Captured participatory institutions: Theory and evidence from Venezuela's Consejos Comunales

Can participatory institutions (PIs) facilitate development when captured by the government? We propose an original theoretical framework to investigate how changing incumbent priorities can shape the developmental and political effects of captured PIs. While patrons concerned with survival can force PIs to specialize in political activities, those pursuing regime consolidation may incentivize PIs to multitask, delivering developmental gains and political rewards. We deploy our framework to study Venezuela’s Communal Councils. Leveraging difference-in-differences analyses, an original survey of Council participants, and 51 interviews with government officials and grassroots Communal Council members, we find that Councils yielded both economic and political returns during an early period marked by political stability and regime consolidation. However, as Venezuela’s economic collapse pushed the government into an authoritarian survival mode, Councils became politically specialized. While showing that captured PIs can foster development under certain circumstances, our findings cast doubt on PIs’ development-enhancing potential under autocracy.