World Bank2012-03-192012-03-192009-06-01978-0-8213-8021-5https://hdl.handle.net/10986/2656Bolivia's trade liberalization, launched in the mid-1980s, has resulted in a relatively open trade regime; but the results have been mixed. Bolivia's export to Gross Domestic Product (GDP) ratio and export entrepreneurship index rating are among the highest in the Latin American and Caribbean (LAC) region and the country has achieved great success in making soya the major export crop in less than 10 years. At the same time, the country's share in world trade has stagnated and exports are increasingly dominated by gas and minerals. Reinvigorating the nontraditional export sector is important for the government of Bolivia as it implements its national development plan. As a resource-rich country, the Bolivian government's emphasis on export diversification is well-placed but the optimal nontraditional export strategy should build on successes in the traditional sector. This study investigates: (a) the role trade should play in Bolivia's development strategy considering the country's natural resource endowment; (b) the lessons of Bolivia's integration to the world economy; (c) the linkages between Bolivia's past trade and economy and a forward-looking analysis of the impact of different scenarios on growth, employment, trade flows, and poverty; (d) constraints to higher export competitiveness and weaknesses related to transport and logistics; and (e) the characteristics of exporting firms and the constraints affecting them. The main findings of the analysis are that preferential access to world markets is necessary but not sufficient for success in nontraditional exports; rather, success depends largely on increasing the competitiveness of exporting firms. Second, a neutral incentive regime is essential to the growth of nontraditional exports. Third, efficient backbone services are vital for reducing exporters' costs. Finally, the government should be proactive in addressing institutional impediments to cross-border trade. The study presents prioritized policy implications of the analysis related to: (i) trade policy and preferential access to markets; (ii) the incentives regime; (iii) backbone services; (iv) increasing the effectiveness of institutions to promote cross-border trade; and (v) setting the foundations for exports diversification.CC BY 3.0 IGOAGGREGATE DEMANDAGRICULTURAL PRODUCTSAGRICULTUREAPPARELBORDER TRADEBUSINESS ENVIRONMENTCAPITAL FLOWSCAPITAL GOODSCAPITAL INFLOWSCAPITAL STOCKCENTRAL BANKCOMMODITIESCOMPARATIVE ADVANTAGECOMPETITIVENESSCONSUMERSCOPYRIGHT CLEARANCECOPYRIGHT CLEARANCE CENTERCURRENCYCUSTOMSCUSTOMS ADMINISTRATIONCUSTOMS REVENUESDEBTDEVALUATIONDEVELOPING COUNTRIESDEVELOPMENT STRATEGYDIVIDENDSDOMESTIC INDUSTRIESDOMESTIC INDUSTRYDOMESTIC MARKETDOMESTIC PRODUCERSDUMPINGDUTY DRAWBACKDUTY DRAWBACKSECONOMETRIC ESTIMATESECONOMETRIC MODELSECONOMIC COMPETITIVENESSECONOMIC DISTORTIONSECONOMIC PERFORMANCEECONOMIC POLICYECONOMIC PROGRESSECONOMIC SECTORSECONOMIC STABILIZATIONECONOMIC STRUCTUREECONOMIES OF SCALEEQUILIBRIUMEXPORT BANSEXPORT BIASEXPORT COMPETITIVENESSEXPORT CONTROLSEXPORT DIVERSIFICATIONEXPORT EARNINGSEXPORT GROWTHEXPORT MARKETEXPORT MARKETSEXPORT OPPORTUNITIESEXPORT PERFORMANCEEXPORT PRICESEXPORT PROCEDURESEXPORT PRODUCTSEXPORT PROMOTIONEXPORT PROMOTION AGENCIESEXPORT PROMOTION AGENCYEXPORT RESTRICTIONSEXPORT SECTOREXPORT SECTORSEXPORT STRUCTUREEXPORT SUBSIDIESEXPORT VOLUMEEXPORT VOLUMESEXPORTERSEXPORTSEXTERNAL TARIFFFISCAL POLICYFOREIGN COMPETITIONFOREIGN COMPETITORSFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN INVESTMENTFOREIGN TECHNOLOGIESFOREIGN TECHNOLOGYFOREIGN TRADEFRANCHISESFREE TRADEFREE TRADE AGREEMENTFREE TRADE AGREEMENTSFREE TRADE AREAFREE TREATMENTGDPGENERALIZED SYSTEM OF PREFERENCESGLOBAL COMPETITIVENESSGLOBAL TRADEGRANGER CAUSALITYGROSS DOMESTIC PRODUCTGROWTH RATEGROWTH RATESHOTELSHUMAN CAPITALIMPACT OF TRADEIMPORT DUTIESIMPORT QUOTASIMPORT REGIMEIMPORT TARIFFSIMPORT TAXESIMPORTSINCOMEINDUSTRIAL PRODUCTSINDUSTRIALIZATIONINEQUALITYINFANT INDUSTRYINFLATIONINTERNATIONAL COMPETITIVENESSINTERNATIONAL FINANCEINTERNATIONAL MARKETINTERNATIONAL MARKETSINTERNATIONAL PRICESINTERNATIONAL STANDARDSINTERNATIONAL TRADEINVESTMENT POLICIESITCLEARNING CAPACITYLIQUIDITYMACROECONOMIC POLICIESMACROECONOMIC STABILITYMARKET FAILURESMARKET SIZEMETAL PRODUCTSMONETARY POLICYMONOPOLIESMONOPOLYMOST FAVORED NATIONNATURAL RESOURCESNET EXPORTSNEW PRODUCTSNON-TARIFF BARRIERSOPEN ECONOMIESOPEN MARKETOPEN MARKET OPERATIONSOPEN TRADE REGIMEOPENNESSOUTPUTOUTSOURCINGPARTIAL EQUILIBRIUM ANALYSISPATENTSPOSITIVE EFFECTSPREFERENTIAL ACCESSPREFERENTIAL ACCESS TO MARKETSPREFERENTIAL AGREEMENTPREFERENTIAL AGREEMENTSPREFERENTIAL MARKET ACCESSPREFERENTIAL TRADEPREFERENTIAL TRADE AGREEMENTSPREFERENTIAL TREATMENTPRICE INCREASESPRICE INDEXPRICE STABILITYPRICE SUPPORTPRODUCTION INPUTSPRODUCTIVITYPRODUCTIVITY GROWTHPROPERTY RIGHTSQUANTITATIVE RESTRICTIONSRATE OF PREFERENCEREAL EXCHANGE RATEREAL EXCHANGE RATESREAL GDPREGIONAL INTEGRATIONREGULATORY FRAMEWORKRENT SEEKINGSHARE OF WORLD EXPORTSSPECIALIZATIONSTRUCTURAL CHANGETARIFF BARRIERSTARIFF EQUIVALENTTARIFF POLICYTARIFF PREFERENCESTARIFF PROTECTIONTARIFF RATETARIFF REVENUETARIFF STRUCTURETAXTAX POLICYTAX REVENUESTAX TREATMENTTECHNOLOGY TRANSFERTELECOMMUNICATIONSTERMS OF TRADETERMS OF TRADE SHOCKSTOTAL FACTOR PRODUCTIVITYTOURISMTRADE AGREEMENTTRADE BALANCETRADE CENTERTRADE FACILITATIONTRADE FLOWSTRADE INDICATORSTRADE INTEGRATIONTRADE LIBERALIZATIONTRADE OPENNESSTRADE POLICYTRADE PROMOTIONTRADE REGIMESTRADE RELATIONSTRADE STRUCTURETRADE TAXESTRANSPORT COSTSUNILATERAL PREFERENCESVALUE ADDEDVALUE OF EXPORTSWAGESWEALTHWORLD ECONOMYWORLD MARKETSWORLD PRICESWORLD TRADEWORLD TRADE ORGANIZATIONWTOZERO TARIFFWorld Bank10.1596/978-0-8213-8021-5