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BOLIVIAN PUBLIC FINANCES, 1882-2010. THE CHALLENGE TO MAKE SOCIAL SPENDING SUSTAINABLE*

  • José Alejandro Peres-Cajías (a1)
Abstract
ABSTRACT

This paper offers a long-term comparative study of Bolivian public finances using a new detailed database. First, it shows that Bolivian government revenues and expenditures were particularly small and volatile until the 1980s. Second, it stresses that, whereas the relative importance of social expenditure has grown constantly since the late 1930s, public revenues have always had an unbalanced structure. Finally, it confirms that budget deficits have been constant, at times reaching levels that were especially damaging for the overall economy. This suggests that the potential redistributive impact of Bolivian public finances was not necessarily (or not only) hindered by the lack of an explicit commitment towards redistributive expenses, but by an extreme vulnerability in the revenue side.

RESUMEN

Este trabajo ofrece un estudio comparativo y de largo plazo de la hacienda pública boliviana mediante una base de datos desagregada. En primer lugar, muestra que los ingresos y gastos públicos fueron bajos y volátiles hasta los 1980s. En segundo lugar, demuestra que mientras la importancia relativa del gasto social se incrementó desde finales de los 1930s, los ingresos públicos mantuvieron una estructura desequilibrada. Finalmente, confirma que los déficits presupuestarios fueron constantes, llegando a alcanzar algunas veces niveles perjudiciales para el resto de la economía. Ello sugiere que el impacto redistribuidor de la hacienda pública boliviana no estuvo necesariamente (o no solo) restringido por la falta de apoyo explícito a gastos redistributivos, sino por una vulnerabilidad considerable en los ingresos.

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This research has benefited from financial support from the University of Barcelona through the APIF (2008-2012) fellowship program; from the Science and Innovation Ministry of Spain through project ECO2009-13331-C02-02; from the Catalonian Research and Universities Grant Agency through the BE-DGR 2011 fellowship program. The author specially thanks Alfonso Herranz Loncán for his constant support and critical readings of previous drafts. The author also thanks Paola Azar, Luis Bértola, Sebastián Fleitas, Ewout Frankema, Herbert Klein, Fernanda Wanderley and three anonymous referees for their valuable comments on previous drafts. The usual disclaimer applies.

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

M. Bordo R. Cortés-Conde (2001): Transferring Wealth and Power from the Old to the New World: Monetary and Fiscal Institutions in the 17th Through the 19th Centuries. Cambridge: Cambridge University Press.

D. Brautigam ; O. Fjeldstad M. Moore (2008): Taxation and State-Building in Developing Countries: Capacity and Consent. Cambridge: Cambridge University Press.

K. Breceda ; J. Rigolini J. Saavedra (2009): «Latin America and the Social Contract: Patterns of Social Spending and Taxation». Population and Development Review, 35, pp. 721-748.

J. L. Cardoso P. Lains (2010): Paying for the Liberal State: The Rise of Public Finance in Nineteenth-Century Europe. Cambridge: Cambridge University Press.

E. Engel ; A. Galetovic C. Raddatz (1999): «Taxes and Income Distribution in Chile: Some Unpleasant Redistributive Arithmetic». Journal of Development Economics, 59, pp. 155-192.

E. Goñi ; J. H. López L. Servén (2011): «Fiscal Redistribution and Income Inequality in Latin America». World Development, 39, pp. 1558-1569.

H. S. Klein (2011): A Concise History of Bolivia. New York: Cambridge University Press.

P. H. Lindert (2004): Growing Public: Social Spending and Economic Growth Since the Eighteenth Century. Cambridge: Cambridge University Press.

S. Steinmo (2003): «The Evolution of Policy Ideas: Tax Policy in the 20th Century». British Journal of Politics and International Relations, 5 (2), pp. 206-236.

B. Yun-Casalilla ; P. O'Brien F. Comín (eds.). (2012): The Rise of Fiscal States: A Global History, 1500-1914. Cambridge: Cambridge University Press.

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Revista de Historia Economica - Journal of Iberian and Latin American Economic History
  • ISSN: 0212-6109
  • EISSN: 2041-3335
  • URL: /core/journals/revista-de-historia-economica-journal-of-iberian-and-latin-american-economic-history
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