Bolivia’s Economic Pivot: Agricultural Potential and Challenges

Bolivia’s agricultural sector has grown faster over the past two decades than in any period since 1960, but this growth has been driven by the expansion of cultivated area rather than by improvements in productivity, while the prevailing policy regime has restricted exports and left significant potential unrealized. Yields for key crops continue to underperform regional peers, and continued expansion of the agricultural frontier risks both environmental costs and reduced access to international markets that increasingly penalize deforestation-linked products. Drawing on cross-country comparisons, case studies of Bolivia’s major crops, and lessons from Peruvian agricultural diversification, this analysis identifies a recurring set of production- and market-side constraints, including restrictions on transgenic seeds, weak R&D and extension services, phytosanitary and logistics gaps, and the lack of commercially-oriented irrigation. Because these constraints interact differently across Bolivia’s diverse agricultural geography, we propose launching a National Strategy for Agricultural Potential to enable each of Bolivia’s distinct agricultural regions to reach its productive frontier. Export diversification would emerge as a natural outcome as more of Bolivia’s regions realize their potential, generating the additional foreign exchange needed to ease the country’s ongoing macroeconomic crisis.

Lessons from Andalusia: How Can Policymakers Promote Economic Growth?

Amid rapid technological change and heightened competition, Europe must re-ignite economic growth. Evidence from Andalusia – Spain’s poorest region – highlights the need to make full use of a region’s productive capabilities to forge new competitive advantages and raise living standards.

What Economic Challenges Does Argentina Face Today?

With one of the world’s highest inflation rates and after more than a decade of economic stagnation and rising poverty, Argentina once again finds itself teetering on the brink of economic collapse. The urgent need for a plan to stabilise the economy has entrusted the newly elected President Javier Milei with a clear mandate: eradicate inflation and reignite economic growth. As the nation watches with a mixture of exhaustion and bated breath, the world also turns its gaze to Argentina, wondering whether Milei’s strategies will be the long-awaited remedy for the country’s struggles.

The deep-rooted cause of Argentina’s economic distress and chronic inflation is persistent public overspending financed by money creation. This understanding lies at the core of Milei’s policy agenda. While the plans signal a move in the right direction, there are no silver bullets. Achieving low and stable inflation involves difficult trade-offs; implementation is challenging; and reforms often take time to bear fruit.

In this article, the authors examine:

The Economics Observatory (ECO) is a new project that bridges the gap between academic research, government policy and the general public. It’s led by Richard Davies, Professor in Practice at the London School of Economics’ School of Public Policy and director of the Growth Lab’s research collaboration at LSE.