MEXICO CITY -- Latin America watchers say that support for democracy in the region is threatened by rising poverty, corruption and crime rates. But they should add another factor -- the resurrection of politically binding subsidies to the poor that produce ''captive votes'' for those in power.

I thought about that last week during a visit to Mexico, when I read that Mexico City's populist mayor, Andrés Manuel López Obrador -- the front-runner in the polls for the 2006 presidential election -- announced his latest giveaway: a $6 million package of free school kits, including three writing blocks, a box of crayons and a calculator, for 1.4 million schoolchildren in the city.

HOW, NOT WHAT

What's wrong with that, you may ask. The problem is not what the mayor is doing, but how he's doing it.

While temporary relief subsidies for the poor may be necessary in bad economic times, many of these programs -- like similar ones in Venezuela, Argentina and other countries -- are not congressionally approved or subject to outside controls. Thus, they end up being mechanisms of political manipulation, and fertile grounds for corruption.

Most economists agree that they also perpetuate poverty. Instead of using at least part of the money to give people job training, or making them work according to their possibilities, they simply give money away, without conditions, creating a culture of dependency on state subsidies. And in many cases, they amount to irresponsible public spending that does little more than increase government debt, critics say.

''I'm not against direct subsidies for the poor, but I'm against subsidies that are not adequately funded, and are not transparent,'' says Juan Molinar, a congressman for Mexico's ruling National Action Party. ``[In Mexico City] they are spending money that isn't there, and that will have to be paid with higher taxes in the future.''

In Venezuela, beleaguered President Hugo Chávez has announced plans to spend more than $1.7 billion from Venezuela's oil income this year on subsidized food and other social programs.

Until recently, one of the few smart things that previous Venezuelan governments did was to insulate the state-run PDVSA oil firm from political pressures, with the idea of using its oil income to develop other sectors of the economy, create jobs and promote long-term development. But Chávez has drastically increased direct subsidies in recent months, and says in his speeches that these handouts to the poor would be discontinued overnight if ''the oligarchy'' wins the Aug. 15 referendum on whether he should remain in office.

In Argentina, a ''Plan for Heads of Family Households'' that started in 2002, after the country's worst economic crisis in recent memory, gives subsidies of about $50 a month to 1.7 million unemployed. Critics say beneficiaries are not always unemployed, and are picked by federal and local officials of the ruling Peronist party in exchange for their political loyalty.

DEPENDENT VOTERS

According to a study by Martin Simonetta and Gustavo Lazzari of the Atlas Foundation in Argentina, a pro-free-market nongovernmental group, nearly 20 percent of Argentine voters are dependent on government party-controlled subsidies.

'In Argentina, the number of voters who can be considered `captive' by the ruling party has virtually doubled over the past two years,'' Simonetta told me in a telephone interview. ``The federal government uses this program to exert political control over provincial and city government: the more votes they deliver, the more subsidies they get.''

As a result, ''we have an uneven playing field'' in which there is an ''unfair competition between the government and the rest of political candidates,'' which is threatening democracy, Simonetta says.

QUESTIONS RAISED

A recent World Bank study on Argentina's ''Heads of Household'' plan raises key questions about its effectiveness, according to a recent article in the daily La Nación.

The World Bank paper, coordinated by Sandra Cesilini, says among other things that the plan's process of registering beneficiaries by local governments ''favors political patronage'' and ''corruption,'' because of the absence of effective monitoring mechanisms.

My conclusion: I don't object to temporary subsidies for the poor, especially in countries ravaged by economic crises. But when they are politically driven, don't have outside controls, lack incentives for the poor to acquire marketable skills and increase public spending, they are a recipe for authoritarian rule and worsening poverty.

Source: Miami Herald