Wednesday, March 6, 2013

Chavez By the Numbers


With the passing of Hugo Chavez, there is much discussion of his legacy.  Leftists are defending him as a great champion of the poor, and more-or-less everyone else condemns him as a demagogue who mismanaged the country.

I prefer to form my views in light of the data, and to that end I present two graphs.  Since Chavez was in power from 1999 to 2013, I make my graphs from 1990 to the most recent available data (either 2011 or 2012, depending on source).  This allows us to see the prior context as well as the Chavez era.  Then I compare Venezuela to four leading Latin American countries - Argentina, Brazil, Chile, and Mexico, so we can compare how Venezuela was run to somewhat comparable economies.  None are a perfect match of course.

First we can look at GDP/capita (from the IMF, here taken at purchasing power parity to facilitate international comparison, and with 1990=1):


On this measure, Venezuela's performance was mediocre, with something of a crisis occurring following Chavez's coming into power in 1999, and the lost ground never made up.  Relative to its peers, Venezuela had the weakest performance.  This is particularly notable in light of the fact that Venezuela is a significant oil exporter and should have benefited from high oil prices.

One might argue that, as a champion of the poor, it's unfair to compare Chavez on the basis of average GDP, since he was focussed on making the lot of the most vulnerable members of society better off, rather than on helping the enterprises of the rich (which might have contributed the most to GDP).

To that end, I looked at the life expectancy at birth of females (from the World Bank), which is a decent way to summarize the overall welfare of the entire society.  If infant mortality is low and healthcare is good, and women are treated decently, this indicator could be high even in a society which doesn't pander to its wealthy elite.  For example, European countries tend to have somewhat higher life expectancies than the US, even though their GDP/capita is generally lower.

Here are the data for the same sample of Latin American countries:


Again, Venezuela's performance under Chavez is mediocre.  All the peer countries gained more ground during the 1999-2012 timeframe than Venezuela, and none experienced a setback comparable to what happened to Venezuela in the early years of Chavez's rule.

If one was to live in Latin America during this period, Chile was clearly the place to be - it did outstandingly better on both indicators than all other countries.  Indeed Chile's life expectancy for women is better than that of the United States (80.7 in 2010), and comparable to that of European countries.  Chile joined the OECD in 2010.

Thus criticism of Chavez as a demagogue who mismanaged the country appears to have some basis in fact.

9 comments:

Fred said...

Not say that Chavez didn't mismanage the economy, but I wonder if differences in data collection and reporting might be responsible for some of the drop off, especially for life expectancy.

Woolsey

Hypnos said...

I think this is more like it:
http://data.worldbank.org/indicator/SI.POV.NAHC/countries/VE?display=graph

Also it would probably be fairer to look at data starting in 2003, after the US-backed coup attempt and oil strike.

adamatari said...

There are some serious issues in the country, and Chavez did mismanage many things. He also acted like a dictator a lot of the time, hung with a bad crowd, etc.

That said, if you had used the Gini index, or looked at malnutrition, or illiteracy... All of these things improved substantially under Chavez. It would be interesting to take apart that life expectancy chart and see how it got that way. But Venezuela has other paradoxical indicators - rising crime despite falling poverty is one I heard about.

The existence of these paradoxes suggests problems. They also unfortunately create a situation where Venezuela becomes a Rorschach test, with each group bringing it's own statistics to the table.

That said, I don't find that your graph really answers the question of whether the poor are better off in Venezuela now than they were before, or whether they are better off in comparison to other countries in South America. Colombia, next door, had similar problems with poverty as Venezuela, but the lot of the poor there has not improved nearly as much.

In any case, claims of Chavez's misrule seem as exagerrated as claims of his effectiveness. "Mediocre" is a far cry from what many claimed about him, especially in the US. To this day I remember when the networks were cheering the attempted coup against him. Yet he was democratically elected several times over.

Stuart Staniford said...

Hypnos: The data on poverty rate appear to be very sparse and don't facilitate a comparison between Venezuela and its neighbors.

Muhammad said...

According to the Center for Economic Policy and Research Chavez did manage to reduce poverty by 50% and extreme poverty by 70%. However he did mismanage the economy despite Venezuela's oil wealth, Venezuela's budget deficit is between 15% - 20% of GDP.

http://transcripts.cnn.com/TRANSCRIPTS/1301/13/fzgps.01.html

peaknik said...

Hi, I just found this, The Chávez Administration at 10 Years: The Economy and SocialIndicators, by the Center for Economic and Policy Research

http://www.cepr.net/documents/publications/venezuela-2009-02.pdf

Hypnos said...

This article has a good summary of the pros and cons, noting for example that Venezuela had the third fastest improvement in its Human Development Index ranking in the world in the past ten years:
http://www.businessweek.com/news/2013-03-07/venezuelans-quality-of-life-improved-in-un-index-under-chavez

It also has the lowest inequality in Latin America - which would raise the HDI even more if it was also adjusted for inequality, as it is for some countries.

This paper argues that Venezuelan progress is in fact sustainable:
http://www.cepr.net/index.php/publications/reports/venezuelas-economic-recovery-is-it-sustainable

Note for example how inflation, which is always claimed as a failure of Chavez, was running above 100% when Chavez took power, and is now down to 15%-20%.

I always found US coverage of Chavez extremely skewed, as he openly challenged US supremacy in Latin America. Given that the US role in that region has been overwhelmingly negative, that can only be a good thing.

John Moore said...

The Guardian DataBlog has a great article on this (http://www.guardian.co.uk/news/datablog/2012/oct/04/venezuela-hugo-chavez-election-data).

It seems Chavez actually improved Venezuela and its people's lives substantially since the day he came to power. He was anything but a demagogue who mismanaged his country.

Just a few quick facts:

* Unemployment has dropped from 14.5% of the total labour force in 1999 to 7.6% in 2009.

* GDP per capita has risen from $4,105 to $10,801 in 2011

* Poverty has decreased - in 1999, 23.4% of the population were recorded as being in extreme poverty, this fell to 8.5% in 2011.

* Infant mortality is now lower than in 1999 - from a rate of 20 per 1,000 live births then to a rate of 13 per 1,000 live births in 2011

etc.

Venezuela also ranks 9th on the 2012 Happy Planet Index with subjective well-being experience of 7.5, way above most western countries.

Luis García said...

Don't count on me if you look for a defense of Chavez's rule. However, I find your conclusion about GDP growth somehow unfair.
Prior to Chavez, i.e. from 1991 to 1999, Venezuela's economy grew slower than that of any of the other four countries and somewhere near 25% of those other four average (guessing from the graph).
On the contrary, under Chavez, i.e. from 1991 to 2012, it grew faster than Mexico's and somewhere near 75% of the other four average (guessing again). So GDP growth seems to have improved with Chavez.
This is not championship of any kind but, as another comentator said above, mere mediocrity. But that mediocrity seems to be a significant improvement relative to the prior situation.