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The Cost of Opposing Hugo Chavez

An important new working paper by Chang-Tai Hsieh, Edward Miguel, Daniel Ortega, and Francisco Rodríguez examines whether Hugo Chavez opposition voters in Venezuela paid a price for their opposition. Between late 2002 and August 2004, more than 4.7 million Venezuelans signed petitions in favor of a recall election for Chavez despite widespread threats that signers would be punished. After Chavez’s victory in the August 2004 recall election, a list of supporters of the final petition was distributed throughout the public sector in a simple software package. Using data from household surveys, the authors determine that opposition voters experienced a 5 percent drop in earnings and a 1.5 percent drop in employment rates after their names were released. The authors also conclude that the retaliatory measures may have cost Venezuela up to 3 percent of G.D.P. due to misallocation of workers across jobs. (HT: Marginal Revolution) [%comments]