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Fujimori's Peru: A case study of state-corporate corruption and its implications for the good governance agenda By Stephanie Poirier A Thesis Submitted to Saint Mary's University, Halifax, Nova Scotia in Partial Fulfillment of the Requirements for the Degree of Masters of Arts in International Development Studies December, 2010, Halifax, Nova Scotia Copyright Stephanie Poirier, 2010 Approved: Dr. Alfredo Schulte-Bockholt Supervisor Approved: Dr. Stephen Schneider External Examiner Approved: Dr. John Cameron First Reader Approved: Dr. Julia Sagebien Second Reader Date: December 22, 2010 Library and Archives Bibliothfeque et 1*1 Canada Archives Canada Published Heritage Direction du Branch Patrimoine de l'6dition 395 Wellington Street 395, rue Wellington OttawaONK1A0N4 OttawaONK1A0N4 Canada Canada Your file Votre reference ISBN: 978-0-494-72010-3 Our file Notre r6f6rence ISBN: 978-0-494-72010-3 NOTICE: AVIS: The author has granted a non L'auteur a accorde une licence non exclusive exclusive license allowing Library and permettant a la Bibliotheque et Archives Archives Canada to reproduce, Canada de reproduce, publier, archiver, publish, archive, preserve, conserve, sauvegarder, conserver, transmettre au public communicate to the public by par telecommunication ou par Nnternet, preter, telecommunication or on the Internet, distribuer et vendre des theses partout dans le loan, distribute and sell theses monde, a des fins commerciales ou autres, sur worldwide, for commercial or non support microforme, papier, electronique et/ou commercial purposes, in microform, autres formats. paper, electronic and/or any other formats. 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While these forms may be included Bien que ces formulaires aient inclus dans in the document page count, their la pagination, il n'y aura aucun contenu removal does not represent any loss manquant. of content from the thesis. 1*1 Canada Fujimori's Peru: A case study of state-corporate corruption and its implications for the good governance agenda By: Stephanie Poirier Abstract During the 1990s, democracy became a central theme in the development discourse, dominating the good governance agenda. However, so many conditions have been named that the term good governance has become almost obsolete. If the practice is the opposite of bad governance, perhaps a better understanding of the conditions facilitating the latter will lead to prioritize the reforms to be encouraged. An example of bad governance is the regime of Peruvian President Alberto Fujimori (1990-2000), which despite its successes in fixing the economy, did so through authoritarian means and was combined with unprecedented levels of corruption. This thesis seeks to explore the structural conditions that facilitated this form of bad governance using the state crime model. It argues that these conditions consisted of the centralization of power and the absence of checks and balances, and served to create an opportunity structure for organizational deviance to occur. December 22, 2010. 2 Table of Contents Abstract 2 Chapter 1: Introduction 4 Chapter 2: Analytical Framework 20 Chapter 3: Traditions of Corruption in Peru 52 Chapter 4: Analysis 88 Chapter 5: Concluding Remarks. 107 References 114 3 In Fujimori's Peru, the most important decisions were always made out of public view and without regard for what Peruvians wanted. That Fujimori could not even face fellow Peruvians for a final farewell, a last hurrah, was equally telling (Conaghan, 2006, 2). CHAPTER ONE INTRODUCTION The period from 1990 to 2000 represented a rather unique era for Peru. It was an era that was dominated by President Alberto Fujimori, a man who came out of nowhere and defied the usual party-based politics that, albeit weak, had dominated the country since its independence. The Fujimori era also consisted of a return to what was in effect authoritarian rule for the first time in over a decade. Surprisingly, this shift away from democracy actually had popular support from the majority of the citizenry, which had become disenchanted with the traditional political parties, the state of the economy, and the growing violence of the Shining Path insurgency. This is an important topic because of the fact that the Fujimori government was operating as a democracy in the eyes of the international community while committing murder and various other crimes at home. "Fujimori always liked to say that his government was unique while simultaneously insisting that it was a democracy" (Conaghan, 2005, 7). The President believed in an efficient type of democracy that would not be ruled by political parties, but rather by "selfless technocrats instead of self-serving politicians" (Ibid., 3). The nature of the regime is subject to some debate, although most scholars agree that it was authoritarian (see Calderon, 2001; Conaghan, 2005; Mauceri, 2006; Burt, 2007; and Quiroz, 2008). The manifestation of this authoritarian shift was the autogolpe, or self-coup, of April 5, 1992. An autogolpe is defined by Cameron (1998) as "a temporary suspension of 4 the constitution and dissolution of congress by the executive, which rules by decree until new legislative elections and a referendum can be called to ratify a political system with broader executive powers" (1998, 220). He argues that a major factor in autogolpes is the perception of a threat and that the level of the latter will usually determine the amount of support for the coup, domestically and internationally. In the Peruvian case, the threat largely stemmed from the Sendero Luminoso [Shining Path] movement. In fact, a major reason for the coup was "the need to fight more effectively against the Shining Path" (Ibid., 227). The irony is that although the threat perception was increasing, Sendero Luminoso was struggling due to a loss in its rural support base. Consequently, they moved their operations to more urban areas, thus causing the increased threat perception (Ibid.). Burt (2007) argues that the regime was authoritarian because it pursued its goals using undemocratic means. According to Carrion (2006), the Fujimori regime became one of "electoral authoritarianism" (2006, 4), in which the democratic process was manipulated in order to pursue its goals. Much of this manipulation was done through corruption, with bribes being paid to policymakers, legislators, members of the judiciary and the media (Conaghan, 2006). Perhaps Zakaria (1997) said it best when he ascribed the term "illiberal democracy", referring to a situation where the government was elected but afterward, did not uphold the principles of "constitutional liberalism". He states that the latter alludes to the "government's goals" rather than the "procedure for selecting government." "It refers to the tradition, deep in Western history, that seeks to protect an individual's autonomy and dignity against coercion, whatever the source- state, church, or society" (1997, 25-6). This definition both acknowledges that the Fujimori government 5 was elected by the citizenry, complying with the most basic of democratic principles, while carrying out authoritarian goals and practices. What takes precedence then, is the form of governance of the regime, rather than the way in which it was put in place. Governance is defined by the World Bank as the following: [T]he manner in which power is exercised in the management of a country's economic and social resources. The World Bank has identified three aspects of governance: (i) the form of political regime; (ii) the process by which authority is exercised in the management of a country's economic and social resources for development; and (iii) the capacity of governments to design, formulate, and implement policies and discharge functions (World Bank, 1994, xiv). Although the term governance has existed for some time, it became more significant in the 1980s when it became acceptable for international financial institutions (IFIs) to question a country's level or form of governance. Weiss (2000) identifies four reasons for this: the "glaring illegitimacy" of authoritarian regimes such as that of Amin and Pol Pot; the spread of democratization in the developing world; the increasing influence of non- state actors such as non-governmental organizations (NGOs) and transnational corporations; and the emerging notion of "sovereignty as responsibility" associated with the protection of human rights (2000, 800). Consequently, institutions such as the World Bank were free to interfere in the domestic affairs of their recipients by imposing conditionalities requiring reforms favorable to democratization and economic liberalization that would lead to 'good governance.' "Good governance has become a political and economic conditionality that is inseparable from debates about appropriate bilateral and multilateral financing for developing and formerly socialist bloc countries" (Ibid., 801). According to Abrahamsen (2000),