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Venezuela's extractive institutions led to economic collapse from "summary" of Why Nations Fail by Daron Acemoglu,James A. Robinson
Venezuela's extractive institutions, which concentrate power and wealth in the hands of a few elites, have been a driving force behind the country's economic collapse. These extractive institutions have stifled competition, innovation, and investment by creating a system where the ruling elite benefits from maintaining the status quo. This has resulted in a lack of economic diversification and over-reliance on oil revenues, leaving the economy vulnerable to external shocks. The Venezuelan government's control over key industries and resources has led to inefficiency, corruption, and mismanagement. Instead of promoting a level playing field for businesses to thrive, extractive institutions have favored those with political connections, leading to widespread cronyism and rent-seeking behavior. This has further discouraged productive economic activity and hindered the development of a dynamic private sector. Moreover, the lack of property right...
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