Identity, Patronage, and Redistribution: Economic Inequality in Bolivia under Evo Morales

Abstract

This paper investigates the extent to which the election of Evo Morales and the Movimiento al Socialismo (MAS) party is associated with a redistribution of economic resources in favor of indigenous populations in Bolivia. We employ household surveys over the period 2000-2013 and a difference framework to study changes in the income distribution. While the analysis period has been one of rapid economic expansion for Bolivia, we show that indigenous groups exhibit significantly higher than average income and expenditure growth in the post-election period, closing roughly one quarter of the income gap with nonindigenous households. These benefits appear to accrue for most indigenous populations, and we find no robust evidence of a preferential impact on any one specific indigenous group. We corroborate these findings with placebo tests and with estimates of economic activity from satellite measures of nighttime lighting paired with census maps of ethnic composition.

On data and trends in horizontal inequality

“…In terms of economic HI, according to Hicks et al (2018), during Morales' time in office, the income gap between Indigenous and non-Indigenous households was reduced by roughly one quarter. The reduction in income inequality was true for most Indigenous groups.…”

Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes

“…During his presidency, Bolivia has distanced itself from the influence of Western institutions, and he has passed several economic reforms such as the nationalization of important industrial sectors (e.g., hydrocarbons, mining), the creation of social welfare programs and the implementation of anti-discrimination law to protect indigenous populations. Furthermore, President Morales increased royalty taxes for hydrocarbons, providing additional revenue with which to increase public spending (Hicks et al, 2015; Canavire-Bacarreza and Rios-Avila, 2015).…”

Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes

“…During his presidency, Bolivia has distanced itself from the influence of Western institutions, and he has passed several economic reforms such as the nationalization of important industrial sectors (e.g., hydrocarbons, mining), the creation of social welfare programs and the implementation of anti-discrimination law to protect indigenous populations. Furthermore, President Morales increased royalty taxes for hydrocarbons, providing additional revenue with which to increase public spending (Hicks et al, 2015;Canavire-Bacarreza and Rios-Avila, 2015).…”