Home > News > Political Revenge and Lost Earnings
111 views 2 min 0 Comment

Political Revenge and Lost Earnings

- May 7, 2009

bq. In 2004, the Chávez regime in Venezuela distributed the list of several million voters whom had attempted to remove him from office throughout the government bureaucracy, allegedly to identify and punish these voters. We match the list of petition signers distributed by the government to household survey respondents to measure the economic effects of being identified as a Chavez political opponent. We find that voters who were identified as Chavez opponents experienced a 5 percent drop in earnings and a 1.5 percentage point drop in employment rates after the voter list was released. A back-of-the-envelope calculation suggests that the loss aggregate TFP from the misallocation of workers across jobs was substantial, on the order of 3 percent of GDP.

From this paper by Chang-Tai Hsieh, Edward Miguel, Daniel Ortega, and Francisco R. Rodriguez. Over at Marginal Revolution (insert hat tip), Alex Tabarrok elaborates:

bq. Between 2002 and 2004 millions of Venezuelans signed petitions calling for a vote to remove Hugo Chavez from office. Signatories were not anonymous and during the petition campaign Chavez supporters hinted darkly that there would be retaliation. Chavez was in fact forced into a recall election, but unfortunately he won (not one of democracies better moments). After the election, the list of signatories was distributed to government agencies in an easy-to-use database. The database included the names and addresses of all registered voters and whether they had signed an anti-Chavez petition. Technology thus provided Chavez supporters the information they needed to retaliate.

Fascinating (and troubling) stuff. Tabarrok notes that Ortega has, at least for the moment, an academic position in Venezuela.

UPDATE: Here is an ungated copy of the paper.