He points to both structural and conjectural factors for explaining this differentiation. The first structural factor is the degree of integration into the North American economy. The second structural factor is the degree of democratic institutionalization within a country. Countries without a democratic tradition have a more difficult time in maintaining stability while carrying out economic and political reform. One conjectural factor is the level of reform in a country.
Countries are better off if they fully implemented the macro and micro-level reforms.
Another conjectural factor is whether countries have majority governments or successful majority coalitions. Governments can achieve a better performance when they can count on a majority in the legislature. Countries like Paraguay have no tradition of democracy and have achieved little in the way of reform. Peru has neglected political reforms such as a transparent and legitimate electoral process. Meanwhile, Bolivia is one of the poorest countries in the region, but it has put together a workable coalition government that supports reform.