IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2019-151.html
   My bibliography  Save this paper

Public Investment in Bolivia: Prospects and Implications

Author

Listed:
  • Mr. Yehenew Endegnanew
  • Dawit Tessema

Abstract

Bolivia’s “Patriotic Agenda 2025” sets targets for social and economic development propelled by state-led industrialization under a five-year development plan (2016–2020). Large-scale public investment has aimed to fill infrastructure gaps and raise productivity to ensure sustained medium-term growth. Pursuit of these goals in a period of lower hydrocarbon revenues has, however, contributed to widening fiscal and external current account deficits. The paper uses a structural model to outline different scenarios for the level of public investment in the face of declining hydrocarbon revenues. It finds that if public investment is sustained at current levels as a share of GDP while hydrocarbon revenues continue to decline, the sustainability of the public debt could be called into question.

Suggested Citation

  • Mr. Yehenew Endegnanew & Dawit Tessema, 2019. "Public Investment in Bolivia: Prospects and Implications," IMF Working Papers 2019/151, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2019/151
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=46987
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jonathan Isham & Daniel Kaufmann, 1999. "The Forgotten Rationale for Policy Reform: The Productivity of Investment Projects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 149-184.
    2. Gabriel Di Bella & Mr. Lawrence Norton & Mr. Joseph Ntamatungiro & Ms. Sumiko Ogawa & Issouf Samaké & Marika Santoro, 2015. "Energy Subsidies in Latin America and the Caribbean: Stocktaking and Policy Challenges," IMF Working Papers 2015/030, International Monetary Fund.
    3. Fosu, Augustin Kwasi & Getachew, Yoseph Yilma & Ziesemer, Thomas H.W., 2016. "Optimal Public Investment, Growth, And Consumption: Evidence From African Countries," Macroeconomic Dynamics, Cambridge University Press, vol. 20(8), pages 1957-1986, December.
    4. Augustin Kwasi Fosu & Yoseph Getachew & Thomas H.W. Ziesemer, 2014. "Optimal Public Investment, Growth, and Consumption: Fresh Evidence from African Countries," Working Papers 201464, University of Pretoria, Department of Economics.
    5. Melina, Giovanni & Yang, Shu-Chun S. & Zanna, Luis-Felipe, 2016. "Debt sustainability, public investment, and natural resources in developing countries: The DIGNAR model," Economic Modelling, Elsevier, vol. 52(PB), pages 630-649.
    6. International Monetary Fund, 2017. "Kingdom of the Netherlands-Netherlands: 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Alternate Executive Director for the Kingdom of the Netherlands-Netherlands," IMF Staff Country Reports 2017/077, International Monetary Fund.
    7. Mr. Andrew Berg & Mr. Rafael A Portillo & Mr. Edward F Buffie & Ms. Catherine A Pattillo & Luis-Felipe Zanna, 2012. "Public Investment, Growth, and Debt Sustainability: Putting together the Pieces," IMF Working Papers 2012/144, International Monetary Fund.
    8. International Monetary Fund, 2017. "Bolivia: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Authorities of Bolivia," IMF Staff Country Reports 2017/395, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alarcon Gambarte, Samuel, 2020. "Multiplicador de inversión pública durante el auge y declive de precios internacionales," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 33, pages 79-104, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gurara, Daniel & Kpodar, Kangni & Presbitero, Andrea F. & Tessema, Dawit, 2021. "On the capacity to absorb public investment: How much is too much?☆," World Development, Elsevier, vol. 145(C).
    2. Daniel Gurara & Mr. Kangni R Kpodar & Mr. Andrea F Presbitero & Dawit Tessema, 2020. "On the Capacity to Absorb Public Investment: How Much is Too Much?," IMF Working Papers 2020/048, International Monetary Fund.
    3. Presbitero, Andrea F., 2016. "Too much and too fast? Public investment scaling-up and absorptive capacity," Journal of Development Economics, Elsevier, vol. 120(C), pages 17-31.
    4. Thomas H.W. ZIESEMER, 2012. "Worker remittances and government behaviour in the receiving countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 37-59, December.
    5. Mr. Takuji Komatsuzaki, 2016. "Improving Public Infrastructure in the Philippines," IMF Working Papers 2016/039, International Monetary Fund.
    6. António Afonso & Eduardo Rodrigues, 2024. "Is public investment in construction and in R&D, growth enhancing? A PVAR approach," Applied Economics, Taylor & Francis Journals, vol. 56(24), pages 2875-2899, May.
    7. Ampofo, Gideon Minua Kwaku & Jinhua, Cheng & Bosah, Philip Chukwunonso & Ayimadu, Edwin Twum & Senadzo, Patrick, 2021. "Nexus between total natural resource rents and public debt in resource-rich countries:A panel data analysis," Resources Policy, Elsevier, vol. 74(C).
    8. Sayed O. M. Timuno & Joel Hinaunye Eita & Lanouar Charfeddine, 2020. "Towards an effective fiscal stimulus: Evidence from Botswana," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1790948-179, January.
    9. Djedje Hermann Yohou, 2015. "In Search of Fiscal Space in Africa: The Role of the Quality of Government Spending," CERDI Working papers halshs-01222812, HAL.
    10. Arnold McIntyre & Ahmed El-Ashram & Mr. Márcio Valério Ronci & Julien Reynaud & Ms. Natasha X Che & Ke Wang & Mr. Sebastian Acevedo Mejia & Mr. Mark Scott Lutz, 2016. "Caribbean Energy: Macro-Related Challenges," IMF Working Papers 2016/053, International Monetary Fund.
    11. Wang, Wencheng & Ning, Zinan & Shu, Yang & Riti, Joshua Sunday & Riti, Miriam-Kamah J., 2023. "Natural resource rents and public debts nexus in African resource-rich and most indebted nations: Issues with aggregation bias," Resources Policy, Elsevier, vol. 82(C).
    12. Thomas H.W. Ziesemer, 2020. "Can we have growth when population is stagnant? Testing linear growth rate formulas of non-scale endogenous growth models," Applied Economics, Taylor & Francis Journals, vol. 52(13), pages 1502-1516, March.
    13. Fisayo Fagbemi, 2020. "Assessing the Role of Governance in West African Fiscal Performance," The American Economist, Sage Publications, vol. 65(1), pages 97-122, March.
    14. Issouf Samaké & Ms. Priscilla S Muthoora & Mr. Bruno Versailles, 2013. "Fiscal Sustainability, Public Investment, and Growth in Natural Resource-Rich, Low-Income Countries: The Case of Cameroon," IMF Working Papers 2013/144, International Monetary Fund.
    15. Lacina Balma & Daniel Gurara & Mthuli Ncube, 2019. "Working Paper 320 - Hands Off Oil Revenues? Public Investment and Cash Transfers," Working Paper Series 2446, African Development Bank.
    16. Okey Mawussé Komlagan Nézan, 2016. "Public Expenditure and Private Sector Investment in WAEMU Countries," Working Papers 328, African Economic Research Consortium, Research Department.
    17. Getachew, Yoseph Y. & Turnovsky, Stephen J., 2015. "Productive government spending and its consequences for the growth–inequality tradeoff," Research in Economics, Elsevier, vol. 69(4), pages 621-640.
    18. Rafael Aguirre Unceta, 2018. "Niger : la Quête du Développement dans un Contexte Adverse," Working Papers hal-02046108, HAL.
    19. Oukhallou, Youssef, 2016. "Analyzing economic growth: what role for public investment?," MPRA Paper 69772, University Library of Munich, Germany.
    20. International Monetary Fund, 2012. "Cameroon: Staff Report for the 2012 Article IV Consultation," IMF Staff Country Reports 2012/237, International Monetary Fund.

    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:imf:imfwpa:2019/151. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    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.