Capitalization and Privatization in Bolivia: An Aproximation to an Evaluation

The paper describes the privatization process in Bolivia, placing emphasis on the particularities of the capitalization mechanism that was used for this purpose, and the regulatory framework introduced as its essential complement. With this background, the paper then details the changes in the industrial organization and ownership patterns in the electricity, oil and gas, telecommunications, transportation, and water industries. The discussion then turns to these processes’ economic and social consequences. In the first case, the key issues are which agents benefited from the transfer of assets, and the effects on firm-level variables like investment, profitability, and transfers to the State. With regards to social outcomes, we focus on the effects on employees and consumers. For the first, interest centers on what happened to employment and wages in the sectors affected; for the second, what occurred to access and prices for privatized utilities, and to welfare more generally. This paper touches on all these issues, although in several cases a full treatment is not possible due to data limitations.