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Central American University - UCA  
  Number 179 | Junio 1996
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Honesty Doesn't Come Cheap

How to overcome the dilemmas of the three impossible Nicaraguas: the Somocista, the Sandinista and the present one riddled with nepotism? Out of the grimy political culture we must seek truly honest elections. It is a challenge for all Nicaraguans.

Nitlápan-Envío team

The government has no time to govern and the state is falling to pieces, while society is divided between those who believe in everything and those who believe in nothing, neither with much grounds to do so." The speaker is Gabriel García Márquez, and he is describing Colombia, but it could as easily be a Nicaraguan describing the turbulent pre electoral setting here. As a result of the vast money laundering scandal revealed in Italy at the end of April which allegedly involves one of Nicaragua's most active presidential candidates as well as members of the Italian mafia, Italian businessmen, informatics pirates, International Masons, Latin American diplomats and even members of international secret services, including the CIA Nicaragua at this moment may well be acquiring even more features of Gabo's own convulsed country.

According to information from the Italian Finance Police, over $12.5 billion has alledgedly been laundered, $970 million of it (60% of Nicaragua's Gross Domestic Product) in "a Nicaraguan bank of a presidential candidate." The reference clearly points to Alvaro Robelo, candidate of the free spending new party Arriba Nicaragua and vice president of the European Bank of Central America (BECA), founded in 1994. Robelo, who lived 30 years in Italy, established links with the business and political class there and was Nicaragua's ambassador in Rome between 1990 and 1993. He denies any involvement in the financial scandal, which he described as a "mega galactic lie" and an "exercise in financial engineering by which my enemies [Antonio Lacayo and other government officials] have created a virtual reality." Robelo says they are trying to destroy him because of his tight links to the current interoceanic canal project through Nicaragua, which would partially replace the Panama Canal and is thus apparently triggering "clashes among huge international economic groups." The Chamorro government's Cabinet announced on May 3 that it will begin an investigation of Robelo's involvement.

Uncertain and Elusive Alliances

The electoral panorama is still uncertain. It was expected that precisely defined candidates and alliances would be registered by mid May, thus clearing some of the deadwood out of the electoral thicket of 43 parties and 22 announced presidential hopefuls. At the request of 9 parties, however, the date for turning in this information to the Supreme Electoral Council was postponed from the 17th to the 24th of May. Alliances are tough for some to make, since the basis for them is not always clear. Arnoldo Alemán's Liberal Alliance is still growing, absorbing sectors that decide to split off from other parties for no other reason than to stand firmly under the Liberal's anti Sandinista banner. At the beginning of May, a group of Conservatives headed by Radio Corporación businessman José Castillo Osejo, their erstwhile presidential candidate, split from the Conservative National Party to join the Liberal Alliance. The fraction of the National Resistance Party that is following Fabio Gadea Mantilla, another Radio Corporación businessman, also tagged onto the alliance in those same days, as did part of former Vice President Virgilio Godoy's Independent Liberal Party although not with his blessing. A satisfied Alemán proclaimed that "we now have the Blue and White Triangle (Conservatives + Liberals + former contras). Alemán chose Conservative cotton grower Enrique Bolaños, another visceral anti Sandinista, as his running mate. Prior to that, Bolaños had been his campaign manager.

Meanwhile, the Social Christians are still deliberating, the miniscule parties are waiting to see which way the wind blows and the divided National Resistance Party is invoking principles.

Whither Sandinismo?

The various party expressions of current or one time Sandinistas the FSLN, the Sandinista Renovation Movement (MRS) and Edén Pastora's Democratic Action Party (PAD) are all having trouble finding even one simple ally. Supply and demand is constantly changing. One US analyst called it "volatile." For months it was expected that the MRS would, as promised in its speeches, forge a center left option made up of various middle of the road parties that want to move past the Sandinista Liberal polarization. But both this and other "centers" seem elusive. MRS leader and presidential candidate Sergio Ramírez finally announced his running mate, a position that had created a lot of expectations, since the slot appeared reserved for potential allies. Upon presenting Leonel Argüello, a young epidemiologist, as his choice, Ramírez defined the MRS as "a party of the left" and said that "we are going to lay claim to the left by defending tolerance and democracy, burying top down styles forever." Almost at the same time, the delegates to the FSLN's second ordinary congress ratified Daniel Ortega, the party's secretary general, as their presidential candidate on May 4, then listened to him announce that his running mate would be Juan Manuel Caldera Lacayo, an unknown cattle rancher, horse trainer and COSEP member from Camoapa whose property had been confiscated by the revolution in the 1980s. By selecting a non Sandinista, as mandated by the Sandinista Assembly some weeks earlier, the FSLN hopes to acquire a new image and, once in office, be able to assure the country's governability.

Is Daniel the only guarantee of cohesion in a party that, even though still the most organized and numerically largest, has been suffering serious ethical erosion since 1990? Does the state party political conception that branded its politics in the 1980s still persist in the FSLN? These were only some of the questions heard among those who had proposed "Daniel in the Frente, but Vilma in the presidency" and disapproved of the congress results. For her part, Vilma Núñez de Escorcia, who ran for the nomination not only to win but even more importantly to rescue the FSLN's honesty, transparency, commitment and credibility, accepted the results with a grace few Nicaraguan candidates summon. Encouraging other, younger Sandinistas to continue her efforts of the past few months, she noted that "the minimum results I have obtained in this Congress indicate the long road to democracy that the FSLN must still travel. The time is not yet ripe, but I am confident that it will be one day." She reaffirmed her dedication to the party in an open letter, and was back at her desk as head of the Nicaraguan Human Rights Center early the morning after the Congress, hard at work as usual.

Russian Roulette

In an event at the beginning of May sponsored by the University for Peace, poet Pablo Antonio Cuadra dramatically warned of the urgent need to "halt the mental fractioning, the multiplication of candidates and parties, the minimal conquests of power, the shameless interest in politics as a way to get rich." Nicaragua's traditional large capitalists, relying on Cuadra to halt the Sandinista/anti Sandinista polarization, briefly launched his presidential candidacy. He now heads an eight member group of notables called the "Ethics and Transparency Commission," forged by official US election observer groups such as the National Democratic and Republican Institutes for International Affairs as a domestic monitoring organization. In his presentation at the University for Peace, Cuadra compared the 1996 elections to a "game of Russian roulette," in which "we could sink into irreversible decadence and misery" if we make an error. The situation is indeed risky and, as former Costa Rican foreign minister Rodrigo Madrigal said in an event organized by the Electoral Bodies of Central America and the Caribbean, it is also discouraging. "Partyocracy," Madrigal charged, "seeks a badly understood political stability that is only managing to consolidate an oligopoly of power to share interests, businesses and last names, and to survive off the structures of their parties at the expense and under the protection of the state. This ongoing deceit has eroded the faith of our peoples, who are seeing their destiny lost in this scheme of the political caste, which is cynically engaged in appearing divided to cover over the infamous alliance that amalgamates it. And in essence, we all know that partyocracy, while entertaining the gallery with great skirmishes, reaches veiled understandings to operate the stage machinery. Because even when the actors trade roles, the script does not change."

"Charro" Goes on Killing

Madrigal's analysis of Central America as a whole fits Nicaragua like a glove. While the local partyocracy played to the gallery, the peasants of Matiguás sent an urgent plea for help to attentive ears in other galleries on April 24. In their message, they charged that a hit list of 300 peasant organization leaders of Sandinista origins was in the hands of members of the armed organization headed by "Charro," adding that 20 had already been killed between March and April. "They have absolute control over collective transport and over the people who make commercial transactions in the mountains," say the peasants. "To be able to work in the zone, you have to carry authorization and Charro grants the permits, which are signed and sealed by him. Charro's networks of collaborators and military intelligence even stretch to the urban area, where they exercise control over leaders of the peasant organizations, political parties, churches, army and police." The political polarization of the armed groups is evident. "The campaign they are carrying out with the peasants," says the message, "is to support 'Charro' and they are calling on the peasantry not to allow political campaigns other than those of Arnoldo Alemán's Liberal Party and the party of the Resistance." The army has given Charro, who is ensconced in Waslala as an "authority," until May to disarm if he does not want an offensive launched against him. But Charro's group is only the most bloody of various armed bands that have continued the spiral of unpunished assaults and rapes in the north of the country. On April 25, controversial presidential candidate Alvaro Robelo got "Tiro al Blanco" and his band to disarm in Apanás, presumably for money. The army supported his action, while several parties expressed disagreement with linking disarmament to the electoral campaign.

The Poisonous Weed

The polarization is not only inside Nicaragua. It also still exists in the country that financed one side in the war of the 1980s. US Democratic congressman Dan Burton, one of the authors of the highly controversial anti Cuba Helms Burton Law, declared in recent congressional hearings on Nicaragua and the upcoming elections that "until the poisonous weed of Sandinismo is destroyed at the root, Nicaragua will continue to suffer."

With the same hostility, his co author, Senator Jesse Helms, wrote to US Secretary of State Warren Christopher at the end of April to say that "we have serious reservations about the impartiality and fairness of the Nicaraguan electoral process." His doubts are fed by the situation in 26 municipalities in which the ID/voter registration card process could not proceed, partly due to the danger created by the armed groups' violence, but even more importantly because of the National Assembly's two year delay in reforming the electoral law to legalize the use of the cards for voter registration. In those municipalities, said Helms, "live those who fought to bring democracy to Nicaragua," referring to former members of the Nicaraguan Resistance, of whom Charro is one. Helms' concern about the electoral process coincides with Arnoldo Aleman's line, even though the Supreme Electoral Council has assured that the residents of those municipalities will be able to register in an ad hoc process during the first weekends of June. Thus these pre election months remain confusing and increasingly tense. Does Nicaragua have enough institutionality and legality to deal with the country's existing serious problems and the new ones that could grow out of the electoral results?

In Plain View

The state of Nicaragua's public affairs today offers clear examples of a dysfunctioning system of legal guarantees. It has become a habit, perhaps even an addiction, to publicly denounce irregularities and corruption in the private sphere. Transgressions that threaten the life and belongings of individuals, no matter who they are, appear in the media daily. Citizens are obliged to assume a blasé attitude since the inability of public administration to improve the situation is obvious to all. Some are taking other measures, which has led to a multitude of ways in which police functions are being privatized. Private urban security guards, sometimes collectively paid for by the families on a given block, are recognized in the city; their counterparts in the countryside are criticized. Nicaragua's citizens, however, have not yet reached the point of privatizing justice, as is happening now in Guatemala, because the local foundations of the social contract are even weaker than the national ones. Denunciations of how private interests are taking precedence within the public institutions otherwise known as corruption are also being heard more commonly. Some believe that corruption can only be eradicated by reducing the public sphere, thus serving the interests of those who, from a conservative capitalist position, advocate the forced withering away of the state. Alongside them, some liberals make a sort of apology for private interests and propose a form of government based so much on individual rationality that they end up justifying corruption. For both tendencies, public vices are private virtues. Denunciations of public illegality are less common in Nicarugua. Also less common are analyses of the costs of honesty and mechanisms of punishment. But the current dynamic in Nicaragua gives us the opportunity to bring such an analysis out into the open.

In the weeks to come, everyone's passions and energies will be increasingly directed to the electoral race, although the politicians' greatest efforts should be dedicated to preparing proposals with coherent content, debated and enriched with the opinions of the greatest number of citizens possible. The consequences of the electoral frenzy on the functioning of democracy are quite obvious. The most transcendental is this: the excessive interest in the public affairs of the future is overshadowing the importance of today's public affairs. The government has been left in the hands of second level bureaucrats, which is extremely serious in a society in which the source of legitimacy is largely the charisma of public leaders and government officials.

The result of this contradiction between present and future some call it necessary while others see it as inevitable is greater foreign involvement in national public affairs. The current period offers two patent examples of this, which clearly reveal the existence of erroneous public behavior. In other words, illegal behavior, since the only rationality in the public domain is the dominion of law.

These examples, described below, have to do with the undue attribution of public credit and the lack of transparency in the national budget. While they are distinct cases in many respects, they have one point in common: they reveal the cost of abandoning illegality and the difficulty of finding a really neutral national institution and a guarantee of the social contract. These cases also feed the hope that, if the public learns about the irregularities, enough voices will be raised in civil society to become strong enough to constitute a "fifth estate" with the strength to achieve an independent punishment or at least to push toward the necessary rectification.

The Agricultural Credit Piñata

The National Development Bank (BANADES) was created by law, with the explicit goal of lending financial facilities to small agricultural producers. This has various important consequences. First, BANADES cannot go bankrupt like any business; it can only be closed by law. Second, it is infringing the law when it does not lend to the economic agents for whom it was created. And third, as a public enterprise, it is subjected to the laws of the market although, like all economic authorities, it can orient them toward specific goals.

In the Sandinista decade, the distribution of credit as a generalized form of subsidy to production was elevated to the rank of public policy. The money lent was not recovered, either because the debts were periodically pardoned or because the interest rates were far below inflation. That was an unquestionably erroneous policy, but it was legal in those years. At most, one could discuss how the credit was divided: a third each to the state companies, small and medium producers including cooperatives and large private businesses. It was clearly not an equitable model.

The culture of non reimbursement and the acute economic difficulties that the producers faced in the 1989 92 period due to the application of strong medicine to stabilize the economy produced a disastrous situation in the state banks, particularly BANADES. Although it was technically bankrupt, the decision was made to recapitalize it. At the same time, all the debtors in the arrears portfolio had their debts pardoned.

The total amount of this operation in the accounting books of the Central Bank which assumed the loss was equivalent to some $500 million. However one evaluates this operation, it has important consequences today because the departure point for assessing the situation of the state banks lies in this: the totality of the state banking system's current overdue portfolio corresponds to debts acquired after 1992.

In four years, BANADES alone has accumulated the equivalent of another $200 million in uncollected debts, with the following major difference: this time its credits to small producers were reduced by 70%. Half of the current arrears portfolio is owed by only 400 large entrepreneurs. If their debt ends up pardoned, these lucky "businessmen" will have received 550 times the annual per capita income that this country's average citizen gets.

Such unequal distribution of recourses is obviously contrary to the law that created BANADES. This is where the reflection on the cost of the return to legality fits in. How can this be turned around? Where will the institutional legitimacy and strength come from to rectify an erroneous policy and punish the abuses?

As could be expected, it had to come from abroad, from the international financial institutions. And they did not hesitate. The obstinacy of the Nicaraguan functionaries, determined to cover up their errors, could have cost the country the loss of an important agreement with the World Bank for a structural adjustment loan earmarked for modernizing the public sector.

It was obviously not a politically easy task to cover up the debts to 12,000 producers, particularly since, when BANADES announced a few months ago that it was going to enforce collection, it allied the massive strength of the small with the political strength of the big. It would have been easy to divide the debtors, establishing a cut off point below which the debts would be forgiven, but that would not have been correct from the perspective of the universal nature of the law. It is no less a violation for a small producer to fail to pay back ten than for a big one not to repay a thousand. In addition, such a decision would have implied giving the culture of non payment a new lease on life.

All these complications were on one side. On the other was the pressure from the financial organizations, which view the chronic deficit of Nicaragua's state banks as an inadmissable drag on the fiscal balance. The commitment signed for the disbursement of the Enhanced Structural Adjustment Facility in 1994 said it clearly: no more recapitalization of the state banks. In this context, what is the meaning of the Central Bank president's January statement that BANADES had been "cleaned up"? It means simply that this bank's portfolio of almost $200 million in overdue debts was removed, and turned over to a company called COBRANICSA better known as "the cobra" which is in charge of recovering what it can of the back debts. COBRANIC will probably be put under the Central Bank.

This transfer was not enough to satisfy the requirements of the international lending agencies. They wanted guarantees that a renovated, reduced and procedurally modernized BANADES would only attend small producers in the future, faithful to the mission for which it was created. They also required security that "the cobra" would truly recover the back debts. Political evidence and simple economic logic recommend that the large debtors be pursued more rigorously. The international financing institutions agree with this, not due to any great humanitarian sensitivity but because they are occasionally capable of making more socially rational calculations.

What happens in the next months will tell us whether or not the lending agencies were correct in trusting the promise of the national politicians. For now, it appears that the intention of starting with the big debtors has served to get the structural adjustment loan for modernizing the state. The cost of returning to legality has been less than the threat of punishment. Regrettably, the nation did not have a chance to participate in this whole debate. It was left out of what was negotiated in its name. At least we can make it known in these pages, because knowledge and information are the first step to achieving the reign of legality.

The Budget's Dark Side

The second case in which the Nicaraguan government has stepped across the line of its own legality is that of the public budget.

The national budget has many dark sides. The darkest of all is its under reporting of the foreign aid that comes into the country. It always appears as less than is actually received. This allows spending to be disguised, adjusted up or down to match the real income. Obviously, if the budget appears every year with a systematic over implementation in the same lines, it isn't because of a lack of forecasting; it is a public policy decision.

All this could and did happen before the Constitution was reformed. The modifications of the legal framework within which the public branches could move forced the executive branch to be more transparent with the legislative branch.

Before the constitutional reforms, the legislators were deceived more each year, in both absolute and proportional terms. The difference beween the budget the National Assembly approved and the one implemented by the executive branch went from $83 million in 1993 to $135 million in 1994 and $207 million in 1994, which respectively represented 20%, 33% and a full 53% of the approved budget.

None of this happened by accident or negligence. Among other things, this manipulation of the budget was related to the tenacious resistance of a number of public officials to transfering 6% of the budget to the universities, as the Constitution establishes.

6% to Universities Approved

In April the National Assembly finally approved (with 52 votes) the assignment of 6% of the National Assembly's ordinary and extraordinary income to the universities. This will mean an additional disbursement of 82 million córdobas in 1996, for which the executive branch and the universities must come to agreement on forms and schedules of payment.
Before the vote, President Chamorro sent the National Assembly a letter announcing that she would veto approval of the 6% "for being gravely incompatible with our legal and constitutional order, and for going against agreements and principles between the branches and undermining the economic and social equilibrium of our country." In Washington, the International Monetary Fund, the World Bank and the Interamerican Development Bank all publicly opposed including extraordinary income (loans and donations) in the 6%.

It is debatable whether it was all that wise to tie a fixed percentage of public subsidy to one sector of society the university sector. Perhaps it would have been better to calculate some percentage in fact, there's no clear reason why it has to be six based on the previous year's budget plus an adjustment for expected inflation, as in any collective contract. But this is not the point. To modify the constitutional disposition that established the 6%, another legal disposition would have to have been established. But the law should never be infringed, because that means entering into illegality.

What has happened this year with respect to the 6%, to some degree as a result of the reforms to the Constitution, illustrates the cost of returning to legality. In this case, however, according to all indications, we can be even less confident that an honest solution will end up prevailing. Although the National Assembly ratified the law on the 6%, the issue of a clear definition of the limits of the public budget is still pending. The debate about the 6% has been very useful to unmask the executive's budget manipulation for these past years. Today the executive is still being stubborn about a budget definition that includes at least part of the foreign resources, especially the donations, probably because they are less controlled than the loans. The reason for the executive's tenacity is clear: including the foreign donations in the budget would leave much less room to use the fund for political not necessarily personal ends. It would cut the funds for many projects that are being implemented, but that do not respond to either the general or the national interest.

These reasons, which are never spoken of, now have a pretext, in the controversial issue of the 6%, to come out into the open. Although this 6% isn't directly charged on each foreign loan or donation, the fact that the executive must include what it previously disguised would substantially increase the budget amount, which implies that the value of the 6% would be substantially greater than it has been up to now. In fact, by disguising the budget over the years, the government kept back 148 million córdobas that rightfully belonged to the universities. This year it will have to come up with 82 million, but from where? It inevitably means increasing government income by charging more taxes, but that is hard to do in a short time. Alternatively, it means redistributing spending, which will of course create resistance, which no government wants in an election year. In addition, it is almost impossible to do so late into the year, when the budget has already long been approved.

Getting out of this impasse, which was created by not having acted legally before, will be arduous. What could be the threat of punishment in this case? The deaths of a worker and a university student in the confrontations with the police on December 13, 1995, did not stop the government, which continued bogging the problem down with its pig headedness. The youth vote in the upcoming elections was also not a threat to public officials who now cannot aspire to any elected office because they did not resign in time to run.

In the case of the 6% there are also outside pressures. Many donors applauded the fact that, according to the constitutional reforms, the foreign debt must appear publicly and transparently budgeted instead of being discretionally handled as it was during the Chamorro government years. But this international requirement could lead the government, in the current conflict over the 6%, simply not to implement many projects to prevent them from falling under the Assembly's control or becoming wrapped up in the bevy of ideological, political, social and economic problems that arose around the 6%.

None of this would have happened if the government had not made the erroneous choice of managing a large part of the foreign aid outside of the budget law, a deeply rooted custom dating back to the 1970s. The universities and the whole nation are now paying the price of this illegal practice. And that price could be very high, losing Nicaragua the opportunity of new internationally financed projects.

Clean Elections in A Muddy Culture?

One of any democratic government's most important missions is to fashion adequate conditions for its own succession. The Nicaraguan Constitution consecrates the Supreme Electoral Council as the fourth branch of government, independent of the others, for this purpose.

No outside observer can fail to be surprised upon seeing that this country in crisis is going through over a year intoxicated by the pre election atmosphere, which is polarizing the nation and paralyzing the economy. One response to this observer's inevitable amazement is perhaps to explain that the construction of democracy has a greater cost than its normal functioning does. In the current extreme pre electoral tensions, we can find certain paraallels with the two cases described above. Making elections honest is very costly for a political system when its past does not predispose it to this and when the majority of the contenders know nothing about the mechanisms of honest compeition.

Although the government has a legal responsibility to guarantee the honesty of the elections, it is a moral responsibility for the political parties. Civil laws do not oblige the parties to have platforms with clear and differentiated content to compete among themselves before well informed and aware electors. The parties permit themselves low blows, caudillismo and all kinds of manipulations. All this is tolerated alleging that these arre "private affairs." This is a major contradiction: the elections, which should be clean, are fed by such a muddy culture.

One way of collaborating to achieve honesty and cleanness would, be for the governing party to be so sure of winning and so desirous of legitimizing itself with national and international public opinion that, from its position of power, it did all within its power to make the elections honest. That was what happened in 1990. The current election is very different: there is no party with electoral pretensions in the government; the majority of the parties and candidates seem to have no interest in offering the electors any substance; and the labyrinth of alliances does not yet permit a preview of how the political market will be organized.

The Three Impossible Nicaraguas

How can the dilemma of the "three impossible Nicaraguas" the Somocista one, the Sandinista one and the current nepotistic one be overcome? How can a new social contract be achieved that allows a national proposal g ranting participation and a response to all Nicaraguans?
How long could this crisis possibly sustain itself? Could it be beneficial for some sector of Nicaraguan society in the medium run? Is there any social class, political party, alliance or coalition of parties in Nicaragua that, alone, could deal with the accumulated social debt, the growing threats of ungovernability, the challenge of insertion into the international economy and the creation of a democracy under the rule of law that would be accepted by the large majority of the population? The upcoming elections and the forecasts of their results spark ever more questions, without enough data yet to be able to answer any of them.

In the electoral whirlwind, the tendency of many politicians to demand the most international electoral monitoring possible to thus reduce the possibilities of fraud is not insignificant. Here again is a parallel with the two cases discussed above: an outside source of authority that represents the threat of punishment is seen as necessary. But in the case of the elections, the threat seems much weaker.

Indisputably, the greatest task before Nicaraguan civil society in the coming months is to move in through all the paths that the political system allows to assure both a conscious vote and the honest and conscientious supervision of such crucial elections.



As confusing as Nicaragua's scenarios are, there is
always room for in depth reflections. The following thoughts on the importance of legality, the costs of moving outside of it and the threat of punishment that can deter transgressors before the fact or actually be applied afterward, have direct relevance to some of the situations the government of Nicaragua faces today, several of which are discussed in these pages.

Generally speaking, the immense majority of human beings is in agreement that societies should be more just. The difficulty begins when one tries to define what justice is. This is why one of the key pieces of the social contract to guarantee people's coexistence in society is the definition of the domain of law.

Law governs both the public and private spheres, as
well as the relations between public and private. It also establishes the separation between the branches of public power, cornerstone of the social edifice.

Why does the judicial branch exist? Because both individuals
and public power transgress laws and go beyond the limits of the social contract that they collectively instituted but do not feel individually obliged to respect. Morality tries to prevent these situations and transform collective obligations into individual ones.

History teaches that there are always transgressors
and that, whether they are individuals or institutions, the cost to them of not abandoning illegal behavior should be higher than what those who respect the law pay to remain within it. And if the transgressors repent? Since this is not a very common phenomenon, the solidity of the social contract cannot be based on such repentance.

Within the social contract, the institutions of justice have the mission of exercising the social coercion necessary to bring those who persist in transgressing in the name of their "rationality" back into legality. It is necessary to remember that someone who is "rational" seeks to achieve his or her goals at the lowest possible cost. In such a case, the threat of punishment is the cost that society imposes on individuals to reduce the cost that actually abandoning legality would bring.

This system, which applies to both private and public transgressors, is no more perfect than any of the democratic institutions, but it is the lesser evil among all the other systems. Since public institutions also experience the temptation to transgress, they should also pay a price to return to legality. The threat of punishment is necessary to guarantee that they, too, will respect the social contract.

There is one difference between the private and public cases: in the affairs of the latter, the system's effectiveness first assumes a real separation and independence of the branches.

This is a basic element of modern constitutional law, but we must not forget that the political culture prevailing in a nation at any given period of its history may not be the most appropriate for the system to function fully. In the United States, for example, the media have come to be considered as a "fourth estate,"necessary to exercise independent control over the three branches of government. Reality, however, shows that the strongest economic groups completely control this fourth estate, which limits the ballyhooed democracy.


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