Venezuelans used to take uneventful politics for granted. No more. They now march in unprecedented numbers against a president - Hugo Chávez - who is unable to keep things running. A six-week general strike has shut down much of the economy, including the oil industry. The crisis now competes with Iraq and North Korea for space on the front pages.

The decline in oil production has raised world prices and disrupted the supply of petrol in the Americas. Fiscal solvency has evaporated, raising the spectre of a default on Brady bonds and a crisis in the mostly foreign-owned banking system. What is fuelling the passions behind the protests?

The Venezuelan story has three main ingredients: poorly diagnosed bad economic performance; the perils of constitutional reform; and the totalitarian implications of revolutionary ideals.

After being the fastest-growing economy on record between 1920 and 1980, Venezuela experienced an extraordinary reversal of fortune in the following two decades, with income per capita falling by half. Disappointed with their lot, Venezuelans voted for a candidate who blamed corruption and privilege - not lack of growth - for their miseries and who offered a political agenda centred on constitutional reform. Since Mr Chávez took power four years ago, income per capita has fallen by another 20 per cent, in spite of high oil prices.

The constitutional reform approved in 1999 did away with a 40-year-old constitution that had generated enough political stability to ensure the transfer of power to nine elected presidents, seven of them running from the opposition. Enough checks and balances were put into the system and sufficient institutional space was created for political parties so that all constituencies found it in their interest to play by the rules and to search for consensus.

The new constitution, through design and circumstance, ended up concentrating power in the presidency and eliminating most checks and balances. It was drafted by a constituent assembly elected through a rule that gave Mr Chávez 92 per cent of the seats with just over 50 per cent of the vote, essentially disenfranchising the opposition. This winner-take-all assembly dissolved the elected Congress and appointed loyal supporters to the Supreme Court, the attorney-general and the comptroller-general without following constitutional procedures. In addition, the new constitution extended the presidential period, allowed for a one-time re-election and substituted a two-chamber congress with a one-chamber national assembly, in order to lessen the burden of consensus-building. This concentration of power has allowed the government to get away with murder, misuse public funds, arm violent gangs and disarm opposition local police.

Last, Mr Chávez's revolutionary ideology, for all its romanticism, inevitably involves a totalitarian system of values that is inconsistent with an open society. According to him, inherited institutions and organisations are a priori bad, income is a sign of corruption, merit a sign of privilege. Stealing is fine if you are poor. Consensus-building is a sign of weakness.

These ideas rub most Venezuelans the wrong way. After all, the country exhibits the highest social and political mobility in the hemisphere. The middle classes find that their dwindling incomes are well deserved, a product of the dramatic rise in educational attainment over the past generation. They feel that a society that does not reward effort, recognise excellence and punish crime is bound to become chaotic. But these values are eroded by the president in his interminable speeches.

To regain governability, the country must return to a political representation that expresses society's wishes and checks and balances to force consensus and limit abuse. This can be achieved only by new elections and reappointing the Supreme Court, attorney-general and comptroller-general. This would require constitut- ional reform or a constituent assembly.

The government has opposed this because it fears losing its power and impunity. The opposition, meanwhile, thinks it can impose it without negotiations. The deadlock is costing all dearly. The international community instead of just facilitating dialogue, as has been the case, should put its force behind a quick electoral solution.

Ricardo Hausmann is professor of the practice of economic development at Harvard University's Kennedy School. He was minister of planning in Venezuela.