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The Economics of ConflictTheory and Empirical Evidence$
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Karl Wärneryd

Print publication date: 2014

Print ISBN-13: 9780262026895

Published to MIT Press Scholarship Online: September 2014

DOI: 10.7551/mitpress/9780262026895.001.0001

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Sociopolitical Conflict and Economic Performance in Bolivia

Sociopolitical Conflict and Economic Performance in Bolivia

(p.127) 6 Sociopolitical Conflict and Economic Performance in Bolivia
The Economics of Conflict

Jose Luis Evia

Roberto Laserna

Stergios Skaperdas

The MIT Press

This chapter discusses the effect of social conflict on economic performance in Bolivia. It first describes the landscape of social and political conflicts in Bolivia, the main organizations and actors, and how these have evolved in the past few decades. The chapter then examines how appropriative conflict, governance, and economic performance interact, and argues that conflict in Bolivia affects economic performance in a number of distinct ways. First, the different types of conflict have direct economic costs that take away resources from production, consumption, and investment. Second, conflict changes the incentives that would normally be expected in a frictionless world of markets so that production, investment, and innovation are distorted in ways that significantly impinge on economic performance. Third, conflict and the levels of resultant economic activity affect investments in “institutions,” “governance,” or “property rights,” which in turn affect future levels of conflict and economic performance.

Keywords:   social conflict, economic growth, political conflict, economic activity, investments

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