Not always...
https://www.washingtonpost.com/news/global-opinions/wp/2017/01/05/as-socialist-venezuela-collapses-socialist-bolivia-thrives-heres-why/?utm_term=.87ec6f8773f2
As socialist Venezuela collapses, socialist Bolivia thrives. Here’s why.
Venezuela’s economy is a catastrophe of Dickensian proportions. And for plenty of readers, that’s hardly a surprise. Every time I write about it, dozens pipe in with some variant on the same comment: “Socialism leading to total ruin — who would’ve thought?!” The temptation to read Venezuela’s collapse as ideological comeuppance seems to be irresistible. My country, people tell me again and again, is just the end of the line on the Road to Serfdom.
There’s just one problem with all this bashing of socialism: Bolivia.
Since 2006, Bolivia has been run by socialists every bit as militant as Venezuela’s. But as economist Omar Zambrano
has argued, the country has experienced a spectacular run of economic growth and poverty reduction with no hint of the chaos that has plagued Venezuela. While inflation spirals toward the thousand-percent mark in
Venezuela, in
Bolivia it runs below 4 percent a year. Shortages of basic consumption goods — rampant in Caracas — are unheard of in La Paz. And
extreme poverty — now growing fast in Venezuela — affects just 17 percent of Bolivians now, down from 38 percent before the socialists took over 10 years ago, even as
inequality shrinks dramatically. The richest 10 percent in Bolivia used to earn 128 times more than the poorest 10 percent; today, they earn 38 times as much.
How can this be? It’s true that Bolivia has been on the receiving end of a staggering boom in natural resources for much of the past decade, as both the volume of its gas and mining exports and the price they fetch abroad jumped at the same time. Export revenue grew six-fold in the decade after Evo Morales, the charismatic hard-left president, took power, from $2.2 billion just before of his election to $12.9 billion at the peak of the boom.
So yes, that’s a bit like putting the game settings on “easy” when it comes to development. But it can hardly explain why Bolivia thrives while Venezuela spirals: Venezuela enjoyed an even bigger commodities boom, with exports climbing from $23 billion before the oil boom to $153 billion at its peak.
Turns out it’s not the boom itself that matters, it’s what you do with it.
Venezuela’s socialists spent the entire export windfall, and then some. Bolivia’s socialists saved much of theirs. [...]
Turns out the difference between Bolivia and Venezuela has nothing to do with abstract ideological labels, and everything to do with fiscal prudence.
I know, I know, fiscal prudence sounds deadly dull, but it makes an enormous difference in real people’s lives. While Venezuela’s reckless socialists were impoverishing the country’s once thriving middle class, Bolivia’s socialists were creating an entirely new indigenous middle class, even
spawning a whole new style of architecture along with it. Why? Because newly affluent Bolivians can afford it: Per capita GDP more than tripled from just $1,000 a year to over $3,200 over a decade. At the same time, new government social programs designed to help older people, mothers and other at-risk groups saw to major improvements in social indicators. To take just one, consider this: Thirty-two percent of Bolivians were chronically malnourished in 2003. By 2012, just 18 percent were.
The point here isn’t to idealize Bolivia’s socialists: The country remains badly governed in important ways. Corruption remains endemic in Bolivia’s public sector, with most infrastructure contracts given out on a no-bid basis to ruling-party cronies. And while nowhere near as extreme as Venezuela’s turn to dictatorship, Bolivia’s political scene has seen worrying authoritarian drift, closing down the spaces for dissent that any proper democracy needs to function. [...]
What’s clear is that the supposedly obvious link between socialism and economic ruin doesn’t check out. It’s not just that it’s easy to find counter examples of socialist governments that fail to set off economic collapse, like Bolivia. It’s also that catastrophe has more often than not come at the hand of committed anti-socialists. Bouts of acute economic chaos ending in hyperinflation broke out in Argentina, Brazil, Peru, and even in Bolivia itself back in the 1980s, each time under centrist or right-wing governments deeply at odds with the socialist left.
Socialism, it turns out, explains nothing about why some countries turn into economic basketcases. Instead, it muddles the debate for political ends, delegitimizing progressive policies that have often been shown to work while convincing conservatives that it’s okay when
they recklessly overspend. After all, if it isn’t economic recklessness that causes economic chaos, but rather an abstract noun (“socialism”), why shouldn’t right-wingers overspend?