Justice in Latin America: The Cinderella of Reform

It is often said that the judicial system is the Cinderella of Latin America's public sector because of the minute budgets it is assigned. Most countries devote between 1-2% of their national budgets to their judicial system, and almost all of that money is spent on salaries.

But the amount of money politicians give to the courts and judges bears little relation to the importance they assign to them, which is why all governments and their cronies devote vast amounts of time and resources to controlling and corrupting them. Perhaps politicians fear that increasing funds would also increase the power of the justice system and therefore, its independence.

In no Latin American nation has there been profound judicial reform. The countries in which the justice system is less corrupt and more immune from the meddling of politicians are also ones where strong civilian institutions were long in place (Costa Rica being a case in point) and where ethical standards and the separation of powers were traditionally greater.

The rest continue to have weak judicial systems and have engaged either in no reform at all, despite international findings and bureaucratic reviews, or very limited reform of some type or other with the result that the origin of the problem has actually been reinforced.

This does not mean that those in positions of power do not entertain lively discussions — sometimes even acting on them — about every thing from changing the way judges are appointed to increasing budgets, updating technology, reshuffling the court structure, elevating the level of training and decentralizing the judicial network.

But in the new millennium, Latin America is left with opinion polls that consistently put the judicial system at the top of the list of the most corrupt, inefficient and untrustworthy institutions.

The economic implications of inadequate judicial institutions are considerable. Conservative estimates by multilateral bodies point to a 15% incidence of such a factor in economic growth due to lack of investor trust.

The problem does not lie in the way judges are appointed, because no matter what mechanism is used, the power of government is such that judges are subservient to those who run it (or to the prosecutors acting in its name).

It is of no real consequence, either, by how much the budget is increased, how many new courts there are and how they divide the load, how many computers are made available, how sophisticated the level of training is or how many judges work from the provinces as opposed to the capital city.

The real problem lies in the dearth of independence from both the government and political law, high costs of access for ordinary citizens and inefficiency. By not attacking these factors, or doing so partially, all attempts at judicial reform have failed. Brazil's new 1988 constitution embraced what looked like ambitious judicial reform, carried out with much enthusiasm in the ensuing years.

The result of greater access to the courts was that pending cases increased ten times in the following decade. In Ecuador, there are more than half a million backlogged cases, lasting a little less than two years on average.

Decisions continue to be made on the basis not of justice but of the legislation controlled by politicians and of how much relative power the parties involved wield even at the low end of the scale.

Ultimately, the Latin American justice system — like the rest of the public sector but to much worse effect — depends on the incentives judges have to be fair or unfair. And it is usually the case that those incentives work against what is right because the courts are an extension of the general condition of power as an instrument of discrimination.

Since the benefits of judicial reform are not immediate, the incentive for decisionmakers to reverse the situation is nil. It does not matter that ordinary citizens at large reject the system that victimizes them. The weakness of civil society — itself closely related to the inadequacy of the judiciary — means that the issue of real reform is subject to the incentives or disincentives of the elites.

The elites brought about the transition from economic nationalism to private enterprise because the cost of the former system had become unbearable. There is no equivalent pressure — at least not yet — to overhaul the justice system.

In fact, the continuous subservience of judges to the powerful is one of the very reasons why the elites managed to turn reform in the 1980s and 1990s into a reshuffling of power — rather than a reversal of the status quo.

The absence of real judicial reform in a context of economic reform has made the problem more acute. Though limited, shallow, and even deceitful, economic reform has expanded the scope of market transactions, creating far greater demand for dispute-resolution mechanisms.

The emerging society born out of migration to the cities had also exposed the need for an adequate judicial system. The more complex the interactions between individuals and groups, the more necessary it becomes to solve disputes and enforce contracts.

Informal or private arrangements — and justices of the peace, who operate like arbitrators in countries like Peru — have helped limit the devastating effect of corrupt, inefficient and untrustworthy courts.

The price has been the widening divide between the country in which the majority of people, live and do business, and the country in which a minority monopolizes the law.

Only when elites have had an interest in promoting legal and judicial updating so as to adapt the institutions to their expanded economic activities have they adjusted the legal and the judicial systems somewhat in order to keep up with international standards.

This was the case in Argentina, for instance, where the laws and the courts tried to adopt American and European rules regarding the relationship between managers and shareholders, and other issues related to the functioning of firms.

These changes and adaptations, however, tend to reflect activities of the powerful business groups connected to the government, not to permit the incorporation of citizens with equal rights into the process of law and justice.

That is why the constant amendment of commercial codes by Latin American countries since the 19th century — with Argentina and Brazil registering the greatest number of changes since 1850 — has not necessarily benefited the population at large.

Since legal codes made by politicians and not court decisions based on merit determine law and justice in Latin America, the modernization of the system means only the modernization of the legal codes.

But those legal codes and the courts that enforce them are themselves part and parcel of the wider reality of countries where power and influence determine what is right.

At any given time, there are typically hundreds of thousands and even millions of cases pending beyond reasonable periods of time in Latin American courts. And almost all of them involve people who command little influence and small businesses that do not have government contracts and do not employ powerful lobbies.

Just as economic reform was conditioned by corporatism, state mercantilism, privilege, wealth transfer and political law — the very system that produced the evils it was supposed to cure — the tiny judicial reform has tended to mirror the system that created the problems it was meant to solve.

Adapted from “Liberty for Latin America: How to Undo Five Hundred Years for State Oppression” by Alvaro Vargas Llosa, published in 2005 by Farrar, Strauss and Giroux.