Backsliding on Good Governance: the Venezuelan case

During the last ten years, Venezuela has experienced a stark regression on its road to good governance, performing negatively in most indicators. Such backsliding can be attributed to the poor governance the country has undergone during its current administration, as well as due to falling oil prices worldwide which has severely damaged the country’s single-commodity-centered economy. A number of corrupt and anti‐democratic processes have also led to this negative transition, that instead of pushing forward the once regional leader, has only pushed it backward. Across this essay, we aim to analyze, through a historical summary of the past twenty years using a process-tracing methodology, the main events in Venezuela that have led to the deterioration of the country’s good governance indicators.

Transition to bad governance in Botswana

The celebratory rhetoric associated with Botswana is that of an “African miracle”, highlighting its exceptionality in being able to transition towards a democratic state after it obtained independence from colonial power in 1966. Against all odds, it was able to develop a functioning multi-party democracy with relatively free and fair elections, rule of law, and universal franchise. Several studies underline the structural and actionable causes that allowed democratic principles to
rapidly spread: maintenance of pre-colonial political institutions, limited colonial exploitation by the British, an endowment in natural resources, effective economic management, and enlightened leadership. However, the most senior democracy in the African continent is undergoing a period of uncertainty and slowdown. An analysis of the indicators of good governance reveals how Botswana is not proceeding towards the successful path on which it embarked more than four decades ago, rather it is downgrading in several components over the 2008-2018 period.

Natural Resource Revenues, Corruption and Expropriation

This paper develops a formal model that looks at the mutually endogenous determination of foreign direct investments in natural resource-rich countries, the decision of host governments to expropriate these investments, and the level of corruption. Higher resource production makes expropriation more attractive from the perspective of national governments. A low expropriation risk is in turn an important determinant of international investments and is therefore associated with high levels of production. Moreover, resource production leads to high levels of corruption. Theoretical results are confirmed by estimations of a simultaneous equation model for 50 resource-rich countries in which the authors endogenize expropriation risk, corruption, and resource production.