Venezuela’s Two Reconstructions: Can Disaster Recovery and Democratic Transition Work Together? Part II

In the first piece of this two-part series I looked at some of the articles that had come out about Venezuela that looked at how recovery from the June 24 earthquakes might impact progress towards a reconstruction of Venezuela’s democratic institutions.

One of the premises of that piece, or rather, one of the motivations for writing it was that the announcement of a new negotiation channel between Dinorah Figuera representing the opposition and supported by the U.S. Department of State, and Jorge Rodriguez, president of the Venezuelan National Assembly on June 18, had been largely forgotten.

This actually changed the very next day as Dinorah Figuera, Marco Rubio and Jorge Rodriguez all announced that the negotiation channel would be launched on August 1. But the relaunch only puts a finer point on the issue. How will Venezuela’s recovery from this disaster work with, facilitate, compete with or undermine the effort to reach a political agreement that could recover Venezuela’s democratic institutions?

One common response among politicians and commentators is to see disaster recovery as a tremendous opportunity for economic growth and a political reset that overcomes existing conflicts. This optimism is logical given the classic Schumpeterian description of capitalism as a process of “creative destruction” that essentially thrives on innovation and continual updating of capital stocks. Furthermore, there is the reality that disasters are a time when many are able to set aside their differences to work together for the greater good.

A considerable social scientific literature shows that while there is some merit to these assumptions, whether the net effect of such a disaster on economic recovery and democratic articulation ends up being positive depends on a number of concrete, contextual factors. In what follows, I will take a look at some of the key points in this literature, linking to some of the better articles for those who want to read further.

Economic growth after disaster

The literature on the economic impacts of disasters in general, appears to be inconclusive other than the unsurprising finding that developed countries are less negatively impacted by the disaster events that occur in their territory and are better positioned to reconstruct than developing world countries (See this literature review by the Inter-American Development Bank).

However, research that breaks down disasters by type is a little more revealing for the Venezuelan case. Earthquakes are the most economically devastating kind of natural disaster. They tend to have direct effects on fewer people in a nation than, say, a drought, but are much more damaging in terms of physical capital such as infrastructure, housing and factories or other productive buildings and equipment. This effectively lowers the capital-worker ratio and that can incentivize investment, increasing the growth rate.

Importantly, this does not mean that an earthquake is a net positive for the economy. Rather, it usually decreases the GDP in the immediate aftermath due to the destruction of physical capital and associated loss of jobs. But given this new, lower starting point, it can create a higher growth rate as destroyed physical capital is reconstructed. To put it differently, a country may experience a higher growth rate after the disaster while still being poorer than before it.

A country’s capacity for rebuilding will depend on contextual factors. In his meta-analysis, Noy concludes that:

Countries with a higher literacy rate, better institutions, higher per capita income, higher degree of openness to trade, and higher levels of government spending are better able to withstand the initial disaster shock and prevent further spillovers into the macro economy. These all suggest an increased ability to mobilize resources for reconstruction. Financial conditions also seem to be of importance; countries with more foreign exchange reserves, and higher levels of domestic credit, but with less-open capital accounts appear to be more robust and better able to endure natural disasters.”

Other than a high literacy rate, Venezuela seems poorly positioned on most of these variables. Venezuela’s state institutions are weak and poorly funded. Foreign reserves are historically low, as is the availability of domestic credit.

Of course, Venezuela is in the midst of a significant economic transition that essentially means it is more open to trade and that it is being reincorporated into international financial institutions. Furthermore, international aid and greater access to its own existing resources could improve its position.

Economic sociologists push analysis beyond a simple equation of capital, reconstruction and recovery, to warn of “disaster capitalism;” processes through which existing inequalities often exacerbate or create new inequalities. Kevin Gotham has written extensively about reconstruction after Hurricane Katrina in a way that will likely be relevant to Venezuela‘s reconstruction efforts under the tutelary control of the Trump administration. In that case Gotham showed that the state shifted from direct provider of relief to service coordinator overseeing private contractors. Unsurprisingly, this created important rent-seeking opportunities with private contractors siphoning public resources, a result that would seem almost guaranteed in the context of Venezuela’s weak institutions.

Gotham also examined the results of a program that provided tax incentives for small reinvestment in the areas most affected by Hurricane Katrina. The idea was to use business incentives to speed community reconstruction. However, he showed that the great majority of the benefits “went to large businesses located in areas least damaged by the hurricanes.” Given the first come, first serve structure of the program, small businesses in highly impacted zones generally had the least bandwidth and fewest resources to take advantage of the opportunity. This too should be especially worrying in the context of Venezuela’s crony capitalism.

There is also, of course, a significant literature on the social dynamics of recovery. Eric Klinenberg has written a lot about the social organization of vulnerability. He collaborated on research that tries to break down the assumption that rebuilding and repopulation are always the best plans for recovery. He and a team of researchers looking at relief efforts after Hurricane Sandy and showed that government supported “managed retreat” was often a better option than reconstruction in a disaster affected and disaster-prone area. “Those who lived in buyout-eligible areas and relocated were significantly less likely to report worsened stress than those who rebuilt in place.”

State capacity and legitimacy

The immediate impact of a disaster such as the June 24 earthquakes is the declaration of a state of emergency which is essentially a partial regime of exception allowing the government to mobilize its response while suspending some the normal restrictions posed by institutional procedures, balance of powers and civil and political rights. This, by definition, strengthens the capacity of an executive branch and gives them extraordinary power over the political arena.

But it is not without risks. In cases in which citizens perceive a leader or government has responded well to a national emergency—think George W. Bush after 9/11—it can provide them with considerable political capital. However, when citizens think a government foundered in its response, it will have an important negative impact—think about the same George W Bush after Hurricane Katrina in which criticism of his late and clumsy recovery efforts dragged down his entire second term.

Research on Mexico shows this process with respect to the government’s poor response to the 2017 earthquakes. Overall, citizen trust in the government declined significantly. Interestingly, citizens who lived close to a disaster relief center (in other words, those who did receive relief from the government) were less likely to show a decline in perceptions of legitimacy after that same earthquake.

This, of course, is exactly what we have seen in Venezuela. While the Delcy Rodriguez government quickly declared a state of emergency and put itself at the center of the disaster response, it ended up looking like Charlie Brown striking out on three pitches with the bases loaded. A state with little capacity for doing anything other than protecting itself and extracting value from its citizens had little to offer in the first days after the earthquakes and its response has been citizen outrage.

Of course, there are also significant dangers that governments can use states of emergency or exception to cover over serious violations of human rights. With respect to the 1999 mudslides in La Guaira, Venezuelan anthropologist Paula Vasquez argued that the militarized state of exception not only caused human rights violations, it set the tone for the military’s predominance in the rest of Hugo Chávez’s presidency. However, the story so far seems to be less about an insidious military control, than one of an armed forces incapable of acting, with confused chains of command and lacking basic equipment.

Disasters and democratization

I first thought of looking at this literature when my colleague Victor Mijares published an X thread regarding this interesting article on the possibilities for “accidental democratization” as the result of a natural disaster. The authors point out that many studies actually do show positive democratizing elements in terms of freedom of expression, civil society participation and even political competition.

However, they point out that these effects are generally short-lived. To have an actual long-term impact requires the right context; there is no automatic push towards democratization. It shakes up the existing equilibrium and opens up some democratic spaces; but the direction this takes is not automatically democratic strengthening. It can just as well be authoritarian strengthening or violence.

“Natural disasters open a window of opportunity and carry the potential to bring about political change, and the direction of this change will depend on the antecedent conditions and agency after the event. The exploratory investigation of potential long-term effects showed that this window of opportunity is rather short-lived, and one should not be overly optimistic about the effect of disasters on democracy. This is especially important given previous findings that partial changes in democratic institutions might be associated with subsequent violence and conflict” (p.2179).

More broadly, the literature shows that disasters function as political accelerants that can destabilize existing equilibriums but with no necessary democratizing function. While most attention has been paid to the case of 1985 Mexico that eventually had democratizing impacts, there are other cases, in which delegitimization of the center simply creates new initiatives to entrench powerholders and marginalized competitors. The point is that disasters create political space but do not by themselves decide who will occupy it, nor whether novel configurations of power become institutionalized after the emergency passes.

Disaster diplomacy and peacebuilding

There is a closely related literature on “disaster diplomacy” that looks at whether disasters can lead to diplomatic resets and create new bilateral or multilateral links. In international terms the fact that the Rodriguez government has worked not only with the U.S. but welcomed search and rescue teams from former foes such as El Salvador and Israel certainly shows a new openness. However, Kelman argues new durable channels are rarely created. Rather, binational relations only seem to prosper when a non-disaster basis for cooperation already exists. In the longer term, a disaster’s effects tend to be overtaken by leadership changes, entrenched enmities, and historical grievances—in other words, the normal motors of political conflict.

The impact of disasters on subnational conflict is similar. Research on the differential impact of the 2004 tsunami on Indonesia and Sri Lanka is instructive. Both countries had ongoing separatist conflicts. In both cases separatist movements attempted to perform some of the relief services governments normally do, but with different degrees of success. In Sri Lanka, the Tamil Tigers were quite successful at this effort, which increased their bargaining position resulting in more intransigence on their part and more repression on the part of the government. In the case of Indonesia, the GAM struggled to provide services, in part because of the government’s ability to block those efforts. The net result was a weakening in their position and an increase in their willingness to make concessions at the bargaining table.

The parallels to Venezuela should be obvious. María Corina Machado’s attempt to return to Venezuela to organize the relief efforts clearly responded to the not inaccurate perception that a significant political moment was in play. She could have capitalized on the Delcy Rodriguez government’s foundering to show she was a viable alternative. It is not clear that she thought through the risks of this backfiring given that, without control of any public institutions, she might have spun her wheels even more than the government. Whatever the case, the Trump administration quickly put an end to that initiative and now it is Rodriguez’s game to win or lose.

Disaster diplomacy therefore does not suspend political conflict; it temporarily relocates that conflict onto the terrain of aid, logistics, reconstruction, and credit-taking. In this relocation, the Delcy Rodriguez government and Machado led opposition are as far apart as ever. Machado and her team have—not without reason—turned the earthquake response into an indictment of state capacity that highlights the need for her return. Rodriguez, without mentioning Machado by name said that it was reprehensible that there were people trying to “create social upheaval.” She also trotted out conspiracy theories about laboratories creating false news.

However, the U.S., Dinorah Figuera and Jorge Rodriguez have announced the relaunch of their plans for negotiations starting August 1. While in broad terms the configuration clearly seems intended to marginalize Machado, if and how her team might articulate with Figuera is still developing.

Conclusion

The upshot of this literature is that neither economic recovery nor democratic transition are necessarily boosted by disaster. Earthquakes can create new political and economic openings. But what these openings lead to depends less on the disaster itself than on the institutions, actors, resources, and political strategies that shape the response. June 24 earthquakes reconfigured Venezuela’s opportunity structure. What is important now is how these opportunities are addressed.

In economic terms, aid and reconstruction could generate sustainable investment, employment, and growth. But the recovery process should not be evaluated simply by how much money and other resources are mobilized, how many contracts are signed, or how fast GDP grows. Disaster recoveries are prime opportunities for rent-seeking, privatization, and selective accumulation. That danger is especially acute in Venezuela, where state institutions have long been weak and lacking transparency. If reconstruction is organized through politically mediated access, lax oversight, and opaque contracting, the result could be growth without recovery — or, worse, growth that deepens the inequalities, exclusions and dysfunctions that made the disaster so devastating in the first place.

In political terms, the disaster has already damaged Venezuelans’ tolerance of the Rodriguez government by confirming what most already knew: that this is a state with considerable coercive and extractive capacity, but limited ability to protect its citizens in moments of extreme need. However, the weakening of authoritarian power is not the same as democratization. Disasters can open space for civil society, loosen restrictions on expression, reveal government failures, and create moments of national solidarity. They can just as easily produce repression, militarization, elite maneuvering, or more conflict.

If reconstruction only strengthens Venezuela’s executive power and its relationship to the Trump administration, it might end up restoring infrastructure while weakening civil society. If instead it builds upon the notable efforts of civil society groups and permanently lifts restrictions on non-governmental organizations and independent media, reconstruction could help rebuild not only the country’s physical capital but also its civic capacity.

The earthquake response creates space for democratic re-institutionalization in a broader sense than just fair elections. Transparent aid tracking, internationally monitored needs assessments, guarantees for civil society organizations, depoliticized housing reconstruction, protection for independent media, and mechanisms to ensure that relief is not distributed through partisan loyalty networks could become confidence-building measures that connect the immediate humanitarian emergency to the process of democratic transition.

But there is a clear danger that the opposite could happen: foreign aid and access to multilateral funding could provide new inputs for existing networks and practices of patronage, clientelism and corruption, and end up reducing the impetus for democratic opening.