ABSTRACT
This chapter examines the Venezuelan democratic regime from 1979 to 1986 in order to determine the extent to which regime type makes a difference regarding the consequences of economic austerity. Several indicators, including wages, unemployment, and prices and subsidies, are examined to determine the consequences of austerity for the working class. The political space created by abrupt regime change may allow for the implementation of any new policy or strategy, whether it is austerity or expansion. Building on a tradition of concertacion and class compromise, Lusinchi in particular has used the notion of the social pact to deal with economic austerity and debt. The long-term success of the "social pact" model in legitimating austerity in Venezuela is by no means guaranteed, however. Conventional wisdom indicates that pluralist democracies are more likely to favor popular sectors in formulating economic policies than are authoritarian regimes.
