Dragon in the Tropics

Venezuela and the Legacy of Hugo Chavez

Javier Corrales, Michael Penfold

• Éditeur: Brookings Institution Press
• Année: 2015
• ISBN:
  9780815725947
• Sujet: Politics & International Relations
• Sous-sujet: Communism, Post-Communism & Socialism

This new and expanded edition of Dragon in the Tropics—the widely acclaimed account of how president Hugo Chávez (1999–2013) revamped Venezuela’s political economy—examines the electoral decline of Chavismo after Chavez’s death and the policies adopted by his successor, Nicolás Maduro, to cope with the economic chaos inherited from previous radical populist policies. Corrales and Penfold argue that Maduro has had to struggle with the inherent contradictions of a large and heterogeneous social coalition, a declining oil sector, the strength of entrenched military interests, and fewer resources to appease international allies, which have strenghtened the autocratic features of an already consolidated hybrid regime. In examining the new political realities of Venezuela, the authors offer lessons on the dynamics of succession in hybrid regimes. This book is a must-read for scholars and analysts of Latin America.

1

Introduction:
The Chávez Revolution in Perspective

This book spotlights one of the most sweeping and unexpected political transformations in contemporary Latin American politics. President Hugo Chávez Frías, in office from 1999 until his death in 2013 (reelected in 2000, 2006, and 2012), transformed a frail but nonetheless pluralistic democracy into a hybrid regime, an outcome achieved in the context of a spectacularly high oil income and widespread electoral support. Hybrid regimes are political systems in which the mechanism for determining access to state office combines both democratic and autocratic practices. In hybrid regimes, freedoms exist and the opposition is allowed to compete in elections, but the system of checks and balances becomes inoperative. More specifically, such regimes display the following features:¹

—Government negotiations with opposition forces are rare.

—Die-hard loyalists of the government are placed at top-level positions in state offices, such as the courts, thereby undermining the system of checks and balances.

—The state actively seeks to undermine the autonomy of civic institutions.

—The law is invoked mostly to penalize opponents but seldom to sanction the government.

—The incumbent changes and circumvents the constitution.

—The electoral field is uneven, with the ruling party making use of sinecures that are systematically denied to the opposition.

Undeniably, the rise of a hybrid regime in Venezuela occurred in the context of significant electoral support. Venezuela under Chávez conducted plenty of elections—seventeen at the time of his death—and chavista forces prevailed in all but one. This widespread use of elections is certainly impressive, and many consider it a sign of democratic vitality, even though electoral institutions have been openly manipulated. This electoral majoritarianism was used by the president to justify concentrating a broad array of institutional power, including ending term limits. As a result, Chávez's “Bolivarian Revolution” (so-named by Chávez after Simón Bolívar, the Venezuela-born South American liberator) reduced accountability, limited alternation in office, and expanded the powers of the executive like few other electoral regimes in Latin America.

These are all typical features of an “electoral autocracy,” a term that became popular early in the new century to describe hybrid regimes in which one dominant party or ruling coalition overwhelms the rest.² Scholars have noted a rise of hybrid systems across the globe in the latter part of the 2000s: the Chávez regime represents the most pronounced case of hybridity to emerge in Latin America since the 1980s. Other nations in Latin America have in the recent past lived through somewhat similar experiences. Oftentimes labeled “neopopulist,” majoritarianism combined with weak political parties has led to strong personalistic rulers as recently as Alberto Fujimori's regime in Peru during the 1990s.³ But chavismo, the term that is conventionally used to denote the methods and goals of Chávez's particular type of hybrid regime, exhibited three additional features that are less typical of other similar experiences in Latin America.

First, there was a heavy and unconcealed militaristic bent, far greater even than under Fujimori. The military was present in the cabinet, in the management of the ever-growing number of state-owned enterprises, and in running subnational government programs. Chavismo essentially contravened and maybe even ended the trend in Latin America until the late 1990s of containing rather than expanding the role of the military in governance and spending in areas that have little to do with national security.

Second, in terms of economic policy the regime was heavily statist. Other than offering a major fiscal stimulus and cheap imports, the state did little to promote private investments and imposed some of the most severe regulatory restrictions in the world. State control expanded in basic industries ranging from power and electricity to telecommunications and ordinary sectors such as cement and hotels. Expropriations expanded from a few abandoned pieces of property to major profitable industries.

Third, the regime adopted a distinctive foreign policy: an active commitment to balance the influence of the United States and to export a somewhat radical political ideology of statism across the region. Chávez became one of the world's closest allies of Iran (which is one of the world's leading buyers of weapons from Russia) and one of the world's most openly confrontational leaders, not just toward the United States but toward any head of state whom he disliked.

In short, in terms of policy and discourse toward his detractors—at home and abroad, in good times and in bad times—the Chávez administration was nothing less than a fire-breathing dragon in the tropics. Latin America has seen few comparable political dragons emerge in its recent history. To be sure, many of the region's leaders have deployed some of these practices, but none undermined checks-and-balances institutions and co-governed with the military to the extent that Chávez did in Venezuela. A number of countries have veered to the left in economic policy, especially when compared to the 1990s, but none has achieved the same degree of state control of the economy as in Chávez's Venezuela.⁴ And although some countries have abandoned the policy of close rapprochement toward the United States that prevailed at the close of the twentieth century, none since Cuba during the cold war has embarked on such a world campaign as has Venezuela to counter American influence in this hemisphere and elsewhere.⁵

The chapters that follow provide an in-depth review of how this major political transformation took place in Venezuela. We chiefly synthesize studies produced by both of us over the past fifteen years. As academics, both of us have focused primarily on the study of Venezuela. We both wrote doctoral dissertations on Venezuelan politics prior to the “Bolivarian revolution” from a comparative perspective (Corrales compared Venezuela to Argentina, Penfold to Colombia). After Chávez came to office and in the course of his presidency, we separately and jointly published academic journal articles, book chapters, and newspaper op-eds and commissioned reports. With this book we seek to summarize a number of key thoughts generated in our research and policy experience, render them accessible to a less specialized audience than that for our earlier writings, and update them to take into consideration new developments and research.

Explaining Chavismo

We have several goals in mind. One is to provide an explanation for Venezuela's political overhaul. Conventional accounts of the Chávez regime generally focus on some combination of three principal factors: the role of (decaying) liberal democracy since the 1970s, (failed) economic reforms in the 1990s, and (overpriced) oil in the 2000s. Some scholars have argued that Venezuela's legendary democracy—one of the first successful “pacted” transitions in Latin America—turned into a rigid “partyarchy” in the 1980s. During this period, two parties, Acción Democrática (AD) and the Social Christian Party (originally Comité de Organización Política Electoral Independiente, or COPEI), dominated the political field. Far too many actors across all income categories were excluded by an agreement among these parties’ leaders that over time restricted access to democratic institutions and failed to manage economic development once fiscal resources flowing from oil started to decline. This led to demands for new and more participatory political institutions, a tide that brought “revolutionary” Chávez to the fore.

Others have argued, instead, that Venezuela's experiment with market economic reforms in the 1990s led to harsh austerity policies that expanded poverty without restoring growth, leading to a demand for a more leftist-populist-nationalist type of economic development. Finally, a new wave of high oil prices in the early 2000s supplied the means for the Chávez regime to deliver on these society-demanded changes. In a nutshell, many scholars think that the failure of liberal democracy and economics explains the demand for the type of regime now in place, while oil provided the figurative and concrete fuel.

We offer a slightly different interpretation of events. First, on the role played by political institutions, we don't dispute the degree of exclusion that preceded Chávez, but we contend that it was the dramatic institutional opening in the 1990s, rather than continued institutional closure, that created the opportunity for regime change. In the 1980s the old pacted democracy entered into a deep social and political crisis, leading to political decentralization and reform, which allowed for more than twenty governorships and more than 300 mayors to be directly elected by the people by 1989. Political decentralization triggered two profound political earthquakes: it allowed new political forces to emerge and capture state office—especially Causa-R at the outset of the 1990s and Chávez's own Movement of the Fifth Republic (Movimiento Quinta República, or MVR) in later years—effectively ending the country's stale “partyarchy.”⁶ Decentralization also eased the stranglehold of the leading traditional parties, AD and COPEI, thereby ushering in an unprecedented party fragmentation. We are convinced that the wedge opened by decentralization and party fragmentation was one of the most important underlying institutional explanations for why Chávez—a consummate newcomer—managed to win state office in 1998 and easily overwhelmed the political system in a matter of a few years. The main point is that greater democratization rather than less democratization made possible the entry of new political actors; and party fragmentation permitted this new political force, once in office, to consolidate power in a short period of time.⁷ Without decentralization (which opened the doors) and party fragmentation (which cleared the path), Chávez would have faced possibly insurmountable obstacles at election time and, certainly, as a policymaker.

With respect to economic reforms, we agree that poverty and erratic economic performance prevailed in the 1980s and 1990s, but we disagree that “neoliberalism” was the key culprit. Market economic reforms never really took hold in Venezuela. Attempts to open the economy by Carlos Andres Peréz in 1989 and, after some delay, by Rafael Caldera in 1996 faced formidable political roadblocks that prevented deep implementation. Other than trade liberalization and a few privatizations, most economic activities, especially on the export side, remained largely statist. Moreover, there is no evidence that the majority of the population repudiated market economic reforms as vehemently as Chávez did when he gained power democratically.⁸ We are persuaded that Venezuela's economic ailments resulted from factors other than “neoliberalism,” namely, the persistence of dependence on oil, which caused macroeconomic volatility; political party fragmentation, which triggered policy incoherence and infighting; government mismanagement of the economy, which led to greater contraction of the private sector in the 1990s; and the Asian crisis of 1997, which devastated Venezuela's economy just around the time that Chávez ran for president. To blame market reforms for Venezuela's economic ills up to 2003 is an exaggeration; other, more serious, economic ailments mattered more.

Our position on oil is a bit more complicated, so we devote an entire chapter to this topic. We do not dispute the growing consensus in development studies that high dependence on mineral or land-based natural resources generates multiple forms of political and economic distortions—the so-called resource curse, or “paradox of plenty,” arguments. But we think that oil alone fails to explain the recent course of Venezuelan politics, and even less, the direction of regime change. Oil has been the key economic factor in Venezuela since large-scale production started in the 1920s, and in subsequent decades the country experienced all forms of political regimes (dictatorships, democracies, and semi-autocracies), institutional arrangements (unipartisan, bipartisan, multipartisan, antipartisan), and economic policies (import-substitution industrialization in the 1950s and 1960s, heavy investment in large utilities in the 1970s, unorthodox economic adjustment in the 1980s, aggressive market reforms in the early 1990s, timid reforms until 2003, and aggressive fiscal spending since 2003). Oil has been invoked over and over again to explain the status quo, even though the status quo has changed repeatedly during the last 100 years.

We propose instead that the explanation for the rise of Chávez's regime lies in what could be called an “institutional resource curse”: oil, certainly, but in combination with a number of institutional arrangements, is what explains key regime change. In particular, Chávez was able to obtain direct political control of the state-owned national oil company, Petróleos de Venezuela, S.A. (PDVSA)—which reflected the erosion of checks and balances already under way prior to the Venezuelan oil boom from 2003 to 2008. This institutional grab by the executive branch allowed it to distribute oil rents to the population without any intermediation from other political actors after 2004. Without this prior institutional change, which also involved deep constitutional reforms that strengthened presidential powers, the oil boom in Venezuela under Chávez might have had a different political effect, one less empowering of the president and less detrimental to the opposition. Our focus is therefore on identifying the type of institutions that, in combination with oil dependence, led to a transformation of regime type and policies after Chávez came to power.

A focus on oil and related institutions, rather than oil alone, is a departure from the common treatment in current (generally quantitative) studies of the resource curse, but it continues a venerable tradition in research on Venezuela and in qualitative studies of development in general. For instance, some of the best works on whether countries succumb to or escape the resource curse—however it is defined—tend to stress variations in institutional features among petro-states.⁹ Likewise, some of the best studies of Venezuelan politics over the years emphasize the role of institutions, not just oil, to explain the origins of democracy in the late 1950s, policy incoherence in the 1980s, and regime change in the early 2000s.¹⁰ All of these studies consider variations in state-based variables, party-based variables, or both. This book builds on the tradition of examining oil and institutions interactively rather than separately.

We do recognize, however, that regardless of institutions, oil dependence generates a demand for “rentism” on the part of economic agents that is perhaps more pronounced than in other societies.¹¹ We define “rentism” as the drive of social, economic, and political actors to extract fiscal resources for private rather than public gains through lobbying for lessened competition. This behavior creates a strong bias toward favoring distorted policies aimed at protecting the extraction of these “rents” by a broad array of actors. Moreover, oil is no doubt the fuel that powered the Chávez regime, as it does any incumbent in petro-states enjoying an oil windfall. But again, understanding why the regime took on the shape that it did and, more important, why it moved in a particular direction (why the dragon protected certain political assets and not others, and spewed fire at some targets and not others), requires us to know more than just the fact that fuel was plentiful.

Additionally, focusing exclusively on oil, as the resource-curse literature often does, fails to explain one of the most noteworthy features of Chávez's policies: the decline in the country's oil sector under his watch. Considering that both in rhetoric and in practice the Chávez regime places oil at the heart of the country's development strategy, allowing this sector to decline as much as it has since 1999 is astounding. If anything, one would think that Chávez should have cherished the oil sector unfailingly. Furthermore, considering the concentration of power in the executive branch, one would also think that he should have had no trouble protecting this asset. Yet most indicators reveal a serious deterioration of Venezuela's oil economy since 1999. Chávez was not the first president in Venezuelan history to be mesmerized by the promise of oil, but he was the one who allowed the sector to decline the most. The mystery of the Chávez regime is not that it relied on oil as much as it did but that, despite this excessive reliance, Chávez allowed the sector to decay. In our chapter on oil we try to explain this decline: again, to explain this decaying trend in the oil sector (not just in regime change) we propose an “institutional-resource-curse” thesis.

Politics under Chavismo

Another objective of this book is to demonstrate that to understand the political system in Venezuela, it is necessary to look not just at the demand side (namely, citizens’ preferences) but also at the supply side: ways whereby strategic actors at the state level managed to manipulate policies and formal rules in order to prevail politically. At its core, chavismo could be conceptualized as a political project that sought to undermine traditional checks and balances by building an electoral majority based on a radical social discourse of inclusion, glued together by property redistribution plus vast social handouts extracted from the oil industry. Like previous populist movements in Latin America, chavismo was a politically “illiberal” project because it used electoral majorities to erode horizontal and vertical accountability.

Robert Dahl's classic idea of liberal democracy combined high contestation and high inclusion; judged in these terms, chavismo may be deemed definitely deficient in the former and problematic in the latter criterion.¹² At the level of contestation, chavismo increasingly undermined political competition for office by placing state resources and security services at the disposal of the ruling party while denying them to its rivals. At the level of inclusion, chavismo mobilized new and nontraditional actors in the electoral arena (which clearly strengthened democracy), but also deliberately excluded comparatively large segments of society, labeling them “oligarchs,” “contemptible,” and “enemies of the common people.” Judged in terms of accountability and treatment of the opposition, this regime was a long way from Dahl's conception of liberal democracy.

Underlying these changes in contestation and inclusion was the complete erosion of checks and balances. Consider one example of this erosion: very few court cases are known where societal actors have sued the state, let alone won a case against the state. Under chavismo, the concept of limits on the power of the majority—which all scholars who study the quality of democracy posit as being a minimal condition that regi...