Venezuela's Dilemma

           The oil-rich country of Venezuela was once one of the most promising economies in South America. Today, however, Venezuela is the most dangerous country in the world.  The shift from prosperity to complete depravation can be explained by the economic downturn that has ravaged through the country, primarily due to corrupt government policies that started with the late President Hugo Chavez. New leadership under Nicholas Maduro has only made the situation worse, causing the economic crisis to reach unprecedented lows. People are starving, people are suffering, and violence has become the solution. For example, gangs have been specializing in the art of kidnapping and holding individuals for ransom in exchange for dollars that they then use to provide for their families.

Kidnapper A/ Kidnapper B	Don’t Kidnap	Kidnap
Don’t Kidnap	(13,8)	(3,10)
Kidnap	(15,2)	(5,5)

            Our discussion of the Prisoner’s Dilemma helped me think about the tragedy of Venezuela from a different point of view. Say you have two individuals, A and B. They are both faced with the same choice: to kidnap or not to kidnap in order to provide food for their family. Due to the anarchic nature of Venezuela, i.e. there is little or no government intervention, the players will choose the dominant strategy of kidnapping, leaving us at the pareto-inefficient equilibrium (5,5). Both kidnappers are able to provide for their families, making neither of them worse off. However, in an ideal world where the Venezuelan government would intervene to stop the violence, both individuals would choose not to kidnap leading us at the pareto-efficient equilibrium (13,8). 

Venezuelans hope that one day our country will no longer be described as the most dangerous country in the world. However, it will take decades to repair the damage that has already been done.