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From Windfall to Curse?
Oil and Industrialization in Venezuela, 1920 to the Present
360 pages | 6 x 9 | 2009
ISBN 978-0-271-03553-6 | cloth: $65.00
Paperback edition is not available in the U.S.
“There are few economic and political histories as enigmatic as Venezuela’s. Until now, little has been written that captures the complexity of its economic and political trajectory. This fascinating book fills an important gap in the most original way and is a brilliant example of interdisciplinary analysis. It provides a convincing critique of the ‘resource curse’ and will force policy makers and scholars to rethink how and why industrial policy succeeds or fails in Latin America.” —José Gabriel Palma, Cambridge University
“This book addresses the key puzzle of Venezuela’s political economy in the twentieth century—the rapid and spectacular rise of Venezuela’s economic development from 1920 to 1965, followed by its precipitous collapse, arguably to this day. If you think the answer is oil, this book will make you think again. Marshalling hard-to-find data, Di John shows how import substitution and export diversification each depend, for their success, on the nature of a country’s political institutions.” —Javier Corrales, Amherst College
“This is an original, lucid, and stimulating work, one that will force economists, political scientists, and historians to rethink the economic history of Venezuela, the validity of the 'resource curse,’ and the political economy of growth more generally. It is a book that embodies the best tradition of interdisciplinary analysis. This is an outstanding contribution to the political economy of development in Latin America and should be required reading for those interested in understanding long-run economic performance and the political economy of economic reform.” —Francisco R. RodrÃguez, United Nations Development Programme
Since the discovery of abundant oil resources in the 1920s, Venezuela has had an economically privileged position among the nations of Latin America, which has led to its being treated by economic and political analysts as an exceptional case. In her well-known study of Venezuela's political economy, The Paradox of Plenty (1997), Stanford political scientist Terry Karl argued that this oil wealth induced extraordinary corruption, rent-seeking, and centralized intervention that resulted in restricting productivity and growth. What this and other studies of Venezuela's economy fail to explain, however, is how such conditions have accompanied both growth and stagnation at different periods of Venezuela's history and why countries experiencing similar levels of corruption and rent-seeking produce divergent developmental outcomes.
By investigating the record of economic development in Venezuela from 1920 to the present, Jonathan Di John shows that the key to explaining why the economy performed much better between 1920 and 1980 than in the post-1980 period is to understand how political strategies interacted with economic strategies—specifically, how politics determined state capacity at any given time and how the stage of development and development strategies affected the nature of political conflicts. In emphasizing the importance of an approach that looks at the political economy, not just at the economy alone, Di John advances the field methodologically while he contributes to a long-needed history of Venezuela's economic performance in the twentieth century.
Jonathan Di John is Lecturer in Political Economy of Development at the School of Oriental and African Studies, University of London, and a Research Fellow at the London School of Economics.
Contents
Preface and Acknowledgments
List of Abbreviations
Part One: Introduction
1. Accounting for Growth and Decline in Venezuela
2. Trends and Cycles in the Venezuelan Economy
Part Two: A Critical Survey of the Resource Curse Literature
3. Economic Explanations of the Growth Collapse in Venezuela
4 Political Economy Explanations of the Growth Collapse in Venezuela
5 Economic Liberalization, Political Instability, and State Capacity in Venezuela
Part Three: An Alternative Political Economy of Venezuelan Growth and Decline
6 Toward a New Political Economy of Late Industrialization
7 Periodization of Industrialization Stages and Strategies in Venezuela
8 The Structure of and Changes in Political Settlements in Venezuela
9 A New View on the Political Economy of Growth in Venezuela
Part Four: Beyond the Venezuelan Case
10 The Political Economy of Growth in Malaysia and Venezuela
11 Conclusion: Rethinking the Political Economy of Growth
References
Index