Socio-Political Conflict and Economic Performance in Bolivia
48 Pages Posted: 11 Mar 2008
Date Written: March 2008
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
JEL Classification: D70, H10, O11, O54
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Self-Enforcing Political System and Economic Growth: Late Medieval Genoa
By Avner Greif
-
Explaining Conflict in Low-Income Countries: Incomplete Contracting in the Shadow of the Future
-
Investing in Terra Incognita: Waiting and Learning
By Christian Thimann and Marcel P. Thum
-
What Determines the Rate of Growth and Technological Change?
By Yuko Kinoshita and Ashoka Mody
-
By Helmut Bester and Kai A. Konrad
-
Easy Targets and the Timing of Conflict
By Helmut Bester and Kai A. Konrad
-
Easy Targets and the Timing of Conflict
By Helmut Bester and Kai A. Konrad