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Latin America is currently caught in a middle-quality institutional
trap, combining flawed democracies and low-to-medium capacity
States. Yet, contrary to conventional wisdom, the sequence of
development - Latin America has democratized before building
capable States - does not explain the region's quandary. States can
make democracy, but so too can democracy make States. Thus, the
starting point of political developments is less important than
whether the State-democracy relationship is a virtuous cycle,
triggering causal mechanisms that reinforce each other. However,
the State-democracy interaction generates a virtuous cycle only
under certain macroconditions. In Latin America, the
State-democracy interaction has not generated a virtuous cycle:
problems regarding the State prevent full democratization and
problems of democracy prevent the development of state capacity.
Moreover, multiple macroconditions provide a foundation for this
distinctive pattern of State-democracy interaction. The suboptimal
political equilibrium in contemporary Latin America is a robust
one.
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