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Distributional Effects of FDI: How the Interaction of FDI and Economic Policy Affects Poor Households in Bolivia

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  • Peter Nunnenkamp
  • Rainer Schweickert
  • Manfred Wiebelt

Abstract

This article provides a CGE analysis of the medium to long-run impact of FDI inflows on poverty and income distribution in Bolivia. The simulation results suggest that FDI inflows enhance economic growth and reduce poverty. However, the income distribution typically becomes more unequal. In particular, FDI widens disparities between urban and rural areas. The Bolivian government may promote the growth-enhancing and poverty-alleviating effects by overcoming labour-market segmentation and providing complementary public investment in infrastructure. But simulated policy reforms or alternative productivity scenarios are hardly effective in reducing the economic divide. Copyright 2007 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Overseas Development Institute in its journal Development Policy Review.

Volume (Year): 25 (2007)
Issue (Month): 4 (07)
Pages: 429-450

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Handle: RePEc:bla:devpol:v:25:y:2007:i:4:p:429-450

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Cited by:
  1. Aliaga Lordemann, Jevier & Villegas Quino, Horacio, 2011. "Poverty, Indigence and Public Investment in Bolivia: A Simulation Analysis," Documentos de trabajo 5/2011, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
  2. repec:hal:journl:halshs-00587797 is not listed on IDEAS

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