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Socio-Political Conflict and Eonomic Performance in Bolivia

Author

Listed:
  • Jose Luis Evia

    (Catholic University of Bolivia and Andean University "Simon Bolivar" of Bolivia)

  • Roberto Laserna

    (CERES- Bolivia)

  • Stergios Skaperdas

    (Department of Economics, University of California-Irvine)

Abstract

We examine how socio-political conflict in Bolivia has affected its economic performance since the 1970s. Such conflict includes strikes, demonstrations, road blockades, and conventional rent-seeking. Since conflict has costs, it diverts resources away from production, tends to reduce investment and could therefore reduce economic growth. We first review the characteristics of conflict in Bolivia using a unique data set. We then provide estimates of the direct costs of conflict and examine the relationship with economic performance using hypotheses derived from a simple model. In particular, we make a distinction between economic growth that is due to external factors like changes in income due to movements in the terms of trade and economic growth that is due to productive investment. Growth due to external factors tends to be positively related to conflict, whereas growth due to productive investment should be negatively related to conflict. Finally, we discuss how levels of conflict, economic performance, and governance might be related in Bolivia’s recent history.

Suggested Citation

  • Jose Luis Evia & Roberto Laserna & Stergios Skaperdas, 2008. "Socio-Political Conflict and Eonomic Performance in Bolivia," Working Papers 070814, University of California-Irvine, Department of Economics.
    • Handle: RePEc:irv:wpaper:070814
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    References listed on IDEAS

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    Cited by:

    1. Carlos Scartascini & Mariano Tommasi, 2012. "The Making of Policy: Institutionalized or Not?," American Journal of Political Science, John Wiley & Sons, vol. 56(4), pages 787-801, October.
    2. Fabiana Machado & Carlos Scartascini & Mariano Tommasi, 2011. "Political Institutions and Street Protests in Latin America," Journal of Conflict Resolution, Peace Science Society (International), vol. 55(3), pages 340-365, June.
    3. Garfinkel, Michelle R. & Skaperdas, Stergios & Syropoulos, Constantinos, 2008. "Globalization and domestic conflict," Journal of International Economics, Elsevier, vol. 76(2), pages 296-308, December.
    4. Stergios Skaperdas, 2011. "The costs of organized violence: a review of the evidence," Economics of Governance, Springer, vol. 12(1), pages 1-23, March.
    5. Rabeh Morrar & Faïz Gallouj, 2016. "The growth of the service sector in Palestine: the productivity challenge," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 179-204.
    6. Eckel, Catherine C. & Fatas, Enrique & Kass, Malcolm, 2022. "Sacrifice: An experiment on the political economy of extreme intergroup punishment," Journal of Economic Psychology, Elsevier, vol. 90(C).

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    More about this item

    Keywords

    Economic growth; Property rights; Governance;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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