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3. Effective Governance
3.1 Democratic Representation
3.2 Lack of Corruption
3.3 Efficient Administration
In-Country Assessment Information

3. Effective Governance

Goal – A popularly elected government free of corruption and functioning efficiently and transparently enough to guarantee economic freedom to individuals and support equitable property markets

 

3.1 Democratic Representation

Core Question: Does the country have free and open elections for the leadership and can citizens engage in free enterprise? Yes and no. Venezuela does hold free elections but free enterprise is not recognized. Economic activity is strictly regulated and economic decisions are mostly controlled by the government.

Source: The Pando Daily 2013, Venezuela’s continued attack on free enterprise
http://pando.com/2013/11/28/venezuelas-war-on-free-enterprise/

3.1.1 Voice & Accountability

3.1.1.1 Are citizens able to elect their government and do they enjoy freedom of expression, association and a free media? No. However citizens do have the right to free elections but free speech is not a right (therefore media is heavily controlled), and could potentially have an extreme impact on elections. Venezuela was had a percentile rank of 22.27 out of 100, and is therefore very weak and trending ↑ from 2011 (20.66) but trending ↓ from 2010 (23.22).

Source: Worldwide Governance Indicators 2012, World Bank
http://info.worldbank.org/governance/wgi/index.aspx#reports
Source: Freedom of the Press 2013, Freedom House
http://www.freedomhouse.org/sites/default/files/Freedom%20of%20the%20Press%202013-%20Infographic.pdf
Source: The Economist Intelligence Unit, Democracy Index 2013
http://www.eiu.com/Handlers/WhitepaperHandler.ashx?fi=Democracy_Index_2013_WEB-2.pdf&mode=wp&campaignid=Democracy0814

3.1.1.2 Are citizens free to form political and civic organizations free of state interference and surveillance? No, Weak. Venezuela scored 5.88 out of 10 in Civil Liberties, and had an overall ranking of 97. While elections are ”free,” the restrictions on media have created quite an impact on political and civic organizations.

Source: The Economist Intelligence Unit, Democracy Index 2013
http://www.eiu.com/Handlers/WhitepaperHandler.ashx?fi=Democracy_Index_2013_WEB-2.pdf&mode=wp&campaignid=Democracy0814

3.1.2 Public Information

Overall Ranking is 59, very weak.

3.1.2.1 Are there regulations governing conflicts of interest in the executive and legislative branches of government? Yes. The Conflicts of Interest Safeguards & Checks and Balances for the Legislative Branch has a score of 54 (Very Weak) and The Conflicts of Interest Safeguards & Checks and Balances for the Executive Branch has a score of 52 (Very Weak).

3.1.2.2 Can citizens access legislative processes and documents? Yes, Venezuela scored 60. Citizens can request and be granted government information. Not at all times is the information given or of high quality. There is no guarantee that information will given.

Source: Global Integrity Report 2011
https://www.globalintegrity.org/global/report-2011/venezuela/

3.1.3 Market Intervention

Overall Ranking of 175, Very Weak. Trend ↓ (174, 2013).

3.1.3.1 To what extent does the government intervene in the private sector including state owned industries? Venezuela scores a 51.8 out of 100. The higher the score, the less intervention. In 2013 Venezuela scored 50.6 so the trend is ↑. However, the score has dropped off significantly since 2012 when it was 67.3.

3.1.3.2 To what extent does the government control prices? Venezuela scored a 49.7 for monetary freedom, or a country ranking of 180, thus very weak. Venezuela had a score of 47.3 in 2013, thus a slight positive trend ↑. The lower the number the more government control. Therefore, 0 means completely repressed and 100 means absolutely free. Monetary freedom has been quite repressed in Venezuela for the last 5 years.

Source: Index of Economic Freedom 2014– Heritage Foundation
http://www.heritage.org/index/country/venezuela

 

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3.2 Lack of Corruption

Core Question: Is the public sector transparent and free of corruption? No, extremely weak. Venezuela is very corrupt and has been for hundreds of years, dating back to the 1800’s. Venezuela continues to rank as one of the highest corrupt countries in Latin America.

Source: El Universal 2013, Transparency International Report
http://www.eluniversal.com/economia/131203/venezuela-ranked-as-the-most-corrupt-country-in-latin-america
Source: Cato Institute 2013, Corruption in Venezuela
http://www.cato.org/publications/commentary/corruption-democracy-venezuela

Transparency

3.2.1   What is the perceived level of corruption in the country? Venezuela is very corrupt and has a ranking of 160 out of 177 counties with a score of 20 out of 100 (100 being clean and 0 being very corrupt). Trend is ↑, with a 2012 score of 19.

Source: Corruption Perception Index 2014, Transparency International
http://www.transparency.org/cpi2013/results

Integrity Mechanisms

3.2.2   A National Integrity System is a framework where the principle institutions that contribute to integrity, transparency and accountability in a society can address corruption in a systematic way. Does a National Integrity System exist? No, very weak. No effective anti-corruption program exists to address corruption in a systematic way. Venezuela has suffered great turmoil over the last several months and has been asked by Transparency International to “uphold the right of access to information and the freedom to protest amid increasing violence and information blackouts in recent days,” (Transparency International 2014). “The lack of independent institutions able to monitor the government’s activities, allowing it to be held accountable, makes the country extremely vulnerable to corruption,” (Transparency International, 2014). There is no oversight in Venezuela to hold those committing corruption accountable.

Source: Transparency International Calls on the Venezuelan Government to Respect Access to Information and Freedom of Movement 2014, Transparency International
http://www.transparency.org/news/pressrelease/transparency_international_calls_on_the_venezuelan_government_to_respect_ac

Extralegal Payments

3.2.3   How often do companies report that officials and/or companies expect additional payments to “expedite” services or gain business? Bribery depth percentage in Venezuela is 5.5% (Very Strong), this is less than the average of Latin American countries (6.5%). 23.6% of firms in Venezuela are expected to give gifts to public officials to “get things done”.

Source: Enterprise Surveys, World Bank, 2010
http://www.enterprisesurveys.org/Data/ExploreEconomies/2010/venezuela

 

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3.3 Efficient Administration

Core Question: Are quality services and qualified civil servants available to the public through the efficient use of public money? Yes but it is very weak. Civil servants are not always reliable and are usually controlled by the government. “New public service comprises exclusively members of the government party or those who support its policies,” (Brewer-Carias, Page 399-400).

Source: Dismantling Democracy in Venezuela, The Chavez Authoritarian Experiment by Allan R. Brewer-Carias, 2010)

Size of Government

3.3.1   What is the size of government relative to GDP? Total government spending in Venezuela is 40% of GDP, and thus considered weak. “Public debt levels continue to rise, reaching close to 60% of GDP,” (Heritage.org).

Source: Index of Economic Freedom 2014, Heritage Foundation
http://www.heritage.org/index/country/venezuela#limited-government

Civil Service

3.3.2   What is the quality of the civil service? Venezuela scores 51 out of 100, strong. The previous year for Venezuela was 2009, and scored a 53 for “administration and civil service.” Trend ↓.

Source: Global Integrity Report 2009 & 2011
https://www.globalintegrity.org/global_year/2011/
https://www.globalintegrity.org/global/the-global-integrity-report-2009/venezuela/

Government Effectiveness

3.3.3   What is the overall effectiveness of the government? Very Weak, Venezuela has a percentile ranking of 12.92 (2012) out of 100, trend ↑ since 2011 (9.95) and 2010 (12.44). The Venezuelan government has lacked effectiveness for several years. In recent months several anti-government protests have occurred. There has been record high inflation and lack of goods.

Source: Governance Matters 2012, World Bank
http://info.worldbank.org/governance/wgi/index.aspx#reports

Source: Venezuela Country Brief, Austrian Government Department of Foreign Affairs and Trade
http://www.dfat.gov.au/geo/venezuela/venezuela_country_brief.html

 

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In-Country Assessment Information

FQ 17. What is the actual experience of small businesses in dealing with the government, particularly the number and complexity of required procedures and the prevalence of extra payments to facilitate services such as licenses or permits?