Hsieh et al. on how Venezuala's government punishes the opposition (and how the opposition punishes government supporters)

Abstract: Do individuals who join the political opposition pay an economic price? We study this question using unique information on individual political activity from Hugo Chávez’s Venezuela, the Maisanta database. The names of millions of pro-opposition supporters who signed recall petitions (seeking to remove Chávez from office) during 2002-2003, and the names of progovernment supporters who signed counter-petitions, were made public. Media accounts detail how this information has been utilized by both sides: by the Government to punish opposition supporters and firms, and by the overwhelmingly pro-opposition private sector to discriminate against government supporters in hiring. After linking this political database to both national household survey and manufacturing firm data, we find that pro-opposition individuals experience significant drops in total earnings after 2003. There is extensive churning in the labor market: pro-opposition individuals disproportionately leave public sector employment and pro-government individuals leave private sector employment. Pro-opposition firms have falling total employment, less access to foreign exchange, and rising tax burdens (possibly due to selective audits). The misallocation of resources associated with political polarization between 1999-2004 contributed to a decline of 5% in TFP in our sample. To the extent other regimes can identify and punish the political opposition, these findings may help explain why dislodging authoritarian regimes often proves difficult in less developed countries.

Chang-Tai Hsieh, Edward Miguel, Daniel Ortega and Francisco Rodriguez (2007), “The Price of Political Opposition: Evidence from Venezuela’s Maisanta,” unpublished paper. Available here (from Political Science Weblog).

Klesner on social capital in Latin America

Abstract: Scholars have argued that social capital—understood to mean those social networks, norms, and trust that allow citizens to act together more successfully to pursue shared goals—encourages political participation and a more robust democratic experience. Consequently, international development agencies have made promotion of social capital a major emphasis in recent years. Using data from the 1999-2001 wave of the World Values Survey, I show that in Argentina, Chile, Mexico, and Peru this relationship holds true. Greater involvement in nonpolitical organizations does lead to more participation in explicitly political activities. Higher levels of interpersonal trust also promote political participation. However, despite encouraging results from studies of popular participation in the region, Latin American levels of organizational involvement and political participation are moderate by the standards of more mature democracies, and levels of trust are relatively low.

Joseph L. Klesner (2007), “Social Capital and Political Participation in Latin America: Evidence from Argentina, Chile, Mexico, and Peru,” Latin American Research Review 42 (2): 1-32. Available here.