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Title:Socio-political conflict and economic performance in Bolivia PDF Logo
Authors:Evia, Jose Luis
Laserna, Roberto
Skaperdas, Stergios
Issue Date:2008
Series/Report no.:CESifo working paper 2249
Abstract:We examine how socio-political conflict in Bolivia has affected its economic performance since the 1970s. Such conflict includes strikes, demonstrations, road blockades, and conventional rent-seeking. Since conflict has costs, it diverts resources away from production, tends to reduce investment and could therefore reduce economic growth. We first review the characteristics of conflict in Bolivia using a unique data set. We then provide estimates of the direct costs of conflict and examine the relationship with economic performance using hypotheses derived from a simple model. In particular, we make a distinction between economic growth that is due to external factors – like changes in income due to movements in the terms of trade – and economic growth that is due to productive investment. Growth due to external factors tends to be positively related to conflict, whereas growth due to productive investment should be negatively related to conflict. Finally, we discuss how levels of conflict, economic performance, and governance might be related in Bolivia’s recent history.
Subjects:economic growth
property rights
governance
JEL:D70
H10
O11
O54
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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