EspañolDevelopment and economic stability depend on the quality of a nation’s institutions, says Argentinean economist Martin Krause, creator of the Institutional Quality Index and an adjunct scholar with the Cato Institute.
On Thursday, during his stay in Caracas, Krause gave a lecture: “Liberal Public Policy: How to Overcome Poverty?” This took place as part of the annual general meeting for CEDICE Libertad, a libertarian policy institute in Venezuela.
— Sinead Sánchez (@SineadSH) August 8, 2014
Institutions are defined as the rules that allow us to coordinate the actions of individuals in society, and “institutional quality means equality of opportunity, for each one of us to progress,” the University of Buenos Aires professor explained. “[It] not only creates an environment for prosperity and a higher quality of life, but also guarantees the principles of decentralization and limits on powers.”
Unfortunately, the Argentinean economist observes that Latin-American nations have been gripped by populism for decades: “Populism is the opposite of institutions, because it places responsibility on the charismatic leader to solve problems, instead of the law.”
Krause claims that Venezuela has the worst institutional quality on the continent. In fact, the 2014 edition of his index places Venezuela 184th in the world, behind Syria and just ahead of Myanmar and Zimbabwe (p.6 PDF in Spanish). That position has worsened from 161st, when the index began in 2007.
He said there is a great need for consensus to overcome economic difficulties: “Venezuelans must realize that developed nations are those where there exists respect for private property, economic freedom, and an independent judiciary.”