The Price of Political Opposition: Evidence from Venezuela's Maisanta

34 Pages Posted: 11 Sep 2008 Last revised: 14 May 2009

Chang-Tai Hsieh

University of Chicago - Booth School of Business; University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Daniel Ortega

Instituto de Estudios Superiores de Administración (IESA)

Edward Miguel

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Francisco R. Rodriguez

Wesleyan University - Department of Economics

Date Written: April 1, 2009

Abstract

During 2002-2004, the identities of millions of Venezuelan voters who had signed petitions to recall President Hugo Chavez or opposition politicians from office were made public by the government. We match these petition signers to manufacturing firm owners and household survey respondents to measure the economic effects of political expression. Put simply, do individuals who join the political opposition pay an economic price? We find that pro-opposition individuals see a fall in their income and disproportionately leave public sector employment, while pro-government individuals leave private sector employment. Pro-opposition firms show rising tax burdens, falling profits, and less access to foreign exchange, while the marginal products of capital and labor in pro-government firms decreased. The misallocation of resources associated with political polarization after 2002 contributed to a 6% decline in TFP in our sample of firms.

Suggested Citation

Hsieh, Chang-Tai and Ortega, Daniel and Miguel, Edward and Rodriguez, Francisco R., The Price of Political Opposition: Evidence from Venezuela's Maisanta (April 1, 2009). Chicago Booth Research Paper No. 08-14. Available at SSRN: https://ssrn.com/abstract=1266210 or http://dx.doi.org/10.2139/ssrn.1266210

Chang-Tai Hsieh (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Daniel Ortega

Instituto de Estudios Superiores de Administración (IESA) ( email )

C/ Campo Santo de los Mártires, 7
San Bernardo 1010, Caracas, Córdoba 14004
Venezuela

Edward Miguel

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Francisco R. Rodriguez

Wesleyan University - Department of Economics ( email )

238 Church Street
Middletown, CT 06459-0007
United States

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