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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So you want to do your bit for the planet? Here is some food for thought…

Climate change, water shortages, rising global pollution levels and food insecurity have made environmental sustainability the most pressing concern of our time. Improvements in production systems and agriculture, and advances in clean technology, will certainly help, but as the global population becomes more conscious of the issues facing us as a human race, we begin to ask ourselves what it is that we can do to help preserve our planet for centuries to come. More than in anything else, the answer to that lies in the diet choices we make.

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Salar de Uyuni and REA – What´s Wrong with the Picture?

An old joke goes that a worse thing than being exploited by capitalism is not being exploited by capitalism at all. Under-exploitation by capitalism could probably be placed somewhere in the middle and an example of it can be seen in the area around a small town of Uyuni in Bolivia. Starting from there, you can take a trip between one and four days long and visit (among other things) the Salar de Uyuni (the famous Salt Flats) and Reserva Eduardo Avaroa (REA) National Park. The Salt Flats, which are the largest and highest in the world, are one of the most beautiful places on the planet. They constitute one of the brightest objects on the earth´s surface and are visible from space. The whole REA area is a natural wonderland supported by one of 12 most important watersheds in South America. The permanent lagoons Read More »

The Relevance of Productivity: From Macro to Micro

CG_MachicadoA longstanding question in economics is why some countries are much wealthier than others. Recent studies show that one part of the answer has much to do with differences in productivity levels among countries. Since the seminal work of Solow (1), an important concern in economic literature has been how to measure productivity. If productivity has a strong influence on growth and welfare in the long run, having a good productivity measure is a crucial element.

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The Need for a Revolution

CG Machicado

Nowadays everybody in Bolivia talks about revolution and the first thing that anyone can imagine, and has seen in the last days, is people fighting and killing each other. I do not want to talk about that kind of revolutions, instead I will talk about another revolution that Bolivia should achieve: A productive revolution in the agricultural sector.

A longstanding question in economics is why some countries are so much richer than others. GDP per capita in Asia grew during the last four decades at 5.2 percent, in the OECD at 3.3 percent and in Latin America at 1.2 percent. In fact the performance in Latin America has been very poor(see table).

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Are we so different?

The “Explaining African Economic Growth” project was launched in 1999 as a common research project between top world universities under the leadership of the African Economic Research Consortium (AERC). As a result of this project, the book “The Political Economy of Economic Growth in Africa, 1960-2000” (1) is considered as a major common-effort breakthrough towards the explanation of recent Africa´s economic history. Top scholars such as Jean-Paul Azam, Robert Bates, Paul Collier, Anke Heoffler, Agustin Kwasi Fosu, Benno Ndulu and Stephen O’Connell seem to agree than most of Sub-Saharan Africa (SSA) underperformances in economic development can be explained mainly by the so-called four “Anti-Growth Syndromes” (2) of policy environments.

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Save First – Consume Later

“Money often costs too much.”
Ralph Waldo Emerson

If children were to learn just one thing in school, it should be The Power of Compound Interest. If everybody understood and applied that simple principle, poverty could be permanently eradicated in one life-time.

Let me explain how it works by comparing two persons, A and B, who, for simplicity, both live for 100 years.

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