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Chavez and the Power of the State
Between 2002 and 2004 millions of Venezuelans signed petitions calling for a vote to remove Hugo Chavez from office. Signatories were not anonymous and during the petition campaign Chavez supporters hinted darkly that there would be retaliation. Chavez was in fact forced into a recall election, but unfortunately he won (not one of democracy's better moments). After the election, the list of signatories was distributed to government agencies in an easy-to-use database. The database included the names and addresses of all registered voters and whether they had signed an anti-Chavez petition. Technology thus provided Chavez supporters the information they needed to retaliate.
Technology cuts both ways, however, and in a truly remarkable paper, Hsieh, Miguel, Ortega and Rodriguez match information in the petition database to another database on wages, employment and income. What the authors find is shocking, albeit not surprising. Before the recall election, petition signatories and non-signatories look alike. After the election, the employment and wages of signatories drop considerably, about a 10% drop in wages relative to non-signatories. Survey evidence conducted by the authors is consistent with retaliation by Chavez supporters especially in the form of job losses in the public sector. The authors estimate that the retaliation was so widespread, many workers were pushed into informal employment, that the Venezuelan economy was significantly damaged.
This is original, important and actionable research. Bravo to the authors, especially to Ortega who--as of this posting--has a job in Venezuela.
Posted by Alex Tabarrok on May 7, 2009 at 07:20 AM in Current Affairs, Data Source, Economics, Law, Political Science | Permalink
Comments
From what I hear from Venezuelans, popular support for Chavez is very real, even if actions like this make it far from democratic. Basically, people see, not without reason, his competitors as just as likely to have corrupt and undemocratic tendencies and all other flaws of Chavez, except they would give less petrodollars to the people. It is not a given that stricter controlled democracy in Venezuela would automatically remove Chavez.
Posted by: Zamfir at May 7, 2009 8:39:12 AM
What does this say for the state of affairs in the US, when a judge order the non-TARP committee to identify themselves?
Posted by: leonid at May 7, 2009 8:40:00 AM
It should be SOP for the President to issue a statement thanking the dictator in question for his recent support for the CIA operations within their country.
Posted by: Andrew at May 7, 2009 8:48:12 AM
not one of democracies better moments
Huh? That phrase is in need of editing to make sense.
Besides, is democracy only "unfortunate" when the people choose someone Alex Tabarrok don't like? Is he the sole arbiter of fortune? Maybe the poor majority in Venezuala felt that they were acting in their own best interest when they elected Chavez.
And what exactly do you mean by "actionable"? You think there is a lawsuit in here somewhere?
Posted by: bartman at May 7, 2009 8:48:49 AM
Well, I always say, led the idiots be ruled by a scammer, I am only sorry for the citizens who hate Chavez, didn't vote for him and now have to suffer, because they are too poor to leave the country. Those are the people that deserve pity =)
Posted by: Max at May 7, 2009 8:54:59 AM
This makes me thankful that Obama is following Bushes path and widely expanding the electronic communications databases. How else will they stop insurgents from gaining power in this country?
Posted by: Gabe at May 7, 2009 9:27:28 AM
"Besides, is democracy only "unfortunate" when the people choose someone Alex Tabarrok don't like?"
No democracy is always right...Always!
Posted by: assman at May 7, 2009 10:05:37 AM
Democracy is a two wolves and a sheep voting on what's for dinner. There's a reason our founders did everything they could to allow influence of the masses but limited it's effect on actual government policies.
Posted by: nelsonal at May 7, 2009 10:21:52 AM
Your use of "unfortunate" to describe an election result you disagree with is, um, *unfortunately* reminiscent of the Reagan Administration's decision to illegally support a terrorist group attempting to violently overthrow the Ortega administration in Nicaragua because Reagan disagreed with his policies.
Posted by: Chris at May 7, 2009 10:24:20 AM
Yeah, what everyone else has said. You don't have to respect Chavez, but respect the process that brought him to office.
Or, on second thought, don't.
Elections, in current practice, do not select the best candidate for a job, they select (in theory) the least bad candidate of a pool of candidates for a job. Democracy, then, can only function as perfectly as the candidate selection process, which is frequently not only non-democratic, but chaotic and random.
The American system, for instance, guarantees that candidates for President will be chosen from a pool of very nearly two, that pool having been selected by approximately one hundred geographically and procedurally disparate processes, but mostly by members of what amounts to two semi-private national clubs, partitioned on ideology. Those club members select from a pool of candidates put forth by elite members of those clubs. So We, The People, get to pick from a pool of candidates proposed by plutocrats and vetted by ideologues.
Which is not to defend Chavez or this retaliatory act. Chavez is a tool.
But, as much as Obama or Bush before him, he's a tool of the people. :)
Posted by: Phil Groce at May 7, 2009 10:28:08 AM
All campaign contributions in U.S. elections should be anonymous for the reasons implied in this post, but you won't even find very many libertarians advocating such a policy, even those who oppose gun registration. The U.S. is far on the path to becoming as poor as Venezuela, and will fall apart in less than 30 years.
Posted by: John Locke at May 7, 2009 10:29:32 AM
Yeah, Alex, it's lame that you would express the idea that it's unfortunate that Chavez held on to power. It's not like Chavez is Bush. I mean, the 2000 and 2004 elections, those were unfortunate. Amirite guys? Guys? Amirite?
Posted by: PM at May 7, 2009 10:58:39 AM
You do attract the loonies, don't you? Isn't it pretty clear that Chavez is a thug, impoverishing his own people and trying to hold onto power by any means necessary?
Posted by: Rich Berger at May 7, 2009 11:28:19 AM
First I think Venezuela can get away with and benefit from socialism in a way that countries that are less dependent on national resource rents cannot, this is not to say that it's the optimal course but only that resource rents suffer less distortion from economic intervention. I wish that Chavez was more competent and was more tolerant of legitimate dissent but it's a tough line to walk. Sedition and attempts to subvert the democratic process are an actual problem for Chavez to deal with. He deals with them poorly but it would be wrong to judge him for dealing with it at all.
I would also like to posit, though I have little faith in the theory myself, that perhaps the signatories were wealthier than average and pursuing certain socialist policies that are not targeted specifically at political enemies might be responsible for some of the effects.
Posted by: Michael Foody at May 7, 2009 11:50:29 AM
"even if actions like this make it far from democratic"
What definition of democratic excludes rewarding supporters and punishing rivals? Why would you expect democracy to produce something other than this tendency?
Posted by: josh at May 7, 2009 11:54:19 AM
contolling for other explanations must be very difficult. Get a petition against the 51% tax rate for high earners going in the uk and then correlate that to post tax income in a years time and I think you'd come up with something (though id imagine they'd look unrepresentative pre petition)...... but i think we all know what happened here
Posted by: mrB at May 7, 2009 12:46:41 PM
I'm curious how "original, important and actionable research" that criticizes a populist leader receives attention, yet the reams of original, important and actionable research criticizing the world's plutocrats is ignored.
It's almost like our poster has a bone to pick.
Posted by: JeffJ at May 7, 2009 1:43:22 PM
Michael Foody and mrB:
"Before the recall election, petition signatories and non-signatories look alike. After the election, the employment and wages of signatories drop considerably, about a 10% drop in wages relative to non-signatories. "
Posted by: Anthony at May 7, 2009 1:46:01 PM
It's interesting that even here on a libertarian econ blog most commenters attack anyone who dares to criticize such a widespread, apparently government sanctioned, retaliation campaign against people whose only offense was to sign petitions. You lefties love your thuggery.
Posted by: Larry at May 7, 2009 1:46:36 PM
The amount of people criticizing Alex's post is shocking if not absolutely horrifying. I think the pro-Chavez crowd makes a very good point; if Chavez is democratically elected then he should be allowed to do whatever he wants. Why stand up for dignity, truth, and virtue when you can champion a quasi dictator who has tied Venezuela's economy to the price of oil. And like any good dictator he throws a bone here or there to the poor. That is how you get left wing sympathizers. Say a few nice words about the poor, throw em a few bones, and suddenly any attempt at dissent against the dictator is right wing agitprop.
The new trick promulgated by the left is to brand any form of criticism of a left wing politician as a hard right attack. God forbid that any left wing politician is doing something truly awful. One would think that criticizing Chavez or Castro wouldnt warrant a defense. However, the fools rush in.
Posted by: John Pertz at May 7, 2009 1:55:23 PM
Well, sure, power corrupts. Even among union leaders. Guess which way the populous votes when given the choice (which they are usually not) between a corrupt populist leader and a corrupt plutocrat (one of "our SOBs")?
I love the "thug" comments. Most Venezuelans recognize that Chavez is standing up to thuggery. Of course his actions will look like thuggery in a few select circles.
Despite the selection bias toward the wealthy in the comment section of an American libertarian economics blog, there is still a healthy dose of reality from the proles. Talk is cheap and that's a great thing for real democracy.
Posted by: JeffJ at May 7, 2009 2:28:47 PM
So Pertz is shocked that some people don't share his and Tabarrok's disgust at the choices of the Venezualan electorate.
I bet Pertz is sad that we can't go back to the good old colonial days, when if we didn't like what some mob of smelly brown foreigners did, we'd just invade and do what was in their own best interest, even if they didn't understand it at the time.
Oh, wait, we're still doing that, aren't we?
Pertz: stop and think for a second why Venezualans, and many other Southern hemisphere nations, keep electing people that right wing Americans don't like.
And Larry, nobody is saying that such intimidation campaigns are good, merely that they are an expected and normal outcome of any democratic process. Supporters are rewarded and opponents punished in every country, in every form of government. Take off your rose-coloured glasses and see the world for what it is, Pollyanna.
Posted by: bartman at May 7, 2009 2:32:20 PM
Wow!
The real unfortunate thing is a discussion that goes on and on, mostly trying to justify and/or sympathize with Hugo Chavez and his reelection(s). Why unfortunate? Beacuse mostly they were either overtly or covertly fraudulent. Lets see:
If tapping the totality of the state's coffers and putting it at the service of the leftist candidate is ok,
If sending armed bands to terrorize the hapless opposition is ok
If having "grabbed' control of the supreme court by padding it with extra judges (using the term very loosely) is ok
If not having a single opposition member of congress and rubber stamping laws to strip the power of opposition elected officials is ok
then I guess Hugo Chavez is the man who should be where he is and all discussion of his legitimacy is null and void. Yet, none of those things are ok anywhere where the rule of law holds sway.
Draw your own conclusions.
Posted by: Pete at May 7, 2009 2:48:46 PM
So, wait, just because someone criticizes the actions of a democratically-elected leader, that makes them a colonialist? I suppose we should stop our criticism of Mugabe as well? Or Bush even?
Posted by: q at May 7, 2009 3:07:23 PM
Bartman
So basically your argument is that because Batista may have been a crony capitalist, therefore a leader like Castro or "gulp" a democratically elected leader like Chavez has free reign. After all the preceding leader was very bad and did very bad things, therefore the newly elected official is justified in his actions because he was selected by the beaten down masses.
This is poor logic and probably subterfuge. You evaluate dictators or elected officials objectively, not comparatively. You dont say oh well Chavez is bad but the poor people elected him and they weren't treated well by the previous guy.
A much better and humane and logical left wing argument would be that Chavez should of embarked on an economic platform similar to Norway's. Norway is similar to Venezuela in the sense that they make money off of oil. However, the difference between Norway and Venezuela is that Norway is run by mostly intelligent, calm, well mannered social democrats who didnt embark on a campaign of destroying property rights. Norway doesnt waste its time getting caught up in symbolic political moments.
No, Norway has done quite the opposite. Norway has made use of their extreme oil wealth to deliver a highly functional welfare state, they have maintained property rights, they have respected the liberty of their individual citizens to some degree and they have a very nice diversified economy. Simply put, Norway isnt going to hell if the price of oil tanks.
Chavez on the other hand has ruined property rights, scared away any private capital that may have found the environment attractive, and has officially tied the fate of Venezuela to the price of oil. Even worse, Chavez has created expectations for the people of Venezuela. They are getting medical and schooling services funded through the state's sale of oil. He has harassed and largely scared away any private business that may have been interested in industrial production. So now what happens to Venezuela as the private economy erodes further and further, the country's fate becomes more and more tied to the sale of oil.
Again I feel very bad for the people of South America. Their leaders could of employed much better models that could of worked for all people. Instead Chavez and many of the others are calling plays out of a very old school left wing playbook. A playbook that should of been chucked years ago. Unsurprisingly, the more functional and quietly efficient Nordic-left wing models get ignored here. And unsurprisingly the left wing fools rush in to support Chavez or any other left wing dictator at every given turn. VERY SAD!
Posted by: John Pertz at May 7, 2009 3:15:10 PM
