The Impact of Governmental Institutions on the Venezuelan Cacao-Chocolate Agro-Chain of Production

This dissertation empirically assesses the impact that governmental and legal institutions have on the Venezuelan cacao-chocolate agro chain of production, as well as the strategies that individuals and groups employ to cope with or evade these institutions.

The central argument of this dissertation is that despite the presence of weak institutional structures and unstable and unpredictable operating conditions, entrepreneurs and businesses are able to maintain and sustain their businesses.

In general, the findings show that dissimilar groups are impacted differently by governmental institutions, based on their respective socioeconomic and political standing, notwithstanding the extent of their political connections, financial resources, and international commercial relations. At the same time, the strategies that dissimilar groups employ to cope with or evade governmental institutions, depend on their socioeconomic and political standing in Venezuela, as well as the extent of their political connections, financial resources, and international commercial relations. Ultimately, institutions are shown to have a direct causal effect on the strategies and mechanisms that different socioeconomic and political groups employ to cope with or evade governmental and legal institutions.

In order to illustrate the effects of institutions on economic performance, the agricultural sector of Venezuela ( cacao-chocolate chain) has been selected, because this economic sub-sector regularly plays a paramount role in the social and economic development of developing countries. Furthermore, Venezuela has been chosen because this country manifests innumerable characteristics, e.g., a strong interventionist State, weak institutional apparatus, weak rule of law,
dependency on one primary revenue source, highly complicated regulatory system, and politicized bureaucracy, which are endemic to many developing countries.

The primary evidence used to demonstrate the validity of the thesis is based on an empirically based, qualitative methodology, (i.e., case studies, in-depth interviews, questionnaires, and surveys, with proportionately high percentage of actors in this sector) which was conducted during the course of 2005-2006. In conjunction with this empirical methodological approach, a complementary approach was employed whereby six principal analytical indicators, i.e., property rights, contract enforcement, credit and financing, labor, governmental regulations, and governance, were analyzed in connection with institutions, and their affect on actors involved in the cacao-chocolate agro chain of production.

Volumes 1-2