Resource Booms, Inequality, and Poverty: The Case of Gas in Bolivia
AbstractThis paper addresses the question of whether the Bolivian gas boom of the 1990s has bypassed large parts of the poor population, thereby leading to increasing inequalities in an already unequal society. Using a Computable General Equilibrium model that is sequentially linked to a microsimulation model, we examine the transmission channels through which the large resource inflows related to the gas boom, both initial foreign investment in the sector and the subsequent export earnings, as well as large public transfer programs affect the distribution of income. These transfers may well be interpreted as a means of redistributing resource rents. Our focus is on labour market impacts, in particular on shifts between formal and informal employment and changes in relative factor prices. Our simulation results suggest that the gas boom induces a combination of unequalising and equalising forces, which tend to offset each other. As net distributional change is limited, growth generated by the boom reduces poverty despite increasing informality.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1287.
Length: 33 pages
Date of creation: Jul 2006
Date of revision:
Poverty; Distribution; Computable General Equilibrium Model; Microsimulation; Natural Gas; Bolivia;
Other versions of this item:
- Jann Lay & Rainer Thiele & Manfred Wiebelt, 2008. "Resource Booms, Inequality, And Poverty: The Case Of Gas In Bolivia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 407-437, 09.
- D3 - Microeconomics - - Distribution
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
- Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-03 (All new papers)
- NEP-DEV-2006-09-03 (Development)
- NEP-ENE-2006-09-03 (Energy Economics)
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.:
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"Natural Resource Abundance and Economic Growth,"
NBER Working Papers
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- Maurizio Bussolo & Jann Lay, 2003. "Globalisation and Poverty Changes in Colombia," OECD Development Centre Working Papers 226, OECD Publishing.
- Spatz, Julius, 2004. "The Impact of Structural Reforms on Wages and employment: The case of Formal versus Informal Workers in Bolivia," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 2, pages 91-122, Abril.
- Federico Escobar & Osvaldo Nina, 2004. "Pension Reform in Bolivia: A Review of Approach and Experience," Development Research Working Paper Series 04/2004, Institute for Advanced Development Studies.
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