethnic and even regional cleavages are wished away or ignored. Complex, urban, literate and ideologically diverse societies without long-standing party loyalties or traditions cannot fit into neat, simple categories--Liberals or Conservatives in Colombia, Peronists or radicals in Argentina and their traditional equivalents in Venezuela, Costa Rica and Uruguay, among others. Splintered electorates, atomized parties and the broad coalitions needed to stitch them together should be the norm in incipient democracies like Latin America’s. Only then can the true colors and quirks of deeply divided nations be identified and addressed.

And only when the economic policies applauded in Washington for others (but becoming discarded for Americans) actually deliver the goods will they receive the type of support that democracy requires. Growth is flattening out in the more recently successful Latin American economies--Chile, Argentina; it has simply vanished in others, like Mexico and Venezuela. Income inequality, for example, has become worse in Mexico, despite poverty alleviation programs.

1994 will see a rash of presidential elections in Latin America, ranging from tiny El Salvador to Brazil and Mexico, from Colombia to Costa Rica. In each one, a pair of issues seem to be dividing the electorate: continuity vs. change, neo-liberal adjustment vs. something ill-defined but strongly embraced: growth, justice, jobs, dignity. Voting for all of the above is no guarantee of achieving any of these aims. But there is every reason to believe that more and more Latin Americans over the next 12 months will follow the Venezuelan path, wherever it actually may lead.