The necessary conditions for a flourishing economy seem straightforward. A country needs an educated populace (in marketable fields of study); a tolerable level of corruption; and a stable government that doesn’t scare off foreign investment, one that mints a currency of reliable value. That list excludes property rights, the rule of law, and low regulations, which are so vital to the equation that they go without saying. Most developed countries meet the benchmarks, almost tautologically. In South America, some nations hit every criterion and prosper. Others can’t seem to get it together, even when their neighbors are increasing gross domestic product and lifting people out of poverty. Here are three of the most notorious South American countries that despite plenty of advantages, still get a “needs improvement” on their economic scores.

Venezuela: Populism and Stale Ideology

Although Venezuela has spent most of the 21st century antagonistic towards the United States, relations between the two nations weren’t always so cool. They maintained a cordial, if quiet, coexistence until the 1999 election of Socialist President Hugo Chavez, who was convinced that the U.S. government was attempting to overthrow him. A member of the Organization of Petroleum Exporting Countries, Venezuela recommended that it and its fellow cartel members raise oil prices, to the chagrin of American interests. Vice President Nicolas Maduro ascended to the presidency upon Chavez’s 2013 death, and has done his part to placate foreign investors by declaring an “offensive” against “capitalist parasites.” Among other initiatives, he ordered electronics stores to sell TVs at below-market prices. Any undergraduate economics student could have predicted the shortage that inevitably followed, but a dearth of luxury goods isn’t all that important when even toilet paper is scarce and money loses half its value every 17 months (inflation in Venezuela hovers right around 63%).

This in a nation that has the largest oil reserves in the world. More than Saudi Arabia, more than Canada, almost as much as Iraq and Iran combined (although it needs to be mentioned that oil reserve estimates can fluctuate wildly from year to year, with the discovery of new sources or the development of more efficient ways to extract, transport and refine). (For related reading, see: Not All Oil Economies are Created Equal.)

Despite all the negative indicators, the United States remains by far Venezuela’s largest trading partner. Venezuela imports twice as much from the United States as it does any other country, and sends 40% of its exports stateside. Again, there’s a lot of hydrocarbons until the Bolivar Coastal Field. There’s also a lot of stale ideology at the upper reaches of government, making it likely that shortages and instability will continue in what by rights should be a rich nation. (For related reading, see: Countries with the Best and Worst Investor Protection.)

Argentina: A Legacy of Bad Policy

Compared to Venezuela, Argentina’s inflation is negligible. But compared to the rest of the world, 41% is devastating. A century ago, Argentina was a First World success in all but location, its per capita income comparable to that of the United States and Canada. Nationalization of major industries and anti-poverty programs reversed that trend, one from which Argentina has yet to rebound. Yet Argentina boasts enormous agricultural capacity, and used to count the United States as an indispensable trading partner. However, a “duty war” in 2012 reduced imports and exports between the countries. Long story short, Argentina violated a trade agreement and failed to compensate some U.S. investors the few million they were owed. In response, the Obama Administration reinstated previously waived duties on Argentine imports. Rather than pay an inexpensive arbitration award, the Argentine government instead made it more difficult for its nation’s exporters to transact business with the largest economy on Earth.

Today the United States accounts for barely 5% of Argentine exports. The comparable number was 20% in the 1950s, when capital presumably had more roadblocks in its path than it does today. (For related reading, see: Better Latin American Buys than Argentina.)

Brazil: Red Tape Stifles Growth

Investopedia pop quiz time: Which country has the larger per capita income, Botswana or Brazil? That the question was even posed should give you a clue as to the surprising answer. The World Bank regards the latter as a difficult place in which to conduct business, thanks to a stultifying culture of red tape and a cumbersome, ineffective taxation system. A nation of 200 million with designs on joining the community of dynamic economies doesn’t have the luxury of making it difficult for moneyed foreigners to come in and start writing checks. Even though Brazil enjoys regionally microscopic levels of inflation (7%) and unemployment (4%), economic dynamism is less than the numbers might indicate, largely because importation and exportation are small relative to the size of the Brazilian economy. Greatly simplifying things, Brazilians sell to and buy from each other. GDP grows at an annual 3%, which barely covers the concomitant population increase. Such small GDP increases are more suited for countries at the economic pinnacle, not for ones that are still looking to grow past their sub-Saharan brethren.

The Bottom Line

For inspiration and example, the sputtering economies of South America need only look to their successful neighbors – Colombia, Peru, Chile – to find sustainable growth and prosperity. With the right reforms and sufficient incentives for foreign investment, there’s no reason why Venezuela, Argentina and Brazil can’t join the party. (For related reading, see: Should India be on Investors' Radars?)