A Regional Landscape of Bolivian Economic Growth

Bolivia is a wide surface country, with more than one million of squared kilometers and diverse ecological ecosystems. Besides its landlockedness, Bolivian economic activity has been shaped by the diverse geographic characteristics mainly distance and the availability of communication channels. In this paper I use a novel regional database of regional economic activity to analyze in what extent the spatial dimension has influenced medium term economic growth of the nine regions during the past 45 years. Contrary to standard approach based on contiguity or geographical distance to introduce spatial issues in the analysis, I use an exponential decay approach built on “true distance” jointly a gravity model. Then, I found as significant the inclusion of spatial consideration in the estimation of static and dynamic balanced panel data models, where I found how the process of regional economic growth has been slightly influenced by this spatial feature implying the still low degree of integration among Bolivian regions.