Kiel Working Papers, Kiel Institute for World Economics
No 1287:
Resource Booms, Inequality, and Poverty: The Case of Gas in Bolivia
Jann Lay, Rainer Thiele and Manfred Wiebelt
Abstract: This paper addresses the question of whether the Bolivian
gas boom of the 1990s has bypassed large parts of the poor population,
thereby leading to increasing inequalities in an already unequal society.
Using a Computable General Equilibrium model that is sequentially linked to
a microsimulation model, we examine the transmission channels through which
the large resource inflows related to the gas boom, both initial foreign
investment in the sector and the subsequent export earnings, as well as
large public transfer programs affect the distribution of income. These
transfers may well be interpreted as a means of redistributing resource
rents. Our focus is on labour market impacts, in particular on shifts
between formal and informal employment and changes in relative factor
prices. Our simulation results suggest that the gas boom induces a
combination of unequalising and equalising forces, which tend to offset
each other. As net distributional change is limited, growth generated by
the boom reduces poverty despite increasing informality.
Keywords: Poverty, Distribution, Computable General Equilibrium Model, Microsimulation, Natural Gas, Bolivia; (follow links to similar papers)
JEL-Codes: D3,; D58,; O17,; O54,; Q33; (follow links to similar papers)
33 pages, July 2006
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