Violence in the barrios of caracas social capital and the political economy of venezuela

Leon Violence in the Barrios of Caracas Social Capital and the Political Economy of Venezuela... This book forwards social capital as a possibleintervening substructural variable that

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Daniel S Leon

Violence in the Barrios

of Caracas

Social Capital and the Political Economy

of Venezuela

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Violence in the Barrios

of Caracas

Social Capital and the Political Economy

of Venezuela

123

Global Studies

University of Leipzig

Leipzig, Saxony, Germany

ISSN 2366-3421 ISSN 2366-343X (electronic)

The Latin American Studies Book Series

ISBN 978-3-030-22939-9 ISBN 978-3-030-22940-5 (eBook)

https://doi.org/10.1007/978-3-030-22940-5

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The idea for this project stems from my time at The American University in Cairo.When I was completing my master’s thesis in political science at this university, Iremember asking my then supervisor, Prof Dan Tschirgi, about Cairo’s surpris-ingly low violence or homicide rate Why did such a poverty-stricken, ultra-densemegacity be mostly free of deadly social violence? After visiting some barrios orslums in Cairo, the Venezuelan in me was struck not by the poverty, but by thepeaceful coexistence, even if socioeconomic conditions were straining.Prof Tschirgi replied to this question by saying something to the effect that,“Cairo

is a fascinating place!” Although I do not dispute the veracity of such a statement,

my experience of the barrios in Cairo allowed me to reflect on the causes of highviolence rates in Caracas This city is less impoverished and smaller than Cairo, butwith social violence rates that are higher by a factor of about 100 Therefore,Caracas provides an ideal place to offer a possible explanation of high urbanviolence rates, which is a social outcome that has shattered too many families andhas been one of Venezuela’s major development obstacles

I am deeply indebted to many people, who helped me in big and small ways tocomplete my doctoral dissertation in Global Studies at the University of Leipzig,which formed the basis of this present book First and foremost, I warmly thank myformer supervisor Prof Heidrun Zinecker (University of Leipzig) Her commentsand critiques were always constructive; even when some of my drafts rightlydeserved unequivocal destruction I am deeply indebted to Heidrun for the con-siderable amount of time and effort that she took to read my many convoluteddrafts, and for her patience and support throughout the 3 years that we workedtogether Our discussions, both in her office and in colloquia, were always aca-demically enriching Heidrun deserves much credit for this project’s virtues.However, all errors of fact, interpretation, or research design are my own Hersupport came not only in the form of constructive critiques of my writing orresearch design but many letters of recommendation, the possibility to teach at theInstitute of Political Science, and encouraging me to speak German early at hercolloquium She has been a true mentor

v

The financial support for this project came from the German AcademicExchange Service (DAAD), which I am incredibly grateful for being awarded thethree-and-a-half-year Graduate School Scholarship Additionally, the GraduateSchool of Global and Area Studies of the University of Leipzig provided me withthe possibility to apply for this scholarship and for additionalfinancial and insti-tutional support to attend supper schools and conferences outside of Germany Italso provided me with a stimulating academic environment and lasting friendships.

In this institution, I am very grateful to Dr Martina Keilbach for her work as thegraduate school’s academic coordinator, who kindly helped me circumvent manyadministrative hurdles

I warmly thank Prof Ulf Engel (University of Leipzig) for taking on supervision

of my project at a late stage and for welcoming me in his colloquium His guidanceallowed my work to become much more readable and to better frame the scope andcontributions of my study I also thank Prof Alejandro Velasco (New YorkUniversity), who was kind enough to read my doctoral dissertation and provide athorough, critical, and constructive review of it He went above and beyond the call

of duty of a reviewer, thus helping me to accentuate the strengths and amend theweaknesses of my book In addition, Prof Ursula Rao (University of Leipzig) andProf Helena Flam (University of Leipzig) let me join and benefit from their col-loquia and gave me constructive comments on several draft chapters of mine, and Ithank them for that I appreciate the effort of my fellow doctoral candidates whokindly read my many drafts and provided helpful comments in several colloquiaand winter schools of the Graduate School I want to especially thank the members

of Prof Zinecker’s colloquium: Steffanie Dreiack, Sebastian Hoppe, Wolfgang

Günther, Thomas Plötze, Patricia Rendón, and Dr Hannes Warnecker-Berger Theyprovided in-depth and constructive feedback in both formal and informal gather-ings I apologize for not mentioning every colleague who contributed to my work

by name Nevertheless, be assured of my sincere appreciation In the last stages ofthis project, Lukas Kob and Ricarda Theobald kindly read parts of it and providedvaluable comments Dr Antonella Regueiro (Lynn University) also contributedsignificantly to help increase the readability of my arguments, to which I am verygrateful

Myfield research in Caracas from April to the end of June of 2016 was essentialfor this research I would not have been able to gather all necessary data without thekind help of many people, which helped a middle-class guy from the mountains of

Mérida to get a good look inside the barrios of Caracas I am immensely indebted to

my host family in Caracas Marisela Ramirez, Sergio Flores, Soley Flores, and theirdog Mario They heartily welcomed me into their home, and their kind hospitality

in hectic Caracas made my field research possible My parents Daniel and MariaEugenia supported me immensely during my stay in Venezuela as they alwayshave Other lifesavers in Caracas were the Alarcon Family, Natasha Diaz, YobanyGuillen, Desirée Noack, and Adriana Quintiliani I immensely appreciate their help:

I also thank the 58 interviewed partners who sacrificed some of their time to sitdown and talk with me Their sincere effort made this project possible

Finally, a big thank you goes to my partner Hanna Bethcke Her patience,German-language correction, support, and love were critical for me tofinish thisproject.

To Hanna, Heidrun, my family, Prof Engel, all my professors, my friends andcolleagues who lend their helping hand in the making of this book,¡Gracias!

1 Introduction 1

1.1 The Puzzle of Urban Violence in the Barrios of Caracas 2

1.2 A Political Economy Approach to Analyzing Urban Violence 7

1.2.1 Disentangling Macro and Substructural Variables 8

1.2.2 Theoretical Framework: Social Capital and Urban Violence 9

1.3 Urban Violence and the Political Economy of Venezuela 13

1.3.1 Rent-Cum-Marginality: A Theoretical Model to Analyze Susceptibility to Urban Violence 15

1.3.2 Barrels, Arepas, and Urban Growth: Explaining Low Susceptibility to Urban Violence 16

1.4 Methodology 26

1.4.1 Case Selection and Sources of Violence Rates in the Barrios of Caracas 27

1.4.2 Operationalizing Social Capital 29

1.5 Structure of the Book 33

1.6 Interviews 34

References 34

2 A Theory of Social Capital as a Moderator of Urban Violence 43

2.1 Introduction 43

2.2 Defining Urban Violence: The Instrumentality of Homicides and the Social Versus Political Classification of Urban Violence 45

2.3 The Shortcomings of (Post-) Structural Theories Explaining Urban Violence Rates 47

2.3.1 Rentierism, Impunity, and the Political Order: The Ambivalent Link Between Oil-Rents and Urban Violence 48

2.3.2 Economic Deprivation: The Low Explanatory Power of Poverty, Inequality, and Urban Exclusion 51

ix

2.3.3 Reconciling the“Paradox of Caracas”: Post-structural

Explanations of Urban Violence 54

2.3.4 Filling the Gap: The Intervening Role of Social Capital 57

2.4 Social Capital’s Moderating Effect of Urban Violence: The Role of Social Network Density and Collective Efficacy 57

2.4.1 The Concept of Social Capital 58

2.4.2 The Role of Social Network Density and Collective Efficacy 61

2.4.3 Social Network Density: The Importance of Weak Ties 62

2.4.4 Collective Efficacy: The Role of Social Disorganization and Collective Action Within the Institutional Context 64

2.5 A Nonlinear Theoretical Model of Social Capital and Urban Violence and Hypotheses 68

References 70

3 High-Connectedness in Three Barrios of Caracas: Empirical Findings on Social Network Density 79

3.1 Introduction 79

3.2 A Brief History of Catia, Petare, and Baruta 81

3.3 Weak Tie Presence in Catia 84

3.4 Weak Tie Presence in Petare 87

3.5 Weak Tie Presence in Baruta 91

3.6 Explaining High Social Network Density in Catia, Petare, and Baruta 94

3.7 Interviews 94

References 96

4 Making Informal Social Control Happen: Empirical Findings on Collective Efficacy 99

4.1 Introduction 99

4.2 Social Disorganization 102

4.2.1 Catia 103

4.2.2 Petare 105

4.2.3 Baruta 107

4.2.4 Findings on Social Disorganization 109

4.3 Collective Action Within the Institutional Context 111

4.3.1 Catia 111

4.3.2 Petare 115

4.3.3 Baruta 117

4.3.4 Findings on Collective Action Within the Institutional Context 120

4.4 Conclusions on Collective Efficacy in Catia, Petare,

and Baruta 120

4.5 Interviews 121

References 123

5 Urban Security Policies and Their Effects on Collective Efficacy 125

5.1 Introduction 125

5.2 The Political Economy of Urban Security Policies in Venezuela from the 1960s Until 2011 128

5.2.1 Unsuccessful Attempts to Demilitarize Urban Security Since 1969 129

5.2.2 Centering Urban Security Policies Around the“War on Drugs” 130

5.2.3 Findings on the Political Economy of Urban Security Policies in Venezuela 135

5.3 Urban Security Policies and State-Barrio Relations 135

5.3.1 Catia 136

5.3.2 Petare 140

5.3.3 Baruta 142

5.3.4 Findings on State-Barrio Relations 145

5.4 Conclusions: Urban Security Policies and Transaction Costs on Collective Efficacy 146

5.5 Interviews 149

References 151

6 Conclusions: Perverse Social Capital as a Cause of High Violence in the Barrios of Caracas 155

6.1 Explaining the Puzzle of Violence in the Barrios of Caracas 156

6.2 Contributions to the Literature and Policy Implications 164

6.3 Calls for Research 167

6.4 Analyzing Urban Violence After Venezuela’s Economic Collapse 169

6.5 Interviews 171

References 171

Index 177

Fig 1.1 Annual homicide rate per 100,000 inhabitants in Venezuela and

Caracas from 1940 to 2016 Source Table created by author with

homicide data from: Ministerio de Sanidad y Asistencia Social

(various years, 1970–1996), Ministerio de Salud y Desarrollo

Social (various years, 2000–2004), Ministerio de Salud (various

years, 2005–2006), Ministerio del Podar Popular para la Salud

(various years, 2007–2014), Cedeño (2013, 3), Pachico (2015),

Kronick (2016), and Seguridad, Justicia y Paz (2017) Homicide

rates calculated by the author with population information from:

Instituto Nacional de Estadística (2014a, 12; b, 9; c, 10), De

Lisio (2001, 218), and World Bank (2017a, b) Note The

following years were omitted due to lack of complete data:

1979, 1981, 1982, 1985, and 1988 3Fig 1.2 Disaggregated Venezuelan real annual GDP growth percentages

from 1998 to 2012 (constant 1997 prices) 17Fig 1.3 The contribution of oil rents to the Venezuelan revenues from

1998 to 2012 19Fig 1.4 Venezuela’s demographic and urban growth rates from 1891 to

2011 Source Graph created by author with data from: Baptista

(2006, 927–930, 935), Instituto Nacional de Estadística (2014a,

12; 2016a, b), and World Bank 2016d (The World Bank

(2016d) source was used to gather data on urban population for

the years from 2001 to 2011 The World Bank classifies urban

centers in Venezuela as agglomerations of 1,000 inhabitants or

more (World Bank 2016e, Table 6) Therefore, this source

estimates the rate of urban population considerable higher than

Baptista’s (2006), which was used for data on this indicator

from 1891 to 2001) *Only including the following population

centers: Caracas, Maracaibo, Valencia, Ciudad Bolivar, Puerto

Cabello, Barquisimeto, Coro, Cumaná, and Carúpano (1) Urban

centers with populations over 2,500 inhabitants (2) Urban

xiii

centers with populations over 3,500 inhabitants (3) Urban

centers with populations over 5,000 inhabitants (4) Urban

centers with populations over 10,000 inhabitants (5) Urban

centers with populations over 1,000 inhabitants 20Fig 1.5 Public and private sector net investment (grossfixed capital

formation) as a percentage of GDP from 1970 to 2010 Source

Figure created by the author with own calculations using data

for years 1970–1996: Banco Central de Venezuela (2002, 126,

175); for years 1997–2010: World Bank (2016a, b) Note

Investment to GDP ratios calculated in Bolivares with 1968

constant prices For the 1970–1984 series, constant prices of

1984 for the 1985–1996 series, and constant prices of 1997 for

the 1997–2010 series 22Fig 1.6 Percentages of household poverty in Venezuela from 1997 to

2012 in Caracas (note that the data provided by the Venezuela’sInstituto Nacional de Estdística (INE) was not disaggregated

enough to calculate the exact values of poverty and inequality

for the Caracas Metropolitan Area (CMA) Therefore, the values

presented are an average of those reported for the Capital

District and Miranda state One-third of Miranda state,

according to INE population data (2016c), belongs to the CMA

This makes the values presented in the above table

representative of Caracas to a large extent but they might

overestimate the city’s population size) from 2002 to 2012

Source Figure created by the author with data from: Instituto

Nacional de Estadística (2016c) 24Fig 1.7 Gini coefficients as a measure of inequality in Venezuela from

1997 to 2012 in Caracas from 2002 to 2012 25Fig 1.8 Map of Caracas, Venezuela with the location of Catia/23 de

Enero, Petare and Santa Cruz del Este/Minas de Baruta barrios 28Fig 2.1 A nonlinear political economy model of urban violence in

Venezuela 69Fig 5.1 Annual drug charges and prison incarceration rates per 100,000

inhabitants in Venezuela from 2001 to 2011 133

Table 3.1 Social network density indicators in Catia 86

Table 3.2 Social network density indicators in Petare 89

Table 3.3 Social network density indicators in Baruta 92

Table 4.1 Indicators of social disorganization in Catia 104

Table 4.2 Indicators of social disorganization in Petare 106

Table 4.3 Indicators of social disorganization in Baruta 108

Table 4.4 Indicators of institutional context and community organization in Catia 113

Table 4.5 Indicators of institutional context and community organization in Petare 116

Table 4.6 Indicators of institutional context and community organization in Baruta 118

Table 5.1 Indicators of state-barrio relations in Catia 137

Table 5.2 Indicators of state-barrio relations in Petare 141

Table 5.3 Indicators of state-barrio relations in Baruta 143

Table 6.1 Findings of social capital’s qualitative comparative analysis in three barrios of Caracas 158

xv

Abstract High urban violence rates have been one of the leading development

chal-lenges in Caracas, Venezuela, as its homicide rates have been higher than most otherLatin American cities However, most violence occurs in its barrios or socioeconom-ically marginalized urban neighborhoods This book aims to examine the structuralcauses of high violence rates in the barrios of Caracas while socioeconomic indi-cators improved through qualitative comparative analysis and a political economyapproach The outcome of high violence rates under improving socioeconomic con-ditions counters the established literature on urban violence, which shows the sig-nificance of this book The introductory chapter discusses the structural parameterunder which violence in the barrios of Caracas took place, which also frames thestudy’s qualitative comparative analysis It discusses Venezuela’s dependence on oilexports since the 1920s, which generated economic rent, reduced the productivity ofnon-oil sectors, and increased the urbanization rate However, the chapter shows that

in the early twenty-first century, socioeconomic indicators improved, thus reducingmarginality or economic deprivation A reduction of marginality should have theo-retically also led to lower urban violence rates, as lower marginality should reducethe incentives of committing homicide to achieve economic and cultural goals such

as accumulating economic resources This book forwards social capital as a possibleintervening substructural variable that can explain the politico-economic structuralconditions—or “causes of causes”—for high violence rates in the barrios of Caracas

to occur The analysis of social capital’s intervening role can explain the theoreticalpuzzle of increased violence rates under improving socioeconomic conditions

Keywords Social capital·Political economy·Violence rates·Barrios·

Caracas·Venezuela

© Springer Nature Switzerland AG 2020

D S Leon, Violence in the Barrios of Caracas, The Latin American

Studies Book Series, https://doi.org/10.1007/978-3-030-22940-5_1

1

1.1 The Puzzle of Urban Violence in the Barrios of Caracas

15 millones de armas ilegales hay actualmente en el país 72% de los asesinados son jóvenes

de entre 15 y 29 años de edad, generalmente de sexo masculino 63% de las víctimas de armas de fuego reciben más de cinco tiros.

—Front-page of El Nacional, 13 August 2010 1

The text above was the front-page headline of one of Venezuela’s oldest and mostrenowned newspapers Accompanying it was a large-size and gruesome image ofCaracas’ central morgue This image, which covered most of El Nacional’s front-page was a response to the Hugo Chavez administration’s (1999–2013) repeateddenial of Venezuela’s violence problem (Acosta2011, 85–86) The image showedthe morgue overflowing with the naked and lifeless bodies of young and middle-agedmale adults lying on stretchers and even on the floor because the institution could notprocess their high inflow fast enough Official data on homicides back the statisticspresented in this front-page edition, as over 91% of homicides in Venezuela occurredthrough firearms (Comisión Presidencial para el Control de Armas, Municiones yDesarme2012, 82; Zubillaga et al.2008, 763)

Venezuela has not experienced any significant armed conflict since the nineteenthcentury No major interstate conflict has occurred in South America since the ChacoWar of the 1930s (Martin2006, 173–176) Yet the front-page of El Nacional citedabove illustrated the problem of high urban violence rates that has plagued Venezuelaand particularly its capital since the late 1980s In this book, I equate the termviolence rates with annual homicide rates per 100,000 inhabitants for the sake ofmeasurement Homicides provide objective evidence for the use of violence, which

is why this book employs the latter term instead of the former As illustrated inFig 1.1, violence rates became a major socioeconomic problem in Caracas andVenezuela only since after the late 1980s Urban violence is a significant problem forsocioeconomic development, as it hurts productivity, which exacerbates poverty andinequality (Fox and Hoelscher2012, 432; Moncada2016, 4) It is a social outcomethat tears families apart and severely hinders possibilities of upward social mobility

of impoverished urban communities

Caracas’ urban violence rates reached and even surpassed those of other highviolence cities around the world, which evidenced the existence of this socioeconomicproblem in the Venezuelan capital The average violence rates from 2005 to 2012

of other high violence cities around the world were 21 in Bogota, 59 in Cape Town,

80 in Kingston, 71 in San Salvador, and 83 in Tegucigalpa, while Caracas’ averagewas of about 114 (United Nations Office on Drugs and Crime 2013) In comparison

to other high violence cities in Venezuela, violence rates in Caracas almost doubledthe average violence rates from 2011 to 2014 of Barquisimeto and Guyana City, the

1 In English: “15 million illegal firearms in the country 72% of homicide victims are from 15 to

29 years of age and primarily male 63% of firearm victims suffer over five gunshots” (El Nacional

13 August 2010, accessed on 19 October 2017, http://kiosko.net/ve/2010-08-13/np/ve_nacional html ) This and other translations in this book are the author’s own.

Fig 1.1 Annual homicide rate per 100,000 inhabitants in Venezuela and Caracas from 1940 to

2016 Source Table created by author with homicide data from: Ministerio de Sanidad y

Asis-tencia Social (various years, 1970 – 1996 ), Ministerio de Salud y Desarrollo Social (various years,

2000 – 2004 ), Ministerio de Salud (various years, 2005 – 2006 ), Ministerio del Podar Popular para la Salud (various years, 2007 – 2014 ), Cedeño ( 2013 , 3), Pachico ( 2015 ), Kronick ( 2016 ), and Seguri- dad, Justicia y Paz ( 2017 ) Homicide rates calculated by the author with population information from: Instituto Nacional de Estadística ( 2014a , 12; b , 9; c , 10), De Lisio ( 2001 , 218), and World Bank ( 2017a , b) Note The following years were omitted due to lack of complete data: 1979, 1981,

1982, 1985, and 1988

country’s second and third most violent cities, which exhibited averages of 60 and 58yearly homicides per 100,000 inhabitants, respectively (Pachico2015) Therefore,high violence rates in Venezuela’s capital has been one of its main socioeconomicproblems in the last decades

This present book contributes to the urban violence literature in the followingmanner: It focuses the analysis on Caracas’ barrios, which are the urban spacesexhibiting the highest concentration of violence rates The urban spaces that arebarrios are parts of a city that concentrate its socioeconomically marginalized inhab-itants that often live in informal neighborhoods built in such spaces (Zayerz Moitalta

2013, 110; Camacho2015, 53–55; Bolivar2015, 62–63).2In economic terms, barrio

2 Early modernization theory attempted to explain the phenomenon of barrios by arguing that it was the first step toward the social mobility of the rural-to-urban migrant, and that secular economic growth would increase barrio-dweller savings rate, and thus investment in capital that lifts them out of poverty (Frankenhoff 1967 , 29; Pachner 1977 , 18) However, in many developing countries

of the contemporary world the stability of informal settlements has been resilient (Marx et al.

2013 , 188–189) Furthermore, evidence shows that barrio-eradication programs worsen the lem, because they do not eradicate the structural conditions creating these marginal urban spaces (Bettencourt and West 2010 , 912).

prob-inhabitants are socioeconomically marginalized because their economic productivity

is less than what they need for subsistence consumption (Elsenhans1994, 396) Inaddition, one may use several terms to refer to barrios, such as slums, shantytowns,

or ranchos, but these are pejorative descriptions of these spaces and their

inhabi-tants (Deffner2011, 111–112; Perlman2010, 152–156) This book chooses the termbarrios to minimize carrying over social prejudices of these urban spaces and theirinhabitants

Barrios are the urban spaces bearing the brunt of the significant socioeconomicproblem that is urban violence The perception of urban violence and insecurity tends

to spread somewhat evenly among a city’s population, but actual urban violence whelmingly occurs in barrios Data from 2010 shows that about 80% of homicidevictims in Venezuela came from marginalized urban areas (Zubillaga2013, 108).Violence in barrios overwhelmingly involves young males as perpetrators and vic-tims (Imbusch2010, 22–24, 31–35; Auyero and Kilanski2015, 189–191; Zubillaga

over-et al.2015, 227–239) It is also important to note that barrio growth, youth bulges, oreconomic deprivation like poverty and inequality cannot explain high violence rates

in Caracas and Venezuela since the 1990s The reason is that longitudinal cal evidence contradicts such often-mentioned explanations As elaborated in thischapter’s third section, higher violence rates occurred while socioeconomic indi-cators were comparatively favorable, which means that to explain high violence inthe barrios of Caracas it becomes vital to examine substructural variables that canintervene between macroeconomic conditions and urban violence rates

empiri-What makes high violence rates in Caracas puzzling is that they occurred whilesocioeconomic conditions improved due to high oil windfalls in the twenty-firstcentury By 2012 socioeconomic indicators like inequality (measured through theGini coefficient) in Caracas and Venezuela decreased to about 0.4, while urban andnational violence rates were among the highest in Latin America (Instituto Nacional

de Estadística2016c; Zubillaga2013, 108–109) The behavior of violence rates inCaracas poses a theoretical puzzle to the academic literature on urban violence,which mainly posits increased violence rates after economic downturns Similarly,improved socioeconomic conditions induced by economic upturns should preventviolence rates from increasing (Cook and Zarkin1985; Bushway et al.2013; Florenceand Barnett 2013, 307–309; Rosenfeld and Messner 2013, 1–6; Rosenfeld et al

2013, 2–3; Zubillaga 2013, 108–109) In economic terms, urban violence shouldhave behaved counter-cyclically That is, homicide rates should have decreased ifthe business cycle, or overall economic productivity, increased However, examiningthe evolution of violence rates in Caracas up to 2011, the year where I was able

to collect suburban data on violence, shows that they behaved pro-cyclically Inother words, violence rates increased while the business cycle, or overall economicproductivity, increased

Moreover, not all barrios in Caracas experience the same violence rates Thereare significant variations of violence rates in different barrios, even if on averagethey are higher than in middle-class neighborhoods How can one account for inter-barrio variations of violence rates while Caracas-wide violence rates behaved pro-cyclically? What factors contribute to variations in urban violence rates between

barrios? The behavior of violence rates in the barrios of Caracas creates a theoreticalpuzzle that the literature, to the knowledge of the author, has not yet explored.Comparing Caracas with other cities around the world such as Managua,Nicaragua, and Cairo, Egypt, which experienced the high presence of barrios and highpoverty, as well as low violence rates, exemplifies the theoretical puzzle addressed

by this book Nicaragua is among the poorest countries in Latin America However,

in comparison to other countries in the region, especially in Central America, itshowed yearly violence rates under 14 homicides per 100,000 inhabitants from 1998

to 2012 (Zinecker2014, 36, 467–468; United Nations Office on Drugs and Crime

2013) Cairo, on the other hand, saw worsening socioeconomic conditions after theInternational Monetary Fund-sponsored structural adjustment programs in the 1990sthat reduced state welfare services while high fertility rates had swelled the urbanpopulation, thus giving way to giant barrios (Deboulet2011, 202, 209, 228; Harriganand El-Said,2009, 78) Nonetheless, annual violence rates in Cairo were less thanone homicide per 100,000 inhabitants yearly from 2003 to 2009 (United NationsOffice on Drugs and Crime 2013) The fact that urban violence rates in Caracashave been high while socioeconomic indicators improved, and that other cities likeManagua and Cairo show low violence rates under poor socioeconomic conditions,further counters the argument blaming high urban violence rates on the presence ofbarrios and detrimental socioeconomic conditions

This book’s objective is to approach an explanation of the theoretical puzzle ofpersistently high violence under improving socioeconomic conditions Specifically,this book analyzes why politico-economic structures affected the ability of Cara-cas’ working-age and adult barrio inhabitants to organize effectively to reduce vio-lence while socioeconomic conditions improved Analyzing effective organization

to reduce violence serves to examine the ability of these barrio inhabitants to createformal and informal organizations of social control In the analysis of public goodslike security (Chaffe 1992, 4–5, 141; Olson1971, 99–100), this book draws fromthe lenses of political economy—the combined use of “state-of-the-art economicsand political science” (Elsenhans1996, 15)—and not the discipline of Marxist dog-matism (Moore1989, 584–586) The political economy approach followed in thisbook accommodates analytical “shortcuts” (Anderson1972, 396) provided by otherrelevant disciplines like urban sociology and criminology

This book offers a cross-sectional qualitative comparative analysis of communityorganization in three barrios of Caracas to explain the puzzle of violence rates inthe barrios of Caracas through a political economy perspective The three analyzedbarrios were barrios are Catia/23 de Enero (henceforth Catia), Petare, and Santa Cruzdel Este/Minas de Baruta (henceforth, Baruta) In line with the research goals, theanalysis of community organization focuses on ways that barrios inhabitants caneffectively impart informal social control to prevent or reduce individuals to useviolence as a tool to achieve their objectives Cross-sectional analyses, however, donot eliminate considering the historical context Comparing cases among a set point

in time allows capturing accumulated historical effects (Rosenfeld et al.2013, 3).The main finding was that informal social control was not effective in some barriosbecause of high transaction costs Transaction costs are inherent costs of achieving

actionable goals, such as information costs (Coase1998) Furthermore, elements ofthe institutional context found in the barrios of Caracas contributed to the creation ofhigh transaction costs such as community organizations created and funded by thenational government and urban security policies that repressively enforced the law onsome crimes Furthermore, specific low-scale organizational arrangements increasedthe incentives for using violence as a tool to predate on economic resources, evenunder improving socioeconomic conditions.

I reached the above conclusion after testing the intervening role of social capitalbetween Caracas’ politico-economic structures and high violence rates in the threebarrios studied The concept of social capital refers to the norms and rules bind-ing social networks and propitiating trust and cooperation in a community, whosemembers repeatedly interact with each other (Fukuyama 2001, 7, 14; Lin 2001,19; Putnam et al.1993, 81–82) The new institutional economics perspective shedslight into the mechanisms that explain why social capital leads to organizationalarrangements allowing for groups of people repeatedly interacting with each other

to effectively achieve goals through collective action Namely, the presence of socialcapital lowers transaction costs to pull local and extra-local resources to achievecollective goals like imparting informal social control By lowering transaction costs

to impart informal social control, an urban neighborhood is more able to prevent

or act against violent individuals and groups, and thus lower urban violence rates(Coase 1937; Morenoff et al 2001, 519–521; Sampson et al.1997, 919; Stiglitz

1999, 60–62; Uphoff1999, 218) Due to the focus on politico-economic structureselaborated in this book, the analytical contribution rests on examining the structuralmacro-determinants or “causes of causes” of high urban violence rates in the bar-rios of Caracas (Moore1966; Parker2008, 2–8, 110–120; Paoli2013, 11, 22–23;Zinecker2007b, 119)

As explained in the coming chapters, social capital can lead to organizational

arrangements preventing and producing high urban violence rates depending on the

effects of the institutional context (Rubio1997, 815; McIlwaine and Moser2001,967–968; Portes1998, 18) The evolution of context-specific institutions, which arethe social “rules of the game” (North2005, 1–2), affects transaction costs, whichplaces conditions on organizational arrangements in an urban neighborhood such asthe ability to pull collective resource to achieve common goals like preventing oracting against violent agents I build and test through causal process tracing (Ben-nett and Checkel 2015; Collier2011) a qualitative theoretical model where socialcapital intervenes in the causal relationship between macrostructural conditions andurban violence Hence, the causal process tracing provided by this present book runsfrom politico-economic macro-conditions to the intervening mesostructure of socialcapital

Analyzing the “causes of causes” of violence in the barrios of Caracas refers

to the analysis of how structures or collective behavior lead to certain outcomes.Structural analyses as the one performed in this book originate from the work ofÉmile Durkheim He proposes that the compositions of social structures lead to social

outcomes.3 This approach leaves aside the analysis of violence’s agency In otherwords, this book focuses on collective action at the local level of the barrio and doesnot examine the behavior of violent individuals or violent acts Agent-level studies

of urban violence aid in explaining the risk factors of violence and victimization

However, they do not “fully explain why rates of violence change over time or why

some communities have persistently higher rates of violence than others” (Emphasis

in original, Rosenfeld et al.2013, 13–14) The aim here is not to argue that analyzingagency or individual behavior is irrelevant since agency is often critical in explainingvariations between cases with similar structural compositions (Fukuyama2014, 31).Instead, the purpose is to highlight that violence rates are structural variables, whichrequire structural explanations

This introductory chapter continues in Sect.1.2with a brief explanation of howthis present book analyzes high violence rates in the barrios of Caracas through apolitical economy conceptual framework This book’s conceptual framework aims

to avoid linear explanations by differentiating politico-economic macrostructuresmaking a case susceptible, but not necessarily leading, to violence and interven-ing politico-economic mesostructures helping trace the structural conditions, or

“causes of causes,” leading to high urban violence rates Section1.3discusses thepolitico-economic condition making Venezuela susceptible to urban violence, whichconcisely explores the evolution of Venezuela’s political economy since major oilexploitation began in 1922 In addition, Sect.1.3shows how Venezuela’s politicaleconomy created a structural condition in the decade before 2011 that should haveled to reduced violence rates in Caracas and nationally Section1.4further elabo-rates on this book’s research design and methodology Finally, Sect.1.5describesthe organization of the forthcoming five chapters and their individual findings

1.2 A Political Economy Approach to Analyzing Urban

Violence

To justify a literature review of violent crime from an economic perspective, inologists Richard Rosenfeld and Steven Messner use the metaphor of “Sutton’sLaw.” It comes from the (mostly) legend of Willie Sutton, an American bank robberwho, when captured by U.S federal agents, reportedly said that he robbed bankssimply because, “that’s where the money was” (Rosenfeld and Messner2013, 1) In

crim-3 Durkheim provides an illustrative example by explaining that suicide, a seemingly individual action, has its causes in the structural constitution of a society, like religious cultural structures (Durkheim 1897 , 8, 335–336; Durkheim 1893 , 356, 360) In his example, social structures created

by Protestantism appear to lead to more suicides than those created by Catholicism (Durkheim

1897 , 8, 335–336) Structures arise and reproduce social outcomes because individuals require information to assess whether their recursive actions will keep on having desirable payoffs (North

1991 , 97–98; North et al 2009 , 16) They channel information in recursive human actions, which delineates individual choices affecting attempts by groups to organize toward achieving community goals (Giddens 1984 , 2; Collins 2004 , 5–6).

the tradition of political economy, the so-called “Sutton’s Law” hints to structuralconditions that create powerful incentives for the use of violence by individuals totake advantage of economic opportunities (Merton 1938, 672) For example, con-ditions of severe poverty and lack of economic opportunities can create powerfulincentives for individuals to use violence as a tool to gain economic resources Suchtheoretical argument has strong empirical and conceptual backing in the urban vio-lence literature, as there is a clear negative correlation between structural economicconditions and violence (Rosenfeld and Messner2013, 3–6; Rosenfeld et al.1999,495–497, 512–514; Sampson et al.2002, 443–445) Hence, the literature points toneighborhood disadvantage and economic downturns as the causes of high violencerates Following such theoretical logic, the literature on urban violence, emanatingmainly from the United States, identified a counter-cyclical relationship betweeneconomic structures and increased violence (Brown and Osterman2012, 220; Cookand Zarkin1985; Moncada2016, 5, 8) In addition, the literature on violence rates

in Venezuela, and of other cases, has blamed its cause on the high opportunitiesprovided by structural economic conditions like economic rent windfalls from highoil exports (Briceño-Leon2006, 2012; España1993) As explained below in moredetail, economic rent means excess income not used to compensate labor, like high oilexports (Buchanan1980, 3; Elsenhans2004, 89) However, disentangling politico-economic structures becomes imperative to properly trace the causal factors creatingopportunities and incentives leading certain urban agents to resort to violence as aneconomic resource accumulation tool

1.2.1 Disentangling Macro and Substructural Variables

The theoretical shortcoming of arguments in favor of a counter-cyclical relationshipbetween structural economic conditions and urban violence is that they are ofteneither ambivalent in their process tracing or provide supply-side explanations Inother words, many established theories on urban violence tend to offer linear expla-nations of this outcome Ambivalent theories providing linear causal relationshipstend to arise when theoretical models ignore the embeddedness (Granovetter1985)

of different social structures like political and economic ones (Przeworski 2003;Rodrik2007; Shirley2009) Ambivalent or linear theories often lead to fallaciouscausal statements Furthermore, supply-side empiricism is common among theo-ries highlighting the importance of economic resources that one can loot, as theyestablish the causes of urban violence solely on higher opportunities over its costs(Medina2008, 45–47; Cramer2002, 1846–1847) Banks certainly provided WillieSutton with high opportunities for armed robbery because, “that’s where the moneywas,” but he and other armed bank robbers were not committing such crime as anend in itself, but as a means to meet a structurally induced demand Bank robbers orhomicide perpetrators commit their crimes as a means to achieve culturally valuedgoals like fulfilling the “American Dream” (Messner and Rosenfeld1994) Impor-tantly, globalizing processes lead individuals to aspire toward achieving economic

goals, especially in Latin America, and not just in the United States A conceptualframework seeking to approximate a theoretical model tracing the process of themacro-determinants of high urban violence rates in the barrios of Caracas must dis-entangle the hierarchy of structural variables inducing the use of urban violence.Ranking variables as either macrostructural or substructural aid significantly to dis-entangle the hierarchy of structural variables.

It is crucial to consider the structural difference between Gewaltanfälligkeit—or susceptibility to violence—and Gewaltwirklichkeit—or actuality of violence to

develop a conceptual framework for the study of violence in the barrios of cas (Zinecker 2014, 42–43) Susceptibility to violence occurs in cases where the

Cara-macrostructure tends to produce the outcome of high urban violence rates The

actu-ality of violence occurs in a subset of cases that are susceptible to violence, butwhere substructural variables lead to high urban violence rates For example, Man-agua or Cairo are cities displaying susceptibility to high violence, due to the highconcentration of poverty, but their violence rates are actually low On the other hand,San Salvador or Tegucigalpa are cities displaying both susceptibility and actuality

of violence, since they exhibit a high concentration of poverty and high violencerates Tracing the causal process leading to actual urban violence helps explain whysuch an outcome appears only in some cases and not in others with similar structuralconditions This conceptual framework helps to avoid “black-box” explanations, asone can engage in process tracing at the structural level.4In doing so, one meets themethodological completeness standard of establishing a theoretical correspondencebetween conditions and outcomes by disaggregating substructural variables fromthe larger dominating structures (Waldner2015, 128) The larger structures remainconstant and become the substructural variables’ parameter (Lijphart1971, 683) Inturn, substructural variables become the independent variables linking the causal pro-cess between the structural parameter and the independent variable Approximating

a theoretical causal model tracing the mechanism linking this study’s tural parameters to high violence rates in Caracas up to 2011 requires the analysis

4 Checkel ( 2006 , 362) illustrates the point behind “black box” explanations through the example

of the international relations thesis “that democracies do not fight other democracies.” Empirical evidence seems to back such thesis, but that there is little theoretical explanation for how the mechanics of that process work Meaning, there is little process tracing between foreign policy in democratic countries and lack of war between democracies.

organizing toward the goal of preventing or acting against motivated violent agents.Social capital can achieve reductions in urban violence by allowing urban neighbor-hoods like barrios to impart informal social control (Rosenfeld et al.2001, 286–287;Messner et al 2004, 884; Messner and Rosenfeld1994; Messner and Rosenfeld

1997, 1396; Rosenfeld and Messner2013, 61–62, 64) As explained further in thenext section, the motivation to use violence by agents may arise from the struc-tural parameter of institutional-anomie induced by the country’s politico-economicmacrostructure Briefly, institutional-anomie refers to the structural condition wheneconomic norms become the dominant institution in society (Rosenfeld and Mess-ner1997, 213–214,2013, 61–62, 64) However, Venezuela’s political economy andits evolution over the twentieth and twenty-first centuries created a macrostructuralcondition where susceptibility to urban violence declined in the decade leading up

to 2011

This theoretical framework helps achieve a nonlinear process tracing betweenVenezuela’s politico-economic structural conditions and urban violence rates by ana-lyzing the intervening effect of the substructural variable that is social capital Theliterature has extensively discussed the concepts of social capital and urban violence,but there is still limited theoretical conceptualization on their relationship (McIlwaineand Moser2001, 966) This study follows sociologist Nan Lin (2001, 19) in defin-ing social capital as the investment in social relations with the expectation of futurereturns, which allows for trust and cooperation in a given community This definition

is consistent with that of the major theorists of the concept, such as sociologists JamesColeman (1988) and Bourdieu (1977), as well as political scientists Robert Putnam

et al (1993) and Francis Fukuyama (2001) These theorists depart from the Marxianpremise that there is capital in repeated social relations when there are “investmentswith expected returns in the marketplace” (Lin2001, 3) However, a lingering prob-lem has been very flexible applicability of the concept; leading it to become a sort

of “social string theory” or a “social theory of everything.” Social scientists haverelied on social capital to explain various social phenomena ranging from the quality

of democratic institutions (Putnam et al.1993, 83–86, 164–167),5and of education(Coleman1988, S109–S110), to the basis for economic growth (Collier1998, 2), theprevalence of corruption (Fukuyama2001, 9; Warren2004), the social integration

of people with disabilities (Condeluci and Fromknecht2014), and, of course, urbanviolence

5 Putnam et al ( 1993 , 83–86, 164–167) examined the widely differing performances of the Italian regional governments Although the different regional governments were constituted under a similar institutional framework and endowed with similar economic resources, socioeconomic performance between them was highly inequitable Putnam’s conclusion was that some Italian regions developed civic networks of cooperation or social capital Social capital like any capital generates positive-sum growth because it solves dilemmas of collective action, such as the prisoner’s dilemma, without the need of third-party contractual enforcement Moreover, De Tocqueville’s ( 1841 , 452–445) obser- vation of how nineteenth-century Americans regularly engaged in political and civil associations is noteworthy because—he argued that this was a major factor in keeping this young nation “civilized” and to promote progress and democratic stability Tocqueville’s work was an important source for the development of Putnam’s conceptualization social capital.

The conceptualization of social capital concerning urban violence stresses theprocess of institutional-anomie leading to the rise of violence as an instrumentaltool or crucial means of resource predation Institutional-anomie explains that anincrease of urban violence rates may occur when the overarching politico-economicstructure leads economic norms to become the dominant institution in a society(Hagedorn2014, 347–349; Rosenfeld and Messner1997, 213–214,2013, 61–62,64) Institutional-anomie does not refer to normlessness—Durkheim’s (1893, 356,360) classical definition of anomie—but the dominance of economic norms in asociety (Rosenfeld and Messner1997, 212) As mentioned above, institutions refer

to the social “rules of the game,” and one finds different institutions—political,economic, and cultural—embedded in social structures (Granovetter 1985; North

2005, 1–2) Despite the embeddedness of different institutions their social integrationtends to be problematic For example, “being a ‘good parent’ comes at the expense

of being a ‘good employee,’ and vice versa” (Rosenfeld and Messner1997, 213).When the economic structure wins this balance of power, it establishes the “rules

of the game” or institutional norms, and thus achieving economic goals becomesmore valuable than any other If the economic structure does not provide formal orlegal ways for agents—especially youth—to achieve such goals (Merton1938, 674),institutional-anomie becomes a conduct of increased urban violence rates by makingits instrumental use a mechanism of resource predation or market access a viablenorm among certain individuals and groups (Messner and Rosenfeld1997, 1396).The structuration of social capital, meaning the structure-agency interplay leading

to the formation or continuation of social structures (Giddens1984), helps reduceurban violence rates by creating informal institutions that foment social control Thisstructuration occurs as social networks become significantly “dense” (Mitchell1969,

15, 17–18; Borgatti and Halgin2011, 1171; Goyal2007, 64), which transaction costs

of achieving collective efficacy—sustainable organization toward specific goals likeimparting informal social control (Messner and Rosenfeld 1997; Rosenfeld et al

2001) Nonetheless, high social network density is necessary, but not sufficient for

a certain structuration of social capital, which lowers violence rates in an urbanneighborhood (Morenoff et al.2001, 547–548) The reduction of transaction costsallowing for collective efficacy is the result of social capital’s positive by-productslike trust and cooperation However, social capital can produce negative externali-ties or unintended consequences to third parties resulting from social interactions.Social capital produces unintended negative consequences or negative externalities,

as collective efficacy allows certain groups to pull resources together to efficientlypredate on economic resources through violence (Field2008, 98; McIlwaine andMoser2001, 981; Rubio1997; Warren2004) Therefore, the structuration of socialcapital can produce both positive externalities in marginalized neighborhoods likebarrios It can produce positive externalities like increasing trust and cooperation in abarrio to prevent youth from joining violent street gangs Under a different structura-tion, however, social capital can produce negative externalities like allowing streetgangs to use violence more effectively as a tool to accumulate economic resources

A problem with the early conceptualization of social capital, forwarded by JamesColeman, compounded the investment in social networks with the production of

socially desirable outcomes through the enrichment of human capital (Coleman1988.See: Fukuyama2001, 8; Field 2008, 93) The presence of social capital does notalways lead to positive outcomes since it can produce undesirable consequences oreffects to third parties, such as is the case with criminal gangs, mafia families, andcorrupt rent-seeking networks In these examples, social capital within the networkcluster could be relatively high, but it may produce net negative externalities; itcan produce socially undesirable outcomes, such as urban violence (Browning et al.

2004, 504–505; Browning2009, 1559–1561; Rubio1997, 815; McIlwaine and Moser

2001, 967–968; Portes1998, 18; Venkatesh1997, 97–101)

As explained at length in chapter two, social capital can increase the ability ofbarrios to organize and impart informal social control, which contributes to keepingurban violence rates low (Bellair2000, 150–152; Fang et al.2013, 122; Sampson

et al.1997, 918–919; Wickes et al.2013, 117; Zubillaga et al.2015, 243–45) Someexamples of informal social control in barrios are getting the state to open a policestation in the barrio, replacing light bulbs in dark alleys, building rapport and trustwith police agents, networks of family and nonfamily members making sure thatchildren and teenagers attend school, and the spaces of socialization provided byreligious or sport organizations The presence or absence of formal and informalorganizations may explain the causes of high violence in the barrios of Caracas.However, social capital can also prevent barrios from achieving this goal and furtherincentivize the use of violence by individual agents Based on the brief discussionabove of social capital and urban violence, the master research question guiding this

study’s research design is: At what structural composition does social capital help

cause high urban violence rates?

The goal of this study is to build and test a structuralist politico-economic retical model of formal and informal organization in the barrios of Caracas, whichcontributes to the explanations of persistently high urban violence rates The theo-retical model of urban violence proposed by this present book has specific policyimplications, but the contribution to development and security theories are of greatersignificance The reason is that discourses promoted by policymakers view barrioinhabitants as either passive or antisocial collective agents because of their poorsocioeconomic status (Marquez 1999, 4–6; Perlman2010, 149–156) EconomistHernando de Soto (2003) for example argues that barrio inhabitants require onlylegal reform for them to accumulate capital as if they have not possessed any andhave been only passive collective agents These views on barrio inhabitants hide theirorganizational or social capital, which reflects the capability of its inhabitants to pullresources together using their social networks Such capital can become crucial inallowing barrio inhabitants to cooperate, and thus prevent or act against violent indi-viduals and groups The theoretical model built and tested by this study attempts

theo-to explain why, or why not, barrio inhabitants in Caracas organize theo-toward their lective goals of imparting informal social control The model forward in this bookmay explain high urban violence rates as macroeconomic conditions improved in thetwenty-first century

col-1.3 Urban Violence and the Political Economy of Venezuela

On December 22, 1922, in the La Rosa oil field in the western Venezuelan state ofZulia, the oil well called Barroso II experienced an unprecedented eruption The out-of-control stream pumping oil upwards of Barroso II reached 40 meters in altitude,spilling 100,000 barrels per day for nine days until it became manageable (RodriguezSosa and Rodriguez Pardo2013, 100) This event marked the start of Venezuela’snew oil era It changed Venezuela’s political economy in qualitative and quantitativeterms Venezuela had exploited and exported oil since the early twentieth century,but such exports were marginal until the 1920s In 1922, oil composed 2% of theVenezuelan gross domestic product (GDP) and 0% of fiscal revenues By 1942, oilrepresented around 17% of overall GDP and 67% of fiscal revenues, which morethan tripled the country’s economic growth (Rodriguez Sosa and Rodriguez Pardo

2013, 101; Karl1987, 68) Even though Venezuela had been a rentier state since itsindependence because it has always specialized itself economically in the productionand export of demand inelastic products (Elsenhans1996, 46–47) like coffee bylanded elites, the number of windfalls generated by agriculture was nowhere nearthat produced by oil exploitation after 1922 From 1900 to 1920, the average yearlyGDP growth rate was only 1.8%, while from the subsequent period of 1920–1948the average rate was 6.8% (Hausmann and Rodriguez2014a, 1–2)

In Venezuela, the influence of oil revenues has been almost omnipresent in allpolitico-economic conditions The increased financial income produced by oil rentspermitted the country to become a consolidated nation-state by building a nationalcommunication infrastructure, modernized the then-obsolete nineteenth-century-styled army, and created economic distribution networks among the elite classes.This occurred because the ensuing Dutch disease6 eliminated the hacienda econ-omy inherited from the Spanish Empire, which in turn eliminated the incentives ofland-owning elites of engaging in political violence The consolidation of the stateremoved the incentives of a powerful landowner gathering a peasant army and mak-ing his way to Caracas to rent-seek on agrarian exports such as coffee There weregovernmental attempts to protect the coffee industry, but the comparative advantage

of oil left agrarian products uncompetitive (Baptista2008, 281–283)

The omnipresent condition of oil—or petroleum—in Venezuela’s macrostructure

is why the renowned Venezuelan writer and intellectual Arturo Uslar Pietri elaboratedthat, “Petroleum is the fundamental and basic fact of the Venezuelan destiny…It

is like a Minotaur of ancient myths, in the depths of his labyrinth, ravenous andthreatening… All issues lack meaning…[Everything is] conditioned, determined,created by petroleum” (Quoted in: Karl1997, 73) However, one should not identify

6 The Dutch disease refers to the effects of an overvalued currency and an overheated economy, due to a high multiplier effect, which are caused by artificially increasing aggregate demand due to the high hard currency inflow coming from natural resource exports This makes importing goods cheaper that producing them domestically, which crowds out preexisting national industries—whose rent creation is not as high—resulting in the rapid contraction of labor-intensive industries leading

to both greater unemployment and inflation (Auty 1993 , 3–5; Gelb 1988 , 321; Sid Ahmed 1987 , 889–890).

rentierism—the practice of distributing economic rent by a government—as the directexplanation of high urban violence rates in Caracas and Venezuela The reason isthat the country became an oil-based rentier state in the 1940s, but violence ratesnationally and in Caracas do not become a significant and increasing problem untilafter the end of the 1980s—see Fig.1.1 One is thus not able to attribute high violencerates to rentierism, as for over 40 years of high oil windfalls violence rates remainedlow in Caracas and Venezuela There was a brief spike in violence rates from 1962 to

64 because of a relatively brief armed conflict with Cuban-inspired leftist guerrillasand the Venezuelan military (Velasco2015, 120–121) During the rest of this four-decade period violence rates remained mostly under a yearly rate of 10 homicidesper 100,000 inhabitants

This section finds that susceptibility to violence in Venezuela and Caracas didnot increase in the decade leading up to 2011 I came to this conclusion based

on the analysis of institutional-anomie created by Venezuela’s politico-economicmacrostructures identified as rent-cum-marginality The following three subsectionsexplain first the theoretical framework behind the analysis of susceptibility to urbanviolence (Sect.1.3.1) After that, Sect.1.3.1shows how in the face of reduced non-oilproductivity after the 1970s, due to increased economic dependency on the oil sector,marginality decreased in the years leading to 2011 In the context of increased urbangrowth, political elites used oil rent distribution to invest in essential services andbuild political networks of patronage to both appease the high amount of surpluslabor found in the barrios of cities like Caracas and to court their political support.Policymakers implemented such clientelistic rent distribution policies with electoralaims that were macroeconomically hurtful in the long term.7However, they producedthe positive side effect of reducing marginality rates—measured through poverty andinequality rates—as such socioeconomic indicator moved in the right direction atthe national level, and especially in Caracas Reductions in marginality rates allowinferring reduced susceptibility to violence in the barrios of Caracas This structuralcondition, therefore, requires the intervention of substructural variables—like socialcapital—to explain high violence rates in the barrios of Caracas

7 Clientelistic policies are macroeconomic hurtful in the long term, as they require inefficient ment that increases the willingness of population to become “clients” of the “patron” ruling elite Rent distribution through clientelistic policies such as jobs in public employment, subsidies, or other forms of cash transfers must be conditional or discriminatory, which increases the willingsness of some to become “clients,” as not to miss the economic opportunities provided by such policies Since the distribution of rent or other economic resource occurs as a result of political power and not market mechanisms, such policies tend to be macroeconomically inefficient However, clientelistic policies resolve the “political-commitment problem” by increasing the rewards of rent-seeking (Robinson and Verdier 2013 , 261–263).

invest-1.3.1 Rent-Cum-Marginality: A Theoretical Model

to Analyze Susceptibility to Urban Violence

Rent-cum-marginality is the politico-economic macrostructure likely contributing toinstitutional-anomie in Venezuela’s politico-economic macrostructure that is Rent-cum-marginality refers to the coexistence of economic rents alongside the socioe-conomically deprived and densely populated urban spaces like barrios (Elsenhans

1994,2004), which can lead to many social outcomes (Elsenhans1994, 396;1996,16–17; Sid Ahmed 2000, 506–507) More specifically, marginality refers to “ad-ditional labor [that] consumes [for subsistence] more than it produces” (Elsenhans

1994, 396) In other words, marginality occurs when the supply of labor is higherthan its demand (Elsenhans2004, 88) On the other hand, rents refer to disposableincome not used to compensate labor, making them the economic antonym of profits(Elsenhans2004, 89)

Venezuela’s massive oil revenues since the 1930s are not profits but rents Theterm of (economic) rent better conceptualizes revenues coming from oil exports.The term rent dates to the eighteenth century, when Smith (1776, 399) defined it as,

“the income of men who love to reap where they never sowed.” Twentieth-centuryeconomist Buchanan (1980, 3) refined this economic concept as, “part of the payment

to an owner of resources over and above that which those resources could command

in any alternative use Rent is a receipt in excess of opportunity costs.” Rents areequity appropriated from scarce and non-reproducible resources (Keynes1936, 376;Minsky 1985, 11) Petro-states like Venezuela accrue a high amount of rent due

to global supply and demand factors that significantly increase the global value ofoil exports and increasingly lower costs of production due to high investments inresearch and development in the oil industry Therefore, petro-states become rentierstates since the monetary resources for its expenditures are not significantly tied to theproductive added-value of its overall labor, but to natural resource exports (Jenkins

et al.2011, 4–5; Karl1997, 197; Mahdavy1970)

Importantly though, the state appropriates rent, thus becoming a rentier state, byusing political power to create a monopoly over the income generated due to marketimperfections (Elsenhans2011, 24) The state, as a “landed-elite”, excludes non-stateactors from owning the subsoil and investing capital resources into the extraction ofoil or other minerals without permission, and payment of royalties or taxes to the state

In doing so, the state creates rent This conceptualization of economic rent follows theMarxian tradition that premises exclusion of capital, hence the importance of politicalpower, for a given revenue to become rent (Hausmann1981, 19) The practice byrentier states like Venezuela that extracts and distributes rents is known as rentierism.The macrostructure of rent-cum-marginality can increase the importance of eco-nomic institutions over all others, which means that noneconomic social institutionslose relative importance Rents mainly tend to produce adverse macroeconomiceffects They tend to reduce employment and the population’s purchasing power.Rents also tend to increase economic inequality Rents tend to reduce the possi-bilities of increasing personal welfare or achieving positively valued cultural goals

through formal means Not being able to achieve culturally valued goals throughformal means often produces social strain, which refers to a high level of sociallyinduced frustration (Brezina and Agnew2013, 146–47) Rentier states tend to developsocioeconomic structures inducting social strain by creating consumption instead ofproduction economies Consumption economies arise in rentier states as the Dutchdisease significantly increases incentives to import consumer goods from abroadinstead of producing them domestically (Elsenhans1996; Karl1997; Jenkins et al.

2011; Luciani and Beblawi1987; Sid Ahmed2000) Such macroeconomic tion reduces industrial employment opportunities that allow for labor empowerment(Elsenhans 1996, 30–32) Reduced industrial employment opportunities increasethe levels of social anxiety and strain of achieving economic goals, which in turnincreases incentives of using violence as a means of achieving valued economicgoals (Messner and Rosenfeld1997, 1396; Brezina and Agnew2013, 146–47; Tay-lor1999, 5–6; Zinecker2007a, 9) The above process is what Rosenfeld and Messner(2013), termed as institutional-anomie, which occurs when economic norms such aseconomic resource accumulation dominate culturally valued goals The significantpresence of institutional-anomie makes the instrumental use of violence not an effect

condi-of normlessness or antisocial behavior per se, but a viable and acceptable norm condi-ofachieving culturally valued economic goals (Rosenfeld and Messner2013, 50–51,61–62)

However, due to a decrease in marginality rates from the end of the 1990s until theyear 2011, I was able to infer that the rent-cum-marginality macrostructure did notincrease susceptibility to higher urban violence rates Rents and especially oil-rentsremained high during this period because of Venezuela’s dependency on exports ofthis high yield commodity Following classical theoretical traditions on violence,such as Becker’s theoretical framework, one would expect a reduction of urbanviolence rates, as improving economic conditions reduced opportunities, or rewards,

of predating on resources (Becker1968, 177–178; Ehrlich1996, 80–81) A reduction

of marginality should have reduced the susceptibility to violence in Caracas, andthus institutional-anomie In other words, this should have reduced, or at least notincreased, institutional pressures of achieving economic goals through alternativemeans like urban violence However, this was not the case, as shown in Fig.1.1,which is why violence’s behavior in Caracas was pro-cyclical

1.3.2 Barrels, Arepas, and Urban Growth: Explaining Low

Susceptibility to Urban Violence

In the analysis of macroeconomic factors like rents and marginality, commonlyused aggregate macroeconomic indicators, such as Gross Domestic Product (GDP)growth, are somewhat inappropriate GDP is an inappropriate macroeconomic indi-cator for rentier countries because they exhibit structural heterogeneity, which refers

to the macroeconomic condition of having a sector of the economy being

Real Oil GDP Growth Real Non-Oil GDP Growth

Fig 1.2 Disaggregated Venezuelan real annual GDP growth percentages from 1998 to 2012

(con-stant 1997 prices)

ble for most economic output (Cordova1973; Elsenhans1996, 46) Therefore, theproblem with aggregate indicators like GDP in a significant oil-exporting countrylike Venezuela is that it “literally mixes apples and oranges—or, more appropriately

[to the Venezuelan case], barrels and arepas” (Hausmann and Rodriguez2014b, 20)

Barrels refer to the oil sector or industry and arepas—Venezuela’s most common

food staple—refers to the non-oil sector of the economy Figure1.2shows the aggregated real—or inflation-adjusted—annual growth rate of both oil and non-oilGDP As one can appreciate in this figure, real oil GDP behaved erratically from

dis-1998 to 2012, in part because of the volatility of oil prices and internal struggles ofthe oil industry like the oil workers’ strike of 2002 and secularly low capital expendi-ture in the oil industry’s productive capacity (Rodriguez Sosa and Rodriguez Pardo

2013, 102–103, 109–110) Real non-oil GDP growth on the other hand, steadilydeclined after 2004; the steep upward spike in non-oil productivity between 2003and 2004 was the result of the oil workers’ strike coming to an end and the global priceboom of that year Therefore, based on a disaggregated analysis of real productivitygrowth in Venezuela, urban violence rates behaved counter-cyclically; violence ratesincreased while non-oil economic productivity declined However, a deeper analysis

of Venezuela’s economic indicators from the early 2000s until the early 2010s showsthat urban violence rates indeed behaved pro-cyclically

The analysis of the country running out of Arepas seems plausible since

consider-ing its economic collapse after 2014 However, this subsection shows that due to theeconomic history of Venezuela, under a context of high urban growth and increasingmarginality, rent redistribution policies had a positive effect on people’s pockets,and primarily on the pockets of the marginalized population Under a rent-cum-marginality structural condition and in the context of high urban growth the politicaldemands emanating from the marginal population are primarily the provision ofbasic services like healthcare and food security (Fox2012, 289–294; Elnur2013,

131–132) Policymakers had to continually expand networks of patronage throughclientelist policies To satisfy an ever-expanding political demand for basic servicesand prevent marginal sectors from becoming a source of political instability How-ever, policies creating political patronage proved disastrous in the long term, as theycreated financial strains to the political system, which requires a constant stream ofhigh rent revenues that ended in around 2014 During high rent-windfall periods, how-ever, these clientelistic policies produced the positive effect of reducing marginalityrates at the national and urban level Decreasing marginality rates explain why thecountry’s macrostructure produced lower susceptibility to high urban violence rates.Hence, exhibiting a pro-cyclical behavior of violence rates both in Venezuela andCaracas.

The variables composing the oil and non-oil sector and the outcomes that theyproduce are different even if there is some overlap between them (Hausmann andRodriguez2014b, 20–21; Manzano2014, 51–52) Although oil rents dominated theVenezuelan economy from 1998 to 2012 (see Fig 1.3), oil production decreasedrelative to other major oil producers, mainly in the Middle East,8after policymak-ers nationalized the industry in 1975 (Rodriguez Sosa and Rodriguez Pardo2013,102–103, 109–110)—a policy decision that stands until today Venezuela has neverextracted and exported oil at full potential, which has limited the revenues of thestate accrued overtime (Manzano2014, 53, 76) Moreover, comparing the indicatorsshown in Fig.1.2with Fig.1.3shows a curious outcome: as oil rents increased theirdominance over the economy, non-oil GDP steadily declined To explain this out-come, one could single out the Dutch disease, or the resource curse, but this wouldnonetheless be highly problematic based on a longitudinal analysis of the country’spolitical economy From the 1930s to the 1970s oil rents dominated the Venezuelaneconomy, which was a time when the country had “a GDP per capita higher thanSpain, Greece, and Israel and only 13% lower than that of the United Kingdom”(Hausmann and Rodriguez2014a, 1–2) As such, the Dutch disease did not seem tohave hindered Venezuela’s economic growth during the period mentioned above

The non-oil sector, the arepas, under the institutional condition of rentierism and

high urban growth saw constrained growth during the second half of the twentiethcentury The non-oil sector saw constrained growth because of incumbent politiciansneed of creating and maintaining a sizeable political clientele to assure electoral vic-tory for their party in the elections that regularly took place in Venezuela Thisanalysis follows political scientist Terry Lynn Karl (1997, 5–6) by arguing that itspoor performance was not the direct result of rent windfalls’ economic dynamics—asforwarded by the resource curse thesis (Auty1993)—but a consequence of politicaldecisions inducing negative socioeconomic In other words, political decisions cen-tered around the distribution of oil-rent windfalls created the adverse socioeconomiceffects associated with the Dutch disease, such as reduced non-oil productivity The

8Oil production in Venezuela increased in absolute terms but decreased in relative terms since the

time of the industry’s nationalization and up to 2012 From 1975 to 2012, it increased from about two to over three barrels million batters per day However, oil production in the major oil exporters

of the Middle East increased in the same time-period from about 11 to about 28 million barrels per day (British Petroleum 2016 ) This shows Venezuela’s relative oil production decrease.

Fig 1.3 The contribution of oil rents to the Venezuelan revenues from 1998 to 2012

Dutch disease or the resource curse is not inevitable or automatic consequences ofhigh rent windfalls

The need to bring Venezuela’s swelling urban populations (see Fig.1.4) into telistic patronage networks was a prime factor that limited the oil sector’s resourcesfor capital expenditure from the 1960s onwards The shift from an agrarian exporter

clien-to an oil exporter made big cities like Caracas the new spaces of expected ment opportunities (Seers1964, 233–235) During the 1970s for example, Caracassaw an annual growth rate of 5% (Gonzalez2005, 108) General population growthstabilized only at the end of the 1990s as shown in Fig.1.4 Also shown is Venezuela’surban growth, which increased steadily up to the 1990s as well Noteworthy from thisfigure, however, is that during the second half of the twentieth century, urban popula-tions in the country grew while the natural rate of increase declined The demographictrends shown in the figure above evidence that urban growth was due primarily torural-to-urban migration and secondarily to natural demographic growth.9In addi-tion, by the end of the 1990s, the growth of barrios also stabilized at 45% of thecapital city’s area by 2010 (Bolívar2015, 63)

employ-9 However, oil rent-induced rural-to-urban migration was not the only factor allowing for urban populations to increase The near eradication of malaria through DDT fumigation from most

of Venezuela, especially the country’s plains, and improvements in basic healthcare during the 1950s—pushed forward by the pioneering work of physician Arnoldo Gabaldon—allowed for a population boom, especially outside Caracas and the Andes Before the 1950s, and Gabaldon’s work, most of Venezuela was virtually uninhabitable Malaria was a greater cause of death than the influenza epidemic of the 1910s, its death rate about twice as high as the urban violence rate of the recent decades (Gonzalez 2005 , 1698–1700; Yepes Colemenares 1995 , 17–19) As explained

by Fox ( 2012 ) improvements in health, which where a global phenomenon, allowed for tions to boom in most of the so-called developing world, which helps to explain increased rates of urbanization.

% of popula on increase between censuses

Fig 1.4 Venezuela’s demographic and urban growth rates from 1891 to 2011 Source Graph

cre-ated by author with data from: Baptista ( 2006 , 927–930, 935), Instituto Nacional de Estadística ( 2014a , 12; 2016a , b ), and World Bank 2016d (The World Bank ( 2016d ) source was used to gather data on urban population for the years from 2001 to 2011 The World Bank classifies urban centers

in Venezuela as agglomerations of 1,000 inhabitants or more (World Bank 2016e , Table 6) fore, this source estimates the rate of urban population considerable higher than Baptista’s ( 2006 ), which was used for data on this indicator from 1891 to 2001) *Only including the following popu- lation centers: Caracas, Maracaibo, Valencia, Ciudad Bolivar, Puerto Cabello, Barquisimeto, Coro, Cumaná, and Carúpano (1) Urban centers with populations over 2,500 inhabitants (2) Urban centers with populations over 3,500 inhabitants (3) Urban centers with populations over 5,000 inhabitants (4) Urban centers with populations over 10,000 inhabitants (5) Urban centers with populations over 1,000 inhabitants

There-The wave of urban-to-rural migration in Venezuela around the mid-twentiethcentury created a new class of urban dwellers uninvolved with either agricultural orindustrial production (Karl1987, 65) The argument here is not that rents createdmarginality, as this marginal population existed before in the agricultural sector Whatoil rents changed was the spatial location of the marginal population; they becamethe inhabitants of barrios in cities like Caracas In the Venezuelan capital, therefore,rent distribution dominated the overarching urban and national macrostructure alongwith marginality

Under the policy paradigm called, Sembrando el Petróleo or “Sowing the

Petroleum,” policymakers destined large parts of oil revenues to finance governmentexpenditures in a downstream or derivative sector with little-to-no technologicalrelation to the oil industry This development strategy involved investing in non-oillabor-intensive heavy industries, like those in Guyana City, but with little success atdiversifying the economy (DiJohn2014, 330–333; Hausmann and Rodriguez2014b,34) and the geographical concentration of the population in the big cities (Gonzalez

2005, 155–157) Resulting from such policy paradigm was reduced investments in oilproduction, (DiJohn2014, 321; Manzano2014, 65; Rodriguez Sosa and Rodriguez

Pardo2013, 102–103) The nationalized oil industry, Petróleos de Venezuela S.A.,

became part of the state’s financial system, and not just a revenue source It had to ticipate in non-oil industries to cover state spending, and hence “Sow the Petroleum.”Public participation in aggregate production (GDP) exponentially increased from

par-an average of less thpar-an 15% before nationalization, to par-an average of more thpar-an40% after 1976 (Karl1997, 141–142) Such high participation of the public sectorremained well into the twenty-first century (Rodriguez Sosa and Rodriguez Pardo

2013, 96–97)

The “sowing the petroleum” development strategy failed to diversify the omy and increase economic growth because of the embeddedness of political andeconomic structures that prevented investment in sustainable labor-intensive indus-tries It is important to note that rentier states do not process and resolve politico-economic strains through contestation of policies but through clientelistic networks

econ-of patronage that appease stakeholders (Elsenhans 1996, 47, 57–58; Naim2001,20–21; Peñafiel2008, 304) In Venezuela, the governing elite since the 1970s gavepriority to rent redistribution to appease segments of the urban population that couldorganize violence against the state (North et al.2013, 3–5) The Punto Fijo regime(1958–1989) and later the Chavista regime (1999–present) stabilized their power byproviding disincentives to powerful organizations like the armed forces, the church,and the new commercial elite against organizing to oppose these governments Indoing so, the distribution of rents became exclusionary of some sociopolitical groupslike far-left parties and movements in the former regime and the middle class in thelatter (Buxton2006, 112–113, 115; Karl1987, 64; Velasco2015, 8–13)

As one can appreciate in Fig.1.5, the evolution of net investment in the non-oilsector within the context of urban growth, especially that of Caracas, saw privateinvestment crowded out by public investment The crowding out of private invest-ment by public investment occurred as policymakers increasingly saw the need toimplement employment patronage strategies due to a large marginal urban popula-tion that could pose a threat to the different elite coalitions that governed the countryafter the 1960s The crowding out of private investment by public investment results

in part because under significant rentier conditions like in Venezuela’s wage-driftsfrom the productive sectors of the economy, such as the oil industry, become impos-sible through market mechanisms Wage-drifts do not occur in a rentier economylike Venezuela because real wages do not rise across the economy as a function ofproductivity (Elsenhans1994, 394–395,1996, 16–17).10Nevertheless, the politicalpower of the rentier state can enact public policies affecting relative consumer prices,

10 Since rentier states like Venezuela appropriate and monopolize rent windfalls through cal power, then membership or access to the state class determines wage increments instead of labor productivity Rent windfalls and their distribution determine employment—or unemploy- ment—instead of the reinvestment of profits in capital and the skill of the labor force (Sid Ahmed

politi-2000 , 506–507) Therefore, under a rent-cum-marginality macrostructure microeconomic success becomes a function of personal connections to the rent accumulating elite instead of one’s own labor or entrepreneurial skills Socioeconomic development takes place when a wage-laborer or entrepreneur can accumulate wealth without the need of contacts, connections, or prestige, except for his or her own productive skills (Elsenhans 1996 , 58).

Public Investment Private Investment

Fig 1.5 Public and private sector net investment (gross fixed capital formation) as a percentage

of GDP from 1970 to 2010 Source Figure created by the author with own calculations using data

for years 1970–1996: Banco Central de Venezuela ( 2002 , 126, 175); for years 1997–2010: World Bank ( 2016a , b) Note Investment to GDP ratios calculated in Bolivares with 1968 constant prices.

For the 1970–1984 series, constant prices of 1984 for the 1985–1996 series, and constant prices of

1997 for the 1997–2010 series

which impacts real wages (Elsenhans2004, 94–95) Changes in relative prices canincrease or reduce marginality in urban spaces, even if the supply of labor is higherthan demand because changes in relative consumer prices affect the ability of surpluslabor to consume above or below their relatively low productive capacity

The most crucial policy example of how policymakers created changes in relativeconsumer prices was through nontariff protectionist policies like foreign exchange(FX) controls These were macroeconomically inefficient and politically fruitful tools

of political patronage, which induced a monstrous Dutch disease explaining to a largeextent the poor performance of the non-oil sector Microeconomically, however, thesepolicies produced positive short-term impacts by reducing marginality rates Policieslike FX controls changed relative consumer prices and—artificially—increased thepopulation’s purchasing power In Venezuela the official purposes of applying FXcontrols has ranged from taming inflation, preventing capital flight, and facilitatingexecutive discretion over imports (Padron1995, 158).11When such regimes cameinto place, they became a significant source of corruption and rent-seeking FXcontrols allowed the government to arbitrarily determine the rate at which economicactors can buy foreign hard currency, mainly U.S dollars, using the national currency,

11 Venezuela has experienced three different FX control regimes and they have operated through multiple tiers of FX rates; all of them since the 1980s The first one took place between 1983 and

1989, the second one from 1994 and 1996, and the third one began in 2003 and has been in place

up to the writing of the present book (Karl 1997 , 176–177; Oliveros 2013 ; Padron 1995 ).

the Bolivar This protectionist mechanism permitted the government to artificiallyovervalue the local currency and distribute the allocation of FX discretionally.For non-oil productivity, policies like FX controls had a twofold effect: It madeimports cheaper than domestic production, and it increased the importance of patron-age networks over economic efficiency In other words, FX controls induced theoutcomes associated with the Dutch disease and thus aggravating its undesirablesocioeconomic outcomes Such policy caused a reduction in non-oil productivity byrendering it internationally uncompetitive because of an overvalued currency, whichincreased the country’s reliance on imports (Karl1997, 176–177; Sid Ahmed1987,903) For example, Venezuela imported 17.8 billion US$ worth of goods in 2004,and then 34.4 billion US$ in 2009 (Obuchi et al.2011, 168–169).

The Dutch disease produced by the latest and long-standing FX controls, starting

in 2003, were bearable for the political system because of the economic context ofvery favorable terms of trade, thanks to the global oil price boom of 2003–2008,and 2010–2014 (Hausmann and Rodriguez 2014a, vii) Hence, high oil revenuesprovided the government with enough hard currency to cover for the loss in non-oilproductivity with increased imports, based on political patronage In other words, FXcontrols created an indirect subsidy to increase domestic consumption Such indirectsubsidy especially and significantly impacted low-income sectors For example, the

government increased the network of retail supermarkets, called Mercal, where such

supermarkets sold food products at low prices due to indirect subsidies According

to data from 2009, 54% of the Venezuelan population acquired at least one productfrom state-owned retail supermarkets (Obuchi et al.2011, 168–171, 180) Therefore,the government was able to provide low-cost grocery stores with staples importedwith an artificially overvalued currency thanks to the FX controls

While oil-rent windfalls were high, policies like FX controls that intended to ate political patronage had the positive impact of lowering relative consumer pricesand thus increasing the purchasing power of Venezuelans at the national and espe-cially at the urban level Marginality rates decreased significantly from the end ofthe 1990s up to 2012, both nation-wide and in Caracas As proxies of marginal-ity, I employed the measurements of economic deprivation that are poverty rates andinequality rates, and the spatial category of the barrio, at the national and urban level.These measurements are adequate proxies showing the percentage of the populationthat are consuming more than they produce—i.e., the marginal population (Elsenhans

cre-1994, 396).12As one can appreciate in Fig.1.6, changes in relative consumer prices,due to indirect subsidies like FX controls, halved household poverty rates nationallyand in Caracas during the analyzed period.13Figure1.7shows the impact of policies

12 However, this study does not make use of unemployment as a proxy of marginality even though the Keynesian roots of the marginality concept would suggest its use This is because marginal individuals could have formal employment and still consume more than they produce, or vice a versa (Barrios et al 1985 , 65–73) Moreover, Levitt and Venkatesh ( 2000 , 771–772) show the convoluted nature of employment in barrio dwellings, which makes its use as an indicator of marginality problematic.

13 The national poverty line measured by the “Canasta Básica” or basic basket of consumer prices entails the monthly costs of covering basic food necessities (2200 calories per person) and nonfood

% of households in poverty (Venezuela) % of households in poverty (Caracas)

Fig 1.6 Percentages of household poverty in Venezuela from 1997 to 2012 in Caracas (note that

the data provided by the Venezuela’s Instituto Nacional de Estdística (INE) was not disaggregated enough to calculate the exact values of poverty and inequality for the Caracas Metropolitan Area (CMA) Therefore, the values presented are an average of those reported for the Capital District and Miranda state One-third of Miranda state, according to INE population data ( 2016c ), belongs

to the CMA This makes the values presented in the above table representative of Caracas to a large

extent but they might overestimate the city’s population size) from 2002 to 2012 Source Figure

created by the author with data from: Instituto Nacional de Estadística ( 2016c )

affecting relative consumer prices like FX controls on the Gini coefficient—the surement of inequality rates This measurement declined by about 0.09 nationallyand about 0.04 in Caracas up to 2012 Considering the reduction in poverty rates, onecan interpret the reduction in inequality as a result of increased purchasing power due

mea-to policies like FX controls that artificially overvalued the local currency and allowed

to subsidize basic goods and services indirectly Resulting from this is the lowering ofrelative consumer prices, which increases the entire population’s purchasing power.The behavior of marginality indicators was due to upward social mobility because

of rent windfall distribution through employment patronage or subsidies on sumption of basic goods This upward social mobility was unsustainable as shown

con-by Venezuela’s economic collapse after 2014 However, relative changes in chasing power increase the productivity of barrio inhabitants, which reduces theireconomic marginality Increased purchasing power by lower income sectors couldexplain why inequality decreased on average; they can accumulate more capital inrelation to higher income classes However, the official measurements of inequalitylook at vertical inequality between individuals, and not between groups within thesame community Hence, it does not look at horizontal inequality (Stewart2005).This type of inequality could show different trends and relationships of relative depri-

pur-necessities (housing, healthcare, water, and electricity) for a an average household (5 persons per household has typically been used in recent years, as it is the average size of the Venezuelan family) The classification of households as economically deprived follows if their income falls below the monthly “Canasta Básica,” which varies constantly due to the country’s volatile inflation rate (Instituto Nacional de Estadística 2016d ).

Fig 1.7 Gini coefficients as a measure of inequality in Venezuela from 1997 to 2012 in Caracas

from 2002 to 2012

vation in marginalized urban sectors concerning urban violence (Briceño-Leon andCamardiel2015, 384–385)

Furthermore, the evolution of barrio prevalence provides a better perspective

on the evolution of marginality Barrios are, in no small degree, useful proxies ofmarginality because they make productivity lags visible by showing economic depri-vation in geographical spaces Barrios are a helpful, but not an entirely adequate proxy

of marginality because they are broad aggregates of different factors including, butnot limited to, legal informality, high rent premiums, and the governance gap (Marx

et al.2013, 194–197) From 1997 to 2007, the evolution of barrios was convoluted.Between these ten years, the percentage of precarious barrios declined substantiallyfrom twelve to seven nationally and eight to five in Caracas However, the percent-age of durable barrios increased 10% points both nation-wide and in Caracas; from

70 to 80 nationally and from 57 to 67 in Caracas (Universidad Católica AndrésBello2016) The changes in barrio structures show a likely significant reduction inmarginality between 1997 and 2007, as barrio inhabitants likely had greater dispos-able resources—after meeting basic consumption needs—to invest in the upgrading

of their housing

Policies aiming to create political patronage had a very significant effect in ing poverty, and thus marginality, even if they were macroeconomically unsustainable

reduc-on the lreduc-ong term, as it became evident after 2014 (DiJohn2014, 351–352; Obuchi

et al.2011, 168–171, 180) Hence, analyzing the political economy of barrels, arepas,

and urban growth in Venezuela helps explain why violence in the barrios of cas behaved pro-cyclically during the decade up to 2011 Urban violence increasedwhile socioeconomic conditions improved Public policies of rent distribution framedunder the “sowing the petroleum” policy paradigm increased the purchasing power

Cara-of the population, especially among low-income and marginalized sectors

Explaining the “causes of causes” of violence in the barrios of Caracas cannotrely on a linear narrative like institutional-anomie as a direct cause of high urban vio-lence rates As shown in this section, susceptibility to urban violence in Venezuela andCaracas declined during the decade up to 2011 because of reduced marginality rates.Explaining the phenomenon of urban violence requires the inclusion of interveningsubstructural variables like social capital’s moderating effect Such nonlinear theo-retical frameworks allow disentangling the convoluted process from macroeconomicconditions like Venezuela’s rent-cum-marginality structure to the actual appearance

of high urban violence rates By looking at intervening structural variables like socialcapital, the analysis provided in this book traces the structural process, as explained

by Zinecker (2014, 42–43) from Gewaltanfälligkeit or susceptibility to violence to

Gewaltwirklichkeit or actual violence.

1.4 Methodology

This book contributes an abductive qualitative variable-oriented comparison in threebarrios of Caracas, which are Catia, Petare, and Baruta, to analyze social capital’sintervening effect between Venezuela’s politico-economic structures and urban vio-lence rates It accommodates the employment of a positivist paradigm that testshypotheses based on measurable variables without sacrificing inductive analysis andcontextual interpretation (Babones2015; Morgan2007; Maxwell2012).14 A com-parative analysis identifies the combination of variables that continuously lead to thesame result (Mill1891, 185–186, 299; Ragin1987, 24–25) Therefore, this studyselects three barrios of Caracas as cases for cross-sectional comparison, showingvariance in the dependent variable of urban violence

The variable-oriented comparison performed in this book employs the bined “Method of Difference and Agreement” developed by John S Mill (1891,258–259)—or in contemporary political science jargon, the combination of “MostSimilar System Design” and “Most Different System Design.” This method per-mits comparing variances in both social capital and urban violence, which attempts

com-to show the variable combination constantly leading com-to positive cases—where thedependent variable is present—even if the number of observations is relatively small(Lieberson1991, 312–314) However, causal processes take place in a real contextthat often affects such processes, which is why this book presents a process-tracinganalysis (Bennet and Checkel2015; Collier2011) of the substructural variable that

is social capital

Causal process tracing, moreover, does not necessarily translate into using titative methods—i.e., statistical significance tests (Ragin1987, 15) When discrim-inating between qualitative and quantitative research methods, as tools of causalinference, one identifies two differentiating factors The first one is the open-ended

quan-14 This book takes the methodological position of recognizing the strengths and limits of the positive approach One can refer to this as the “realist approach” (Maxwell 2012 , 656–658).