Determinants of Economic Growth in Bolivia

The Bolivian economy has recorded an important rhythm of economic growth in recent years, particularly between 2006 and 2014. The challenge facing the country is to enhance and sustain the growth rate of the economy in order to improve the living conditions of the population. In this paper an approximation of the determinants of economic growth is made using estimates of growth regressions based on the Barro (1991) methodology with regional panel data (departmental level) for years 1993-2014. According to the results, the basic factors explaining Bolivia's economic growth are physical and human capital, macroeconomic stability, the country's institutionality, and income redistribution. In this regard, policies aimed at strengthening education, with emphasis on quality, a greater provision of productive infrastructure, macroeconomic stability with annual inflation below 6%, sustainable public spending, legal security and efficient administration of justice, and deepening the income redistribution are key factors in boosting and sustaining economic growth.