Poverty in Bolivia continues to be among the highest in Latin America despite decades of concerted national and international efforts to reduce it. Bolivia has meticulously followed the recommendations of the Washington consensus at the same time as external aid has been generous and foreign direct investment has boomed. Nevertheless, average productivity and incomes remain at the same low level as they were 50 years ago. This paper suggests that the failure of previous development policies is due to a lack of social mobility in the country. Without social mobility, there is little incentive for people to invest in human and physical capital, and without investment there cannot be productivity growth. In addition, the lack of social mobility implies an inefficient use of human capital, and it hinders the construction of efficient social mechanisms for redistribution and consumption smoothing over the life-cycle.
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Find related papers by JEL classification: E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Hassler, John & Rodriguez Mora, Jose V. & Zeira, Joseph, 2002.
"Inequality and Mobility,"
Working Paper Series
rwp02-009, Harvard University, John F. Kennedy School of Government.
[Downloadable!]
Other versions:
Hassler, John & Rodríguez Mora, José Vicente & Zeira, Joseph, 2000.
"Inequality and Mobility,"
CEPR Discussion Papers
2497, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
John Hassler & Jose V. Rodriguez Mora & Joseph Zeira, 2007.
"Inequality and Mobility,"
ESE Discussion Papers
165, Edinburgh School of Economics, University of Edinburgh.
[Downloadable!]