Resource Booms, Inequality, and Poverty: The Case of Gas in Bolivia

Jann Lay, Rainer Thiele and Manfred Wiebelt ()

No 331645, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This paper addresses the question of whether the Bolivian gas boom of the 1990s has bypassed large parts of the poor population, thereby leading to increasing inequalities in an already unequal society. Using a Computable General Equilibrium model that is sequentially linked to a microsimulation model, we examine the transmission channels through which the large resource inflows related to the gas boom, both initial foreign investment in the sector and the subsequent export earnings, as well as large public transfer programs affect the distribution of income. These transfers may well be interpreted as a means of redistributing resource rents. Our focus is on labour market impacts, in particular on shifts between formal and informal employment and changes in relative factor prices. Our simulation results suggest that the gas boom induces a combination of unequalising and equalising forces, which tend to offset each other. As net distributional change is limited, growth generated by the boom reduces poverty despite increasing informality.

Keywords: Food Security and Poverty; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 33
Date: 2007
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https://ageconsearch.umn.edu/record/331645/files/2986.pdf (application/pdf)

Related works:
Journal Article: RESOURCE BOOMS, INEQUALITY, AND POVERTY: THE CASE OF GAS IN BOLIVIA (2008)
Working Paper: Resource booms, inequality, and poverty: The case of gas in Bolivia (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331645

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