José Peres (Universitat de Barcelona, España)
Looking at the long term, it is clear that Bolivian export sector is one of the most concentrated in the Latin America context. Non-renewable natural resources exports have represented at least 80% per cent of total export value since 1880 until today (Gray, 2003; Wanderley, 2009). Even more, one single product constituted the bulk of Bolivian exports: silver (1880-1895), tin (1905-1980) and natural gas (1995-2010). Unless some measures are taken, this structure could affect the potential of state intervention in the economy. Mainly, this could generate an extreme pro-cyclicality and volatile public finances (Jimenez and Tromben, 2006; OECD, 2008). The present paper confirms this hypothesis. First of all, it proves the Bolivian Public Finances dependence on natural resource exports. This is done looking at the co-integration of several fiscal variables with an export price basket. Secondly, it demonstrates that Bolivian Public Finances were pro-cyclical. Nevertheless, it shows that Bolivian Public Finances volatility was not extremely different than other Latin American experiences. So, finally, it is argue that the main restriction lied in the greater volatility of those items that could foster economic growth and development (Stinjs, 2005).
