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Socio-Political Conflict and Economic Performance in Bolivia

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Author Info
Jose-Luis Evia ()
Roberto Laserna ()
Stergios Skaperdas ()

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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.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2249.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2249

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Related research
Keywords: economic growth; property rights; governance;

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Find related papers by JEL classification:
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
H10 - Public Economics - - Structure and Scope of Government - - - General
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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  1. Alberto Abadie & Javier Gardeazabal, 2001. "The Economic Costs of Conflict: A Case-Control Study for the Basque Country," NBER Working Papers 8478, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier. [Downloadable!] (restricted)
    Other versions:
  3. Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2002. "Fractionalization," Harvard Institute of Economic Research Working Papers 1959, Harvard - Institute of Economic Research. [Downloadable!]
    Other versions:
    • Wacziarg, Romain & Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio, 2002. "Fractionalization," Research Papers 1744, Stanford University, Graduate School of Business. [Downloadable!]
    • Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2003. "Fractionalization," NBER Working Papers 9411, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    • Alesina, Alberto, et al, 2003. " Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-94, June. [Downloadable!] (restricted)
  4. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 725-753, August.
  5. Lee, J. & Skaperdas, S., 1998. "Workshops or Barracks? Productive versus Enforcive Investment and Economic Performance," Papers 97-98-20, California Irvine - School of Social Sciences.
  6. Paul Collier & Anke Hoeffler, 2004. "Greed and Grievance in Civil War," Development and Comp Systems 0409007, EconWPA. [Downloadable!]
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  7. Acemoglu, Daron & Johnson, Simon & Robinson, James A, 2004. "Institutions as the Fundamental Cause of Long-Run Growth," CEPR Discussion Papers 4458, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Stergios Skaperdas & Constantinos Syropoulos, 2002. "Insecure Property and the Efficiency of Exchange," Economic Journal, Royal Economic Society, vol. 112(476), pages 133-146, January. [Downloadable!] (restricted)
  9. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September. [Downloadable!] (restricted)
    Other versions:
  10. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, 01. [Downloadable!] (restricted)
    Other versions:
  11. Francisco M. Gonzalez, 2005. "Insecure Property and Technological Backwardness," Economic Journal, Royal Economic Society, vol. 115(505), pages 703-721, 07. [Downloadable!] (restricted)
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