Trade Liberalisation in Latin America: the Bolivian Case1

Abstract— Bolivia adopted a drastic trade liberalisation in 1985 as part of its neo- liberal New Economic Policy. The paper discusses the theoretical arguments which underlie such a policy and the main neo-structuralist criticisms. It then looks at the effects of liberalisation on resource allocation, productivity growth and export performance. It concludes that the results have been disappointing which gives rise to some scepticism concerning the advantages of a wholesale policy of trade liberalisation in a low income country such as Bolivia.