The Scope of State Incapacity

I just finished reading, Blogging the Revolution: Caracas Chronicles and the Hugo Chávez Era, a compilation of blog posts written by Francisco Toro and Juan Cristóbal Nagel. I’m very inclined to agree with David Frum that this marks an indispensable read for anyone with even a passing interest in the Chávez era. Though just a compilation of their posts organized thematically, the book reads very coherently, and thanks to Toro’s deep knowledge of political theory provides a much deeper look into the basis for chavismo as a movement and as a product of the peculiar Venezuelan petrostate. It also provides a litany of anecdotes about the micro-level inefficiencies and annoyances that make up so much of the failure of chavismo (notwithstanding the importance of its macro-level blunders), and, in many ways, this is what I found to be the most interesting part of the book.

The post “No Hay Material” to me sums up much of the problem, not just with chavismo, but with virtually every state-centric model that has been attempted in Latin America; the state lacks the capacity to perform even many of the barebones roles of the state (like having a reliable system for providing driver’s licenses), yet forces itself into ever more complex and highly technical spheres (like running massive, industrial companies). Latin American countries have rarely ever had capable governments (i.e. governments capable of competently fulfilling the roles assigned to it), yet since the advent of the import-substitution industrialization (ISI) era, have often had very big governments (i.e. ones that attempted to do many things).

The effect of this, in a very broad sense, was the onset of the debt crises of the 1980s and the neoliberal reforms adopted throughout the 1990s. Neoliberalism (or the “Washington Consensus” as it was dubbed following John Williamson’s influential description of development policies) essentially sought to pare back the state to only its most basic functions (national security, protecting property rights, enforcing contracts and providing education and basic healthcare) and let markets take care of the rest. This worked to a degree, but often states were, ironically, too weak to effectively become smaller. Botched privatizations, failures to reform labor codes or refocus public expenditures (i.e. cutting public health and education rather than face down entrenched public sector interests) left the impression on many that neoliberal policies were worse than what had proceeded them. Francis Fukuyama makes this point clearly “The Imperative of State-Building”—the relative size of the state is much less important than how strong it is. So rather than having a small but effective state, Latin America switched out a big, ineffective state of a smaller, ineffective state.

Unfortunately, in many parts of Latin America, people didn’t see this failure as an impetus to focus on improving state capacity. Rather the problem as many saw it, was not the quality of the state, rather that it wasn’t doing enough. Venezuela is the quintessential example of this. Even though, as Toro and Nagel illustrate so eloquently, the problem in Venezuela was that the state had become a massive patronage network where competence professionalism mattered little compared to pleasing the right people, the Chávez solution was simply to extend that same state deeper into every aspect of national life. The effect is a state that does a little bit of everything terribly instead of a few things really well.

To my mind, the best example of a country that did improve state capacity is Chile. This is not to say that the massive downsizing of the non-security segment of the Chilean state was not a painful transition, it certainly was (not even counting the serious abuses committed by the Pinochet regime). The point is that now Chile has the least corrupt and most professional bureaucracy in Latin America. This has allowed Chile to very effectively manage its economy and implement social programs that have left it with the lowest poverty rate in the region and a two-decade streak of growth that no other country in the region can even come close to matching.


2 thoughts on “The Scope of State Incapacity

  1. Chile has plenty of good points, but it relies way too much on an incompetent, avaricious and corrupt private sector. When things go wrong, the state is so feckless and weak that it has no plan B to step in and replace a crappy contractor with one that has proved itself competent. Highways go unpaved for years after contractors halt work and leave, walking off with the money for the project. Voucher schools fake their books and fail to teach students but continue to get state funding. The private water system in Santiago gets turned off for a day to millions of customers because of routine mudlsides. Sure, the state gets to claim plausible deniability — but that doesn’t mean you and I have to accept such BS.

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