Identity, Patronage, and Redistribution: Economic Inequality in Bolivia under Evo Morales

Abstract

This paper investigates the extent to which the election of Evo Morales and the MAS party is associated with a redistribution of economic resources in favor of indigenous populations in Bolivia. We employ household surveys over the period 2000-2013 and a difference-in-differences framework to study changes in the income distribution. While the analysis period has been one of rapid economic expansion for Bolivia, we show that indigenous groups exhibit significantly higher than average income and expenditure growth in the post-election period, closing roughly one-quarter of the income gap with non-indigenous households. These benefits appear to accrue for most indigenous populations and we find no robust evidence of a preferential impact on any one specific indigenous group. We corroborate these findings with placebo tests and with estimates of economic activity from satellite measures of night-time lighting paired with census maps of ethnic composition.