Bolivia’s past has been so tumultuous that “Bolivianization” at one point became a synonym for political and social decomposition. The country’s troubles are the direct result of its demography, geography, history, and long dependence on a few rich natural resources.
Bolivia’s population is a unique amalgamation of ethnicities—a remarkable mix of pre- and post-Columbian cultures, institutions, religions, languages, and belief systems. Over 60 percent (the largest such percentage in Latin America) of its 9 million people are members of the indigenous peoples. But this diversity has not generated harmony; to the contrary, the country is polarized by severe divisions and a history of elite exploitation of native groups.
These identity fractures accentuate—and are, in turn, accentuated by—the country’s geographic and economic fissures. Whereas roughly two-thirds of the people living in the five highland departments (La Paz, Cochabamba, Chuquisaca, Potosi, and Oruro) identify themselves as Aymara or Quechua, a similar proportion claim no indigenous affiliation in the four lowland areas (Santa Cruz, Pando, Beni, and Tarija). The 2005 election (see map) reflected these divisions: Evo Morales’ Movement toward Socialism (MAS) polled twice as high (64 percent of the vote) in the highlands than in the lowlands (31 percent). The political turmoil that has periodically erupted within the country since usually reflects this same dynamic.
Bolivia urgently needs to reshape its governing institutions so that they are better able to deal with the realities of its fragmentation and weak administrative capacity. Instead of unrealistically expecting the evolution of an efficient centralized regime that determines policy to the satisfaction of all its citizens, Bolivia should learn from its experiences in implementing decentralization in the past (the Law of Popular Participation and the Law of Decentralization reforms), and heed the advantages of directing far more funding and responsibility to regional and local governments. The country should also learn from the experiences of other states divided by language, history, and identity, and follow their lead by transforming itself into a more decentralized, identity-based federation of entities that are obliged to compromise at the national level. A “bottom heavy, top light” structure is probably the only way to overcome the long history of administrative dysfunction and intergroup acrimony, making institutions far more representative, relevant, and responsive in the process.
A divided government with partitions of autonomy can never serve economic growth. While interior reforms are hard to implement, the regulations on which these agencies operate is rather misguided and is open for deliberate misinterpretation to exploit loopholes in the local code. Capitalistic ventures cannot regulate themselves as their firm is built upon exploitative measures.