Lately, a perceived political shift in Latin America toward populism has received much attention. But the question remains: how much of a shift toward populism can be identified? Although populism has been documented as a growing phenomenon in Latin America, in general it does not seem to be growing very much. The metrics that I use show only two out of Latin America’s seven largest countries becoming more populist.

On the Difficult Chore of Defining Populism

The principal explanations of populism do not define what it is but instead, offer elucidations of what it may contain. To offer a non-statistical clarification, populist regimes are more disposed to using second-best solutions to impede market forces than are other forms of government. The social and economic indices constructed by market-oriented groups such as the Fraser Institute and the Heritage Foundation often characterize such governments as unfree or anti-market.

So what is populism? Rhetorically speaking, you might be a populist if you pledge to fight against elites (often presented as corrupt) and for the people or other groups that are defined as economically and socially marginalized. A charismatic leader, rather than a collection of members of a political party, is often thought to be part of the equation. The critics of populist leaders have been known to characterize them as having a “personalistic style of governing,” a difficult concept to pin a number on. Populist policies are sometimes perceived to include efforts to tax the rich (they, of course, are not “the people”). Nationalization of one industry or another – whether steel, electricity, railroads or oil - is a common but not required populist step. The redistribution of other types of property – including land – to the less privileged or to the government is the common currency of populist regimes. When a government takes control of properties, it is understood to be acting as a representative of the people.

As the preceding analysis suggests, the thrust of populism could be associated with the political left. But as long as the policy engine is fueled by appeals to some definition of “the common people” and against another group identified as “unfairly powerful,” any movement can be considered populist. In the case of 20th century Brazil, during the various governments of Getulio Vargas, the people included the urban middle class. The epithet elite was reserved for the cocoa and coffee latifundistas. Years later, when the populist Juan Perón took office in Argentina, the urban middle class and especially the working class again were included among “the people." However, regardless of other policy stripes of populist governments, whether we think of Vargas’s or of Juan Perón’s or of Benito Mussolini’s in Italy, their roles in the economy are large compared with those governments more gratifying to the economic elite.

Chart 3 and Chart 4

Another policy that is not unique to the left but that is sometimes associated with populism is corporatism, in which governments support industry-wide cartels. These cartels are intended to preserve industrial solvency by controlling output so as to maintain prices at higher levels than would exist on free markets. Often, the industrial stability that corporatism is intended to preserve can come at the expense of efficiency, competitiveness, and technological advancement.

Although Latin American populism is often characterized as a 20th century phenomenon, the foundations were plainly visible in the 19th century. In Mexico the 1856 Ley Lerdo declared that land held by the Catholic Church which was not used day-to-day had to be put up for sale. Churches and monasteries were exempt from these sales, but the Church’s vast rural landholdings were not. One of the intentions of the Ley Lerdo was to offer the peasantry opportunities to acquire land cheaply. However, the outcome of the Ley Lerdo was far from what had been intended. Populism was particularly intense in countries and at times when economic power was concentrated in the hands of few. To many economic elites, what are now viewed as fundamental rights – such as the opportunity for anyone to get an education – were not self-evident.

The path and advent of populism, however, has varied markedly across countries and over time. For instance, the 1930s saw the rise of populism in Brazil, but not in Argentina, even though both countries were hit by the depression. However, Brazil’s gross national product fell by 28 percent between 1929 and 1932. The effects of the great depression on Argentina were milder and shorter-lived. Argentina did not see populism until the 1940s, with the ascendancy of Juan Peron. In the 1930s, Argentina’s government operated in accordance with the latifundista model, not the populist model. In contrast, the Peron administration nationalized railroads, and the telephone system.

It is easy to refer to the rise of populism over the last decade in Latin America, but somewhat more difficult to determine who is a populist. Not only may the populism practiced in one country be different from that practiced in another country, but that the populism practiced in a country may vary over time.

In 2006 Bolivian president Evo Morales announced the nationalization of the country’s natural gas resources (which are Latin America’s second largest) and later nationalized a Swiss metals plant. It would be easy and correct to include these steps as examples of populism. However, nationalized mineral reserves or production also exist in countries whose governments are generally not considered to be populist (Chile, which has nationalized copper) or not strongly so (like Mexico, which has nationalized hydrocarbons).

In any case, concerns over populist governments in Latin America have of late focused on Venezuelan president Hugo Chavez, who has announced intentions to nationalize the country’s largest telephone company, to take over privately owned electrical producers, and to absorb oil projects that have involved foreign oil companies. As a result of these characterizations, it is convenient to measure populism as anti-competitive behavior either including or excluding international policies. Such measures are easy to find and quantify. Inasmuch as they account for more than eighty percent of the population of Latin America’s nineteen countries, I shall focus on the seven most populous Latin American countries. These are, in order of population, Brazil, Mexico, Colombia, Argentina, Peru, Venezuela, and Chile.