Tuesday, March 18, 2014

Economic Policy in Venezuela and Bolivia

Dorothy Kronick has a really interesting post on Venezuela in 538. What's particularly useful about it is the explanation of how Chavistas compare Venezuela now to how it was in the past, whereas opponents compare it to how it is underperforming relative to other Latin American countries today. She tops it off with a comparison to the economic successes Bolivia has been seeing under Evo Morales, who was used natural resource windfalls much more prudently and effectively, maintaining solid economic growth and low inflation.

She sums it up as follows:

What might help Venezuela out of its impasse, then, is a kind of reciprocal learning process: If the cosseted nostalgics could grasp that so much of what repels them in Bolivarian socialism mirrors what came before, and if supporters of Chavismo could see that the revolution reflects so much of Venezuela’s past, perhaps both sides would come around to the wisdom of the data behind the mainstream opposition’s regional comparisons. Absent this convergence, it’s hard to imagine a way forward for Venezuela.

Good points. What she does not address, though, is the "why" question. Why did Evo Morales, who uses similar rhetoric, professes a similar ideological orientation, and faces a similarly elite opposition, go in such a different and more successful direction? Perhaps because it's so uninterestingly stable at the moment, Bolivia gets no attention paid to it at all.


Omar 10:34 AM  

Perhaps due to the fact that Hugo Chavez claimed to be the mantle of regional leadership. He was obviously willing to bear the cost of this: the establishment of regional organizations (ALBA, PetroCaribe); subsidies to other countries (Nicaragua, Cuba); donations to other nations whether it be electrical plants, campaign contributions, funding to start-up TV stations and other state businesses in other countries, political (and possible financial support) to FARC in Colombia, etc.

I can’t think of anyone who put this much effort for the sake of regional integration. This incurs huge expenditures and it has obviously payed off, just look at the multilateral inaction in Venezuela today. That's a byproduct of Venezuela's investments.

Greg Weeks 10:44 AM  

Good point. Perhaps also oil provides an inflated sense of wealth that can be thrown around.

jeff house 6:43 PM  

There's a lot of evidence there that Hugo Chavez got a huge windfall, and utterly wasted it.

But where is the evidence that the poor use a different benchmark than the middle class to determine whether they are sympathetic or not?

Absent empiral evidence, that's a "just-so story."

  © Blogger templates The Professional Template by Ourblogtemplates.com 2008

Back to TOP