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Venezuela: Public Debate and the Management of Oil Resources and Revenues

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Abstract

Although Venezuela’s experience since the 1980s would seem to make it a classic example of the resource curse, that perspective fails to explain the country’s impressive economic, social and institutional performance—including healthy public debate—during the first five decades after oil was first produced on a large scale. This chapter takes a long view of the Venezuelan experience and argues that this initial performance was lengthy and positive but fragile, given the incapacity of the country’s institutions to adapt to the different environment that developed afterwards, characterized by high oil price volatility and significant and sudden declines in oil revenues. The prolonged initial period of equilibrium became a curse of sorts. Lacking adaptive efficiency, political institutions were forced to rely increasingly on maintaining an illusion of harmony, and as faltering performance became evident, Venezuelans began questioning the model and its hegemonic arrangements. The scope and magnitude of the economic, social and institutional devastation that followed were such that public debate became one the first casualties. One of the main problems in contemporary Venezuela is the polarization of politics. This makes it difficult for the country’s population to arrive at reasonable solutions through public discussion.

Keywords

  • Venezuela
  • Natural resources
  • Oil
  • Gas
  • Petroleum governance
  • Civil society
  • Resource curse
  • Polarization
  • PDVSA
  • Chávez
  • Maduro
  • Taxation
  • SocialismDemocracyAuthoritarianism

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Fig. 19.1
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Fig. 19.4

Notes

  1. 1.

    PDVSA Agriculture and PDVAL in food production and distribution; PDVSA Services in exploration, drilling and other oil services; PDVSA Industrial in manufacturing; PDVSA Engineering and Construction; PDVSA Shipping; PDVSA Urban Development; PDVSA Communal Gas.

  2. 2.

    The basket price is the weighted average of the price at which the different qualities of crude oil exported are sold in a given period.

  3. 3.

    These laws include the Organic Law of the Communal Councils, Organic Law of the People’s Power, Organic Law of the Communes, Organic Law of the Communes Economic System, Organic Law of Social Welfare, Organic Law of the Federal Council of Government, Organic Law of Public and Popular Planning and Organic Law for Community Planning.

  4. 4.

    For a detailed account of the negotiations between Venezuela, the oil companies, the US State Department and the British Foreign Office that led to the 1943 Hydrocarbons Law and the 1944 Tax Law, see Rabe (1982). Machado (1990) also deals with the public debate on this issue.

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Villasmil, R. (2018). Venezuela: Public Debate and the Management of Oil Resources and Revenues. In: Overland, I. (eds) Public Brainpower. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-60627-9_19

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