IDEAS home Printed from https://ideas.repec.org/p/glh/wpfacu/263.html

Bolivia’s Economic Pivot: Reviving the Energy Sector

Author

Listed:
  • Lucas Lamby

    (Center for International Development at Harvard University)

  • Lucila Venturi
  • Jose Ignacio Hernandez
  • Ricardo Hausmann

    (Harvard's Growth Lab)

Abstract

Bolivia’s energy system is in structural decline. Natural gas production has fallen 54% since its 2014 peak, collapsing export volumes and turning hydrocarbons from a fiscal engine into a net drain on reserves. The cause is institutional, not geological: the 2005–2009 nationalization cycle increased state revenue capture during the commodity boom but weakened the incentives for long-term exploration. Fuel and domestic gas subsidies compounded the problem, distorting price signals and crowding out renewable investment. The current administration’s January 2026 fuel reform raised diesel prices by 163% and gasoline by 86%, but the heightened global oil prices have displayed the remaining structural weakness and domestic gas subsidy remains untouched, costing Bolivia over $900 million in forgone export earnings in 2025 alone. The reform agenda requires three priority actions: embedding fuel prices in a rules-based formula; restructuring hydrocarbons contracts to restore exploration incentives; and accelerating renewable energy deployment to free up natural gas for export.

Suggested Citation

  • Lucas Lamby & Lucila Venturi & Jose Ignacio Hernandez & Ricardo Hausmann, 2026. "Bolivia’s Economic Pivot: Reviving the Energy Sector," Growth Lab Working Papers 263, Harvard's Growth Lab.
    • Handle: RePEc:glh:wpfacu:263
    as

    Download full text from publisher

    File URL: https://growthlab.hks.harvard.edu/wp-content/uploads/2026/05/2026-04-glwp-263-bolivia-economic-pivot-energy-spanish.pdf
    Download Restriction: no
    File URL: https://growthlab.hks.harvard.edu/wp-content/uploads/2026/05/2026-04-glwp-263-bolivia-economic-pivot-energy-english.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:glh:wpfacu:263. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chuck McKenney (email available below). General contact details of provider: https://growthlab.hks.harvard.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.