Mises Wire

Why Bolivia Needs to Decentralize

It was only eight months ago that Bolivia concluded a bizarre political conflict that saw President Evo Morales step down from office. Morales was pursuing a fourth presidential term but encountered numerous constitutional roadblocks.

Protesters cited irregularities and alleged voter fraud during elections in October 2019 as the principal motive behind their demonstrations. Discontent was so high that international observers such as the Organization of American States found a number of inconsistencies with Bolivia’s electoral process.

Eventually the military, trade unions, the police, and other civic organizations joined the electoral protests. The pressure was so strong that Morales had no choice but to step down on November 10 and later fled to Mexico. Morales’s supporters did not go quietly, though. Many protested out on the streets and clashed with security forces, leaving thirty-three people dead. Since then Jeanine Añez has assumed power as the interim president of Bolivia. For now, the country has plans of holding another set of elections later in 2020.

Instability in Bolivian Politics Is Practically a Given

The small Southern Cone country has kept a rather low profile compared to its more newsworthy neighbors such as Argentina, Chile, and Peru in recent decades. But that does not signify that it has been exempt from the same political drama that has brought Latin America repeated episodes of disappointment. Political instability is deeply ingrained in the country’s DNA. Since gaining independence in 1825, Bolivia has experienced more than 190 coup attempts and revolutions. Morales came into power in 2006, largely appealing to the impoverished mestizos and indigenous groups. Himself of Aymara extraction, Morales focused on improving the plight of the indigenous people residing in Bolivia’s Altiplano (high plain) region.

One of the hallmarks of his presidency was the ratification of a new constitution. Taking a page out of the Latin American playbook of “Wiki-Constitutionalism,” Morales created a new constitution—the seventeenth constitution in Bolivia’s history—via popular referendum in 2009 which declared that Bolivia was a “plurinational” state that ostensibly upheld the rights of indigenous groups and Afro-Bolivians. Constitutional revision is part and parcel of the Latin American political experience and is often a harbinger of looming political and economic instability. Morales did channel the Latin American populist energy of Venezuelan leader Hugo Chávez and made a strategic alliance with Venezuela to counterbalance the “neoliberal” bloc of countries—Chile, Colombia, and Peru—that many on the Latin American left view as US puppets.

Surprisingly, Morales maintained a modicum of restraint in his economic policy and did not jump the shark the way Chávez and his successor Nicolás Maduro did with their economic interventionism. For some on the hard left, Morales’s administration was a mixed bag. His administration did allow for a dam project to be built in the Beni lowlands and for the revival of a project for a highway cutting through the Bolivian Amazon.

None of these projects sat well with the international left. Statecraft often requires making tough decisions that generally ignore the concerns of ivory tower pundits. At the very least, Morales recognized that replicating the Bolivarian model would not have been in Bolivia’s best interest.

The Morales Era Witnessed Heightened Polarization

Morales’s historic rise to the presidency was met with controversy from the start. Bolivia is marked by clear geographic divides that fundamentally define the country’s politics. The white and mixed-race populations tend to be concentrated in the country’s eastern lowlands. As mentioned before, Bolivia’s indigenous population largely inhabits the highlands, which often finds itself at the center of political conflicts.

Indeed, the wealth disparities between the two regions are stark. The Santa Cruz Department, which is renowned for its capital city of Santa Cruz de la Sierra, produces approximately 35 percent of GDP and receives nearly 40 percent in foreign investment. Thanks to its robust economic and population growth over the years, residents of the Santa Cruz department (cruceños) have forged an identity of their own, a trend that revved up during the Morales era.

After Morales secured victory in 2006, there was already talk about cruceños attempting to form a breakaway nation of Camba. Many international leftists started blaming the US government for trying to promote secession in Bolivia. Although separatism never came about in earnest, there was always a fear in the back of Morales’s mind that the vibrant region of Santa Cruz would pose a major threat to his regime.

The existence of a political subunit such as the Santa Cruz department effectively limited the potential excesses of Morales’s administration. In many regards, this resembles the development of the West, in which competing jurisdictions placed checks on state overreach and allowed countries to rapidly develop as the more established empires in the East stagnated.

What’s Next for Bolivia?

Now that Morales is out of the picture, Bolivia’s future looks unclear. Given Añez’s temporary hold of the Bolivian presidency, one can only wonder how Bolivia’s next president will govern. Drawing from Bolivia’s overall history, there is reason to be pessimistic.

The country has a long history of political instability and a profound lack of economic freedom—Bolivia is currently ranked at a putrid 175th place out of 180 countries on the Heritage Foundation’s 2020 Index of Economic Freedom. Its lingering lack of property rights and judicial inefficiency continue to hobble the country.

Taking into account its political challenges, Bolivia has its work cut out for it. The path to success may not be so straightforward for Bolivia, though. Not all countries can have a copy and pasted classical liberal experience like we’ve seen in the West.

Even Chile’s model may be difficult to export to its landlocked neighbor. But there is the unique alternative of separatism, which Bolivia should strongly entertain. If it cannot build itself up in a conventional manner, Bolivia should pursue the uniquely radical path of decentralization. It can be a first mover in Latin America by taking this option. We live in a time where all sorts of lifeless NGOs (nongovernmental organizations) think they can impose Western democracies on developing countries and expect the same results. This is the height of conceit and illustrates the pretentiousness of many development experts.

Decentralization is an exercise in humility, because it recognizes the very real problems of statecraft and how there are often irreconcilable differences among distinct groups of a certain polity. Insisting on them being under the same political roof is just asking for conflict.

Taking into account Bolivia’s checkered past and its uncertain future, decentralization offers a clean break from its seemingly perpetual state of conflict. As the late Enoch Powell boldly proclaimed, “The supreme function of statesmanship is to provide against preventable evil.”

Decentralization is perhaps the way for Bolivia to avoid the preventable evil of ethnic strife that has ensnared it since day one. Under radical decentralization, Bolivians of all backgrounds could pursue their own destinies without having to turn their political process into a game of tribalistic knockout every election cycle.

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