Development Research

Studies In Comparative International Development

, Volume 26, Issue 2, pp 37-57

Democracy, economic crisis and the problem of governance: The case of Bolivia

  • James M. Malloy

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Abstract

This article examines the political context within which the Bolivian government of Víctor Paz Estenssoro (1985–1989) launched, implemented, and sustained a draconian neoliberal economic stabilization program. The article argues that the key to the successful economic program was the political skill and leadership of President Paz, in particular, his ability to negotiate a political pact with the main opposition party. Finally, the article ponders the tensions and contradictions between neoliberal economic policies and the process of consolidating democracy in a context of extreme economic crisis.