Current strides toward formal democracy outside the advanced industria
l countries appear to be combined with movements away from participato
ry democracy and equality. We analyze this apparent paradox, focusing
on Latin America. Our theoretical framework is based on our earlier co
mparative historical analysis of the relationship between capitalist d
evelopment and democracy and on the literature on political participat
ion and social democracy in advanced industrial democracies. Three clu
sters of power-the balance of class power, structure of the state and
state-society relations, and international power structures-and their
interaction consistently explain progress toward limited formal democr
acy and mounting obstacles to greater participation and socioeconomic
equality.