Clientelism and Social Funds: Evidence from Chávez's Misiones

Latin American Politics and Society, Winter 2007 by Penfold-Becerra, Michael

ABSTRACT

The latest president in Latin America to adopt social funds on a large scale as an integral part of his government program has been Hugo Chávez Frías of Venezuela. Based on the literature on clientelism and social funds in Latin America, this article finds that Venezuela's latest experiments with social funds were influenced by political variables. It uses empirical data from the distribution of resources for some of the subnational misiones programs to show how, given increased levels of electoral competition and weak institutional constraints, the government used these funds clientelistically, even while distributing oil income to the very poor. Chávez's misiones served two very different purposes: to manipulate the political context and to distribute funds directly to the low-income population.

During the last several years, multilateral organizations have encouraged different governments in Latin America, regardless of their democratic credentials, to address income inequality by designing special funds that target poor sectors of the population (Siri 2000; Cornia and Reddy 2001). These social funds have been conceived as mechanisms needed to provide social insurance and reduce economic uncertainty in those sectors of the population negatively affected by the transitional costs of a more integrated international economy (IADB 2004).

By protecting the poor, resources from social funds attempt to compensate for the costs of adverse external shocks, as well as to provide excluded sectors of society with the opportunities to access financial and human capital, such as credit, education, and health care. These types of funds are also believed to respond more swiftly than formal budgetary allocations to social needs because they can address bottomup local demands and bypass heavy, strict, and often inefficient bureaucracies (Siri 2000). Occasionally, these funds have also helped to encourage synergies between the different levels of government, nongovernmental organizations, and even the private sector in the administration of social projects.

In Latin America, however, social funds can and have been diverted by political interests. Under certain political circumstances, they can help either to "buy votes" for re-election purposes or to build political constituencies that strengthen support for the government. It has even been claimed that during the 1990s, the use of these types of social funds encouraged the rise of neopopulist leaders in the region (Roberts 1995; Weyland 1999). Social funds can thus become politicized and subject to clientelistic practices. Detailed descriptions and explanations have been given to show how social funds under Carlos Salinas de Gortari in Mexico, Carlos Menem in Argentina, and Alberto Fujimori in Peru where openly driven by political considerations (Molinar and Weldon 1994; Bruhn 1996; Graham and Kane 1998; Schady 2000; Magaloni et al. 2002; Weitz-Shapiro 2005). Even social funds like PROGRESA under the Ernesto Zedillo government in Mexico, a program praised internationally for appropriately targeting the extreme poor, apparently succumbed to the temptation of allocating resources using political rather than purely technical criteria (Rocha-Menocal 2001).

The latest politician in Latin America to adopt social funds on a large scale as an integral part of a government program has been Venezuelan president Hugo Chávez Frías. Chávez is a former paratrooper who, after leading a failed military coup in 1992, was democratically elected in 1998. His distributive platform promised to end what he portrayed as a corrupt party regime, which had dominated politics during the previous 40 years and had left the country with a large social deficit.

Once elected, Chávez dismantled the existing social programs designed under previous administrations and created a Unified Social Fund (FUS in Spanish), directly managed by the armed forces, which, according to statements by government officials, soon proved to be corrupt and inefficient. Under electoral pressures-particularly the possibility that his presidency might be revoked by a referendum called by the opposition in 2004-and taking advantage of the oil windfall provided by high oil prices at the time, Chávez tapped into resources from Venezuela's state-owned oil company, Petróleos de Venezuela (PDVSA), to finance social programs that he labeled "missions to save the people."1

These missions (misiones in Spanish) started out to provide health care in the poorest areas in the country, particularly the shantytowns of the urban centers (Misión Barrio Adentro). After that, a series of socalled misiones provided various social services, ranging from teaching literacy in rural and urban areas (Misión Robinson) to helping poor adults study for a high school degree (Misión Ribas). The government also focused on the need to provide citizens with identification cards (Misión Identidad). ID cards were required to access the cash transfers granted to people to encourage their participation in the social programs, and also required by the National Electoral Council for voting. After the two-month strike by PDVSA's management and oil workers in 2003, the Chávez administration designed another program to distribute subsidized food directly to the poor by creating discount stores throughout the country (Misión Mercal). Yet another government program aimed at creating jobs through the promotion of cooperatives (Misión Vuelvan Caras).