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From Windfall to Curse? Oil and Industrialization in Venezuela, 1920 to the Present

Jonathan Di John
Penn State University Press (December 2009)

This book examines the political economy of growth in Venezuela since the discovery of oil in 1920. Oil windfalls are often considered more of a curse than a blessing, the co-called ‘resource curse’. This book challenges this idea. It does much more than simply point out that oil abundance coincided with dramatic variations in Venezuelan economic performance; it also attempts to explain why the use of oil rents has been more and less growth- and productivity-enhancing over time. It offers an alternative political economy framework for explaining the dramatic variations in Venezuelan industrial growth in the past century. It argues that growth and decline in Venezuela is better explained by examining the extent to which development strategies and political settlements have been compatible. This study also explains why the Venezuelan case, far from being exceptional, is relevant for re-thinking the political economy of industrial policy and economic growth in Latin America and beyond.

  • Dr Jonathan Di John is a research fellow on the Crisis States Research Centre at LSE.


This book addresses the key puzzle of Venezuela’s political economy in the twentieth century - the rapid and spectacular rise of Venezuela’s economic development from 1920 to 1965, followed by its precipitous collapse, arguably to this day. If you think the answer is oil, this book will make you think again. Marshalling hard-to-find data, Di John shows how import substitution and export diversification each depend, for their success, on the nature of a country’s political institutions.'
Javier Corrales, Amherst College

'This is an original, lucid, and stimulating work, one that will force economists, political scientists, and historians to rethink the economic history of Venezuela, the validity of the 'resource curse,' and the political economy of growth more generally. It is a book that embodies the best tradition of interdisciplinary analysis. This is an outstanding contribution to the political economy of development in Latin America and should be required reading for those interested in understanding long-run economic performance and the political economy of economic reform.'
Francisco R. Rodríguez, United Nations Development Programme

'There are few economic and political histories as enigmatic as Venezuela’s. Until now, little has been written that captures the complexity of its economic and political trajectory. This fascinating book fills an important gap in the most original way and is a brilliant example of interdisciplinary analysis. It provides a convincing critique of the ‘resource curse’ and will force policy makers and scholars to rethink how and why industrial policy succeeds or fails in Latin America.'
Jose Gabriel Palma, Cambridge University

From Windfall to Curse