This Selected Issues paper examines economic developments in Bolivia during 1990–97. Macroeconomic developments in 1997 were generally sound. Economic growth for the year remained moderately robust while inflation continued on a downward path. However, the structural reforms adopted since 1995 generated fiscal costs of about 3 percent of GDP in 1997, with the 1996 pension reform accounting for about half of these costs. The paper also reviews Bolivia’s growth performance over 1960–97 and assesses the factors behind that performance.
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Mr. Benedict J. Clements, Christopher Faircloth, and Marijn Verhoeven
This paper examines trends in government spending in Latin America from the mid-1990s to 2006. It also examines key policy issues, including the cyclicality of spending, public investment, public employment, and social expenditures. It finds that primary expenditures have trended upward for the past ten years as a share of GDP, driven by increases in current spending, in particular for social expenditures. Fluctuations in real spending have continued to follow a procyclical pattern. The paper finds that there is substantial scope to improve the efficiency of public investment, public employment, and social spending.