The Cyclicality of Fiscal Policy in Bolivia

Darwin Ugarte ()
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Darwin Ugarte: Ministerio de Economía y Finanzas Públicas
Authors registered in the RePEc Author Service: Osmar Bolivar Rosales ()

Cuadernos de Investigación Económica Boliviana, 2016, vol. 1, issue 2, 1-40

Abstract: This paper analyzes the performance of fiscal policy in Bolivia in years 2003-2015. To this end, the structural fiscal balance and the fiscal impulse are calculated with the aim of characterizing the expansive or contractive nature thereof and determining whether the fiscal policy in recent years has been procyclical or countercyclical relative to evolution of the economic cycle. The findings suggest that the fiscal policy in Bolivia was contractive over years 2003 to 2008 and expansive in the period 2009-2015. Moreover, compared to the economic cycle the fiscal policy was countercyclical from 2003 to 2012, procyclical in 2013 and 2014 and countercyclical in 2015. These results are maintained when using information from the Non-Financial Public Sector (NFPS) or of the Treasury, different classifications of the fiscal accounts or when approximating the non-hydrocarbons fiscal balance. Additionally, the paper highlights the heterodox nature of Bolivia’s fiscal policy and identifies public investment as a countercyclical fiscal policy instrument.

Keywords: Structural Fiscal Balance; Fiscal Impulse; Cyclicality of the Fiscal Policy (search for similar items in EconPapers)
JEL-codes: E32 E62 H61 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:efp:journl:v:1:y:2015:i:2:p:1-40

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