Beyond the IFIs, beyond USAID in Chavista Venezuela: Promoting the Free Market in the Middle-Income World

Many scholars assert that the U.S. state promotes free market economic policies abroad through the leverage it wields within international financial institutions (IFIs), such as the International Monetary Fund and the World Bank. Other scholars have focused on U.S. bilateral aid programs, such as those implemented by USAID, and their emphasis on free market economic policies. In many middle-income countries, though, IFIs and U.S. development agencies do not maintain economic development programs. If the U.S. state cannot promote free market policies through IFIs and its bilateral development agencies, how does it promote them at all in middle-income countries? In this paper, I provide a case study of U.S. foreign policy toward Venezuela, a middle-income country, under the government of President Hugo Chávez (1999–2013). I draw on interviews with U.S. state elites, including several former ambassadors and State Department employees, and U.S. state documents to show how the U.S. encourages free market economic reforms through its support for civil society organizations that embrace these reforms. In particular, I focus on the work of the Center for International Private Enterprise, which has explicitly linked political freedom with economic freedom. Through this organization, the U.S. works with free market think tanks and promotes free market initiatives, all in the form of political rather than economic assistance.