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LatAm’s Socialist Countries Rival World’s Worst in Institutional Quality

By: Belén Marty - @belenmarty - Apr 27, 2015, 10:40 am
Venezuela está por debajo, incluso, de Cuba, en el ránking de Libertad y Progreso (Maduradas)
Venezuela comes last in the region in Fundación Libertad y Progreso’s Institutional Quality Index. (Maduradas)

EspañolLatin-American countries with governments that claim to be pursuing a “socialist” agenda come out the worst in the latest Institutional Quality Index published by Argentina’s Freedom and Progress Foundation, with several regional nations ranking alongside countries such as South Sudan, Zimbabwe, Eritrea, and Gabon.

Argentina, governed between 2003 and 2007 by the late former President Néstor Kirchner, and by his spouse President Cristina Kirchner since 2007, has fallen the most in the rankings over the last 10 years, dropping 50 places to occupy position 137 out of 193 surveyed nations. In 2014 alone, Argentina fell several places to be rated worse than China, Uganda, and Lebanon.

The report, authored by academic Martín Krause, takes an average of eight indicators used by recognized international organizations. Among them are the Index of Economic Freedom (Compiled by the Fraser Institute and the Heritage Foundation), Doing Business, the Rule of Law (the World Bank), and Corruption Perceptions (Transparency International).

By contrast, those countries leading with regard to institutional quality are Switzerland, New Zealand, Finland, and Denmark. Among those who have dramatically improved their ranking in the last 20 years are Georgia (up 81 places), Romania (which rose 49), Croatia (up 45), and Bulgaria (improved by 40 positions).

In Latin America, Peru has risen by 20 places in the index since 1996, and Colombia by 15. Brazil has also climbed five spots, despite the corruption scandal involving state oil firm Petrobras which has broken out within the last year.

Socialist Slump

Taking the same long-term view, the index shows how other regional countries have slid dramatically in the quality of their public institutions. Bolivia is down 99 places, Argentina by 33, Ecuador by 81, Venezuela by 75, and Paraguay fell by 61 positions, all since 1996.

“These results indicate the consequences of the Bolivarian-socialist style reforms that have been implemented, to a greater or lesser extent, from the beginning of this century in several of the countries showing worse performance,” argues Krause, professor in economics at the University of Buenos Aires.

The study also shows that things have gotten dramatically worse for many countries since 2006, with Argentina, Bolivia, Belize, Suriname, Venezuela, Ecuador, and El Salvador registering significant falls from that point onwards.

“Comparing the performance from 1996 mentioned above with this [from 2006], it follows that Argentina’s decline has accelerated in recent years,” Krause states.

The differences between healthy and failing institutions “condemn thousands and millions of people to living in oppression and poverty,” the report argues.

“The citizens of some of these countries are more oppressed than the English before Magna Carta,” it adds.

The Short Term: 2015 Results

The bottom 20 countries of the 2015 ranking are: North Korea (193), Cuba (192), Eritrea (191), South Sudan (190), Afghanistan (189), Turkmenistan (188), and Venezuela (184).

In Latin America, the countries with the worst institutional quality are Venezuela (184), Cuba (173), Haiti (165), Ecuador (151), Bolivia (139), Argentina (137), Honduras (130), Paraguay (124), Guyana (122), and Nicaragua (114).


“Former Economy Minister of Argentina Felisa Miceli sentenced for corruption.”

In its analysis section, the report highlights the importance of institutions in reversing the decline. For Krause, the road to regional progress requires respecting individual rights, and the greater availability of better economic opportunities for these countries’ inhabitants.

“In sum, those countries that have a good institutional quality or those that have improved, in particular in relation to market institutions — and those that protect investment and entrepreneurial activity — show a greater economic performance, and with it, offer more opportunities for progress to their inhabitants,” the index concludes.

Translated by Laurie Blair.

Belén Marty Belén Marty

Belén Marty is the Libertarian Latina, a journalist based in Buenos Aires, Argentina. She has lived in Guatemala, Jordan, the United Arab Emirates, and the United States and is a former candidate for local office with Argentina's Libertarian Party. Follow @BelenMarty.