Dissent is an important part of public discourse in any setting. In a truly democratic regime, one would expect dissent to carry little cost (though I expect it might in hard to observe ways). But what about in autocratic regimes? What is the price of opposing the ruling party?
In a recent working paper, Chang-Tai Hsieh, Edward Miguel, Daniel Ortega and Francisco Rodriguez try to address this question in the context of the Hugo Chavez led Venezuela. In their own words:
In 2004, the Chávez regime in Venezuela distributed the list of several million voters whom had attempted to remove him from office throughout the government bureaucracy, allegedly to identify and punish these voters. We match the list of petition signers distributed by the government to household survey respondents to measure the economic effects of being identified as a Chavez political opponent. We find that voters who were identified as Chavez opponents experienced a 5 percent drop in earnings and a 1.5 percentage point drop in employment rates after the voter list was released. A back-of-the-envelope calculation suggests that the loss aggregate TFP from the misallocation of workers across jobs was substantial, on the order of 3 percent of GDP.
That political opposition in an autocratic regime can invite economic retribution is not that surprising, but the 3% of GDP number kind of is. It's just a great illustration of how the incentives of the public and autocratic leaders are not aligned: one would hope that a 3% loss of GDP would have dissuaded Chavez from going after his opposition.
All in all, a really interesting, if not very sad, read.
(Ed: Marginal Revolution has an interesting take on this paper, as well)