Corruption, Mismanagement, and Abuse of Power in Hugo Chávez's Venezuela
The windfall of oil revenues has encouraged the rise in corruption. In the approximately eight years Chávez has been in power, his government has received between $175 billion and $225 billion from oil and new debt. Along with the increase in revenues has come a simultaneous reduction in transparency. For example, the state-owned oil company ceased publishing its consolidated annual financial statements in 2003, and Chávez has created new state-run financial institutions, whose operations are also opaque, that spend funds at the discretion of the executive.
Corruption now permeates all levels of Venezuelan society. Bureaucrats now rarely follow existing bidding regulations, and ordinary citizens must pay bribes to accomplish bureaucratic transactions and have to suffer rampant neglect of basic government services. All this has been encouraged by a general environment of impunity: officers implicated in major corruption scandals have sometimes been removed from their posts, but they have not otherwise been held legally accountable.
The dramatic rise in corruption under Chávez is ironic since he came to power largely on an anti-corruption campaign platform. To truly fight corruption, the government needs to increase the transparency of its institutions and reduce its extensive involvement in the economy, something that has placed Venezuela among the least economically free countries in the world.
A summary from Cato Institute. Go here for Full Text of Development Policy Analysis no. 2 (PDF, 292 KB.)
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