September 29, 2006

The Antidote to Petropopulism

Here's a question I've been mulling: is Mi Negra, Manuel Rosales' plan to hand out a portion of Venezuela's oil rents directly to poor families via a debit card, a populist proposal?

That, certainly, is how Vicepresident José Vicente Rangel, feigning unawareness of the massive glass palace chavismo inhabits on this topic, described it: "pure populism." Is that so?

Petropopulism: as Venezuelan as papelón con limón
In Venezuelan political economy, populism has a specific meaning. It describes the quid pro quo whereby politicians dole out oil rents selectively to their supporters in return for, well, political support. This is what I've called the Petrostate Trick: "turning oil money into political power - or, more precisely, turning control of the state’s oil money into control of the state - in a self-perpetuating cycle."

That chavismo's power is based largely on this sort of petropopulist arrangement seems really, really obvious to me. But that's nothing new: every Venezuelan government since at least the Trienio (1945-1948) has sustained its support through some twist on the petrostate trick. Medina and Pérez Jiménez had the Banco Obrero, CAP had Corpomercadeo and Chávez has Mercal. The cronies have changed over the years; the underlying mechanism hasn't.

The system works by distributing oil rents selectively, channeling the money primarily to your own political supporters. In this way, you set up an incentive structure that helps perpetuate the party in power, rewarding support for the official line and punishing dissent.

Mi Negra's sotto voce radicalism
By this reckoning, Mi Negra is not a populist proposal. Just the opposite: as billed, it constitutes a radical challenge to the deeply entrenched petropopulist mindset.

If oil rents are distributed following objective rather than political criteria, the incentive structure that underlies the petrostate model crumbles. By delinking recipients' political views from their claim on oil rents, a properly implemented Mi Negra would represent the start of a truly revolutionary change in Venezuela's political economy and political culture.

Under a scheme like Mi Negra, people would stake their claims on the nation's oil rents as citizens, not as political clients. And, all the prickly implementation issues aside, this is its most appealing feature. It would end the indignity too many poor Venezuelans now suffer of having to pimp out their political beliefs for a Mision check. It would end the implicit threat that now hangs over too many transactional chavistas that to Think Different could mean risking your livelihood.

For all of Chavez's revolutionary rhetoric, the fact is that delinking political support from oil rent distribution would constitute a far more radical break with the country's political traditions than anything his government has done in eight years.