For the last half-century, scholars, politicians and Venezuelans in general have commonly applied the concept of the ‘resource curse’ to Venezuela in order to explain why the nation, with such extraordinary oil income derived from the output of a small workforce, has performed somewhat disappointingly on the economic front. The resource curse thesis attributes Venezuela's alleged productive sluggishness to the historically tight control that the state has exercised over the oil sector and the resultant tendency towards excessive state intervention in the economy. This centralism stifles individual initiative and is conducive to widespread corruption. This pattern is considered to be more pronounced during periods of oil boom such as the 1970s and, according to the critics of the government of Hugo Chávez, the early years of the twenty-first century. Although resource curse explanations, which posit the existence of a ‘rentier state’, converge with neoliberal thinking, some of their defenders are located elsewhere on the political spectrum.

In From Windfall to Curse?, Jonathan Di John puts the rentier and neoliberal theories to the test. On the basis of a thorough examination of an array of empirical factors related to the economy, as well as secondary political works, Di John calls into question the applicability of both sets of explanations to the Venezuelan case. In chapter 3 he presents statistics derived from the World Bank, the Banco Central de Venezuela and other sources in nine tables in an attempt to refute basic economic precepts of the resource curse. In the first place, the data demonstrate that manufacturing in Venezuela was not ‘crowded out’ by other non-oil sectors during the boom years of the 1970s, in that it received relatively high percentages of investment and its output was proportionately greater than the rest of the non-oil economy. In the second place, the resource curse model fails to explain aspects of economic performance both before and after the 1970s, including the ‘relatively rapid manufacturing growth’ (p. 76) that coincided with oil expansion between the 1920s and the 1960s. Venezuela's centralised state, aided by substantial oil-derived income, promoted economic expansion in accordance with the ‘easy stage’ of import substitution.

In the following chapter Di John takes issue with the thesis, put forward most systematically by Terry Lynn Karl in The Paradox of Plenty, that attributes Venezuela's institutional backwardness to the nation's status as an oil producer. Di John criticises Karl for ‘arbitrarily’ choosing the 1920s, which was the beginning of massive oil production in Venezuela, as ‘the point in which state formation takes place’ (p. 82), and thus demonstrating the correlation between oil booms and deformed institutional growth. Di John fails to explain why he considers Karl's focus on that decade to be arbitrary, however. State building began timidly under Antonio Guzmán Blanco after he reached power in 1870 and gained momentum during the first two decades of the twentieth century. Nevertheless, the consolidation of the process occurred in the 1920s, when Venezuela became an oil exporter soon to be unmatched by any nation in the world. Although Di John fails to refute the thesis on the institutional salience of the 1920s, he does demonstrate the shortcomings of Karl's path-dependent analysis, which minimises the options available to governments in subsequent years.

Di John is on firmer ground when he refutes neoliberalism's claim of a ‘cause and effect’ relationship between oil-driven centralisation and corruption. In fact, prominent examples of corruption in Latin America confirm his argument. The case of Venezuela's twice-elected president, Carlos Andrés Pérez, is emblematic. Pérez was nearly jailed following his first administration in the 1970s, which was characterised by state-interventionist economic policies and widespread corruption, and was impeached during his second, neoliberal government in 1993. Other Latin American presidents who promoted neoliberalism in the 1990s and were also notoriously corrupt include Alberto Fujimori, Carlos Salinas de Gortari, Fernando Collor de Mello and Carlos Menem. Di John draws on World Bank statistics for over 20 nations, presented in three tables, to disprove the relationship between mineral abundance on the one hand and high levels of corruption and slow growth on the other. He also questions the validity of the widely held notion that state companies are necessarily less efficient than private ones, arguing that ‘there is no empirically established relationship between the relative share of public ownership and economic performance’ (p. 71).

Di John makes a distinction between the challenges of the first, ‘easy’ stage of import substitution and those associated with its more advanced stage, and then attempts to determine the regime types that are compatible with each one. He does not consider populist policies, or even corruption, as inherent impediments to the successful implementation of import substitution during its initial stage. In response to economic stagnation in the 1960s, the Venezuelan government began to adopt the more ambitious goals of ‘big push’ industrialisation associated with the second stage, which included exports and mass production of steel and aluminium. According to the author, the political fragmentation and polarisation that set in after 1968 undermined the government's efforts to promote targeted growth and other second-stage goals. Di John advocates a neo-corporatist-type arrangement as most suitable for the second stage, since major actors including political parties, state managers and business and labour leaders can reach consensuses on large-scale projects. Ironically, Di John views the Punto Fijo Pact of 1958 based on consensus from above as ideal, even while political scientists over the last two decades have generally held it responsible for the elitist democracy that produced the legitimacy crisis leading to Chávez's election in 1998. In short, Di John presents a nuanced, well-documented analysis of Venezuelan political economy and history, and in so doing questions widely held assumptions regarding the nation's status as an oil exporter.