Foreign Influence and the Cold War History of Democracy in Latin America

Roberto Bonfatti (Oxford University)

Abstract: The recent political economy literature on regime change and non-democratic politics has not paid enough attention to the role of foreign influence. I look at the Cold War history of democracy in Latin America and construct a theory of power allocation in the presence of foreign influence. In this theory, the outcome of a distributional conflict between an incumbent group and a challenger is altered by the capacity of the incumbent to obtain external support from a key trading partner. This capacity is grounded in the incumbent's larger exposure to the international economy, which makes him easier to control from the exterior, using the threat of trade sanctions. I also allow for the possibility that there is international competition for the geopolitical alignment of the incumbent's country, and study how this choice of alignment is determined by economic or political self-interest. I argue that this theory can help understand the Cold War history of democracy in Latin America, but that it is useful in a number of other contexts as well.

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