Uruguay may be one of Latin America's least well-known countries, but the sustained success of the country's ruling left-wing Frente Amplio coalition offers many vital lessons for the European left.

Uruguay has long merited greater attention. A small country of just three million people, it has a strong liberal political tradition. One of the least religious countries in the region, it was one of the first to extend the franchise to women and to introduce a state pension. Today it is perhaps best known to the outside world for the austere lifestyle of its president, Jos?(C) 'Pepe' Mujica, and its legalisation of marijuana.

Two weeks ago Uruguay held parliamentary and presidential elections. Although of less international significance than the Brazilian poll the same day, they were nonetheless noteworthy. Securing 48.7 per cent of the vote, the left-wing Frente Amplio (FA) coalition became the first political party in the country's history to achieve three consecutive parliamentary majorities. The FA presidential candidate and former president Tabar?(C) V??zquez fell just short of victory, but is almost certain to regain the presidency in the second round vote on 30 November. Remarkably, after 10 years in power, more people voted for the FA in 2014 than in the last elections in 2009. By the end of this expected third term in office, the FA will have governed the country for 15 years. For a comparable period of one-party rule in Uruguay, one has to look back to the Colorado governments of the 1940s and 50s, the golden age of batllista welfare capitalism.

Of course, this is not an isolated case: across the region, leftist parties have now ruled for at least a decade, and the recent victories of Dilma Rousseff in Brazil and Evo Morales in Bolivia have consolidated the left's position as the dominant force across Latin America. European social democrats, whose support bases have crumbled amid EU-wide austerity, can only look on with envy.

Uruguay is a particularly useful case study for Europeans because the country's society and culture are arguably closer to those of Europe than almost any other Latin American country.

How the left has won

What factors explain this long cycle of left-wing hegemony? First, Uruguay has, like the rest of the region, enjoyed something that Europe palpably lacks: growth. Uruguay's economy has benefited from strong demand for its agricultural exports both from its larger neighbours, Brazil and Argentina, and further afield from China. This benign external environment meant that between 2006 and 2013 the Uruguayan economy grew by an average of 5.5 per cent a year. This has produced historically low levels of unemployment (just 6.3 per cent in 2013), and has helped to deliver a massive reduction in poverty. The proportion of people in poverty fell from 39.9 per cent in 2004 when the left took office to just 11.5 per cent in 2013. Extreme poverty fell from 4.7 per cent to 0.5 per cent over the same period.

These impressive social advances were not merely the result of an 'external bonanza', but were also the product of social policies introduced under the two FA administrations. These included direct income transfers to the poorest families through the Uruguayan Social Card, and new cash benefits provided to poor families on the condition that their children are in formal education and signed up to a local health centre. There are similarities here with Brazil's popular bolsa familia.

Redistribution has been buttressed by 'pre-distribution'. Wage councils have been reintroduced, meaning that wages in each sector of the economy are negotiated nationally between the government, unions and employers. In the FA's first term, this led to a 20 per cent increase in real wages and a major increase in trade union membership, which rose from 140,000 in 2004 to 320,000 in 2008. In order to support the poorest workers, the minimum wage was increased in real terms by 135 per cent between 2004 and 2009. Rural workers in particular have benefited from significant wage increases.

The positive effect of these policies can be seen in the narrowing of income inequality in what was already the most egalitarian country in the region. Between 2002 and 2012 the richest fifth of the population saw their share of national income fall from 41.8 per cent to 34.8 per cent, while the share of the poorest fifth increased from 8.8 per cent to 10 per cent. As Thomas Piketty's work has demonstrated, to secure strong growth and lower income inequality in today's globalised economy is no mean feat.

These measures partly explain the changing composition of the left's vote, with the FA consolidating its support among the poor, particularly those in rural areas. The FA is now the largest single political force in 14 of the 19 departments of the country, including in areas that were previously bastions for the two traditional parties, the Blancos and Colorados. Having previously been strongest in the capital, the FA is now stronger in the interior of the country: in 2014 the FA secured 615,527 votes in the interior and 484,916 in Montevideo, compared to 583,057 and 522,205 respectively in 2009.

The FA has also been associated with the liberalisation of Uruguayan society: Uruguay has become the first country in Latin America to legalise abortion, marriage equality has been passed into law, and marijuana has been legalised – or, more accurately, nationalised, with the state possessing a monopoly on production, distribution and sale. These liberal measures partly explain why the left remains far and away the most popular choice among younger voters (58 per cent of those under 30 voted for it in the recent election).

Beyond its social achievements in government, there are a number of institutional factors that help explain this long cycle of political hegemony. One is the pluralistic nature of the FA itself, which is both a party in itself and a coalition of parties and factions. This is in large part because of Uruguay's unusual electoral law, the ley de lemas, which means that voters must, at the same time as voting for a party's candidate for president, also choose which faction of that party they want to vote for in parliament. This simultaneous combination of an internal primary and a general election gives voters a tool for refreshing a party's leadership, providing the FA with an important source of renewable political energy.

Compared to the stale electoralism of many European social democratic parties, the FA has also retained a wider presence in Uruguayan society outside of the electoral process. It has close links to a comparatively powerful trade union movement, and remains the most organised political movement in the country. Uruguay is a country of frequent citizen-initiated referendums, meaning that the left has continually been involved in extra-parliamentary campaigns during its period in office – most recently campaigning against a proposal to lower the age of criminal responsibility to 16. This has cemented the FA's links to an array of progressive social movements, and identified it with causes beyond seeking political office.

Finally, ethical and rather brave political leadership has played an important role. President Mujica famously lives in his small farmhouse rather than the presidential palace, and gives 90 per cent of his salary to charity. A number of his decisions have been unpopular yet principled: most voters do not support the recent legalisation of marijuana, and there was considerable opposition to his decisions to take in hundreds of Syrian refugees and former detainees of the US prison at Guantanamo Bay. Nevertheless, in part because of this principled leadership, he leaves office with high approval ratings.

The challenge of the rising middle class
Not everything is rosy, of course. Voters have expressed frustration with the quality of public education, and there is real concern about crime – concerns mirrored in the recent Brazilian election too, as a more middle-class electorate has asserted itself. According to the World Bank, in 2011 for the first time there were more Latin Americans defined as 'middle class' than those defined as living in poverty. In this context, the challenge for the left is to demonstrate to an expanded middle class that it is addressing their concerns about public services and crime. Moreover, future economic growth in Uruguay is highly dependent on what happens in its larger neighbours – particularly Argentina, whose economy is once again looking precarious.

At one level the Uruguayan case simply supports the axiom that 'it's the economy stupid' – governments that preside over successful economies generally get re-elected. This is particularly true for the left, whose ability to redistribute income critically depends on wider growth. However, the degree of political hegemony that the FA enjoys, and its deep social roots, point to some wider lessons. One is its clarity of focus on reducing poverty and narrowing inequality. Another is its refreshing willingness to challenge orthodoxy – on drugs, for instance, and on direct intervention in wage bargaining. Yet another is its success at marrying discipline where necessary with internal pluralism and diversity, presented openly to the voters. A final lesson is the explicit articulation of a mission that includes winning elections but extends far beyond that, facilitated by mechanisms of direct democracy and exemplified by courageous leadership.

Rick Muir is associate director for public service reform at IPPR. He wrote his DPhil thesis on the left in Chile and Uruguay.