Redistributive populism versus strengthening property rights: A comparative study of Venezuela and Zimbabwe, and Uruguay and Botswana

van Zyl, Ernst Jacobus (2021-03)

Thesis (MA)--Stellenbosch University, 2021.

Thesis

ENGLISH ABSTRACT: Liberal democracies are commonly lauded for their accomplishments in maintaining democratic stability, as well as steady trends of decreasing poverty. The general observation has been that liberal democracies have exhibited impressive records of economic growth, accompanied by relative political stability. However, as the 21stcentury has progressed, issues such as inequality persist and new political trends emerge. The liberal democratic paradigm is evidently coming under increasing scrutiny and in many cases challenged. Many of these challenges originated in a new wave of populism, of both a left-wing and right-wing variety, which are gaining a foothold and momentum in the Western world, as well as in the global South. While the Western democracies are witnessing a resurgence in right-wing populism, the global South is being increasingly characterised by the rise of left-wing populism. This thesis focuses specifically on case studies in the global South and thus on a populism of the left built on a platform of radical redistribution. The thesis attempts to answer the following research question: Is redistributive populism a sustainable long-term policy path for economic growth, poverty and inequality reduction, and for democratic consolidation, or is protecting and enforcing property rights a better alternative to achieve these aims? In order to answer this question, four case studies were compared and contrasted: Venezuela and Zimbabwe were selected as cases where redistributive, left-wing populist regimes have prevailed and under which property rights were substantially eroded; Uruguay and Botswana represent cases of the protection and enforcing of property rights.This qualitative thesis utilises a comparative case study research design, using desktop analysis. In Venezuela and Zimbabwe a decline in support for the incumbent party was the catalyst for increasingly radical redistributive populist platforms. This thesis found that the redistributive populist cases of Venezuela and Zimbabwe achieved initial improvements in poverty reduction, but that as their redistributive policy paths became increasingly radicalized, these positive conditions stagnated and eventually regressed. Under these redistributive populist regimes, liberal democratic checks on power were weakened or eliminated, and their radical policies led to prolonged periods of substantial economic contraction and hyperinflation. When the Chávez and Maduro regimes in Venezuela, and the Mugabe regime in Zimbabwe, failed to deliver on their populist promises and their economies faltered, their support dwindled further, resulting in an increased radicalization of their redistributive policies and escalated suppression of the opposition in order to retain power. The cumulative result was that support for democracy as the preferable system significantly declined amongst the populations of their countries. Their democracies therefore deconsolidated through declining support for democracy and the erosion or elimination of liberal democratic institutions. . In contrast, the two cases where property rights were protected and enforced, namely Uruguay and Botswana, achieved impressive declines in poverty levels and sustained relatively high levels of economic growth. Protecting property rights contributed significantly to their investor-friendly economies and attracted large amounts of foreign direct investment. Venezuela and Botswana were both were rich in one major commodity, but in contrast to Venezuela, where the regime nationalised the oil industry, Botswana negotiated a deal with the diamond industry on the basis of respecting its property rights. The result was that the diamond industry became the engine of the Botswana economy, as it split the revenues with the government, which then re-invested in infrastructure, education and healthcare, and diversifying the economy. Both Uruguay and Botswana are internationally recognised for their strong liberal democratic institutions and stable democratic records, and support for democracy in both countries is significantly high. Their democracies have been able to maintain their level of consolidation, as well as build on it. Yet none of the four cases examined has shown a radical reduction in their Gini coefficients, which is a phenomenon requiring further research.

AFRIKAANSE OPSOMMING: Liberale demokrasieë word gewoonlik geprys vir hul prestasies om demokratiese stabiliteit te handhaaf, sowel as die bestendige neigings van dalende armoede. Die algemene waarneming was dat liberale demokrasieë indrukwekkende rekords van ekonomiese groei getoon het, gepaard met relatiewe politieke stabiliteit. Namate die 21ste eeu egter gevorder het, duur kwessies soos ongelykheid voort en nuwe politieke tendense kom na vore. Die liberale demokratiese paradigma word klaarblyklik toenemend onder die loep geneem en in baie gevalle betwis. Baie van hierdie uitdagings het ontstaan in 'n nuwe golf van populisme, van linkse en regse variëteite wat in die Westerse wêreld sowel as in die wêreldwye Suide vastrapplek en momentum kry. Terwyl die Westerse demokrasieë 'n oplewing in die regse populisme sien, word die wêreldwye Suide toenemend gekenmerk deur die opkoms van linkse populisme. Hierdie tesis fokus spesifiek op gevallestudies in die wêreldwye Suide en dus op linksepopulisme gebou op 'n platform van radikale herverdeling.Die proefskrif poog om die volgende navorsingsvraag te beantwoord: Is herverdelende populisme 'n volhoubare langtermynbeleidspad vir ekonomiese groei, armoede en ongelykheid, en vir demokratiese konsolidasie, of is die beskerming en afdwinging van eiendomsreg 'n beter alternatief om hierdie doelstellings te bereik? Ten einde hierdie vraag te beantwoord, is vier gevallestudies vergelyk en gekontrasteer: Venezuela en Zimbabwe is gekies as gevalle waar herverdelende, linkse populistiese regimes geheers het en waaronder eiendomsreg aansienlik verweer is; Uruguay en Botswana verteenwoordig gevalle van die beskerming en afdwinging van eiendomsreg. Hierdie kwalitatiewe tesis maak gebruik van 'n vergelykende gevallestudie navorsingsontwerp, wat gebruik maak van lessenaarontleding.In Venezuela en Zimbabwe was 'n afname in steun vir die huidige party die katalisator vir toenemend radikale herverdelendepopulistiese platforms. In hierdie proefskrif is bevind dat die herverdelende populistiese gevalle van Venezuela en Zimbabwe aanvanklike verbeterings in die vermindering van armoede behaal het, maar dat hierdie positiewe toestande gestagneer het en uiteindelik agteruitgegaan het toe hul herverdelende beleidspad toenemend geradikaliseer het. Onder hierdie herverdelende populistiese regimes is liberale demokratiese magskontrole verswak of uitgeskakel, en hul radikale beleid het gelei tot lang tydperke van aansienlike ekonomiese inkrimping en hiperinflasie. Toe die Chávez-en Maduro-bewindein Venezuela en die Mugabe-bewind in Zimbabwe nie hul populistiese beloftes kon nakom nie en hul ekonomieë verswak, het hul steun verder afgeneem, wat gelei het tot 'n toenemende radikalisering van hul herverdelingsbeleid en die onderdrukking van die opposisie is in 'n toenemende mate verhoog om mag te behou. Die kumulatiewe resultaat was dat steun vir demokrasie as die voorkeurstelsel aansienlik afgeneem het onder die bevolking van hul lande. Hul demokrasieë is dus gedekonsolideer deur dalende steun vir demokrasie en die erosie of uitskakeling van liberale demokratiese instellings.Daarteenoor het die twee gevalle waar eiendomsreg beskerm en toegepas is, naamlik Uruguay en Botswana, indrukwekkende afname in armoede-vlakke behaal en relatief hoë vlakke van ekonomiese groei behou. Die beskerming van eiendomsreg het aansienlik bygedra tot hul beleggersvriendelike ekonomieë en het groot hoeveelhede direkte buitelandse beleggings gelok. Beide Venezuela en Botswana was ryk aan een groot kommoditeit, maar in teenstelling met Venezuela,waar die regime die oliebedryf genasionaliseer het, het Botswana 'n ooreenkoms met die diamantbedryf onderhandel op grond van sy eiendomsreg. Die gevolg was dat die diamantbedryf die motor van die Botswana-ekonomie geword het, aangesien dit die inkomste gedeel het met die regering, wat die regering dan weer in infrastruktuur, onderwys en gesondheidsorg belê het en die ekonomie mee gediversifiseer het. Beide Uruguay en Botswana word internasionaal erken vir hul sterk liberale demokratiese instellings en stabiele demokratiese rekords, en die steun vir demokrasie in albei lande is aansienlik hoog. Hulle demokrasieë kon hul konsolidasievlakke volhou en daarop voortbou. Tog het geen van die vier gevalle wat ondersoek is, 'n radikale vermindering in hul Gini-koëffisiënte getoon nie, wat 'n verskynsel is wat verdere ondersoek verg.

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