Val Dorta posts a sobering analysis of Venezuela’s current political situation. The short version: Chávez is himself a manifestation of the weakness of Venezuela’s political culture. Merely removing him from power will not by itself bring prosperity and political stability. Structural reform, particularly economic liberalization to boost the Venezuelan private sector, is needed, yet the prospects for such reform seem unclear at best.


  1. The curse of oil again.

    Share the revenues from oil equally amongst the population, after all they belong to the people don’t they?

    No strong central state, no revenues to bribe an bully the people with, and a government dependent upon economic growth to provide it with taxes.

    Result: A liberal democracy where the power is not usurped by tyrants.

  2. Norway and England are immune to the curse, I guess. The curse of oil is a myth and democracy is another myth. Most Latin American countries don’t have oil and still have the same problems; Venezuela and Uruguay had democracy for many years and still have the same problems. The “root cause” is elsewhere.

  3. Share the revenues from oil equally amongst the population, after all they belong to the people don’t they?

    You make the mistake of assuming this is about ‘the people’ when it’s really about the power of those who control it. Remember, Chavez is a Fidelisto.

  4. What do you think of the notion that title is at least part of the problem? What I mean is, even where private property rights are at least theoretically somewhere between respected and enshrined in Latin America, it is often difficult to show clear title. This in turn limits access to capital for a significant segment of the population, and creates a disincentive to otherwise use property to create additional wealth. I’ve taught (briefly) on this theme in the business, government, and society class I teach at my local business school (same place I got my MBA).

  5. That is the theme of Hernando de Soto’s The Mistery of Capital; I also remember years ago reading a newspaper article by Mario Vargas Llosa about the informal economy. It is not a problem but the solution poor people find to overcome artificial obstacles created by the state, even if that sets them as victims of police blackmail and having to work without credit and financing. Without the informal economy, poverty would be even worse to the majority of the people in those countries. Try founding a company in Venezuela and you’ll see what that means.

    This also helps see that corruption is a derived phenomenom, a consequence of the system and not the cause of anything. The whole bureaucratic structure of statism and populism forces you to buy your way in.

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