By Antonio Lecuna, TELOS

The situation in Venezuela is spinning out of control. The economy is shriveling at double-digit rates, corruption is generalized, and the nightmare of hyperinflation has returned with a vengeance. What happened? The difficulties suffered during the Chavismo era were predictable consequences of the policy choices of the past six decades. These policy choices led to the populist principles underlying Chavismo, which prioritizes the struggle against individual poverty and social exclusion at the expense of institutionalization and fiscal discipline.

Populist Venezuela

With populism as a common ground, the following two distinctive periods divide the last half-century: Puntofijismo (1959–98) and Chavismo (1999–present). The Punto Fijo Pact, or Puntofijismo, became a powerful subsidized coalition between the two dominant parties, i.e., the Democratic Action Party (AD) and the Social Christian Party (COPEI), which governed without competition through compromise and shared spoils.^[1] The AD represented the workers and peasants and advocated for state intervention and land redistribution, whereas the COPEI represented the interests of the church, businesses, and the social elite.^[2]

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