I argued that President Chávez is building a political machine in Venezuela, not unlike the machines that used to riddle American politics. Since Venezuela is obviously not a communist country, or even heading that way, I called it “Daleyism.”
Anonymous responded: “This is an absolutely retarded phrase. There is not a shred of evidence that this is happening in Venezuela. I’ve lived here for over three years, and know all kinds of families that do not belong to the PSUV, that absolutely hate Chavez, and have voted against him repeatedly, and they still have full access to ALL the benefits of the government, including state health care, education, subsidized food, pensions, etc. etc.”
Anonymous, however, is wrong.
How do I know that? Simply put, because the Venezuelan government provided us with the data we need to see Daleyism in action. In 2003, the opposition collected 3.5 million signatures calling for a recall election under the 1999 constitution. In 2004, the government put all 3.5 million names on the web, including birthdates and addresses. Chang-Tai Hsieh, Ted Miguel, Daniel Ortega (not this one, another Daniel Ortega), and Francisco Rodríguez realized that they could take the government’s list and check it against the Venezuelan household and industrial surveys. The surveys follow 150,000 people twice a year, and include birthdates, gender, and residence, enough to match 87,100 of them against the list. The industrial surveys track firms, but the identity of the firms’ board members is public. Access to this data, then, let them see what, if anything, happened to the incomes and employment of signers versus non-signers.
People who signed the recall petition saw a 4% drop in their incomes relative to non-signers. Why? Easy: there is a big relative drop in public-sector employment of signers (4.3%), and signers who lost their jobs were more likely to have to move into the informal (and badly-paid) sector. Now, Venezuela is a politicized society: government supporters (ID’d as the signers of a counterpetition) saw an even bigger relative drop in their private-sector employment (5.9%), but they didn’t see a drop in their income, because they moved into the public sector.
Richard Joseph Daley would be impressed.
But Hugo Chávez is better than Richard Daley; no, he’s almost as good as Richard Nixon. Remember my last post about Venezuela? How Chávez has improved tax collection? Well, as any American who remembers the Nixon administration knows quite well, a politicized and effective tax authority can be a very useful part of a machine. Turns out that companies whose board members signed anti-government petitions saw a 33% relative increase in their assessed taxes. (US$305,360 versus US$229,020.) That’s the “ugly” part of Venezuela’s better tax administration.
They also received 51% less subsidized foreign exchange. In a country where the government rations foreign exchange at subsidized prices, that’s one hella competitive disadvantage.
Brilliant machine politics! Part of me can’t help but be impressed, although I suspect, given my general humorlessness about legal corruption here at home, that feeling would go away right quick were I in fact Venezuelan.
More later on the misiones and PDVSA’s social spending. But right now, back over to you, Anonymous.