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The international community and some Latin American leaders have warned recently that crises in Argentina and Colombia could lead to political contagion within the region. However, it is possible...

Since Argentina's external debt default in December 2001, the international community has worried that political contagion might spread to Brazil and other parts of Latin America.

Colombian President Alvaro Uribe Velez repeatedly has warned neighboring countries that without coordinated military support against the Revolutionary Armed Forces of Colombia (FARC) and other rebel groups, political contagion from the Colombian conflict could spread quickly throughout the Andes region.

From the standpoint of the international community and regional leaders, Latin America is "healthy" when its governments have minimal barriers on international trade and capital transfers, privatize state enterprises and deregulate their economies, pay their debts on time and in general implement the macroeconomic policies advocated by the Washington Consensus and the International Monetary Fund.

However, the international community worries about "political contagion" when regional economies weaken, countries default, social discontent increases and voters start choosing populist candidates that campaign against open commercial borders and free-market policies.

Viewed through this prism, South America in particular appears to be suffering symptoms of regional political contagion.

Argentina has defaulted, is suffering its worst economic crisis since the Great Depression, and its democratic stability is threatened by soaring unemployment and poverty. Brazil has just elected a new socialist president who campaigned on a populist platform of economic nationalism, increased social spending and rejection of U.S.-led regional initiatives like the Washington Consensus macroeconomic reform model, the Free Trade Area of the Americas and Plan Colombia.