ABSTRACT
In his provocative 1985 speech to the UN General Assembly, President Alan García of Peru bluntly defined the choices confronting Latin America: “It is either debt or democracy.” The magnitude of the current crisis rivals that of the Great Depression, which provoked political unrest throughout Latin America. Objective economic realities, however, merely provide a starting point for understanding the variable political impact of the debt crisis. Political trends underline the limitations of theoretical perspectives that stress the incapacity of democratic institutions to withstand or manage economic crises. Broader claims about the tension between successful economic management and democratic governance in Latin America, which supposedly explain the cyclical alternation of democracy and authoritarianism in the hemisphere, also fail to stand up to empirical evidence. The notion that Latin American democracy represents a purely cyclical phenomenon driven by contradictions between economic and political rationality is no less problematic than the popular support or economic management approaches.
