In recent years, scholars such as Joe Foweraker (2020) and Max Cameron (2021) have argued that Latin American politics is characterized by the coexistence and interplay of oligarchic and democratic modes of rule. This coexistence can work so smoothly that it becomes easy to overlook the oligarchic elements of rule informally shaping democratic processes. In other cases, the contradictions between the inegalitarian and exclusionary logic of oligarchy and the egalitarian and inclusionary promise of democracy manifest themselves in waves of popular contention that challenge the disproportionate wealth and power of oligarchic groups, giving rise to open struggles over the dismantling, adaptation, or restoration of oligarchical rule.
Three Central Andean countries—Bolivia, Ecuador, and Peru—present an interesting panorama of such cases. In Ecuador, after serious challenges to oligarchic power, oligarchic actors have managed not only to restore preexisting modes of oligarchic rule but to take formal control of the state: first with one of the wealthiest and most influential members of Ecuador’s financial elite, Guillermo Lasso (Ruiz et al. 2024), then with the heir of one of the most powerful business groups built around the export of bananas, Daniel Noboa (Herrera and Macaroff 2023). Peru, in contrast, has long been described as a case of entrenched and relatively stable coexistence of democratic and oligarchic patterns of rule, amounting to a situation of state capture (Crabtree and Durand 2017). This configuration has recently come under increasing popular pressure (Cameron 2021, 783-5; Crabtree et al. 2023, 199-200), with the oligarchic and the democratic modes increasingly jarring. In Bolivia, oligarchic actors, who had to adapt to the challenges brought about by the governments of the Movimiento al Socialismo (MAS), mainly succeeded in protecting both their wealth and their model of accumulation. Yet, with the disintegration of the MAS, the demise of its economic development model, and the election results in August 2025, this peculiar coexistence of oligarchic and democratic modes is facing a new phase of heightened uncertainty and, most probably, significant change.
In this contribution, we suggest that the three-dimensional theory of business power, which distinguishes between structural, instrumental, and discursive power, offers a useful approach to theorize and empirically analyze oligarchic modes of rule under democratic conditions. Drawing on a book in which we compare the political role of economic elites in Bolivia, Ecuador, and Peru (Crabtree et al. 2023, 2024), we show how analyzing the business power of oligarchic members of the economic elite helps explain the tumultuous interplay between oligarchic and democratic modes of rule. In what follows, we lay out our theoretical argument before briefly assessing the recent past and current situation in the three countries.
Business Power and Modes of Oligarchic Rule
As Jeffrey Winters has put it, democracy “refers to dispersed formal political power based on rights, procedures, and levels of popular participation,” while “oligarchy is defined by concentrated material power based on enforced claims or rights to property and wealth” (2011, 11; emphasis in the original). Given that the two concepts refer to different realms of power—the formal political and the material economic realm—democracy and oligarchy are far from incompatible. In fact, all democratic regimes combine democratic and oligarchic “modes of rule” (Cameron 2021; Foweraker 2020). This combination, however, remains contradictory, as “extreme material inequality produces extreme political inequality” (Winters 2011, 4), systematically undercutting the principle and promise of political equality at the core of democracy.
Combining conceptual proposals by Winters (2011) and Foweraker (2020), we define modes of oligarchic rule as those mechanisms through which extremely rich individuals (oligarchs) defend their disproportionate wealth, that is, property and income (Winters 2011, 6-7). But how can we theorize and empirically analyze such oligarchic modes of rule and their interplay with democratic ones? Here, the three-dimensional theory of business power offers a useful approach (Crabtree et al. 2024, 15-28). Structural business power refers to the indirect and impersonal mechanisms through which the preferences of oligarchs—and economic elites in general—are systematically considered by political decision-makers simply because the former’s influence on macroeconomic developments makes their responses politically relevant. As Foweraker has argued, however, even under conditions of democracy, oligarchical actors usually retain a much more direct form of influence within the institutions and agencies of the state (2020, 17-18). This type of influence is analytically grasped by the notion of instrumental power, that is, the ability to shape political decision-making via campaign donations, lobbying, the presence of business representatives in political parties, governments, and state agencies, as well as through corruption. Third and finally, defending extreme wealth in democratic regimes requires more than influence on the narrow political arena. Discursive business power, therefore, refers to the ability of economic elites, including oligarchs, “to shape social values, public discourses, and public opinion—including what Gramsci called the ‘common sense’” (Crabtree et al. 2023, 25).
Yet, going beyond our book and other studies on business power in Latin America, oligarchic rule zooms in on a subset of particularly wealthy and, therefore powerful, members of the economic elite: oligarchs, including their families (Winters 2011, 6). In contemporary Latin America, this means focusing on the large, diversified business groups (grupos económicos) that, together with multinational corporations, tend to control large parts of the formal economy and are “mostly owned and managed by families” (Schneider 2013, 10; see also Foweraker 2020, 45). In the 1980s, for instance, Peru’s “Twelve Apostles,” the twelve largest business groups, were mostly family owned, much like the twelve business groups that “controlled almost half of Ecuador’s national economy” (Crabtree et al. 2023, 101). Over the decades, economic structures have seen important changes, but the crucial role of extremely wealthy individuals and families that control, often in cooperation with multinational corporations, important shares of the formal national economy persists. In Bolivia, for instance, while the largest companies have either been transnationalized (since the 1990s) or returned to state control (during the mid-2000s), these are complemented by large business groups typically formed around banks and controlled by a small set of highly influential families (Molina 2019, 41-74).
Ecuador: Democratic Restoration of Oligarchic Rule
During the last two decades, Ecuador has experienced pronounced oscillations in the political role and influence of economic elites. At the beginning of the 21st century, the so-called “citizens’ revolution” led by Rafael Correa posed a serious threat to economic elites. During his first years in government, Correa challenged those oligarchic actors who used their wealth for political purposes by utilizing well-connected business associations, intimate relations with established parties, the presence of business representatives in state agencies, and business control over private media. Consequently, business associations and groups saw their instrumental power reduced. Newly established public media outlets and Correa’s public relations campaigning simultaneously limited their discursive power.
While Correa’s state-centered, neo-developmentalist economic policies were hardly aligned with oligarchic preferences, they did not include measures to redistribute the disproportionate property and income of the wealthiest individuals and families. Correa centered his attacks on certain business groups—namely those owned by, or openly aligned with, opposition politicians, such as the Noboa group, owned by Daniel Noboa’s father and former opposition politician, Álvaro Noboa. Other major business groups maintained fairly good relations with Correa (Crabtree et al. 2023, 125-34).
The Correa government brought a significant, if temporary, reduction in instrumental and discursive business power. This reduced salience of oligarchic modes of rule, however, was hardly used to expand democratic modes. Instead, it increased the relative autonomy of the state and a concentration of presidential power. With the oligarchical structure of Ecuador’s private economy remaining basically untouched, however, structural business power and, hence, the material foundation of oligarchic political influence persisted. This became visible during the latter phase of the Correa presidency. The collapse of oil prices increased the government’s dependency on the country’s private sector, while rising economic difficulties and corruption scandals undermined Correa’s discursive hegemony. When the split between President Lenín Moreno and his erstwhile mentor Correa pushed the former to search for new partners, economic elites were quick to reestablish their direct relationship and institutional presence within the government (Crabtree et al. 2023, 163-70). With Lasso’s election in 2021, oligarchic actors took direct control of the national government, reestablishing instrumental business power as the key mode of oligarchic rule. While Lasso’s was a relatively recent family-owned business group, which centered around the Banco Guayaquil (Ruiz et al. 2024, 63), Daniel Noboa is the heir to a traditional banana exporting family business (Herrera and Macaroff 2023). Both “presidentes empresarios” (Nercesian 2020), however, belong to the Guayaquil-centered segment of Ecuador’s economic elite that controls coastal agribusiness and the related financial sector. Facilitated by a deep security crisis and rampant criminal violence—met with states of exception and militarization (Dressler and Wolff 2024)—Ecuador is nearing a level of democratically legitimized oligarchic state capture unprecedented in its recent history.
Bolivia: Oligarchic Hedging in Times of Uncertainty
In 2020, Bolivia seemed to be on a corresponding trajectory towards the return of the oligarchy to power. After almost 14 years as president, Evo Morales was forced to resign and leave the country. The interim presidency of Jeanine Áñez was decidedly pro-business with close ties to the agribusiness elites from Santa Cruz. Their return to power initiated a reversal of the policies implemented by the MAS government.
Under MAS rule, Bolivia had followed a similar trajectory to Ecuador. The 2005 election of Evo Morales and the “process of change” that followed constituted a significant challenge to economic elites, and to the landed oligarchical groups of Santa Cruz in particular. Yet, as in Ecuador, while significant losses in instrumental and discursive business power weakened oligarchic influence over policy-making, structural power persisted. In fact, most oligarchic groups—and economic elites in general—established fairly cooperative relationships with the Morales government, to the point at which opposition movements mobilized in the name of democracy against both the supposed “dictator” Morales and his oligarchic “allies” among the country’s traditional economic elites. However, such “allies” proved more than happy to rejoin forces with the political right, once the latter had finally (and surprisingly) proven able to eject the MAS from power (Crabtree et al. 2023, 155-163).
In contrast to Ecuador, the collapse of the Áñez government brought an abrupt end to the attempt to reestablish the privileged political access that oligarchic actors had enjoyed before the Morales era. The new MAS government under Luis Arce even discontinued the indirect forms of instrumental business enjoyed by power oligarchic groups under Morales. It was only in the context of the worsening economic crisis—and the increasingly serious shortage of foreign currency—that the Arce government felt compelled to approach the economic elites. Once again, the structural power of those business sectors generating export income enabled a gradual reconstruction of instrumental power. At the same time, the economic crisis, the split of the governing party, and the bitter dispute between Arce and Morales have brought an end to the discursive hegemony of the MAS. After the first round of the presidential elections in August 2025, it is safe to say that Bolivia will return to a more pro-business government backed by the country’s economic elites. Yet, whether with right-wing politician “Tuto” Quiroga or the more centrist Rodrigo Paz in the presidency, it is hard to imagine Bolivian society accepting a fully-fledged return to pro-business policies and neoliberal structural adjustment without significant resistance.
Peru: Oligarchic Versus Democratic Modes of Rule
In contrast to Bolivia and Ecuador, Peru did not take part in the much-discussed “pink tide.” Facilitated by the economic crisis of the late 1980s and the internal armed conflict, the semi-authoritarian regime of Alberto Fujimori (1990-2000) conjoined “‘neoliberal populism’ and oligarchy” (Cameron 2021, 782). While neoliberal reforms meant that Peru’s major companies came to be dominated by transnational capital, Peruvian business groups in the hands of wealthy families (such as the Romeros, Brescias, and Benavides) retained their economic power and consolidated their control over government policy (Crabtree et al. 2023, 80-90).
At the core of oligarchic modes of rule was (and still is) the structural power of those all-important extractive industries, mining in particular, which generate crucial export income, foreign investment, and state revenue. Instrumental power is constituted by powerful business associations like the Confederación de Instituciones Empresariales Privadas (CONFIEP), which has long had privileged access to economic policy formulation, giving a unified voice to the private sector, even while essentially representing big business. Also, since Fujimori, key economic ministers have routinely been recruited from the private sector—the revolving door syndrome—and international banking circles, while economic think tanks and elite-owned private media have played key roles in shaping public debate (Crabtree and Durand, 2017). As a result, and long after Fujimori was ousted and democracy had returned, a situation of entrenched state capture persisted in which oligarchic interests systematically took precedence over a gravely weakened and fragmented set of popular-sector organizations. Throughout the first two decades of the 21st century, this configuration prevented Peru moving away from oligarchic neoliberalism (Crabtree et al. 2023, 134-45).
In recent years, however, both political and economic elites—including CONFIEP and prominent business groups—have themselves besmirched their reputation through involvement in illegal activities. Among these, the Lava Jato scandal stands out, in which both foreign and local investors were revealed to be bribing politicians at the highest level to secure contracts (Durand, 2018). Consequently, political dissatisfaction skyrocketed, culminating in the election of outsider Pedro Castillo in 2021. Temporarily, it looked as if Castillo might finally pose a significant challenge to the powers-that-be. But his ouster—after an attempted self-coup—and replacement by Dina Boluarte in December 2022 quickly returned a pro-business government to power, committed to respecting the liberal economy and the privileges of the oligarchy. At the same time, the repression of protest and civil society organizations, controversial constitutional reforms, and the refusal to concede fresh elections set the country on a path of autocratization (V-Dem 2025). As democratic and oligarchic modes of rule seem increasingly to be in open conflict, the elections of 2026 promise to test the strength of pro-business governance and its ability to generate legitimacy and support among a decidedly disenchanted yet disorganized electorate.
Conclusions
This brief overview of the three Central Andean countries shows how democratic and oligarchic modes of rule continue to clash in ways that prove politically destabilizing. We have seen how, in Bolivia, powerful business interests are waiting to exploit the structural opportunities given to them by splits in the MAS and the economic crisis, taking advantage of an acute shortage of foreign exchange and consequent inflationary pressures to win over public opinion. In Ecuador, the heir to the Noboa dynasty defeated his left-of-center opponent in the April 2025 run-off election, moving the country further towards oligarchic state capture. In Peru, since the ousting of Pedro Castillo, status-quo-oriented forces, including powerful business groups, have used their power in Congress and the repression of protest to stabilize a polarized and highly fragmented society. The 2026 elections will test whether the right-wing parties, backed by the economic elites, will manage to return a “safe pair of hands” to the executive office.
Beyond these conjunctural dynamics, the three cases reveal important structural factors that shape the evolution of oligarchic modes of rule. First, in presidentialist systems, the heads of state matter. Presidential elections can usher in challenges to oligarchic interests or bring oligarchs into the highest position of political power. Yet, precisely because presidents come and go, parliaments—as currently in Peru—play an important role in guaranteeing instrumental oligarchic power. Second, Peru’s major corruption scandals confirm Foweraker’s argument that “patrimonial” states characterized by clientelist networks and the systematic use of public office for private purposes are crucial for sustaining oligarchic power (2020, 36). These same logics, as Bolivia and Ecuador show, can also be used as means to incorporate popular sector groups (Wolff 2018). Third, in terms of economic structures, extractivism can have varying implications. In the context of the commodities boom, the state income generated by Bolivia’s gas and Ecuador’s oil sector facilitated the reduction in oligarchic structural power. In Peru, in contrast, the booming mining sector helped sustain oligarchic neoliberalism (Crabtree et al. 2023, 148).
In the longer timeframe, the three countries seem destined for further “unsettled statecraft,” to use the phrase coined by Conaghan and Malloy (1994) over 30 years ago, with the failure to find some form of stable coexistence of oligarchic and democratic modes of rule. Weak democratic institutions remain malleable to forms of political influence geared towards capture rather than more equitable forms of governance, whether benefiting the usual oligarchic actors and their allies or, at times, their popular challengers. The three countries’ dependence on the export of raw materials tends to reproduce a political economy that underscores the extreme forms of income, asset, regional, socioeconomic, and ethnic inequality that have proved so difficult to tackle. The rise of illicit economies, increasingly intertwined with both state institutions and the formal private sector, only deepens this malaise. The resulting interplay between mutually entangled democratic, oligarchic, and criminal modes of rule poses yet another challenge to academic research as well as to democratic politics.