Chávez’s Real Legacy Is Disaster

Dec. 6 is the 20th anniversary of the election of Hugo Chávez as president of Venezuela. There is little to celebrate: Venezuela has been ricocheting from crisis to crisis to recent years. It is battling hyperinflation, food shortages, massive emigration, and rising crime as the Nicolás Maduro regime becomes ever more authoritarian.

The instinct of many has been to blame the bumbling Maduro. But Venezuela’s current crises are a culmination of Chávez’s politics and policies that Maduro first hid behind and then doubled down on.

It didn’t have to be like this. Between the 1960s and early 1980s, Venezuela was a beacon on the hill in Latin America. It was a precocious democracy in a region riddled with juntas. It was politically stable despite its neighbors falling to repeated coups and bloody insurgencies. And it was economically prosperous, drawing immigrants not only from around Latin America but also from Europe and elsewhere.

To be sure, mainstream political parties were not beyond reproach: Stability came in part because extreme elements were restricted from competing electorally. And my own research indicates that ruling governments cultivated loyal constituencies in part by distributing exclusionary favors rather than through sound policy.

But like so many countries in the region, Venezuela fell victim to a wave of economic crises in the late 1980s through to the 1990s. As the price of oil collapsed from over $35 a barrel in 1980 to close to $10 a barrel in 1986, Venezuela suffered economic contraction, inflation, and a major banking crisis. Real wages in 1999 were nearly 70 percent below what they were 20 years prior. The traditional party system collapsed under the weight of these crises.

When structural adjustment caused even more economic pain, Venezuelans elected an unlikely outsider who promised to deliver for the growing ranks of Venezuela’s poor: Hugo Chávez. Chávez was a career military officer who was jailed for a failed 1992 coup and, upon being pardoned and released two years later, forged ahead with building a new political party. Once he was elected, Chávez quickly set to work refashioning Venezuela’s institutional architecture through a populist approach. After demonizing traditional politicians and elites as responsible for the crisis, he won passage of a new constitution that simultaneously strengthened the powers of the executive and abolished the upper chamber of congress in 1999. He then won partisan control of the National Electoral Council in 2000. In 2004, he stacked the nation’s top court by increasing the number of justices from 20 to 32 and placing partisan allies on the bench.

Chávez then set to routing his political foes and consolidating his power. He tilted the playing field in his favor through first massively expanding the size of the state and bureaucracy and then politicizing state largesse. State employees were enticed, cajoled, and bullied into turning out to vote for Chávez in a cascade of elections during the 2000s. Chávez also crafted a range of progressive policies known as “social missions” that touched the lives of millions of Venezuelans, including programs that doled out cheap food, subsidized literacy and adult education programs, provided housing, and distributed land.

All too often, however, access to these programs became politicized. My research indicates that the ruling party politicized land grants, for instance, while political opponents fought tooth and nail to deny Chávez supporters from receiving these same benefits.

To be sure, some of Chávez’s policies produced real economic gains, lifted millions out of poverty, and generated improved health outcomes. They also dramatically reduced inequality in a region notorious for an enormous and longstanding gap between rich and poor. And Chávez nationalized key industries that had been sold off during previous governments, when the initial privatization had often shunted profits into foreign rather than domestic hands.

These policies won Chávez real and intensely loyal support among many Venezuelans. But they were not cheap, and in the end they have cost the Venezuelan economy dearly. The problem is that Chávez’s spending spree was funded by an incredible run-up in the price of oil. Between the time he was elected and the time he died in office, oil marched from $20 a barrel to around $110 a barrel. Chávez spent even beyond the country’s ballooning means, racking up enormous piles of debt.

Then, suddenly, Chávez died from cancer in 2013. His anointed successor, Nicolás Maduro, inherited not only Chávez’s political mantle but also Venezuela’s enormous overhang of debt just as the price of oil began to plummet and the windfall evaporated.

The timing could not have been worse for Maduro. Venezuela’s creditors are now banging down the door to get paid. Meanwhile, the ruling party’s social contract with voters is premised on the distribution of state largesse. Rather than swallow a bitter reform pill, Maduro has chosen to create outside bogeymen and scapegoats—the banks, elites, the United States, and Colombia, among others—to justify his tenuous rule.

This imperative has caused Maduro to wildly contort Venezuela’s political system and economy to maintain the status quo. The byzantine system of currency controls has become ever more farcical, generating an enormous black market for foreign cash and making it all but impossible to conduct international business in Venezuela. Inflation has skyrocketed to over 1 million percent. To maintain some degree of order, the government has installed widespread price controls.

But the population is seething. The health care system has collapsed, and even basic drugs are no longer available to doctors. Hunger is spreading as about 10 million people skip at least one meal a day, in many cases to help feed their children. Some 82 percent of households are now in poverty.

It is no wonder that anti-government protests have erupted in the streets. But Maduro has simply repressed them rather than addressed their root cause. He conducted an end-run around the National Assembly when the opposition won the most seats by convoking a new constituent assembly, and he has jailed his most serious political opposition. Even the military is getting nervous, and recent months have seen several abortive—and strange—takeover attempts. Maduro has therefore turned to selective military retirements and promotions, while also granting the military lucrative control over drug trafficking routes and imports. These too are practices and legacies that are inherited from the Chávez playbook but that have evolved into crueler and more arbitrary forms under Maduro.

It is not only ironic but also sad that the main winners under Chávez, everyday citizens, are today’s losers in Venezuela. But it is hard to know when their lot will improve. As Maduro’s abuses and missteps grow in number, it becomes ever riskier for him to step down or hand over power. Venezuela is now boxed in by Chávez’s ugliest legacy—dictatorship.