Fifteen Eighty Four

How do landowners protect their interests in contemporary democracies? Classic social science studies have argued that landowners’ economic interests are incompatible with democracy, as democratization should lead to the increasing taxation or even expropriation of their assets in response to redistributive demands from the poor. However, agrarian elites and democracy have coexisted in Latin America since the transitions of the Third Wave in the mid-1980s, defying these predictions. Moreover, in the region with the highest land inequality in the world and where almost half of the rural population still lives in poverty, democratic governments have been highly respectful of landowners’ property rights, even during the left wave that swept the continent in the 2000s. These perplexing facts indicate that agrarian elites have found ways to protect their interests in democracies and, even more puzzling, that they have been able to do so in a context where urbanization and social policy expansion have seriously undermined their capacity to control the votes of the rural poor. However, while the historical role of landed elites as obstacles to democratic consolidation in Latin America has been widely studied, four decades after the start of the Third Wave, how these elites have adapted to the new democratic context remains underexplored.

My new book, Agrarian Elites and Democracy in Latin America, addresses this gap in our knowledge by studying the strategies agrarian elites employ to protect their interests in democracy. A birds-eye view of Latin America shows there is great variation in how agrarian elites have adapted to the democratic game. In countries such as Brazil, Chile, and El Salvador, landowners have organized in the electoral arena by building parties, running for office themselves, or supporting likeminded candidates. In other countries, such as Argentina and Bolivia, in contrast, they have shunned the electoral arena, influencing politics through nonelectoral channels such as lobbying or, when this has failed to block unwanted policies, protests.

The book explains this variation by developing a theory of when agrarian elites will organize in the electoral arena to protect their interests and how they decide between the different political strategies available to them in democracies. It argues that two factors shape agrarian elites’ strategies of political influence: the perception of an existential threat and the level of intra-group fragmentation. Taking Argentina, Brazil and Chile since their last democratic transitions as its empirical focus, the book advances these arguments through careful process-tracing, drawing on more than 150 elite interviews as well as multiple primary sources, such as newspaper articles, business associations’ publications, and legislative debates records.

The perception of an existential threat—defined as a policy that jeopardizes the continuity of agrarian elites’ business—is a necessary condition for electoral investment. Land reform, confiscatory taxes or stringent environmental regulations are examples of existential threats. Non-electoral strategies, such as lobbying or personal contact with policymakers, are ill-suited to deal with existential threats because they depend on a group’s ability to access an administration, but it is political rivals who usually implement threatening policies. By contrast, electoral strategies—such as party-building or sponsoring like-minded candidates—are a more reliable source of influence because they entail electing politicians to key policy-making positions that already share the group’s preferences and thus do not need persuading. Therefore, when confronting an existential threat, like agrarian elites faced in Brazil and Chile during their respective democratic transitions, landed elites will be willing to pay the extra cost of organizing in the electoral arena. Where this threat is absent, as it was the case in Argentina before 2008, agrarian elites will prefer cheaper, informal means of exerting influence. Through a path-dependent explanation, the book shows that where agrarian elites invested in electoral representation during the democratic transition, they were better positioned to neutralize new policy threats during the leftwing governments of the 2000s.

The type of electoral strategy landowners will pursue is conditioned by their degree of intra-group fragmentation. Where landed elites are cohesive, like in Chile, they will engage in party-building. In contrast, cleavages within the agrarian elite hinder party-building because they increase coordination costs. When these divisions are significant, the agreements that developing a party organization entails, from selecting candidates and leaders to constructing a territorial organization and designing a party platform, will be harder to bring about. Therefore, in cases of high fragmentation, like in Brazil, landowners will deploy a non-partisan, candidate-centered strategy, which does not require those kinds of compromises.

Understanding this variation in Latin American agrarian elites’ political strategies matters because it affects landowners’ ability to influence policy realms of great regional and global significance such as inequality reduction and environmental protection. The following figure illustrates this point well by depicting the contrasting capacity of governments in four Latin American countries, Argentina, Bolivia, Brazil, and Chile, to redistribute resources away from agricultural producers. The graph displays the evolution of IDB’s TSE (an estimator of governments’ net support for agriculture—subsidies minus taxes) as a share of each country’s GDP in the last two decades. Positive values indicate net transfers from the rest of society to agriculture. Negative values indicate redistribution from the agricultural sector to the rest of society. As we can see, in the two countries where agrarian elites are organized in the electoral arena (Brazil and Chile), they have been able to secure net transfers towards their sector throughout the period. By contrast, in the two countries where agrarian elites lack electoral representation (Argentina and Bolivia), governments have extracted resources from them. Nowhere is this difference clearer than when comparing Argentina and Brazil. In Argentina, where agrarian elites have no electoral representation, every government since 2001 has extracted bountiful resources from them, reaching the equivalent of 3 percent of the country’s GDP annually during the administrations of the center-left Frente Para la Victoria (FPV) (2003–2015). In contrast, in Brazil, where a powerful multiparty caucus known as the Bancada Ruralista represents agrarian elites’ interest in Congress, governments have consistently and generously subsidized agribusiness. This includes the leftwing administrations of the Workers Party (PT) (2003–2016) which transferred annually, on average, resources equivalent to 0.65 percent of the country’s GDP from the rest of society to agriculture. This equals to billions of dollars in subsidies every year to some of the wealthiest people in Brazil, one of the most unequal countries in the world.

Total Support Estimate (TSE) for agriculture as percentage of country GDP. Argentina,

Bolivia, Brazil and Chile, 2000–2020

Source: Author based on IDB-Agrimonitor

By studying how agrarian elites can use democratic institutions to protect their interests, the book helps us understand why democracy may perpetuate, instead of reducing, inequality. In Latin America, four decades of democracy have accomplished little in terms of diminishing extreme inequality, even after many years of leftist dominance. These limits to redistribution have helped democratic continuity in the region, lowering economic elites’ incentives to destabilize it. However, by protecting the interests of wealthy elites, democratic governments have simultaneously frustrated the redistributive expectations of the same dispossessed groups that democratization incorporated into the political arena. This, in turn, has created new challenges for Latin American democracies, as persistent inequality has spurred support for rightwing anti-system candidates across the region.

The findings in Agrarian Elites and Democracy in Latin America invite us to reflect on how avoiding democratic destabilization from above (i.e., through the protection of economic elites’ interests) may spark political instability from below, as citizens’ redistributive ambitions remain unfulfilled, an issue of enormous contemporary relevance across the world.