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The effect of coca and FDI on the level of corruption in Bolivia

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  • Antonio Bojanic

Abstract

This paper analyzes the causes of corruption in contemporary Bolivia. It argues that, along with the well-documented observation that richer countries tend, on average, to be less corrupt than poorer ones, corruption is directly dependent on FDI inflows, with higher levels of FDI associated with lower levels of corruption and vice versa. Additionally, the findings reveal that a less controlled, more permissive market for coca leaves actually reduces the level of corruption in the country, supporting the hypothesis that the way to a less corrupt Bolivia is by lowering government intervention into this controversial market. Copyright The Author(s) 2014

Suggested Citation

  • Antonio Bojanic, 2014. "The effect of coca and FDI on the level of corruption in Bolivia," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-23, December.
    • Handle: RePEc:spr:laecrv:v:23:y:2014:i:1:p:1-23
    DOI: 10.1007/s40503-014-0011-5
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    More about this item

    Keywords

    Latin America; Bolivia; Corruption; Foreign Direct Investment; Coca; D60; D73; H10; O54;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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