The Political Economy of Tax Reform in Venezuela

Abstract

In the last decade the Latin American political science literature has focused increasingly on the analysis of public policy. To date, however, this literature has failed to provide satisfactory answers to some fundamental theoretical questions concerning the importance of variations in regimes or government for understanding public policy formation. First, how important is regime type in understanding policy formation processes? And second, how do policy formation processes help to consolidate or undermine political regimes? The question of the relationship between regime characteristics and policy processes has generally been approached from two different although complementary viewpoints. The traditional perspective has focused on the output side of the political equation and attempted to explain policy output or performance by reference to regime type.' By and large, the findings of the literature have been mixed. More important, though, these studies were criticized for a variety of theoretical and methodological reasons ranging from the inappropriate definition of the independent variable to the inaccurate measurement of the dependent one.2 Moreover, excessive emphasis on the question of whether regimes are installed through elections has led to the underestimation of equally important ideological factors concerning the social coalitions upon which regimes rest and to whose needs they tend to respond. An alternative analytical focus is the policy formation process. This approach offers some distinctive advantages because decision-making processes are both significantly more sensitive to regime type influence and far less susceptible to variations attributable to the impact of forces outside the control of the political elites. Although at first glance the study of policy formulation may appear as a formalistic exercise, on closer inspection it becomes evident that the structure of the policy formation process has important consequences for the nature of the policies as well as for the articulation of the interests of social actors. Policymaking processes, after all, institutionalize certain interest representation routines that in turn tend to strengthen or weaken the relative position of sociopolitical actors. As a perceptive analyst of the capitalist state has noted, policy studies are fundamentally incomplete as long as [their] main emphasis is on matters of policy content. The formal structure, or method, of policy making is of equal significance, especially since it predetermines what can and does become the content of a policy.3 Moreover, the recent emphasis on the dynamics of redemocratization and the limits within which it proceeds adds a new dimension to the investigation of the relation between regime type and policy formation processes. How does the latter help consolidate or undermine the former? This is a relatively new, yet very important, issue on the agenda of redemocratization studies. Yet our understanding of this crucial dimension of the process of consolidation of political regimes is even more limited. To date, most studies of policy formation processes in Latin America have concentrated