Latin America’s Imperiled Progress: Chavez and the End of “Partyarchy” in Venezuela

On 6 December 1998, Venezuelans elected as their new president Hugo Chávez Frias, a former lieutenant colonel and the leader of two failed coup attempts in 1992, effectively putting an end to the pacted political arrangement that had been in place in the country for the past 40 years. That arrangement, known as the Punto Fijo system, had been characterized by the alternation in power of two powerful and deeply rooted political parties, the center-left Acción Democrática (Democratic Action, or AD) and the center-right Social Christian Party (COPEI). Neither Chávez, who won 56 percent of the presidential vote, nor Henrique Salas Römer, who finished second with 40 percent, was the nominee of either of these parties (though Römer was endorsed by both of them late in the campaign). Moreover, in legislative elections held the previous month, the combined representation of the two parties fell well below 50 percent of the seats in both houses of Congress.

The Punto Fijo system originated with the fall of the dictatorship of Marcos Pérez Jiménez in 1958, when AD, COPEI, and the Democratic Republican Union (URD) signed a pact at Punto Fijo to share power and oil wealth, regardless of which one of them won the elections. As a result of this arrangement, Venezuela developed into a model democracy for the hemisphere, withstanding the pressures of a guerrilla war, military rule in its southern neighbors, and the booms and busts of the oil industry. That model democracy, however, also generated a government dominated by AD and COPEI, which created hierarchical national organizations and relied on oil revenues to satisfy the needs of their major constituencies. State subsidies gave everyone a bit of the wealth, but income distribution remained inequitable and the parties gradually took control of most organizations within civil society.

By the 1980s, plummeting oil revenues and a massive foreign debt brought Venezuela’s dependence on oil into stark relief. The population, however, still seemed to believe that Venezuela was a rich nation and that oil wealth was their inherent right. They blamed a corrupt elite for siphoning off this wealth and found their scapegoat in Carlos Andrés Pérez, who had served his first term as president during the fabulous boom of the mid-1970s, and then in 1989 had become the first Venezuelan president elected to a second term. The population expected Pérez to restore the easy lifestyle of the boom years, but instead, he announced El Gran Viraje (The Great Turn-Around) as his program to restore equilibrium to the economy. Announcing that the country was broke and in need of austerity, Pérez provoked a massive riot in 1989 by raising gas prices. The next two years were filled with student protests, labor strikes, and an increasingly heated political debate as Pérez attempted to carry out a radical structural-adjustment program. Then, on 4 February 1992, Lt. Colonel Hugo Chávez Frias and a group of junior army officers led an unsuccessful coup attempt against Pérez that collapsed within hours. Nevertheless, it generated wide support within the lower and middle classes, and on March 10 thousands of citizens banged on pots throughout the country to protest government policies and to support the coup plotters. A second, bloodier coup attempt took place on 27 November 1992, this time carried out primarily by the air force. It too was suppressed by forces loyal to President Pérez, but it generated less popular support because of the more violent methods of the coup plotters. After surviving these two coup attempts, President Pérez was impeached and driven from office in 1993 on a charge of misappropriation of public funds.

With elections approaching in December 1993, former president Rafael Caldera, the founder of COPEI and one of the architects of the Punto Fijo agreement, broke from the party he had founded and ran as an independent on a platform of integrity, fighting poverty, and reversing El Gran Viraje. As he took office in February 1994, the banking system collapsed...