Bolivia: Impact of shocks and poverty policy on household welfare
AbstractThis paper evaluates the short term impacts on poverty of pro-poor expenditure during the 1998-2002 period of Bolivian economic recession. Observed characteristics of recession are simulated by the combined effects of negative terms of trade shock, reduction in foreing saving flows and low output growth. Evaluation is performed by simulating the impacts of shocks and social expendituresin an environment of low growth: i) on macro aggregates of consumption, income, saving and prices (based on a simple static 1-2-3 model), ii) on household income and consumption levels, and iii)on consumption based poverty indicators. The following were main results from experiments: The termsof trade shock had greater negative impact on household income then reduction in foreing saving flows. In contrast, reduction in foreing saving flows had greater negative impact on house hold consumption then the terms of trade shock. The head count ratio has been greater from reduction in foreing saving flows then from the terms of trade shock. Poverty gap and poverty intensity has concentrated in rural áreas, being greater from reduction in foreing saving flows then from the terms of trade shock. The Combined positive effects from observed social expenditure policy and effort in an environment of low output gorwth, did not compensate the combined negative impacts from the experienced terms of trade shock and reduction in foreing saving flows. These conclusions show that under macroeconomic disequilibrium poverty reduction efforts become policies of poverty contaiment or safety net programs. Poverty reduction is a long term objetive that requires long term commitment for an enviroment on macroeconomic stability.
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Bibliographic InfoArticle provided by Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana in its journal Revista Latinoamericana de Desarrollo Economico.
Volume (Year): (2006)
Issue (Month): 6 (Abril)
Contact details of provider:
Postal: Universidad católica Boliviana San Pablo, Instituto de Investigaciones Socio Económicas, Av. 14 de septiembre 4807. Obrajes, La Paz, Bolivia
Phone: (591-2) 784159
Fax: (591-2) 786707
Web page: http://www.iisec.ucb.edu.bo
More information through EDIRC
growth; Bolivia; poverty;
Other versions of this item:
- Barja, Gover & Monterrey, Javier & Villarroel, Sergio, 2004. "Bolivia: Impact of shocks and poverty policy on household welfare," MPRA Paper 22937, University Library of Munich, Germany.
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