Venezuela is a textbook example of a resource-dependent country. Nevertheless, Venezuela currently combines an economy that is stagnant, despite high oil prices, with an increasingly authoritarian government.
Pedro L. Rodríguez, José R. Morales, Francisco J. MonaldiSeptember 30, 2012
Special drawing rights (SDRs) should become a more relevant instrument of international monetary cooperation. This requires transforming them into a pure reserve asset and the International Monetary Fund into a fully SDR-funded institution.
Latin America recently experienced a new wave of nationalization in the hydrocarbon sector with tax increases and the participation and control of the state. There is considerable variation in the specific policies that Latin American countries implemented, however.
The political institutions that established Venezuela's democracy in the 1960s were deliberately set up to generate a cooperative equilibrium with low stakes of power. The recent political reforms, increasing the stakes of power, have stimulated a complete breakdown in cooperation and a highly polarized political system.