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Why Doesn’t Bolivia Catch Up With Chile?

By Paola Barrientos.

Neoclassical growth theory predicts convergence among countries with similar structural characteristics (i.e. preferences, technologies, and rates of population growth). In the case of Bolivia and Chile, despite of their differences, they have many common characteristics that could make us think that there should be some sort of converge: both are mining countries, have shared similar history (ex-spanish colonies and went under militar dictatorships and socialist regimes in similar periods), are catholic, speak the same language, and are located next to each other. However they do not converge (see Figure 1). Why is this? Is it a matter of time? (is it going to happen in the future?)

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Is Poverty Alleviation harmful for the Environment (in the Bolivian forest conservation context)?

By Stanislaw Czaplick

Bolivia has an enormous natural resource potential that properly managed could promote economic development and address the pressing need for poverty reduction.

There is a relatively new development policy approach, which combines environmental conservation and poverty reduction and which is based on the existence of a “Poverty-Environmental Degradation” nexus (P-ED nexus), resulting in “win-win opportunities”.

Acknowledging a variety of different relations between those two development issues there is a big debate (1) concerning the nexus nature, the conditions under which it applies and the intensity of its application. Nevertheless, academics (2) seem to agree on its general nature, concurring on the dual causal relation between environmental degradation and poverty.

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A Boom or a Boomerang: Reflections on Social Policy in Bolivia

By Natasha Morales

Social policy in Bolivia has changed substantially since the increase in world oil prices. According to the Supreme Decree 29565 enacted in May 2008, the increase of revenues coming from the direct hydrocarbon taxes (IDH) should be used, among others, for social protection programs. However, there is not a clear relationship between the logic of the intervention of social programs and the allocation of IDH resources.

As of two years ago, Bolivia was considered a low income country. During 2008, however, the high commodity prices (especially oil, minerals and soy beans) gave the country a strong comparative advantage, and the resulting GDP growth has caused Bolivia to shift to the medium income group.

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Bolivia back in the international headlines

By Raphael Jeronimo Calderon

“Bolivia’s Evo Morales stands on the brink of a ruinous civil war in his attempts to refound the Andean nation as a socialist state” states British The Guardian (1). RIA Novosti, the Russian news agency, writes Bolivia descends into chaos – Dead and wounded as a result of turmoils” (2). “8 dead during riots in Bolivia” covers the Austrian PR-Inside (3) and Qatari Al-Jazeera, as well as Spanish El Pais quoted Alfredo Rada, describing the events as “massacre” (4). Even UN Secretary-General Ban Ki-moon felt the need to comment on the present situation in Bolivia, stating that he is “deeply concerned about the violent clashes and the resulting loss of life in Bolivia, as well as the attempts to disrupt the nation’s economic infrastructure”(5).

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The Incentives to Engage in Corruption

By Gonzalo Forgues-Puccio

“Very few established institutions, governments and constitutions…are ever destroyed
by their enemies until they have been corrupted and weakened by their friends.”
Walter Lippmann

Assume that it is the middle of the summer and that you just bought your favourite ice cream from a shop. You remove the wrapping but there is no bin in sight. Hence, you have two options: you either look for a bin or just “accidentally drop” (throw) the ice cream’s wrapping on the pavement.

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Quo Vadis Torch?

By Flavio Machicado

If doubts whether the Chinese economy is in fact the new world power lingered like nicotine on a wedding gown the morning after, the upcoming Beijing Olympics will eliminate all delusions. The unipolar hegemony shortly held by the US withers away before our very eyes, and preeminence in the post-American world is being distributed amongst a host of nations. This redistribution notwithstanding, the wellbeing of the new big boys in Asia – India and China – hinges on growth in the greatest consumer society to ever engulf the planet, and both tremble before the possibility of a recession made in USA.

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The Monetary Approach to Poverty: Strengths and Weaknesses

By Fabian Soria

Poverty has been created by the economic and social system that we have designed for the world.
It is the institutions that we have built, and feel so proud of, which created poverty.
It is the concepts we developed to understand the reality around us, made us
see things wrongly. […] It is our policies borne out of our reasonings and
theoretical framework, with which we explain interactions among
institutions and people, that caused this problem for so

many human beings.”

Muhammad Yunus, Nobel Peace Prize 2006

When we read about poverty in the news, most of us know more or less what it means. But what are they exactly talking about? When an academic publishes a paper on poverty reduction, what exactly is he proposing to reduce?

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