Macroeconomic Policy And Pro-Poor Growth In Bolivia

In this paper, the authors analyze the potential and limitations of macroeconomic policy to affect pro-poor growth in Bolivia. After discussing the possibility to use macro policy to affect pro-poor growth in general, the author then turns to the case of Bolivia, a highly dualistic small open economy that undertook significant macroeconomic and structural reforms in the 1990s. They show that the growth these reforms generated was generally pro-poor in the 1990s but was not enough to achieve significant poverty reduction due to high levels of initial inequality. It also made the country more vulnerable to external shocks which forced the economy into an anti-poor contraction after 1998.