The Venezuelan Crisis and the Political Costs of Reforms

by Pablo Duarte*

Venezuela is in deep political and economic crisis. According to Reuters – quoting a leaked document from the Venezuelan Central Bank – output fell 19% and prices increased 800% during 2016. Even though the “Socialism of the 21st Century”, the political program initiated by former President Hugo Chavez, has been losing support in other countries, in Venezuela it is still alive. The government has responded to people’s discontent with violence rather than with economic reforms. One reason for the reluctance to reform can be that the government would have to assume high political costs if it wanted to solve the current economic crisis.

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The Socialism of the 21st Century is on its Way out!?

by Andrea L. Tapia-Hoffmann*

Rafael Correa was inaugurated as President of Ecuador in 2007. He joined forces with Chavez to promote the idea of a so-called “Socialism of the 21st Century” in Latin America. After Chavez’s death in 2013, Correa became the self-proclaimed leader of the movement. Because the new socialism has led to severe problems, it has recently lost support. Latin America is moving to the right. If a majority of Ecuadorians vote against Correa’s ruling socialists on April 2 this year, the entire project should be on its way out. The odds are good. The governments’ authoritarian behavior and the slowdown of the economy have eroded the popularity of Correa’s political party.

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