How Sanctions led to Authoritarian Capitalism in Venezuela

Abstract

After a deterioration of democratic conditions in Venezuela, in 2017 the United States intensified its sanctions imposed on the regime of Nicolás Maduro. The sanctions failed to topple the regime, but they accelerated the transformation of the Venezuelan economy. To counter the sanctions, Maduro carried out substantive economic policy changes, resulting in the emergence of a neo-patrimonial and authoritarian form of capitalism. In this new model, private ownership is the rule, and economic agents operate for profit. Yet there is frequent state intervention that denies individuals’ fundamental political and economic rights, and the purpose of laws and regulations is ensuring regime survival.