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Power, Institutions, and Leadership in War and Peace

[ Latin American Studies ]

Power, Institutions, and Leadership in War and Peace

Lessons from Peru and Ecuador, 1995-1998

By David R. Mares and David Scott Palmer

An examination of the border war between Peru and Ecuador reveals new approaches to Latin American leadership and a transformed power structure that integrates domestic and international factors

2012

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In January 1995, fighting broke out between Ecuadorian and Peruvian military forces in a remote section of the Amazon. It took more than three years and the interplay of multiple actors and factors to achieve a definitive peace agreement, thus ending what had been the region's oldest unresolved border dispute. This conflict and its resolution provide insights about other unresolved and/or disputed land and sea boundaries which involve almost every country in the Western Hemisphere.

Drawing on extensive field research at the time of the dispute and during its aftermath, including interviews with high-ranking diplomats and military officials, Power, Institutions, and Leadership in War and Peace is the first book-length study to relate this complex border dispute and its resolution to broader theories of conflict. The findings emphasize an emerging leadership approach in which individuals are not mere captives of power and institutions. In addition, the authors illuminate an overlap in national and international arenas in shaping effective articulation, perception, and selection of policy.

In the “new” democratic Latin America that emerged in the late 1970s through the early 1990s, historical memory remains influential in shaping the context of disputes, in spite of presumed U.S. post–Cold War influence. This study offers important, broader perspectives on a hemisphere still rife with boundary disputes as a rising number of people and products (including arms) pass through these borderlands.

  • Preface
  • Chapter 1. Introduction: Explaining Interstate Conflict and Boundary Disputes in Post–Cold War Latin America
  • Chapter 2. Two Nations in Conflict
  • Chapter 3. Presidential Decision Making: The Institutional and Personal Context
  • Chapter 4. Domestic Politics and the Push toward War
  • Chapter 5. The Domestic Bases for Resolution
  • Chapter 6. Hemispheric Diplomacy and the Politics of a Solution
  • Chapter 7. Conclusions: Lessons Learned, Progress Achieved, and Implications for Other Boundary Disputes
  • Appendix A. Effective Number of Parties
  • Appendix B. Ecuadorean Attitudes toward Relations with Peru (November 1992)
  • Appendix C. Polling Data on Border Issues (1994–1996)
  • Notes
  • Bibliography
  • Index

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Introduction

Explaining Interstate Conflict and Boundary Disputes in Post–Cold War Latin America

In January 1995 fighting broke out between Ecuadorean and Peruvian military forces in a remote section of the Amazon that ultimately cost hundreds and perhaps even more than a thousand lives. Ecuador refused to abandon outposts constructed in territory it disputed with Peru. As the fighting quickly escalated before becoming bogged down for some thirty-four days, first dismay and then determination gripped the Western Hemisphere. How could fighter bombers, helicopters, land mines, surface-to-air missiles, and thousands of troops be converging rapidly on a far-off section of the jungle? How could tanks, warships, and thousands more troops be mobilized in reserve, guarding sea lanes and potentially vulnerable points along a 2,000-kilometer border? Was there any way in which the international community could contribute to end the fighting and establish a lasting peace?

Some observers and policy analysts viewed this event as an anomaly in the "new" Latin America of dramatically lowered levels of overt ideological conflict, redemocratization, and economic integration. After the U.S. "victory" in the Cold War and its undisputed influence in the Western Hemisphere in the 1990s, some were surprised that such violence could even be contemplated by Latin American states. Other analysts interpret interstate violence as the result of some internal flaw in the political system: nondemocratic politics, "immature" democratic institutions, and populist leadership may contribute to diversionary war in times of political and economic stress. These views do not explain the violence in 1995, however. Nor do they offer insights on how to minimize the likelihood of its future outbreak in a hemisphere still rife with disputed territorial and maritime boundaries, competition over natural resources, illegal flows of people and products across borders, and increasing arms purchases. One recent example is the military incursion by Colombia against a guerrilla camp on the territory of its neighbor Ecuador in 2008.

In the "new" democratic Latin America which emerged from the late 1970s through the early 1990s, sovereign jurisdiction disputes over land, territorial seas, and airspace continue to trouble the region (see the section "Disputes in the Western Hemisphere" below). In spite of presumed U.S. post–Cold War influence, in the 1990s military force was verbally threatened, displayed, and used at least fifty times in Latin America. Nor should we be believe that the few wars that have occurred in Latin America make it a uniquely peaceful region; a comparison of the number of wars after World War II puts the region in the middle of the pack. In the specific case of Ecuador and Peru, the return and routinization of democratic practice were insufficient to overcome the long history of a festering border dispute between the two countries. Ecuador's political leaders and citizenry alike came to believe that war was a legitimate means to produce a "just" settlement. As fighting broke out in the midst of an electoral campaign for president in Peru, the leading opposition candidate, former United Nations (UN) secretary general Javier Pérez de Cuellar, advocated a much tougher response than the economic carrot and personal diplomacy approach that had been pursued up to that point by incumbent candidate Alberto Fujimori.

The use of large-scale military force over a sustained period clearly implies a decision by central government authorities. Not all disputes lead to violence, and not all violence escalates to war. In fact, most disputes imply neither war nor violence, even at low levels. In the case of the Peru-Ecuador border dispute, someone made a decision in the period from December 1994 to January 1995 that produced war and someone made another decision between August and October 1998 that brought peace. If we can explain who did what and why at both points, it may help us better understand the roles of power, institutions, and individuals in making war and peace and provide lessons that can be applied here and elsewhere in order to defuse a future threat more quickly.

The decision to make war or peace is influenced by both domestic and international factors. In each arena, power and institutions mediate interests and historical memories and shape the context in which choices will be made. Yet individuals are not mere captives of power and institutions—leadership matters. Its display can make a decisive difference in sorting out how options are articulated, perceived, and ultimately selected. Both the historical analysis of the politics of war and peace between Ecuador and Peru and the extended discussion of the relationship of this case to larger issues of conflict and its resolution illuminate the details of these interrelationships among power, institutions, and leadership in both domestic and international arenas.

This opening chapter has five sections. The first section discusses interstate disputes in the region. The data indicate that such disputes are neither rare in Latin America nor confined to the past. Thus thinking about how disputes become militarized, how they escalate to war, how the fighting stops, and how a dispute gets resolved has great relevance for the Western Hemisphere today. Subsequent sections examine our key variables: institutions, power, and leadership. The second and third sections analyze the argument that institutions are important determinants of international behavior, including war and peace. Domestic institutions are the subject of the second section, highlighting the importance of electoral incentives for politicians, bureaucratic politics, and military interests. The third section focuses on international institutions as facilitators of interstate cooperation. It points out the insufficiency of international institutions by documenting the widespread and elaborate institutional structure in the region at the outbreak of the war in 1995. The fourth section proposes ways to think about the relationship between power and institutions. We argue that power is relational and composed of a number of factors and thus is best understood in terms of a "strategic balance" among rivals. The fifth section discusses the importance of political leadership and proposes two characteristics that will determine to what degree leaders are constrained by the institutional context and power relations within which they operate. We develop hypotheses about the ability and willingness of political leaders to be innovative and take risks in dealing with international disputes.

Subsequent chapters deal with the core themes of external developments, domestic institutions, and individual leadership and statecraft. Chapter 2 presents the extensive historical background and details of the conflict itself. Chapter 3 discusses the domestic institutional elements in Peru and Ecuador that bear on our understanding of the dispute. Chapter 4 deals with the forces and factors that led to war. Chapter 5 considers the domestic bases for resolution of the conflict, while Chapter 6 offers a parallel analysis of the most relevant international elements. Chapter 7 discusses the lessons learned from the Ecuador-Peru dispute and how they might assist in dealing with and resolving the numerous ongoing disputes in the Americas.

In sum, this book presents a detailed analysis of the Ecuador-Peru border conflict and its resolution but frames it within core themes from the literature on conflict resolution and draws lessons from this case for consideration in other ongoing disputes among nations.

Disputes in the Western Hemisphere

A significant number of interstate disputes continue to be present in the Western Hemisphere. These range from territorial and maritime disputes to the illegal flow of people and products across international boundaries. Some are quite active, others fester below a veneer of civility, and still others are consciously kept off the diplomatic table by all parties. The Ecuador-Peru experience, however, counsels us to avoid taking the nonviolence or limited violence of these disputes for granted.

Of the thirty-five members of the Organization of American States (OAS), only three have not been involved in international boundary disputes (Bahamas, Jamaica, Paraguay), while thirty-two member nations (Antigua and Barbuda, Argentina, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Granada, Guatemala, Guyana, Haiti, Honduras, Mexico, Nicaragua, Panama, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, the United States, Uruguay, and Venezuela) have had at least one such dispute during this period, in addition to disputes between French Guiana and Suriname and Great Britain and Argentina. Counting disputes in Latin America has unfortunately been unsystematic and plagued by errors. For example, though Beth A. Simmons lists territorial disputes between Argentina and Chile as resolved in 1995, they have not demarcated the Hielos Continentales (Southern Patagonian Ice Field). Chile issued a diplomatic protest in 2006 when Argentina produced a map with demarcations. Nor has the El Salvador/Honduras dispute been resolved as she states: the 1992 International Court of Justice (ICJ) ruling on one aspect of the dispute ignored the Isla de Conejo, so the countries continue to have a boundary dispute. Simmons lists the Bolivia/Chile dispute over Bolivia's outlet to the sea as settled in 1996, but that is clearly incorrect. The two countries have not even had ambassador-level relations since 1978. She also mistakenly claims that Argentina's dispute with Great Britain over the Malvinas/Falklands Islands was resolved in 1996, but it is still ongoing as well.

Although a number of dependencies of European states are found in the Caribbean Sea, only in South America are they involved in boundary disputes (French Guiana with Suriname and Great Britain with Argentina over South Atlantic islands, including the Malvinas/Falklands). From the list we can see that 91.4 percent (thirty-two of thirty-five) of the independent nations in the Western Hemisphere continue to have boundary disagreements of some type. Clearly, such disputes span the hemisphere.

The United States maintains boundary disagreements with twenty-two of the thirty-five members of the OAS. A number of these issues involve claims that foreign warships and planes must solicit permission to transit territorial seas and airspace. Although these types of disputes are unlikely to escalate to severe conflicts, it is U.S. military might that limits them, rather than something inherent in maritime and aerial sovereignty issues. In fact, the United States has actually engaged in provocative behavior in these cases by conducting "operational assertions" of its rights to go wherever it wishes without prior permission. Therefore we cannot assume that the response would be similarly peaceful if a Latin American nation were to engage in similar operational assertions. In the 1987 Caldas incident, for example, the presence of a Colombian warship in waters disputed by Venezuela produced military mobilizations and a two-week crisis.

One of the interesting aspects of these boundary disputes, aside from their ubiquity, is that they can involve the closest of allies and be resolved even by the worst of enemies. To illustrate: the United States and Canada maintain numerous boundary disputes, while the United States and Cuba negotiated a treaty agreement over maritime boundaries in 1977. Although this treaty still has not been ratified, the parties have continuously exchanged diplomatic notes extending it.

Migrations, contraband (including illicit drugs), guerrillas, and even disagreements about implementing treaties ratified by all sides can lead to severe conflict, including military action. Certainly, the U.S. invasion of Panama in 1989, in which over twenty thousand U.S. Marines captured Manuel Noriega at the cost of approximately five hundred lives in the name of democracy and the drug war, is a dramatic instance. But Latin Americans themselves have been willing to use force against their neighbors for reasons having little to do with territory or boundaries, as the 1937 massacre of twelve thousand to thirty thousand Haitian migrants by Dominican police forces demonstrates. In the 1969 war between Honduras and El Salvador that cost over three thousand lives, the border dispute was secondary to the migration issue. Venezuela and Colombia have seen their relations deteriorate in recent years over guerrilla, contraband, and migration issues rather than because of their boundary disagreements.

Domestic Institutions

Institutions are humanly devised constraints that shape human interaction by prescribing acceptable forms of behavior and proscribing unacceptable ones. These rules may be explicit and embodied in organizational structures or implicit and informal. Institutions are more formalized in domestic politics because the structure of a polity reflects them. At the international level institutions are not as numerous; they may be more informal (as in the case of diplomatic conventions) and provide weaker incentives to guide international behavior.

Institutions are important factors in explaining both domestic and international behavior because political competition threatens to become violent whenever participants worry about their vulnerability to the misbehavior of other actors. At the domestic level such a situation may produce a collapse in domestic order, perhaps even leading to civil war. Internationally, the analog is interstate tension that can lead to war.

The danger of a breakdown in cooperation is diminished when institutions accomplish three tasks: (1) provide information concerning the likely behavior of others, (2) reduce transaction costs in collecting and evaluating that information, and (3) provide transparency in the actual behavior of others. The combination of these three elements enhances the credibility of the actors' commitment to cooperate, thereby reducing the danger of falling prey to partners who go back on their word.

The mere existence of institutions, however, does not automatically accomplish cooperation at either the domestic or the international level. (Clearly, democratic institutions have collapsed with depressing regularity in Latin America, and the United States has ignored the OAS on various issues of importance to Latin American governments.) The ability of institutions to have a significant impact is enhanced if three conditions are present. First, the relevant actors must expect to be around in the future to play the game again so that today's losses might be reasonably expected to even out over time. Second, the institutions must be able to create links across issue areas, thereby allowing actors to be compensated for losses in one area by gains in another. Third, the most powerful actors must support the institutions, even when they are constrained from pursuing their immediate short-run interests by the rules of those entities.

Democratic domestic institutions are by far the best for enhancing cooperation. This type of institutional structure provides for greater accountability by leaders to a broader (though still not complete) spectrum of the citizenry and greater information and transparency through the concomitant presence of a free press. While most democracies do not function with total effectiveness, they can usually be expected to perform in a more satisfactory manner in these areas than their authoritarian counterparts.

Edward Mansfield and Jack Snyder argue that during the first decade of "new" democracies two factors produce dramatically increased risks of war. The first is that certain "imperfections" in the composition of political parties and functioning of the electoral system may allow democratic politics to become "hijacked" by special interests. These interests will seek private benefits and distribute their costs to the country at large. The second factor lies in the nature of these powerful special interests. If they are nationalists they are likely to use external threats to build broader support at home. Consequently, they are more likely to push foreign adventures that produce war.

This study looks closely at Ecuador and Peru to see if these democratic imperfections are present and if they played an important role on the road to war. That is not a self-evident claim. Ecuador's political system is not easily hijacked by special interests because the barriers for entry to congress and the presidency are low—parties can be easily organized and win high office. It is plausible to argue that Alberto Fujimori hijacked Peruvian politics in 1992–1993 with his autogolpe (self-coup) before the country returned to democratic forms in 1993–1994; however, his international strategy was not an aggressive military one. Rather than being a case of special interests hijacking politics, the imperfection that may matter most is the peculiarly Latin American tradition of "delegative democracy," in which leaders are given great leeway to undertake initiatives that promise, at least rhetorically, to solve the nation's most pressing problems.

One of the lacunae in Mansfield's and Snyder's view of the behavioral implications of "new" democracies is that it provides no insights into why the same institutions that provide incentives for war can also produce peace and perhaps even a definitive resolution of the conflict. This omission would not be important if we could assume that the institutions of those who do not gain military victory will both change and move toward greater democracy as a result of war. However, there is no justification for making such an assumption. In the case at hand, both Ecuadorean and Peruvian democratic institutions began to weaken in 1997 after the Ecuadorean legislative coup against President Abdalá Bucaram and as President Alberto Fujimori started to restrict democratic practices and procedures in Peru in order to ensure continuance in power. Even in the context of weakened democratic institutions, however, the peace treaty was signed in 1998.

We argue that it is more fruitful to unpack the democratic institutional constraints themselves rather than focus on imperfections in their structure or on interest groups. Three factors in Latin American democracies help us understand how international behavior is affected by the institutional constraints of democratic politics: electoral incentives, bureaucratic politics, and military interests.

Electoral Incentives

In democratic polities, politicians face important constraints arising from the need to stand for periodic elections. The logic underlying this argument assumes that a politician's interest can be usefully condensed to winning elections. The claim is not that politicians have no other interests but that they first need to be elected in order to accomplish whatever their goals are in politics. The politician thus needs to offer the voters what they want in order to be elected or reelected.

To undertake a specific case analysis, we need a realistic model of electoral politics in that nation. This means examining the electoral system (regulations on running for office) and the party system, as well as public opinion on the relevant issue.

Term limits affect the electoral constraints on politicians in a democracy. Officeholders who wish to retain their position must be cognizant of voter preferences on policy issues. Presidents and members of congress who cannot run for reelection cannot be directly sanctioned via the ballot box. Ceteris paribus, presidents will face incentive structures that favor their pursuit of a personal policy agenda. The constraint on members of congress is still operative, however, in that they can seek election to other offices, whereas presidents rarely seek lower-level elective offices after their terms.

Party strength should also affect electoral constraints on the executive. In political systems with strong parties, executives who cannot be reelected will feel constrained by the desire for their party's candidate to win next time. If the president is significantly constrained by the legislature, and party discipline is strong, even a president facing no reelection possibilities may feel constrained by voter preferences.

The strength of party systems varies across Latin America in terms of their level of institutionalization (stability in interparty competition, established roots in society, legitimacy among the populace, and stability of their organizational structure and rules). In general, weak party systems have negative implications for countries. Presidents are less likely to get support in the legislature because weak parties are not able to control congresses or lack the internal discipline necessary to sustain political coalitions to pass specific policy initiatives.

Such disadvantages for policy making may be mitigated to a degree in weak party systems because the presidents are not constrained by their need to support their parties in congress or to prepare them for the next presidential elections. Presidents in these circumstances can try to make policy on its intrinsic merits by appealing directly to the public for support. Going to the people, nevertheless, presents its own challenges, as demonstrated when Ecuadorean president Sixto Durán Ballén lost the referendum for economic reforms in 1995.

This discussion of domestic institutional context gives us a means to understand the role of history, a factor often simply alluded to as all powerful until change actually happens. History and historical context may also play a significant role in given sets of circumstances. History is vast and complicated; what matters for politics is how history is interpreted and by whom. One way of thinking about how history matters is to associate different historical interpretations of an event with interest groups or the society at large. The weight of history on a particular issue will thus be influenced by the institutional constraints on the leader. The more highly constrained a leader is by his or her constituency, the more weight the corresponding interpretation of history carries.

The "weight of history" has implications for conflict resolution. The way in which history is interpreted will influence the nature of the side payments that are necessary for concessions on particularly tough issues. As this case demonstrates, the sense of insult and abandonment that Ecuadoreans and their military felt after the war of 1941 meant more than actual sovereignty over disputed territory. Understanding how that history was interpreted raised the possibility that resolution without actually modifying borders could be a viable option.

Bureaucratic Politics

The impact of bureaucracies on policy depends on how the decision-making unit is structured as well as the degree of the bureaucratic leadership's independence from the chief executive. Although a foreign ministry might be assumed to have a significant impact on all foreign policies, policy making can be structured in such a way as to exclude or minimize the foreign ministry's influence. If the president selects ministers because of their professional qualifications rather than their personal ties to the chief executive, the bureaucracy will be more likely to influence policy.

The diplomatic corps in the United States and in many Latin American countries is very professional and capable. Yet a diplomat has very little independent bargaining power to use at home; the international reputation of a country is not a powerful tool in domestic politics. It is not in the interests of career diplomats in the foreign ministry, as agents of the president and subject to censure by the congress simply for policy disagreements, to blaze an independent path around new options to resolve issues as protracted and nettlesome as border disputes.

The diplomatic corps of a country, however, may play a fundamental role in proposing and developing options for other countries. Such an effort can help the national leadership of disputing nations to get something on the negotiating table that they themselves cannot offer directly. As the experience of the U.S. guarantor of the 1942 Rio Protocol, Luigi Einaudi, demonstrates in this case, innovative and skillful diplomats can have a major impact on helping rival nations find a mutually acceptable path to resolution.

Military Interests

The military is an agent of the government, but its firepower and reputation among particular segments of the population can render its subordination to government leaders problematic. Even well-established democracies find civilian control of the military to be incomplete. Unfortunately, Latin America's history indicates that the issue of military subordination to democratic civilian control has not yet been settled. Thus military leaders have at least a de facto independent influence over policy making in areas they consider relevant to their role in national defense.

Because the military is a player on national security issues, we need to consider military interests when discussing interstate conflict in Latin America. It is commonplace in the study of Latin American politics to perceive the military as xenophobic, antidemocratic, and focused on the short-term needs of its organization (arms, people, and pensions). But as the New Institutionalism paradigm demonstrates, the way in which self-interest is pursued varies by institutional context. In the current context of democratic politics Latin American militaries are recognizing that professionalization and modernization of their force structure requires that they cede day-to-day operations of government to civilians and focus on their task of defending the nation. Democracy itself is thus not questioned, and the military's focus narrows to resources and nationalism.

What are the implications of the military's professionalization on the process through which border issues are negotiated? One might hypothesize that the military is unlikely to play the leading role in resolving a border dispute because of its intense nationalism, fears of territorial vulnerability, and concern over its budget and prerogatives. Two factors, however, suggest that the militaries may not be complete obstacles to peaceful resolutions of international disputes. Latin American militaries are not anxious for large-scale wars, because they can actually undermine the institution of the military. In war the outcome is often uncertain on the battlefield as well as at the peace table. Even military victory is no guarantee of "winning the peace." The economic costs of a major war to the country would likely be disastrous; with many basic needs of most Latin American populations unmet, governments might decide to cut the military budget and accept defeat. A comparison of the Argentine military's decision not to fight Chile in 1978 and its decision to fight Great Britain in 1982 shows that militaries can be very rational when it comes to war and still get it wrong, resulting in huge costs to the institution. Consequently, in some conditions the military's professional interests turn it into a supporter of a comprehensive package resolving a border dispute.

If domestic institutions matter for interstate relations, should we be concerned about potential conflict in Latin America? The weakening of democratic practice in Latin America, while retaining democratic forms, is disappointing for many reasons. Paradoxically, however, the end of the Ecuador-Peru conflict as democracy was eroding in both countries is actually an encouraging sign. It suggests that peace and conflict resolution are possible even with very imperfect, even deteriorating domestic political institutions. To understand such an unexpected outcome more fully, we need to explore the role of international institutions in the process of peaceful settlement of disputes.

International Institutions

The institutional architecture of the Western Hemisphere is quite developed. The governments of Latin America, especially, have long viewed subregional, regional, and international bodies as important vehicles to accomplish their own foreign policy objectives while simultaneously serving to limit those of others. The Pan American Union (PAU, now the OAS) dates from the 1880s as a regional forum for working through various multilateral issues from the mundane (as in setting postage rates and procedures) to the significant (as in dealing with the principle of nonintervention). Ad hoc groups of states were often formed at the request of contending parties in the early to mid-twentieth century to help resolve disputes, from borders to wars. One such initiative was the establishment of a four-country guarantor mechanism (involving Brazil, Argentina, Chile, and the United States) within the Rio Protocol of 1942 that ended the 1941 Ecuador-Peru War.

The OAS succeeded the PAU in 1948 with a much broader mandate, including cultural exchanges, health programs, and dispute resolution among member states. While for many years it served more as a regional debating forum for official representatives, at moments of crisis foreign minister meetings sometimes assisted with the peaceful resolution of conflicts, sanctions against members (for example, Cuba in 1962), or even authorizations for the use of force (as in the Dominican Republic in 1965). Too frequently, however, the OAS served more as an instrument of U.S. policy in the region than as a truly representative entity, often meriting Fidel Castro's reference to the OAS as the United States' "Ministry of Colonies."

Nevertheless, due to a historic conjuncture of international, regional, and domestic factors in the 1980s, the OAS began to take on new and more autonomous responsibilities in Latin America. So, too, did other multilateral organizations, from the United Nations and new ad hoc groups of states with shared concerns to subregional free-trade areas. The most important of these historic conjunctures included the following developments:

  1. the winding down and end of the Cold War between 1985 and 1991,
  2. the progressive democratization of Latin America beginning in 1978 and including fifteen countries by 1991,
  3. the Iran-Contra scandal of 1986 in the midst of major U.S. unilateral involvement in Nicaragua,
  4. Cuba's withdrawal of support for the government of Nicaragua and the rebels in El Salvador and Guatemala between 1988 and 1991, and
  5. the election of an experienced internationalist (George Herbert Walker Bush) as president of the United States in November 1988, which produced significant new support for multilateral solutions to both international and internal conflict.

The overall result of such a felicitous combination of overlapping developments in the space of a few years was the strengthening of existing regional and subregional organizations and the creation of a number of new initiatives. With the Santiago Agreement of June 1991 (Resolution 1080), the OAS for the first time adopted a mechanism for consultation and response to internal threats to democracy in member countries. This mechanism was invoked, with considerable success, in response to autogolpes in Peru in 1992 and Guatemala in 1993 and to a civil-military standoff in Paraguay in 1994. Sometimes it was less successful, as in Haiti in 1991 after the military coup there. Resolution 1080 was strengthened in 2001 with the Democratic Charter, also known as the Declaration of Lima, which firmly established the protection of democracy in the hemisphere as a multilateral responsibility.

The Iran-Contra scandal, which involved illegal payments to the Nicaraguan rebels by White House officials at a time when the U.S. Congress had suspended government funding, both discredited the U.S. approach in Central America and served to immobilize the aggressive and unilateral policy. The controversy surrounding U.S. initiatives in Nicaragua since late 1981 had already produced an ad hoc regional response with the formation of the so-called Contadora Group, made up of Mexico, Panama, Colombia, and Venezuela, to serve as a moderating intermediary. Over time, four other South American countries that had recently returned to democracy—Peru, Argentina, Uruguay, and Brazil—complemented this ad hoc entity and came to be known as the Contadora Support Group.

In response to the perceived untoward meddling by both the United States and the Contadora Groups, the five Central American countries (for the first time in their history under elected governments at the same time) joined forces at the initiative of Costa Rican president Oscar Aria to produce their own peace plan in the Esquipulas Accords of 1986–1987 (also known as the San José Agreement or the Arias Peace Plan). In sum, multilateral regional groups made up of elected governments emerged out of the Central American conflicts to work together toward some definitive resolution that would end the violence. Their efforts were aided by changes in policies by key external actors—the blunting of U.S. policy due to Iran-Contra as well as the subsequent decision by Cuba to withdraw material support for the government of Nicaragua and the rebels in both El Salvador and Guatemala.

Under President George Herbert Walker Bush (1989–1993), U.S. policy shifted significantly toward support for multilateral initiatives to help restore peace in the region. Beyond further legitimization and reinforcement of OAS mechanisms to support democracy through resolutions, foreign minister meetings, and election observer missions, both the United States and its Latin American counterparts turned to the United Nations to secure support for peacekeeping initiatives in the region. While the UN had provided peacekeeping missions to other parts of the world for many years, it had never done so in the Western Hemisphere. With the assistance and direct involvement of the UN's first secretary general from Latin America, Javier Pérez de Cuellar of Peru, and of his successor, Boutros Boutros Ghali, this international body approved the establishment of four conflict resolution missions and one electoral observer mission to Central America and the Caribbean between 1989 and 1994. The UN Nicaragua 1990 Election Observation Mission was the first election oversight body under United Nations auspices. During the same period, the OAS also became much more involved, establishing twenty-four election observation missions between 1990 and 1994.

In each case, the role of international institutions has made a significant difference in the ability of the regional governments involved to establish and then maintain internal peace under inclusive democratic governments, even though problems remain, as in Guatemala and particularly in Haiti. Even with some difficulties, the era of multilateral responses to conflicts and electoral oversight undoubtedly was finally at hand. Such an array of domestic and international institutions can be expected to influence interstate behavior, but only in conjunction with the relative distribution of power among the rivals and the goals and skills of political leaders in specific situations, as illustrated by the failure to resolve the "coup" in Honduras in 2009.

The progressive development of such a web of international institutions should produce dramatically enhanced credibility of the signals being sent among rivals. This will undoubtedly be an asset when the parties are attempting to negotiate a solution. Yet we must also explain why the proliferation of such institutions in various parts of the region in the early 1990s did not prevent the Peru-Ecuador conflict from erupting into war in 1995 but did assist the parties over their almost four-year effort to achieve a definitive peaceful resolution of their dispute.

Power and Institutions

Institutions reflect power because the powerful can set the parameters for negotiating the creation of institutions. Once those institutions are developed, the powerful must find it in their interests to abide by those institutions if they are to influence behavior beyond what power itself can determine. Even in this situation, however, we cannot speak of institutions eliminating differences in power between competitors. Instead, as Peru's experience in this case demonstrates, institutions mediate power so that the powerful make concessions and pay a bit more for what they might well have gotten anyway.

If we think about institutions as setting contexts and providing incentives for certain behaviors and choices, then we have to think about power in terms of influencing what institutions might come into play in specific disputes as well as providing incentives for the institutions themselves to change the way they have defined an issue. Different forums may privilege different types of resources or choices. Ecuador tried to steer the dispute into institutions in which the issue could be discussed in terms of just settlements to war (for example, the UN), but Peru successfully kept the dispute in an institutional context defined by the Rio Protocol of 1942, even though this position ensured that the issue was not reopened for decades. Ecuador could not affect the way in which such a multilateral institution structured Peru's choices until it created a situation in which behavior (war) might escalate far beyond the abilities of the reigning international institution to manage.

Consequently, we need to think about power in terms of military, diplomatic, and economic resources. Power is relative, so we should think about how the distribution of these resources produces a "strategic balance" that determines how the costs and benefits of choices within that institutional context are distributed.

The strategic balance is a relative measure that includes but is not limited to the military balance. We use it here to refer to the factors which influence the likely costs produced by the strategies that each actor can use in particular disputes, rather than in its more narrow military sense (as in "strategic nuclear weapons"). As numerous studies of the conflict behavior of small states have demonstrated, a focus on the absolute capability of a nation, even incorporating nonmilitary factors, is inadequate for analyzing interstate conflict dynamics.

The appropriateness of a measure of the strategic balance depends upon the particular political-military strategy being utilized and the political-military strategy being confronted. The strategic balance is defined by the resources that are relevant to those strategies and thus helps us understand the bargaining situation between the actors. While others have made this point by using variations in military strategy, risk assessments, and time frames, we add diplomatic and economic factors to the range of relevant resources. Because of incomplete information, however, the strategic balance is never entirely clear to either party.

The military balance is a traditional concept for investigating power relations among states and includes the quality and quantity of personnel, the type and quantity of armaments, and doctrines for utilizing those resources. Studies of the foreign policy of great powers tend to emphasize the quantitative aspect of such resources because the social and economic disparities that underlie qualitative differences among great powers are not large. But the experiences of Iraq in the Gulf War, Israel in the Middle East, and Chile in South America demonstrate the importance of quality differentials where they exist.

Ultimately, military power might render institutions irrelevant by presenting all parties with a fait accompli. Institutions would simply reflect the terms of the course of the war. Yet military power may also be used to influence choices within a specific institutional context. If institutions matter, we need to think of military power not simply in terms of winning a war but also in terms of influencing the distribution of costs and benefits that accompany each policy choice.

The relevant diplomatic resources revolve around the ability to garner external support for, and blunt external criticism of, one's strategy in the dispute. This is affected not just by the skill of the diplomatic corps but also by the standing which one's position on the disputed issue has in the international political order of the era. Great powers may claim that their interests and values are universal, use force in the defense of those interests, and face little international sanction. Smaller powers, however, must couch the defense of their interests within the context set by the reigning political order of the great powers or be prepared to face international sanctions.

When smaller states can link their actions to the interests of great powers, new opportunities for advancing their interests arise. It may be possible to gain support for the use of force, aid in defending against a rival's use of force, or perhaps even increase international pressure on the rival to negotiate the previously nonnegotiable. Alternatively, when a small state has interests that are of minor consequence to the great powers, its rival's diplomacy might serve to convince the great powers that any benefits they might garner from becoming involved in the dispute would be outweighed by the associated costs.

Economic resources include both those that can be used in a nonmilitary way to influence behavior by a rival and those for building up national capacity to use military force. When economic leverage is sufficient to gain one's goals at acceptable costs, force is unlikely to be used. But when that economic leverage is deemed insufficient, the way in which economic resources affect a state's ability to mobilize, use, and resupply military forces becomes paramount.

A state's economic infrastructure (railroads, highways, and airports) can dramatically affect the logistical costs of using force. The ability to raise revenue for defense can be an important consideration, because it highlights the domestic opportunity costs involved in using force, thereby making it more likely that opposition to its use will form. For example, the inability of a state to tax the wealthy in a poor country imposes a severe constraint on state expenditures. Military expenditures thus come more openly at the cost of expenditures on economic and social welfare. When domestic elites are focused on moderating the polarization of society, they are unlikely to support a leader who wishes to spend the government's meager resources in militarized bargaining with a neighbor.

Honduras in the 1960s and 1970s provides a good example of this economic constraint on the use of force and helps explain why El Salvador believed it could quickly defeat Honduras with a blitz in 1969. Honduras also illustrates how diplomacy might overcome this constraint. After the 1979 victory by the Sandinistas in neighboring Nicaragua, the United States flooded Honduras with both economic and military aid. Economic constraints on the military capabilities of Honduras were thus overcome until the United States perceived that the Sandinistas were defeated and thus lost interest.

While institutions and power influence choices, ultimately such choices are made by people, not by institutions or resources. So it is also necessary to consider the role of key leaders in dealing with conflict situations.

Political Leadership and Statecraft

Political leaders and diplomats respond to the incentives embodied in the political institutions within which they interact. As already noted, the major institutional factors facing presidents in Latin America will be those that influence elections, the existence of entrenched bureaucracies, and the military's willingness to abide by the particular political structures of authority reigning at the moment. Within these constraints, a leader's communication and organizational skills, as well as vision in creating opportunities for cooperation, can have a dramatic impact on conflict.

In short, it is clear to us that political leaders, constrained as they may be, retain important discretion and an ability to make a fundamental difference. Those who do are often heralded as "political entrepreneurs." It is imperative for the analyst of international affairs to understand this factor in as systematic a way as possible.

The leadership qualities that should matter can be usefully summarized as follows:

  1. The ability to innovate. Innovation is important because when war occurs it means that a dispute has festered: other strategies for resolution have been attempted but failed. The absence of new ideas on how to think about or distribute the benefits at stake suggests a continuation of diplomatic failure and the possibility of violence to break the stalemate.
  2. The willingness to take risks. Risk acceptance is important for two reasons. If a leader has new ideas but is timid about putting them on the agenda, the institutional constraints will determine whether or not he or she does so. Only under very loose constraints will a risk-averse leader propose new ideas that do not have the possibility of immediate support. In contrast, a leader who is risk acceptant and has new ideas will be quite willing to seek to create the political conditions that mitigate the institutional constraints at least on this issue.

How do these incentive structures and personal characteristics affect policy making in the Ecuador-Peru case? With no reelection and a weak party system in Ecuador, we should expect innovative and risk-acceptant presidents to promote policies that they believe are correct and will strengthen their place in history, even at the expense of short-term costs. Under these circumstances, presidents will be more susceptible to breaking with tradition if medium-term benefits are likely. But if the president is too cautious or lacks vision, the "strong hand of history" will make it unlikely that the obstacles to resolution will be overcome.

When reelection of a president is permitted, some of the incentives for a president change: the payoff from a risky policy would need to occur by the time of the next election for which the president is eligible (nonconsecutive terms in Peru until 1993, consecutive once thereafter; one nonconsecutive term in Ecuador after the 1998 reforms). Since the risk to the president is increased, the payoffs need to be proportionately greater than they were before. President Fujimori had incentives to settle the border dispute, given his desire to secure re-reelection on the basis of a dubious interpretation of the 1993 Constitution. An Ecuadorean president after 1998 who was innovative and risk acceptant could push for a historic solution if the payoffs were expected to materialize by the time the president could run again.

Conclusion

It is our perception that the war, subsequent peace, and ultimate resolution of the conflict between Ecuador and Peru are best understood as a rational process in which both domestic and international factors played fundamental roles at every step. We did not find that entrenched bureaucracies constituted a major influence on policy making, and our previous work indicates that the military was not a major autonomous factor in decision making on the border after the return to democracy. President Fujimori had few institutional constraints after his reelection in April 1995, with a weak party system, a largely re-created bureaucracy in the aftermath of hyperinflation, and a subservient military weakened by civil war, presidential favoritism, and massive retirements due to earlier economic distress. Ecuador's heads of state were very much limited in their ability to act by a multiparty congress, a diffuse bureaucracy, and a strong military, so they needed to consult regularly with these key actors to ensure consensus.

Among the critical factors that we have identified are the multiple developments beyond either country's borders in the late 1980s and early 1990s. In combination, they generated a dramatic increase in both the number of new multilateral organizations operating in the Western Hemisphere and the scope of activity and responsibility of existing multilateral bodies. While many important foreign policy relationships remained within more traditional bilateral frameworks, the multilateral arena offered new opportunities and alternatives for individual states (including Ecuador and Peru) as well as an emerging new diplomatic ethos further legitimating interaction among states to accomplish important foreign policy objectives.

Given the significant number of internal and external disputes, it is understandable that individual governments (and contenders for power as well) would find that multilateral mechanisms would be legitimate instruments to help them resolve these issues. In their moment of crisis, even as the 1995 war was breaking out, both Ecuador and Peru turned to the long-standing but also long-eschewed multilateral instrument of the guarantor mechanism within the Rio Protocol to try to find a solution to the dispute that had eluded them for decades, even centuries.

Another key factor that we have identified for conflict resolution is the operation and effectiveness of domestic institutions. At the moment the outbreak of hostilities between Ecuador and Peru occurred, both countries had functioning if imperfect democracies. Ecuador's had been operating since the transition from military to elected civilian rule in 1979. Peru had been democratic since 1980 with a brief but significant interruption in 1992 due to President Fujimori's autogolpe; by the end of 1993 it had been put back on track, with a new constitution and democratic procedures after intense OAS pressure through Resolution 1080.

In both countries, the chief executive took on the responsibility of trying to find an outcome that would satisfy national objectives. In Ecuador, with power more fragmented and dispersed, this meant constant consultation by the executive with key domestic actors, including congress, the military, business, and the media. In Peru, in contrast, with power concentrated in the presidency and with a majority in congress, consultation took place within a very restricted circle that included only a very small number of key officials in the executive branch. In a dramatic display of delegative democracy at a critical moment, both heads of state took the initiative to break through a final and apparently insurmountable impasse, as we shall see.

A third key factor is the exercise of individual leadership and statecraft within the inevitable constraints of domestic and international institutions. In the denouement of the Peru-Ecuador dispute and its resolution, Ecuador's President Durán Ballén made a critical decision at the outset of hostilities in January 1995 by once again accepting for his country (after a 35-year hiatus) the Rio Protocol as the instrument to serve as the foundation for negotiation. His successor, President Bucaram, committed Ecuador to a definitive resolution, gave up Ecuador's historic claim to "sovereign" access to the Amazon, and made the first state visit to Peru in his country's history. Jamil Mahuad, who succeeded Bucaram as president, took a bold personal initiative and accepted a final resolution that gave his country only symbolic access to hitherto disputed territory.

For his part, President Fujimori overcame great internal resistance to any negotiation with Ecuador at all by admitting that there was a problem in the first place. In addition, he met with the successive heads of state of his northern neighbor to bring a personal dimension to the process. At a crucial moment, he thwarted his military commander in chief's plan to reinitiate hostilities unilaterally at the border. With the process at its final impasse, he sacrificed his foreign minister and accepted the symbolic territorial concession that permitted a definitive resolution.

Within the multilateral mechanism of the guarantors, U.S. representative ambassador Luigi Einaudi served as the key actor. He devoted his full time and energies to coordination among his counterparts from Brazil, Argentina, and Chile, finding imaginative solutions to various impasses and serving as a constant and constructive presence even when there seemed to be no possible way to reconcile the differences between the parties.

All parties were constrained by deep-seated historical memories, physical limitations, the uncertain realities within their own countries, and the procedures imposed by international treaty. At critical junctures, however, each of these key figures exercised leadership that made important, even vital contributions to an eventual settlement.

These three core themes are developed in the chapters that follow. We turn first to a consideration of the background and details of the conflict itself then consider the domestic institutional elements in each country, the factors leading to war, and the domestic bases for conflict resolution. We end with a parallel analysis of the relevant international elements.

David R. Mares is Professor of Political Science at the University of California, San Diego, where he also serves as Institute of the Americas Chair for Inter-American Affairs and is Director of the Center for Iberian and Latin American Studies. His previous books include Drug Wars and Coffeehouses: The Political Economy of Drug Policy, Violent Peace: Militarized Interstate Bargaining in Latin America, and The United States and Chile: Coming in from the Cold with Francisco Rojas Aravena.

David Scott Palmer is Professor of International Relations and of Political Science at Boston University, where he is also Founding Director of the Latin American Studies Program. His previous books include U.S. Relations with Latin America during the Clinton Years, Shining Path of Peru (ed.), and Peru: The Authoritarian Tradition.

“The analysis of developments during the years 1995 to 1998 is especially masterful, artfully weaving together the many different strands. The book also benefits from the provision of some good maps and helpful chronologies…Mares and Palmer have undoubtedly written the most comprehensive work possible on the Ecuador−Peru territorial settlement pending the future opening of the diplomatic archives of the key players.”
—Philip Chrimes, International Affairs