In “Responding to Economic Collapse in Venezuela,” economist Ana María Chirinos-Leañez examines Venezuela’s economic crisis and explores how policymakers might approach recovery in a country that has experienced one of the deepest peacetime economic contractions in modern history. Between 2013 and 2020, Venezuela’s economy shrank by more than three-quarters, driven by the collapse of oil production, macroeconomic mismanagement, and institutional breakdown. The country’s heavy dependence on petroleum exports—accounting for the vast majority of export revenues—left it particularly vulnerable to external shocks and policy failures.

Chirinos-Leañez argues that recovery in such a complex environment cannot rely on a single sweeping reform plan. Instead, she highlights the Problem-Driven Iterative Adaptation (PDIA) framework, which emphasizes gradual, problem-focused reforms and continuous learning. Rather than attempting immediate comprehensive transformation, policymakers should prioritize addressing specific constraints, strengthening institutional capacity, and testing solutions incrementally. This adaptive approach, she suggests, may offer a more realistic path for rebuilding Venezuela’s economy and restoring growth over time.

Ana María Chirinos-Leañez is a Venezuelan economist specializing in macroeconomics and financial systems. She currently works as an economist at the United Nations Development Programme (UNDP) in New York, researching development policy and Venezuela’s economic recovery. To see full biography. »»

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