Friday, March 21, 2008

You've read the BS... now read the rebuttal 

A few weeks back Francisco Rodriguez published an article in Foriegn Affairs magazine belittleing the changes under Chavez as "An Empty Revolution" which claimed to show that the Chavez administration hasn't accomplished much of anything, especially when the oil windfall it has benefited from is taken into account.

Even to the non-economist such as myself it appeared to have some pretty obvious flaws. First there were lots of assertions but little in the way of hard numbers and statistics. Some of the calculations seemed bogus as for example when he didn't realize that poverty statistics in Venezuela don't include in-kind benefits such as low cost food and health care. Others seem cherry picked as when he showed statistics that didn't cover Chavez's full term but rather only a sub-set of years or analyzing the health system based only on minor and seldom used health metrics.

But while I could sense the numbers weren't right it fell to the trained economists at the Center for Economic and Policy Research to show that in fact many of the numbers were either manipulated or just plain wrong. Their full analysis can be found here and really should be read by all.

Just to give a snippet of what they reveal, in Rodriguez's article he cliams that inequality, as measured by the Gini co-efficient, had gotten worse under Chavez. They did that by only looking at that co-efficient between 2000 and 2005 (even though Chavez came to office in 1999 and we are now in 2008). When the CEPR economists did what any rational person would do, look at how the Gini co-efficient changed between 1999 and 2007, they found that it indicated a very substantial DECLINE in inequality in Venezuela.

I wonder if the deans and other faculty at Wesleyan University are aware of what patently false and dishonest drivel their collegue, Dr. Rodriguez, publishes?

In summary, the authors conclude:

While is is usefull to discuss the imbalances in the Venezuelan economy and what might be done to correct them, there is little use in presenting such a grossly exaggerated picture of an economy as if it were on the brink of ruin, and pretending that Venezuela's poor have not benefited from the economy's most rapid expansion in decades, and from the government's large increases in social spending and programs.



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