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Bolivia and the slowdown of the reform process (Inglês)

Bolivia was one of the early adjusters of the 1980s, and the success of its stabilization program of August 1985 in stopping hyperinflation has received considerable attention. The program went beyond stabilization and included a broad set of economic reforms, encompassing the liberalization of the markets for goods, money and credit, and labor. The stabilization program and these first reforms were packaged in the omnibus Supreme Decree 21060 (S.D. 21060). Later, S.D. 21060 became the symbol of the new development model for Bolivia. Bolivians would refer to the liberal model in force after 1985 as the model of S.D. 21060. In the aftermath of S.D. 21060, the government designed and implemented, in a very orderly way, an economic policy rich in transformations. The purpose of this paper is to show in detail how the dynamics of the first generation of reforms have been very different from those of structural adjustment in the Bolivian experience. It is organized as follows: 1) survey of the conditions preceding S.D. 21060 and contents of the stabilization package of 1985; 2) description of the state of the reforms along with some quantitative results; 3) author's view of the political competence of the reformist governments in dealing with the adjustment measures and coping with the opposition; 4) capacity governance, with an emphasis on the fiscal accounts and the difficulties met in two of the second-generation reforms, privatization and social security reform; and 5) concluding remarks.


  • Autor

    Morales, Juan Antonio

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    Documento de Trabalho (Série Numerada)

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    América Latina e Caribe,

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  • Nome do documento

    Bolivia and the slowdown of the reform process

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    purchase of goods and services;finance and economic;financial sector reform;high real interest rate;Public and Publicly Guaranteed;corruption in tax administration;terms of trade;social security reform;stabilization program;governance capacity;urban affair;rate of growth;nonfinancial public sector;real exchange rate;export of goods;current account deficit;current account balance;fiscal deficit;Tax Reform;Economic Policy;consumer price index;nonrenewable natural resource;lines of credit;suspension of payment;increase in index;increase tariff;supervision of bank;price of fuel;internal revenue service;political science literature;savings and investment;expansion of expenditure;ad valorem tariffs;taxation of enterprise;value added tax;degree of autonomy;foreign debt crisis;total external debt;public sector deficit;private fixed investment;private financial institution;exchange rate appreciation;composition of expenditure;tax on profits;allocation of resource;system of production;income from assets;market for good;distribution of shares;source of financing;opposition to privatization;gdp growth rate;demand for money;loss of income;private capital market;public sector investment;international financial institution;exchange rate depreciation;lack of infrastructure;wages and salary;control of inflation;urban labor force;public health service;privatization and decentralization;exchange rate unification;minimum reserve requirement;open market operation;certificate of deposit;manufacturing sector;tax law;stabilization plan;popular participation;authoritarian governments;Exchange Rates;fiscal correction;tax structure;foreign trade;Fiscal Reform;military government;market liberalization;long-term loan;banking crisis;quantitative restriction;disruptive factor;open economy;imported inputs;commercial bank;monetary restraint;democratic government;black market;tariff structure;adjustment measure;incentive regime;fiscal account;complementary reform;capital expenditure;high share;investment rate;real gdp;export price;external shock;prudential rule;competitive imports;tax revenue;subsidized credit;short period;tax collection;social unrest;foreign donor;government's commitment;severance payment;economic reform;Land tenure;small deficits;intangible asset;Labor Market;internal strife;capital-intensive industries;public education;mining law;labor problem;political instability;medium-size enterprise;high trade;inflation rate;domestic policies;external developments;trade partner;export performance;domestic economy;net worth;production activity;state enterprises;joint-stock company;government share;stabilization effort;saving rate;participatory democracy;basic infrastructure;skilled labor;fundamental changes;foreign investor;delinquency rate;agricultural area;Medical Insurance;tax base;medical service;draft law;installed capacity;primary balance;fiscal effort;commitment device;policy reversal;institutional context;investment code;tax concession;property right;fiscal stance;private enterprise;risk sharing;capital expense;net transfer;large creditor;domestic currencies;debt service;foreign saving;previous one;important component;price control;Tax Compliance;oil sector;competitive edge;agricultural import;high tariff;capital good;external agencies;commercial debt;loan service;political cause;high wage;import tariff;raise revenues;fiscal position;real value;high inflation;sale proceeds;special treatment;deficit financing;monetary policy;drug traffic;fiscal measure;mitigation program;adjustment process;government transfer;supply shortages;foreign exchange;price growth;executive order;Economic Management;foreign creditor;inflationary pressure;trade surplus;public finance;illegal trade;treasury bill;great depression;government bond;lower tariff;geographic position;reform process;private property;wildcat strike;political unrest;constitutional mandate;Labor Union;communist party;state involvement;structural adjustment;domestic industry;protective barrier



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