Center for Global Development Note
March 24, 2025
Abstract
After the decision of the Venezuelan regime to disregard the results of the presidential election of July 28, 2024, and subsequently swear in Maduro for a new term on January 10, 2025, the international community faces a new reality. The Venezuelan people, essentially, have tried every single tool in the kit to try to transition to democracy without success.
As the administration will define a new strategy on Venezuela, one of the tools at it disposal is reenacting and deepening economic sanctions on the regime. While the effectiveness of sanctions as the optimal tool to restore democracy in Venezuela is hard to assess empirically, part of the policy discussion is centered on one of its consequences: whether this strategy could result in more migration and irregular crossings at the US Southwestern border.
This note explores the empirical evidence about the relationship between sanctions and migration in the context of Venezuela. In particular, we study the relationship between oil prices and income (for which its variation could proxy for the imposition of sanctions) and outmigration of Venezuelans, measured through Venezuelans crossing the US border. Our main findings suggest that higher oil income or prices results in more, not less, crossings of Venezuelans migrants.
In theory, the relationship is not obvious. On the one hand, greater sanctions, and hence, lower oil revenues, could make matters worse for Venezuelan citizens, prompting them to leave. On the other hand, migration is a costly investment, and lower income might make it less affordable. In addition, greater income to the regime might imply that it makes it more capable of stabilizing its support coalition, making a political transition less likely (de Mezquita and Smith, 2011). For those outside of the ruling coalition and their supporters, this may constitute greater incentive to leave. Combining this incentive with a short-term improvement on economic conditions may make outmigration not only more desirable but also more affordable. This would justify a positive relationship between oil income and outmigration.
This means that, a priori, it is not obvious what is the sign of the relationship between oil income and outmigration in Venezuela. Different theories predict different outcomes, meaning that the question should be empirically settled. This note explores this empirical question.
Citation
Bahar, Dany, and Ricardo Hausmann. "Sanctions on Venezuela are not Driving Migration to the US Southwest Border: An Empirical Assessment." Center for Global Development Note, March 24, 2025.