Guatemala holds its politicians accountable, offering lessons for Latin America

Guatemala holds its politicians accountable, offering lessons for Latin America
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The recent resignation and indictment of Guatemalan President Otto Perez Molina demonstrate the potential of international investigative and prosecutorial commissions in holding national institutions and politicians accountable.

Political corruption in the Latin American context—defined as the cyclical illegitimate abuse of public office to extract capital from the private sector for personal gain—may be conceptualized as an informal industry entry tax.

The act of political corruption is informal because it is not written in law, operating de facto. It deals with the entry to industry because when a company successfully bribes a government official to obtain a contract for the first time, it effectively breaks the entry barrier and ensures access to future bribes.  It is considered a tax because, despite political corruption’s informality, it systematically forces the flow of private sector funds to public sector representatives.

There are powerful incentives which lead the private sector to oblige rather than boycott political corruption. Executives and lobbyists, especially in the infrastructure industry, depend on securing government procurement contracts to maintain their firm’s productivity at full capacity. There are individual monetary incentives, as well, for lobbyists, such as fat bonuses.

On the receiving end, politicians in Latin America run business-like electoral campaigns, accepting large donations in exchange for the possibility to receive a procurement-related bribe once in office. Candidates see fundraising strictly as an investment, in which they have four years in office to make their return. This opportunistic mentality creates a vicious cycle where campaign contributors expect to be compensated with procurement contracts in the near to medium term.

The law does not do much to contain this cycle. Candidates are protected by undeveloped and incomplete electoral codes that, for the most part, do not explicitly place limits on campaign contributions. Few countries in the hemisphere have explicit limits on the amount a candidate can spend—Brazil, Chile, Colombia, Ecuador, Mexico, and Paraguay are some examples.

Lessons learned from Guatemala

Each state in Latin America, with its entirely unique political conditions, suffers from a chronic incapacity to curb corruption to OECD levels.

Even UruguayChile, Bahamas, Barbados, and St. Lucia, the only countries in the hemisphere ranked above average on the Heritage Foundation’s freedom from corruption index, remain plagued by a culture of clientelism, albeit in a more subtle manner than their regional neighbors. With that said, when examining best practices to political and governance reform, the mentioned southern cone and Caribbean states should not be presented as the golden examples. Rather, reformers should look to Guatemala, where civil society and social dissenters have forced the political class to move structural reforms to the center of the political agenda.

Massive protests and overwhelming evidence have led to the recent resignation and immediate indictment of Guatemalan ex-president Otto Perez Molina (2012-2015). Perez Molina, who will remain in jail for the next three months until his trial begins, is allegedly the ringleader of a custom’s fraud scheme called La Linea, in which Guatemala’s custom authority instituted a de facto bribery scheme for businesses seeking lower tax rates on imports.

Guatemalan political and judicial experts claim, however, that the collapse of Perez Molina will not deter future corruption and will not serve as an absolute lesson for future lawmakers and high level technocrats contemplating abusing their authority.

Social dissenters, which have been taking to the streets since April 2015, also understand that Perez Molina’s resignation and indictment does not constitute an immediate fix to Guatemala’s culture of corruption, but rather a necessary first step to improve governance. According to dissenters, such improvement in governance should be implemented in three fundamental and sequential steps: 1) the resignation of allegedly corrupt lawmakers and bureaucrats; 2) political and electoral reform; and 3) structural constitutional reform, to be undertaken by a constituent assembly.

These prescriptions, which were developed and postulated informally by a grassroots bottom-up social movement, have dominated the electoral campaign platforms of Guatemala’s presidential candidates. The inability of traditional parties to adapt to the new political agenda and the proven links between the larger parties—Partido Patriota  (PP) and Libertad Democrática Renovada (Lider)—to corruption has sunk them in the September 6 general elections. The Lider presidential candidate, an early front runner, did not make the runoff on October 25 and the PP won less than 10% of legislative seats.

If social pressure persists through the end of 2015, the next governing legislative coalition and president will need to tackle structural bureaucratic, political, electoral, and constitutional reform to create a more accountable and transparent governance system. Undoubtedly, Guatemala—which has served as a sociopolitical test tube in the past months—provides the rest of a corruption-plagued hemisphere with optimism.

Multilateralism as part of the solution to political corruption

National judicial institutions on their own in Guatemala could not have led to the complete dismantling of La Linea.  There is an international and multilateral variable at play in Guatemala not present elsewhere in hemispheric judicial systems: the International Commission against Impunity in Guatemala (CICIG).

The CICIG, an international investigative and prosecutorial commission, has multilateral support and resources and permanently supports the public prosecutor’s office.  The CICIG was an instrumental actor in exposing and prosecuting La Linea and is widely acknowledged and respected by local institutions.

The CICIG’s achievements in exposing La Linea, as well as a number of smaller political corruption cases, highlight the institution’s exceptional enforcement capacity and its ability to maintain a higher degree of political accountability. The CICIG’s success should prompt other states in the hemisphere to think about replicating this institution’s international model and take advantage of the high levels of international willingness to cooperate in judicial enforcement assistance.

Hopefully the example of Guatemala, which is among the most destitute countries in the hemisphere, will incentivize other corruption-plagued governments in Latin America to accept international resources to reinforce badly needed accountability mechanisms.

Categories: Latin America, Politics

About Author

Daniel Lemaitre

Daniel is a GRI Senior Analyst. He has worked in policy research centered on the political economy of the Andean region in the public, NGO, and private sectors. Daniel holds an MSc in Comparative Political Economy from the London School of Economics, concentrating on Latin American markets.