EXPLAINING CHAVISMO: THE UNEXPECTED ALLIANCE OF RADICAL LEFTISTS AND THE MILITARY IN VENEZUELA UNDER HUGO CHÁVEZ Javier Corrales

12 EXPLAINING CHAVISMO: THE UNEXPECTED ALLIANCE OF RADICAL LEFTISTS AND THE MILITARY IN VENEZUELA UNDER HUGO CHÁVEZ Javier CorralesRead more at location 7049

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Knowing that a severe episode of growth collapse preceded Chávez is perhaps enough to understand why this change occurred: most political scientists agree with Przeworski and colleagues (2000) that severe economic crises jeopardize not just the incumbents, but also the very continuity of democratic regimes in non-rich countries.Read more at location 7052

Note: CHAVEZ UN REGALO DELLA CRISI Edit

personalistic, popular, populist, pro-poor, revolutionary, participatory, socialist, Castroite, fascist, competitive authoritarian, soft authoritarian, third-world-oriented, hybrid, statist, polarizing, oil-addicted, Caesaristic, counterhegemonic,Read more at location 7058

Note: COME DESCRIVERE IL CHAVISMO? DISACCORDI Edit

chavismo consists not simply of a “civilian–military alliance,” to quote the man himself (Chávez, Harnecker, and Boudin 2005, 81), but an alliance of radical–leftistcivilians and the militaryRead more at location 7061

Note: ALLEANZA RADICALISMO DI SINISTRA E MILITARI Edit

it was clear that chavismo, as a political regime, occupied a “gray zone” between democracy and authoritarianism (Coppedge 2003; McCoy 2004).Read more at location 7065

Note: ZONA GRIGIA Edit

There is no question that leftist–military ruling alliances are not new in Latin America (Remmer 1991), dating back to Cuba in the 1930s, when a young sergeant, Fulgencio Batista, sought to dominate Cuban politics by courting radical leftist civilians (first, student leaders, and then communists).Read more at location 7071

Note: IL PRECEDENTE DI CUBA CON HATISTA Edit

In the early 1990s, the common response to the economic woes of the region was the emergence of market-oriented administrations.Read more at location 7076

Note: LA RISPOSTA SUDAM ALLA CRISI NEI NOVANTA Edit

introducing more economic liberalization rather than less.Read more at location 7078

Note: c Edit

Most of the scholarship seeking to explain chavismo argues that the previous regime, the “Fourth Republic” or the “Punto Fijo regime,” suffered from excessively exclusionary politics: political institutions became too rigid to give entry to new, smaller, nondominant political forces, which led to accumulated resentment,Read more at location 7082

Note: ORTODOSSIA: CHAVEZ INCLUDE GLI ESCLUSI Edit

The old regime benefited two parties, AD and COPEI, and no one else. According to this view, chavismo was, at its core, a movement designed to break down institutional barriers,Read more at location 7086

Note: c Edit

I seek to modify the view of pre-existing institutional rigidity and closure. While some institutions did remain closed and even ossified, the most important story is how many other political institutions actually offered shelter to a number of nondominant forces, which I will call small opposition forces (SOFs).Read more at location 7088

Note: IN REALTÁ GLI ESCLUSI MM ERANO AFFATTO TALI Edit

It was this degree of institutional sheltering, together with two decades of growth collapse, that explains why leftist SOFs grew in numbers large enough to sustain a new ruling coalition and learned to work with the military to a degree that had few parallels in the region.Read more at location 7094

Note: c PRONTI AD ENTRARE IN POLITICA Edit

rise of the left in Latin America in the 2000s is the result of both gripes (i.e., complaints about the socioeconomic status quo) and institutional opportunities.Read more at location 7097

Note: LAMENTELA E OPPORTUNISMO DEGLI INSIDERS Edit

I agree with scholars on Venezuela, who almost unanimously argue that citizens by the late 1990s had ample reasons to vote for an anti–status quo option, but I disagree with those who underplay the institutional openings of the Punto Fijo era.Read more at location 7098

Note: LAMENTELE GIUSTE MA NN X LA CHIUSURA Edit

Chávez has had to deal with two different sources of tensions within his initial coalition: (1) the defection of moderate leftists, and (2) divisions within the military.Read more at location 7112

Note: CHAVEZ E I SYOI DUE PROBLEMI Edit

fiscal spending)Read more at location 7115

Note: I MEZZI X TENERE INSIEME LA COALIZIONE Edit

(1) polarization, (2) corruption and impunity for supporters, and (3) job discrimination and other legal abuses for opponents.Read more at location 7117

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A Look at the First ChavistasRead more at location 7125

INTRODUCTION - Venezuela Before Chávez: Anatomy of an Economic Collapse by Ricardo Hausmann, Francisco R. Rodríguez

Venezuela Before Chávez: Anatomy of an Economic Collapse by Ricardo Hausmann, Francisco R. Rodríguez

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Last annotated on May 20, 2017

INTRODUCTION Ricardo Hausmann and Francisco RodríguezRead more at location 309

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The twentieth century saw the transformation of Venezuela from one of the poorest to one of the richest economies in Latin America. Between 1900 and 1920, per capita GDP had grown at a rate of barely 1.8 percent; between 1920 and 1948, it grew at 6.8 percent per annum. By 1958, per capita GDP was 4.8 times what it would have been had Venezuela had the average growth rate of Argentina, Brazil, Chile, and Peru (calculations based on Maddison 2001).Read more at location 314

Note: XX SECOLO. DA PIÚ POVERO A PIÙ RICCO Edit

richest country in Latin America and one of the twenty richest countries in the world,Read more at location 317

Note: SETTANTA Edit

higher than Spain, Greece, and IsraelRead more at location 318

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In the 1970s, the Venezuelan economy did an about-face. Per capita non-oil GDP declined by a cumulative 18.64 percent between 1978 and 2001.Read more at location 319

Note: DECLINO DAI SETTANTA Edit

Venezuela’s development failure has made it a common illustration of the “resource curse”—the hypothesis that natural resources can be harmful for a country’s development prospects. Indeed, Venezuela is one of the examples Sachs and Warner (1999, 2) use to explain the idea that resource-abundant economies have lower growth.Read more at location 322

Note: LA MALEDIZIONE DELLA MANNA Edit

Note: c Edit

Easterly (2001, 264), for example, cites the Venezuelan decline in GDP in support of the idea that inequality is harmful for growth.Read more at location 325

Note: DISEG DANNOSE X LA CRESCITA Edit

Becker (1996), in contrast, has argued that the same growth performance actually shows that economic freedom is essential for growth.Read more at location 326

Note: NIENTE MERCATO NIENTE CRESCITA Edit

Many existing explanations do not pass these tests. For example, Venezuela’s failure to grow is often attributed to its lack of progress in carrying out free-market reforms during the eighties and nineties. While Venezuela is indisputably far from a stellar reformer, existing data do not support the hypothesis that it is substantially different from many other countries in the region in this respect (at least until 1999). According to Eduardo Lora’s (2001) index of economic reform, the Venezuelan economy by 1999 was more free market–oriented than were the economies of Mexico and Uruguay, and its speed of reform (in terms of proportional improvement in the index) was actually the median for the region between 1985 and 1999.Read more at location 331

Note: NON SEMBRA CHE LE RIDORME DI MERCATO SPIEGHINO VTUTTO Edit

Alternatively, consider the hypothesis that Venezuela’s growth problems are due to the exacerbated rent-seeking that was generated by the concentration of high-resource rents in the hands of the state. If this explanation is correct, then how do we account for the fact that Venezuela was the region’s fastest-growing economy between 1920 and 1970, a period during which the role of oil was dominant and fiscal oil revenues were significantly higher than during the nineties?Read more at location 337

Note: ANCHE L IPOTESI RENT SEEKING NN REGGE. CE N ERA ANCHE DI PIÙ AI TEMPI D ORO Edit

Toward Within-Country Growth EmpiricsRead more at location 349

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there has been a growing awareness of the limitations of cross-country economic data to help us understand why some countries are rich and others poor (Rodrik 2005). Internationally comparable country-level data are necessarily limited in their scope and depth.Read more at location 354

Note: OGNI PAESE HA IL SUO SPECIFICO. BDIFFICILE GENERALIZZARE Edit

One answer, recently given by Hausmann, Rodrik, and Velasco (2004), relies on exploiting local instead of global information.Read more at location 367

Note: MEGLIO CONCENTRARCI SULLO SPECIFICO Edit

They call their method “growth diagnostics”Read more at location 371

Note: c Edit

The essence of those methods is that instead of asking whether a policy such as trade protectionism is good for growth—a question that simply lacks a well-defined answer in a complex world—it asks more general questions such as: Does the effect depend on other variables? Is it at least not harmful for growth? Does the “average” country benefit or lose out from trade protection?Read more at location 387

Note: PERSONALIZZARE KE DOMANDE Edit

Questions and AnswersRead more at location 417

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“Why Did Venezuelan Growth Collapse?”Read more at location 428

Note: DOMANSA Edit

Venezuela’s growth performance can be accounted for as the consequence of three forces. One is declining oil production. The second is declining non-oil productivity. The third is the incapacity of the economy to move resources into alternative industries as a response to the decline in oil rents that has occurred since the seventies.Read more at location 430

Note: IL PROB: ECON INGESSATA Edit

why Venezuela found it so difficult to develop an alternative export industry, in contrast to other countries that suffered declines in their traditional exports.Read more at location 433

Note: PERCHÈ NESSUNA ALTERNATIVA? Edit

the specialized inputs, knowledge, and institutions necessary to produce oil efficiently are not very valuable for the production of other goods.Read more at location 435

Note: STANDARDIZZAZIONE. BPICA DIVERSITÀ ED ELASTICITÀ Edit

Osmel Manzano’s piece “Venezuela after a Century of Oil Exploitation” tackles the issue of accounting for the oil sector’s performance.Read more at location 440

Note: PERCHÈ IL PETROLIO ANDÒ IN CFRISI? Edit

The key question here is why a country that boasts massive amounts of oil reserves decides not to take advantage of them and instead to maintain limits on production. Manzano argues that this policy was framed in an era in which oil was believed to be near exhaustion,Read more at location 441

Note: ESTRAZIONE STITICA. SI CREDEVA AD UN ESAURIMENTO DEL PETR Edit

These principles may have made sense in the sixties, but they were no longer reasonable after new exploration revealed that the country had indeed quite massive amounts of reserves, while changes in consumption patterns and greater efficiency of extraction techniques led to the oil glut of the eighties and nineties.Read more at location 443

Note: VALUTAZIONI INSPIEGABILI Edit

“Public Investment and Productivity Growth in the Venezuelan Manufacturing Industry” by José Pineda and Francisco RodríguezRead more at location 452

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does public investment generate higher productivity, or does the public sector tend to invest more in localities where productivity is growing?Read more at location 455

Note: IL RUOLO DEGLI INVESTIMENTI PUBBLICI Edit

They find that the contribution of public investment to productivity growth in the Venezuelan manufacturing sector is substantial: according to their estimates, non-oil per capita GDP would be 37 percent higher than its present value had the government not allowed the stock of public capital to decline after 1983. This explanation suggests that the misallocation of public expenditures is a substantial contributor to the Venezuelan economic collapse.Read more at location 457

Note: c MISALLOCATION DELLA SPESA PUBBLICA Edit

While minimum wages, firing restrictions, and mandated nonwage benefits often have a reasonable justification in terms of the provision of social insurance, they can also generate substantial distortions to the reallocation of labor across firms. In countries with a large unregulated economy, these can generate considerable incentives to shift to the informal sector. Indeed, between 1990 and 2001 Venezuela was the country with the highest growth rate in informal sector employment in Latin America (Bermúdez 2004). Omar Bello and Adriana Bermúdez’s chapter, “The Incidence of Labor Market Reforms on Employment in the Venezuelan Manufacturing Sector, 1995–2001,” attempts to estimate the cost of these increased regulations using the same panel of manufacturing firms.Read more at location 462

Note: LE DISTORSIONI DI UN MERCATO IPEREGOLAMENT Edit

In “Understanding Economic Growth in Venezuela, 1970–2005: The Real Effects of a Financial Collapse,” Matías Braun looks at another possible suspect for the collapse in aggregate productivity. Between 1989 and 1996, Venezuela suffered a series of deep credit crunches from which it never fully recovered. Therefore, even though the size of Venezuela’s banking sector was consistent with what one would expect for the country’s level of income up to the 1980s, by the mid-2000s the sector was between four to six times smaller than one would expect.Read more at location 471

Note: PROBLEMI SUL MERCATO FINANZ Edit

Note: FINANZA RACHITICA Edit

Daniel Ortega and Lant Pritchett’s “Much Higher Schooling, Much Lower Wages: Human Capital and Economic Collapse in Venezuela.” This chapter looks at the hypothesis that lack of schooling may be a contributor to the collapse. The authors’ answer is a resounding “no.” Venezuela’s growth in schooling capital was substantially higher than the median country and even faster than the median East Asian country!Read more at location 480

Note: MANCANZA DI CAPITALE UMANO? NO Edit

A second “no” comes from Samuel Freije’s study “Income Distribution and Redistribution in Venezuela.” The increasing relevance of distributive conflict in Venezuela has fueled speculation that the growth in poverty and inequality is at the root of the implosion of Venezuela’s political system. Freije finds that while Venezuelan inequality has increased, its increase is consistent with what one would expect given the collapse in capital accumulation and the growth in informalization. Further, Venezuela in the 1970s was a relatively equal economy by Latin American standards, so it is difficult to tell a story in which inequality is a causal determinant of the collapse.Read more at location 487

Note: ALTRO O LA DISEG NN INCIDE SULLA CRISI Edit

In contrast to much conventional wisdom, Moreno and Shelton contest that Venezuela actually carried out significant fiscal adjustments after the onset of the debt crisis.Read more at location 495

Note: ALTRO NO. L AUSTERITY NN CONTA Edit

the post-1983 response was actually quite reasonable. Falling oil revenues were met with efforts to raise new sources of revenue and cut expenditures.Read more at location 497

Note: c Edit

Poor fiscal policy may be a consequence instead of a cause of the collapse,Read more at location 501

Note: c Edit

Dan Levy and Dean Yang’s “Competing for Jobs or Creating Jobs? The Impact of Immigration on Native-Born Unemployment in Venezuela, 1980–2003,” which looks at how changes in immigration patterns have affected patterns of job creation in Venezuela.Read more at location 503

Note: IL FATTORE MIGRATORIO Edit

a contrast between Colombian immigration, which tends to raise Venezuelan unemployment, and European immigration, which does not.Read more at location 506

Note: COLOMBIANI ED EUROPEI Edit

European immigrants generate considerable positive externalities that offset their direct effects on labor supply and wages. It also suggests that the reversal in European migration that occurred because of the growth collapse could have generated a feedback loop in which the initial collapse caused the loss of a vibrant immigrant community and its spilloverRead more at location 507

Note: c Edit

The Venezuelan collapse was not only economic. Up until the 1990s, Venezuela boasted a stable democratic political system that was commonly viewed as an example to follow by other developing middle-income countries.Read more at location 510

Note: ANCHE UN COLLASSO ISTITUZION Edit