Socio-Political Conflict and Economic Performance in Bolivia

Jose-Luis Evia, Roberto Laserna and Stergios Skaperdas

No 2249, CESifo Working Paper Series from CESifo

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.

Keywords: economic growth; property rights; governance (search for similar items in EconPapers)
JEL-codes: D70 H10 O11 O54 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Socio-Political Conflict and Eonomic Performance in Bolivia (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2249

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