Dutch disease and Venezuelan industrialisation (1968-1994)

Abstract

This thesis examines the impact of the 1970s oil booms on Venezuelan private manufacturing within the framework of the Dutch disease and 'resource curse' theses. However, as some of the assumptions implicit in the Dutch disease model do not hold for Venezuela, other factors and theories were brought into the picture. Attention was drawn to the implications of the existence of unemployment before the boom. Our major hypothesis is that, assuming the existence of unemployment, the role of government policies, especially industrial, export promotion and technology policies, are bound to play an important role in shaping the final outcome of a boom. In researching these issues, a Dutch disease index and an econometric model were estimated. A cointegration and error-correction methodology was chosen to test for the predictions of the standard Dutch disease model. We not only identified the existence of Dutch disease symptoms in Venezuela during 1973-82, but also established whether the transmission mechanisms predicted by the theoretical model operated during these years in Venezuela. The thesis has also involved the compilation of a 30-to-40 year data set of national accounts and trade figures, as well as detailed variables for 18 manufacturing lines.