Outline--Dictatorship and Democracy
I.	Democratization since 1974
A.	Transfer political power from dictators or one–party regimes to civilian democracies occurred peacefully
B.	Dictators initiated the process, with open elections and a return to civilian authority
1.	Mass movements organized protests only after dictators initiated reform (Schaeffer, 147).
a.	Exceptions: South Korea, Poland, and South Africa had mass movements
2.	Democratization occurred in regional waves, moving westward around the world. Political and economic consequences were much the same everywhere (e.g., new constitutions, elections, and diverse political participation).
a.	Beginning in southern Europe in the mid-1970s, then moved west across the Atlantic to Latin America.
(1)	Dictatorships in major Latin American countries began folding in mid-1980s, and most remain dictatorships disappear by end of the decade (Schaeffer, 148).
(2)	In late 1980s, several countries in East Asia democratized, followed in 1989 by collapse of communist regimes in Eastern Europe.
(a)	Soviet Union democratized and dissolved into separate republics, as did Yugoslavia and Czechoslovakia.
(3)	South Africa abandoned apartheid, adopted majority rule, and in 1994 inaugurated a black president
II.	Southern Europe: Falling Behind  
Turkish economist noted "none of the southern European countries (except Spain in 1951 and in 1960) ran a commodity surplus in all the years between 1946 and 1974. None of them ever reached point when their economies generated sufficient exports to pay for their imports" (quoted in Schaeffer, 149).
A.	Iberian and Ionian (ancient Greek people that settled in eastern Greece and in Ionia) dictatorships with industrial deficiencies exported workers, not industrial goods, imported free – spending Western Europe tourists, and received infusions of cash from external sources.

B.	After World War II, West European countries recovered and began to grow, experienced labor shortages began exporting workers from Europe's periphery, particularly from Spain, Portugal, southern Italy, Greece, and Turkey.
1.	During 1960s, nearly one million Portuguese workers left country to work in France and West Germany, and early 1970s 100,000 were emigrating annually.
2.	In Spain half-million workers had left the province of Andalucia during the 1950s. This immigration emptied rural villages.
a.	"Cartiguera is a dying village, in agony. It's winding streets, invaded by weeds and nettles, without a dog's bark or child's laugh to break the silence, and close pathetic gravity, the lugubrious air of the cemetery" (quoted in Schaeffer, 150).
3.	Emigration reduced domestic unemployment, providing a safety valve for dictatorships, help boost their economies because immigrants sent remittances back to families who stayed behind.
a.	In Spain, emigrants remittances made up about one half of the annual trade deficit 1960s.
4.	Spain, Portugal, Greece imported tourists spent budgets to build hotels, resorts, and infrastructure needed to develop this industry.
a.	By 1973 the number of tourists visiting Spain exceeded the number of people living there.
C.	Economic aid from external sources after World War II
1.	United States provided Iberian dictatorships after the war in return for establishment of US military bases in the 1950s 
2.	United States gave economic and military assistance to Greece, a country bordering communist dictatorships in Eastern Europe.
3.	Portugal, under the Salazar dictatorship, derived income from its exploitation of Mozambique, Angola, and Guinea – Bissau
4.	By the 1960s despite modest gains, the rest of Western Europe was leaving the country behind economically
III.	US dollar devaluations (1971) and southern European crisis 
A.	Resulted in rise of Portuguese, Spanish, Greek currencies, making it difficult for them to export goods while increasing their large trade deficits
B.	OPEC cut oil supplies and raised prices, and OPEC countries refuse to sell oil to dictatorships
1.	Refused to sell to Portugal because it allowed US forces to use Portuguese bases to assist Israeli war effort (Schaeffer, 151).
a.	Rising price of oil led to global recession; Western European countries laid off immigrant workers and sent them home.
b.	Rising domestic unemployment and discontent reduce the money received from emigrant worker earnings, which further increased trade deficits.
c.	Fewer European family vacation abroad, reducing tourist receipts
2.	In both Portugal and Greece, military defeat in wars abroad either turned elements of the military against the dictatorship (Portugal) or discredited it completely (Greece) .
IV.	Latin America: Debt and Devolution
A.	In 1978, 17 of the 20 Latin American countries were governed by military or authoritarian governments; by 1990, "17 of the 20 countries and over 90% of the population were living under democratic governments."
B.	Alliance between military rulers and bureaucratic elites formed the social basis of what political scientist called "bureaucratic authoritarian regimes (Schaeffer, 154).
C.	1973 oil crisis created same economic problems for Latin American dictatorships that it did for regimes in southern Europe.
1.	Increased the cost of imported oil and food, which raise prices and contribute to inflation, and created trade deficits, which weakened their currencies.
a.	Created an opportunity-- rising oil prices were good for oil-producing countries (e.g., Mexico and Venezuela) 
b.	Higher oil prices became part of financial tools that were available to dictatorships by lenders in the North.
2.	Dictators borrowed money to cover trade deficits and invested in their economies.
a.	Dictators borrowed about $350 billion between 1970 and 1983
b.	Creating jobs, building dams and roads, increasing exports, raising military spending, covering budget deficits, and creating economic growth and enhance their legitimacy.
c.	 Brazilian dictatorship borrowed the largest and recorded highest rates of growth, called a "miracle" by economists
V.	Latin American Debt in late 1970s
A.	Northern lenders insisted that loans be tied to floating, not fixed interest rates, rates that rose dramatically.
B.	Dictators had to make higher interest payments on money that borrowed in the 1970s
C.	High interest rates attracted Latin American investors, who withdrew their money from domestic bank accounts and invested in US government securities
1.	Capital flight made it difficult for countries to purchase imports and repay debt also eroding the tax base, depriving Latin American dictatorships of money (Schaeffer, 154-5).
2.	Higher interest rates increase costs of loans, and falling commodity prices reduced income of Latin American countries.
3.	Borrowed money was used by dictatorships to increase production of exports, which flooded markets.
4.	High US interest rates triggered a recession in United States and around the world, which reduce demand for goods produced in Latin America.
a.	Rising supplies and falling demand led to falling prices.
5.	Debt and political crisis in Argentina
a.	Falklands Island war, 1982
(1)	Humiliating defeat for Argentina's dictatorship
(2)	For many years US officials permitted, condone, or encourage dictatorships throughout Latin America (e.g., Chile 1973); changed with Argentina
(a)	President Reagan told Argentinian dictator Galtieri, "I do not want to fail to emphasize pointedly that the relationship between our two countries will suffer seriously."
(3)	Military had waged a "dirty war" against civilian dissidents during the 1970s and 1980s, kidnapping, torturing, jailing, and murdering opponents. Army Gen. explained, "we are going to kill 50,000 people: 25,000 subversives, 20,000 sympathizers, and we will make 5,000 mistakes" (Schaeffer, 157).
b.	Argentina, Brazil, the Philippines, throughout Latin America dictatorships confronted debt – related economic crisis.
(1)	Lenders insisted on austerity programs to ensure repayment of debt, dictators needed support of wealthy elites and middle classes who demanded political power and a return to democracy
VI.	Democracy and Development
A.	Contemporary democratization is largely a product of economic crisis.
B.	Dictators dissolve power to civilian democrats trying to retain some residual political power and protect themselves from prosecution for economic crimes (corruption) or violations of human rights (illegal arrest, torture, murder dissidents) (Schaeffer, 169).
C.	Civilian democrats had to address difficult economic problems, however, they adopted a common approach
1.	Open their economies to foreign investment and trade
a.	Reduced tariff barriers, opened economy to foreign investors, and lifted current exchange restrictions
(1)	Problem: Consumers bought expensive imported goods: Nike shoes, Levi jeans, and foreign cars.
(a)	Spending on imports created trade deficits, forcing down the value of their currency (Schaeffer, 170).
b.	Governments hoped foreign companies would inject new money, management skills, and technology into economy
c.	Devalued currencies made their goods cheaper and easier to sell abroad, increased exports and reduce trade deficits (Schaeffer,169).
2.	Sold off or privatized state – owned public assets and industries
a.	Civilian democrats hoped sale of public assets would raise money to repay debts, reduce government budget deficits, and cut the cost of subsidizing inefficient industries, and provide economic opportunities for domestic investors
b.	in Brazil sale of 92 parastatal firms and a port authority by end of 1992 had been valued at $62 billion
c.	Problem was few domestic investors could afford to purchase large companies, while currency devaluation made it cheaper for foreign investors.
(1)	Idea was to sell firms to domestic buyers and use the money raised introduced technology, improved productivity, and increase competitiveness (Schaeffer, 171).
3.	Cut military spending
a.	Governments have demilitarize for a variety of economic reasons
(1)	They believe heavy military spending did little to contribute to economic growth and put their economies at a disadvantage of global competition with states devoting smaller percentage of GNP to military expenditure (e.g., Germany and Japan).
D.	Economic Crisis and Democracy
1.	During the late 1970s and 1980s economic crisis of different sorts created problems contribute to the collapse of dictatorships around the world
2.	Civilian Democrats who assume power templates solve separate crisis by opening their economies, selling off state assets, and reducing military spending.
a.	Latin America despite economic growth number of people poverty has increased
b.	"Resumption of economic growth has been bought at a very high social price, which includes poverty, increase unemployment and income inequality, and this is leading 
 to social problems (Schaeffer, 173).