Macroeconomic Policy and Pro-Poor Growth in Bolivia
AbstractIn this paper, we analyze the potential and limitations of macroeconomic policy to affect propoor growth in Bolivia. After discussing the possibility to use macro policy to affect pro-poor growth in general, I then turn to the case of Bolivia, a highly dualistic small open economy that undertook significant macroeconomic and structural reforms in the 1990s. We show that the growth these reforms generated was generally pro-poor in the 1990s but was not enough to achieve significant poverty reduction due to high levels of initial inequality. It also made the country more vulnerable to external shocks which forced the economy into an anti-poor contraction after 1998. Using a dynamic CGE model we demonstrate that there are only limited options for pro-poor macro policy which is particularly due to the low domestic savings rate and the high rate of dollarization of the economy. Consequently, in order to increase the options for pro-poor macro policy, the large inequality, the high dualism, the low savings rate, and high dollarization of the economy need to be addressed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 143.
Length: 23 pages
Date of creation: 08 Jun 2006
Date of revision:
Contact details of provider:
Postal: Platz des Göttinger Sieben 3, 37073 Göttingen
Phone: 0049-551-39 81 72
Fax: 0049-551-39 81 73
Web page: http://www.iai.wiwi.uni-goettingen.de
More information through EDIRC
Pro-Poor Growth; Bolivia; CGE model; dollarization;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-24 (All new papers)
- NEP-CMP-2006-06-24 (Computational Economics)
- NEP-DEV-2006-06-24 (Development)
- NEP-LAM-2006-06-24 (Central & South America)
- NEP-MAC-2006-06-24 (Macroeconomics)
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.:
- Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
- Schweickert, Rainer & Thiele, Rainer & Wiebelt, Manfred, 2003. "Makroökonomische Reformen und Armutsbekämpfung in Bolivien: ebnet die HIPC-Initiative den Weg zu sozialverträglicher Anpassung?," Kiel Discussion Papers 398, Kiel Institute for the World Economy (IfW).
- Daniel Kaufmann & Massimo Mastruzzi & Diego Zavaleta, 2003. "Sustained Macroeconomic Reforms, Tepid Growth: A Governance Puzzle in Bolivia?," Development and Comp Systems 0308003, EconWPA.
- Dani Rodrick, 2003.
Economics working papers
2003-17, Department of Economics, Johannes Kepler University Linz, Austria.
- Theo S Eicher & Cecilia Garcia Penalosa, .
"Inequality and Growth,"
Discussion Papers in Economics at the University of Washington
0083, Department of Economics at the University of Washington.
- Eduardo Lora, 2001.
"Structural Reforms in Latin America: What Has Been Reformed and How to Measure It,"
Research Department Publications
4293, Inter-American Development Bank, Research Department.
- Eduardo Lora, 2001. "Structural reforms in Latin America: What has been reformed and how to measure it?," Research Department Publications 4287, Inter-American Development Bank, Research Department.
- World Bank, 2004. "Bolivia : Public Expenditure Management for Fiscal Sustainability and Equitable and Efficient Public Serivces," World Bank Other Operational Studies 14385, The World Bank.
- Eduardo Lora & Ugo Panizza, 2002.
"Structural Reforms in Latin America under Scrutiny,"
Research Department Publications
4301, Inter-American Development Bank, Research Department.
- Eduardo Lora & Ugo Panizza, 2002. "Structural Reforms in Latin America under Scrutiny," Research Department Publications 4303, Inter-American Development Bank, Research Department.
- Stephan Klasen & Melanie Grosse & Rainer Thiele & Jann Lay & Julius Spatz & Manfred Wiebelt, 2004. "Operationalizing Pro-Poor Growth - Country Case Study: Bolivia," Ibero America Institute for Econ. Research (IAI) Discussion Papers 101, Ibero-America Institute for Economic Research.
- Rainer Schweickert & Rainer Thiele & Manfred Wiebelt, 2005. "Exchange Rate Policy in a Dollarized Economy: A CGE Analysis for Bolivia," Kiel Working Papers 1255, Kiel Institute for the World Economy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Jaep).
If references are entirely missing, you can add them using this form.