12.07.2006
Spanish Lessons for Moscow
№3 2006 July/September

The latest edition of Freedom House’s survey of civil and
political rights around the world had sobering news for Russia. It
reports that in 2005 Russia was the only country to register a
negative category change going from “partly free” to “not free.” In
essence, according to Freedom House, Russia is no longer a
democratic society. Certainly, one can take issue with Freedom
House’s harsh assessment of Russian democracy or lack thereof, as
well as its methodology for gauging the quality of democracy around
the world. As a “not free” country Russia finds itself in the
company of some unsavory political regimes notorious for their
human rights abuses, such as Pakistan and war-torn Iraq, and just a
few notches above some of the most repressive political systems in
the world, such as China, Cuba and North Korea. But no one can
dispute that in recent years democracy in Russia has deteriorated
to an alarming degree.

Under President Vladimir Putin, Russia has centralized political
control in a way unprecedented since the fall of Communism and
quite reminiscent of Soviet times. Putin has strengthened the
state’s security services apparatus in his struggle against
Chechnen rebels (thereby fueling widespread human rights abuses)
and has restricted political competition by appointing regional
governors and encumbering independent parliamentary candidacies. He
has also moved to assume control of the national media. According
to a 2004 report by the New York-based Committee to Protect
Journalists (CPJ), Putin has succeeded in turning the Russian media
into a “Soviet-style propaganda machine.” The report further notes
that political control over state television coverage has become so
overt that managers have said openly that their main goal is “to
promote Putin and his policies.”

A more recent and potentially devastating blow to Russia’s
democracy that made headlines the world over is the move to curtail
the growth of civil society, which is still recovering from
Communism’s long rule. A new law passed by the Duma in December
2005 has the potential to roll back political pluralism in Russia
and the capacity of private groups to question the actions of the
government. Under the pretext of preventing external influence over
domestic affairs, the new law will, among other things, keep
foreign non-profit organizations from having branches in Russia and
cut the flow of foreign funds into Russian organizations suspected
of engaging in political activities. If fully enacted as passed,
this new law will surely mean the sudden death of numerous
non-governmental organizations now active in myriad of civic and/or
pro-democracy pursuits such as protecting the environment,
promoting human rights and advancing the welfare of minority
groups.

For observers of the global trend toward democracy of the last
three decades, the travails of Russian democracy raise the
compelling question of whether the experience of other recently
democratic societies might prove fruitful in understanding what
went wrong in Russia and what can be done to remedy things. The
case of Spain readily comes to mind if only because it is generally
hailed by scholars and policy-makers as the paradigm of successful
democratization and a model for struggling democracies. “Spain is a
miracle,” raves Adam Przeworsky in his influential book Democracy
and the Market, a study about the interaction of political and
economic change in Latin America and the post-Communist world. The
data from Freedom House reveals Spain’s enviable post-transition
trajectory. With the death of General Francisco Franco in November
1975, Spain moved from the rank of “Not Free” to “Partly Free.”
After the 1977 elections the country was declared “Free,” a
categorization it has retained ever since. More suggestive,
perhaps, is that Spain’s 2005 rankings for respect of civil and
political rights place the country in the company of some of the
world’s most advanced democracies such as the United States and
Britain.

A MODEL FOR RUSSIA?

One can wonder what relevance, if any, the Spanish experience
might have for post-Communist Russia. Spain’s democratic success is
generally viewed as the result of the positive external influence
of the European Union (EU), to which Spain was admitted in 1986.
European integration has aided democratization in Spain in
multiple, mutually reinforcing ways. Between 1986-1996, Spain
received more than 10 billion U.S. dollars in European aid designed
to raise living standards, improve the country’s public
infrastructure, and reduce economic disparities within the
population. These developments, in turn, have created a very
positive environment for the modernization of the state apparatus,
including most notably judicial institutions, and for the adoption
of European standards of civil and political rights.

Notwithstanding its “European” advantages, Spain remains a
surprisingly useful example for those concerned with the future of
democracy in Russia. For one thing, the influence of the European
Union on Spain’s democratic trajectory, while significant, has been
vastly exaggerated. By the time it joined the EU, Spain was already
a consolidated democracy with nearly a decade of democratic
politics under its belt. Thus, Spain’s entry into the European
Union is best seen as a reflection of the country’s democratic
progress rather than its actual engine. A more important point is
that in its struggle to democratize Spain had to overcome
historical obstacles not unlike those facing Russia. Like Russia,
Spain was by-passed by the great intellectual and social happenings
thought to have shaped the foundations of liberal democracy: the
Reformation, the Enlightenment and the industrial revolution. As a
result, not unlike post-Communist Russia, when Spain began to
transition out of nearly four decades of institutionalized
dictatorship, democracy was virtually unknown to the country.

Before Franco’s death in 1975, the short-lived Second Republic
(1931-1936) was Spain’s most recent and only significant experience
with open, competitive politics. And little about this period in
Spanish history provided any indication about the capacity of the
Spaniards to govern themselves under democracy. Quite the contrary,
this period consolidated Spain’s reputation as being “different”
from the rest of Europe and thus unsuitable for democracy. The
chaotic politics of the Republican era ushered in a bloody civil
war (1936-1939), which occasioned the death of more than half a
million people, and the rise of the Franco regime (1939-1977), one
of the longest dictatorships on record for a European country. This
problematic political history and the perceived propensity of the
Spaniards toward anarchy and violence explains the many gloomy
forecasts (today largely forgotten) issued by scholars and
policy-makers around the time of Franco’s death. “It is naХve to
expect Franco’s death to work a miracle. In the political future of
Spain I see a great deal of darkness and hardly any light; my
forecast must be pessimistic,” wrote Jose Amodia, a noted Spanish
social scientist in his 1976 book Franco’s Political Legacies.

Arguably more important in accounting for the relevance of the
Spanish political experience to Russia is that grappling with
ethnic-based, sub-nationalist violence and terrorism has been the
crux of democratization in both countries. Like Russia, Spain is a
multinational state with important cultural-linguistic cleavages
and a history of state repression of regional identities. This
meant that in both countries the drama of democratization would
unfold against a crisis of “stateness” driven by demands for
regional home rule, and in some instances outright independence,
from ethnically distinct communities. Thus, accommodating these
demands and by extension re-inventing the notion of the central
state have been critical to democratic sustainability in Spain, as
it appears to be the case in Russia and other democratizing states
challenged by peripheral nationalism.

Finally, Spain, like Russia, undertook to democratize without
many of the conditions generally deemed a prerequisite for
successful democratization. The most notable is a vibrant and
robust civil society, which many influential scholars have
identified as the most important component behind a successful
democracy. Civil society stands for an amalgam of associations that
brings citizens together in non-hierarchical relationships—from
recreational groups such as bowling leagues, to religious groupings
to non-governmental organizations (NGOs). It is meant to impart a
myriad of democratic virtues, key among them being the curtailing
of the authoritarian tendencies of the state and the enhancing of
the democratic capacities of the citizenry. Since turning
democratic, Spain, like Russia and many other post-Communist
societies, has exhibited a prominent civil society deficit.
According to the University of Michigan’s World Values Survey,
which provides the richest database for contrasting levels of civil
society density across national boundaries, only about a third of
the Spanish public belong to a voluntary association, about the
same as in the post-Communist world.

As would be expected, Spain’s democratic success poses no
miracle prescriptions for Russia and other struggling democracies.
But it compellingly suggests a point often overlooked in
discussions about democratization. Democracy is the product of the
skills and talents of real-life political actors rather than the
result of some macro-historical process linked to the development
of the economy, or the constitutional configuration of civil
society and political organizations. No case proves this point
better than Spain, where the transition to a well-functioning
democracy depended upon the extraordinary capacity of political
actors to compromise with each other and to devise novel
constitutional arrangements to manage political and economic
uncertainty. This goes a long way toward explaining why in Spain,
formidable obstacles to democratization, such as a weak civil
society, fragmented political institutions, unemployment and
terrorism, did not derail the march toward a consolidated
democracy.

THE PRIMACY OF CONSENSUS

Among newly democratic states, Spain has a well-deserved
reputation as a “pacted” democracy, a direct reference to the
prominent role that intra-elite political compromises played in the
process of regime change to democracy. Prior to the 1977 elections,
Spain’s first since the end of the civil war in 1936,
representatives from the Left and the Right settled some of the
most contentious issues of the democratic transition. Key among
them was the decision not to delve into the recriminations of the
past, the so-called “Pact of Silence,” and the agreements to create
a parliamentary monarchy instead of another republic, and to
restore autonomy rights to the Basques and the Catalans following
the enactment of a new democratic constitution.

The primacy of elite consensus that permeated the Spanish
democratic transition was a direct by-product of the political
learning that the country derived from its traumatic past,
especially the horrific violence of the Spanish Civil War. Spain’s
political class emerged from the Franco dictatorship determined not
to repeat the mistakes of the past. Of special concern to the
architects of Spain’s new democracy was avoiding the political
divisiveness that doomed the Second Republic and that drove the
country into civil war. With that goal in mind, democracy in Spain
was inaugurated with a broad intra-elite accord intended to
dismantle Franco’s institutional legacy and to consolidate a new
democratic regime in as non-confrontational a manner as
possible.

The epoch-making Moncloa accord was brokered by Prime Minister
Adolfo SuЗrez following the 1977 elections and in anticipation of
the drafting of the country’s new democratic Constitution in 1978.
Often fittingly regarded as the symbolic end of the Spanish Civil
War, this agreement was embraced by political actors from virtually
the entire political spectrum – from Communists to Christian
Democrats. The Moncloa accord also enjoyed the support of a wide
range of societal actors including the employers, the labor
movement and the Catholic Church. Indeed, among major political
organizations, only the neo-Francoist party Alianza Popular and
Batasuna, the political wing of the Basque separatist movement,
remained outside of the area of political consensus created by the
Moncloa accord. Such widespread social and political support
accounts for the accord’s speedy acceptance by the Spanish public.
Subsequent to its signing, the Moncloa accord was debated in the
national parliament, where it was rapidly turned into law. This
development enhanced the legitimacy of the accord and facilitated
its implementation across Spanish society.

 The best-known aspects of the Moncloa accord are those of
relation to the economy, given that its most urgent and
controversial purpose was to stabilize and protect the economy from
the domestic repercussions of the international energy crisis of
the mid 1970s. Inflation, which in 1977 appeared to be
skyrocketing, was foremost in the minds of the government around
the time of the transition. Accordingly, the most important
component of the Moncloa accord was the implementation of a
national wage band that dictated that salary increases could not
exceed 20-22 percent in anticipation of an inflation rate of 20
percent. This wage scheme aimed to slow down the growth of
inflation by decreasing wage demands, alongside containing labor
conflict and encouraging economic activity and business
profitability.

Although there is a tendency to oversell the importance of the
Moncloa accord, its positive effects upon the country’s process of
democratic consolidation are undeniable and wide reaching. The
Moncloa accord had immediate, positive results, especially in the
economic realm. The annual rate of inflation fell from almost 25
percent in 1977 to 14 percent by 1982 and the rate of wage
inflation was reduced from 30 to 15 percent. The accord’s success
in curbing inflation meant that in striking contrast to many other
new democracies where democratization and economic crisis
coincided, in Spain hyperinflation would be successfully avoided.
In turn, avoiding hyperinflation ensured that the consolidation of
democracy in Spain would not be complicated by the loss of
government credibility, as was the case in many new democracies in
South America and the post-Communist world.

Politically, the benefits of the Moncloa accord are multifold,
albeit not altogether self-evident. First and foremost, this pact
aided in the consolidation of Spanish democracy by integrating the
nascent democratic political class around the project of
democratization and by creating a new and to a certain extent
radical way of doing politics in Spain. The Moncloa accord can be
credited with merging “civil” and “political” societies into a
collective body working together on behalf of the consolidation of
democracy. It brought together the organizations most centrally
concerned with the consolidation of democracy (the government, the
state bureaucracy, the party system, organized labor, and
employers’ groups). Simultaneously, it isolated the social forces
most likely to disrupt or derail the project of democratization:
the military, terrorist organizations, and extreme right-wing
groups.

Facilitating political representation was another contribution
of the Moncloa accord. It provided a mode of interest
representation that allowed for the fast and effective recognition
of mutual interests to a plurality of actors and for the resolution
of many of the tasks confronting them. The enactment of the new
democratic constitution is a case in point. It is difficult to
envision the broad political consensus encapsulated in this
document without the precedent for political consensus and
cooperation set by the Moncloa accord. Unlike previous Spanish
constitutions, most notably that of the inter-war Second Republic,
a ruling government did not impose the 1978 constitution. Instead,
it was a negotiated settlement involving all the major political
parties, very much in the spirit of the Moncloa accord.

MODERATING AND SEQUENCING REFORMS

In Spain, as in Russia and virtually every new democracy,
reforms designed to liberalize the economy and revamp outmoded
economic structures have inflicted a great deal of pain upon
society. By far the most evident cost of economic reform in Spain
is high unemployment, a consequence, among other factors, of an
ambitious program of re-industrialization that became a requirement
for the country’s entry into the European Union. In 1984, the year
economic restructuring was launched, the government in a single
stroke sold or dissolved dozens of state-owned enterprises
including banks, automobile companies, and steel mills. The
government also moved to liberalize Franco’s rigid labor market
laws to allow employers greater flexibility in hiring and firing
workers. The impact of these measures on the national unemployment
picture was rapid and dramatic.

Spain’s annual unemployment rate averaged 12 percent from
1977-1986 and climbed to 18.4 percent between 1986 and 1990.
Through the 1990s, the unemployment rate continued to rise reaching
its peak at 24 percent by 1994 (a record for an OECD country) or
3.7 million of the active population. This upsurge in unemployment
came as a shock to a nation that had grown accustomed to near full
employment under Franco. Between 1965 and 1974, the unemployment
rate in Spain averaged 1.5 percent, one of the lowest in Europe.
Surprisingly, the dramatic reversal of fortune in Spain’s
unemployment picture in the post-transition era did not erode the
citizenry’s confidence in democracy, as has been the case in the
majority of newly democratic nations. Moreover, the party that
implemented these reforms (the PSOE, the Spanish Socialist Party)
continued to win impressive electoral victories until 1996. What
explains these outcomes of economic reform in Spain?

The answer to these puzzling questions rests on the unique
dynamics of economic reform in Spain, especially the willingness of
the government to adopt an approach to economic reform that called
for moderation, negotiation with society and, above all,
compensation for those most adversely affected by economic change.
This approach stands in striking contrast to the so-called
“Washington consensus” preferred by U.S. administrations and
multilateral organizations such as the World Bank and the IMF and
implemented in Latin America and most of the formerly Communist
world. Beyond preaching the virtues of neo-liberalism and fiscal
restraint, the Washington consensus advises “shock therapy,” or the
speedy implementation of privatizations and other policies aimed at
creating and/or deepening the market economy. Moreover, this
approach calls for the exclusion of societal actors, such as trade
unions, from the bargaining table. Advocates of shock therapy fear
that allowing the unions a role in the crafting of economic reforms
could compromise the coherence of the reform effort or, worse yet,
cause delays in its implementation.

Little of what is recommended in the Washington consensus is
reflected in the Spanish experience. For starters, the
stabilization plan designed by state technocrats to tackle rising
inflation in Spain in 1977 aimed at restoring the economy to health
without provoking political conflict and unnecessary risks to the
consolidation of democracy. Thus, rather than relying on shock and
exclusion, economic stabilization in Spain was anchored on direct
negotiation and social pacts with societal actors, including the
national unions. Using the Moncloa accords as a template, between
1977 and 1986, representatives from government, labor and
employers’ groups negotiated wage policy with the purpose of
gradually moderating wages in an effort to tame inflation.
Consequently, Spain was spared the draconian plans of economic
stabilization implemented in other transitional democracies.

When the time came to reform Franco’s vast and mostly outmoded
state-owned enterprises, grouped around the National Institute for
Industry (INI), the government in Spain proceeded with considerable
caution. Not a single public enterprise was sold or dismantled
until every politically sensitive task of relation to the
construction of a new democratic system was accomplished.
Therefore, in Spain, and in contrast to other new democracies,
democratic consolidation and economic restructuring did not
technically converge. By the time privatizations and other reform
efforts got under way in the mid-1980s, Spanish democracy was fully
consolidated. Additionally, the pains of industrial reconversion in
Spain were cushioned by an expanding welfare net. Government
financing of pensions, unemployment benefits, health and education
went up in real terms 39.7 percent between 1975 and 1982 and 57.6
percent between 1982 and 1989. As a proportion of GDP, social
spending in Spain increased from 9.9 percent in 1975 to 17.8
percent by the end of the 1980s. These public expenses aimed to
compensate the working class for its sacrifices, the actor hardest
hit by economic reform.

DECENTRALIZING THE STATE

Accommodating the demands for self-government from ethnically
distinct communities emerged as the most explosive issue in the
consolidation of democracy in Spain, as well as the most serious
test of the political skills of the country’s early democratic
leaders. The drive for regional self-government pitted a military
establishment socialized by Franco into the notion of a whole and
indivisible Spain against intransigent and violence-prone
separatist movements demanding nothing short of independence from
the central state. This confrontation was ensured by Franco’s
obsessive and repressive attempt to create a culturally and
linguistically homogenous nation, especially in the Basque country,
which in the post-transition period has become ground zero for the
struggle for regional self-rule.

In the years preceding the transition to democracy, Franco’s
efforts to annihilate the unique cultural heritage of the Basque
people gave rise to Euskadia Askatasuna (Basque Homeland and
Liberty, better known as ETA), Europe’s most formidable terrorist
band. At least through the 1960s, ETA violence was restricted to
acts of vandalism, such as blowing up monuments and setting up
bombs in front of Civil Guard stations, but with the advent of a
more open political climate the organization’s terrorist tactics
would be dramatically transformed. Indeed, the unraveling of the
Franco regime afforded ETA the opportunity to impose a veritable
reign of terror upon the Spanish people. The 1973 assassination of
Franco’s Prime Minister and alter ego General Luis Carrero Blanco
in 1973 attested to ETA’s capacity to directly threaten the state.
ETA-sponsored violence intensified after Franco’s death and to this
day accounts for over 800 deaths, the result of numerous
assassinations, kidnappings and bombings all aimed at destabilizing
the nation’s democratic system.

The government’s central strategy for addressing the dilemma
posed by sub-nationalist groups was to assure regional leaders that
their demands for home rule would be honored. This commitment
reflected the belief by the founders of Spanish democracy that the
survival of both democracy and the nation’s geographic integrity
was contingent upon the successful de-centralization of the state.
It was fulfilled after a constitutional framework was firmly in
place with procedures for how to deal with the de-centralization of
the state. Accordingly, in Spain the process of devolution of
powers to the regions would be preceded by the re-organization of
the political system, including approval by the Spanish people of a
brand new democratic constitution. These happenings made it
possible for Spain to undertake a project of regional
self-government with the backing of a central state whose authority
was consolidated and legitimated, thereby ensuring that
democratization and de-centralization would prove mutually
reinforcing.

Among the virtues of the Spanish approach was averting a
Yugoslavia-type scenario in which regional agendas, elections, and
institutions were allowed to submerge and undermine national
institutions. In Spain, by contrast, by the time regional
identities and institutions began to assert themselves politically
and challenge the new political regime, the country enjoyed a
relatively coherent and stable set of national political
structures. Their resilience permitted the nation to successfully
withstand not only the violence generated by ETA but also the
military rebellion of 1981, which came in the wake of the granting
of limited self-rule to the Catalans and the Basques. This attack
on democracy reflected the perception of military officers that the
nation was bursting at the seams and was rooted in the Francoist
notion that only a non-democratic government had the capacity to
hold the country together.

The political instruments of Spain’s new democracy also
possessed the capacity to absorb the demands for regional
self-government. The new constitution embodies an exquisitely
ambiguous compromise that acknowledges, on the one hand, the
country’s unitary nature in contrast to a federal one, and, on the
other, its multiple “nationalities” and the right of the regions
and its peoples to seek home rule. Understandably, this
constitutional compromise is fraught with tension, since it aims to
satisfy both centrists and regionalists. But it has facilitated
Western Europe’s largest process of devolution of powers from the
central state to regional governments in the post-war period. By
the mid-1980s, Spain had evolved into a collection of seventeen
autonomous communities (so-called autonomТas), with each community
ruled by an elected legislative body and a specific set of powers
granted by the central administration in Madrid, effectively making
the nation a federal state in practice, while not officially in
name. Education, social and cultural policy, law enforcement, and
taxation are some of the areas of public administration, over which
regional governments have been granted significant control.

A majority of the Basques approved the autonomy statute in 1979
and public opinion data suggests that Basque public has remained
supportive of this arrangement ever since. According to a 2003 poll
by researchers from the University of the Basque Country, 30
percent of Basques express to be “satisfied” with the present
stipulations of the statute, 40 percent are “partially satisfied,”
(and presumably would like to see it expanded), and 25 are
“dissatisfied.” As to political status preferences, 32 express
support for the status quo (autonomy), 35 percent prefer a federal
state, and 30 percent prefer independence. To be sure, extending
self-governance to the Basques has not appeased ETA, which demands
outright independence from Spain, but it has had a palpable effect
in shaping the politics of terrorism in Spain. It has undermined
ETA’s campaign to portray the state in Spain as a colonial
oppressor (a goal of ETA since its inception) and to turn the
Basque people against Spain. This, in turn, has prevented the
conflict in the Basque country from becoming one between “the
central government and ordinary Basque people” and from
discrediting Spain as a democratic state.