Assessing Whether Oil Dependency in Venezuela Contributes to National Instability

The focus of this article is on what role, if any, oil has on Venezuela's instability. When trying to explain why a resource-rich country experiences slow or negative growth, experts often point to the resource curse. The following pages explore the traditional theory behind the resource curse as well as alternative perspectives to this theory such as ownership structure and the correlation between oil prices and democracy. This article also explores the various forms of instability within Venezuela and their causes. Finally, the article looks at President Hugo Chavez's political and economic policies as well as the stagnation of the state oil company, Petroleos de Venezuela (PDVSA). This article dispels the myth that the resource curse is the source of destabilization in many resource dependent countries. Rather than a cause of instability, this phenomenon is a symptom of a much larger problem that is largely structural.