The Consequences of Incorporation- Reform and Heightened Coup Risk in Bolivia

The Consequences of Incorporation:
Reform and Heightened Coup Risk in Bolivia
Erica Rhodin
Undergraduate Honors Thesis
Department of Government
Advisor: Gustavo Flores-Macías
April 16, 2012

1
Table of Contents
1. Introduction ………………………………………………………………………..........2
2. Reform, Then and Now…………………………………………………………………16
A Comparison of the MNR (1952-1964) and the MAS (2006-Present)
3. Economic Crash and Resource Wealth…………………………………………………37
Political Implications in an Atypical Rentier State
4. Praetorian Politics Revisited…………………………………………………………….49
The Role of the Military
5. Conclusion……………………………………………………………………………….59
Appendices……………………………………………………………………………….65
References………………………………………………………………………………..67

2
Introduction
On the night of April 8, 1952, 2,000 policeman joined forces with workers and followers
of the Movimiento Nacional Revolucionario (MNR) and occupied La Paz. After Radio Illimani
proclaimed the victory of revolutionary forces at dawn, the army mustered a counterattack.
When it seemed that the insurrection had failed, armed miners confronted the army north of the
city and severed the military’s supply lines with the help of party supporters. By April 11, the
military had surrendered amid institutional crisis and miners and MNR militants had overtaken
La Paz. Four days later, exiled party leader and winner of the 1951 election Víctor Paz
Estenssoro returned to Bolivia to accept the presidency.1
Riding the wave of popular zeal, the
revolutionary government promised sweeping reforms on behalf of peasants, labor, and the
middle class and the complete destruction of the powerful mine-owning oligarchy, La Rosca.
During his first term (1952-1956), Paz followed through on these promises to radically transform
the status quo, promulgating universal suffrage (1952), nationalization of the tin mines (1952),
agrarian reform (1953), and education reform (1955). Yet, revolutionary euphoria soon gave
way into intense political, economic, and social conflict.
On November 4, 1964, Paz fled to Peru with his closest advisors. The night before, a
civil-military coalition led by Generals René Barrientos Ortuño and Alfredo Ovando Candia
removed Paz from power. Despite efforts to muster the support of army units, Paz and his
ministers were unable to overcome the insurrection.2
As quickly as it started, Bolivia’s
revolutionary experiment came to a close. The 1964 military coup inaugurated two decades of

1
Merilee Grindle, “1952 and All That: The Bolivian Revolution in Comparative Perspective,” in Proclaiming
Revolution: Bolivia in Comparative Perspective, ed. Merilee Grindle and Pilar Domingo (London: Institution of
Latin American Studies, 2003), 5.
2
Christopher Mitchell, The Legacy of Populism in Bolivia: From the MNR to Military Rule (New York: Praeger,
1977), 96.

3
authoritarianism in Bolivia. Over the course of the next fifty years, ideologically ambivalent
military rule, economic recession upon the return to democracy, and a “Crisis of Representation”
compromised the changes of the early 1950s.3
This is the story of the Movimiento Nacional Revolucionario in Bolivia. With slight
modifications, it could be told about all but three Latin American countries during the 1950s and
1960s.4
Before 1978, competitive regimes were 20 times more likely to break down than after.5
In countries with diverse histories, levels of modernization, and social structure, militaries
intervened to check presidential power, protect their institutional interests, preserve public order,
manage the economy, and/or combat real or imagined communist threats.6
Writing in 1974,
Abraham A. Lowenthal was resigned to the pervasive presence of the military in politics: “The
faith of a decade ago—that military involvement in Latin American politics would decline as a
result of economic development, social modernization, military professionalization, and
American influence—can no longer be sustained.…it appears that the military’s significant role
in Latin American politics is here to stay.”7
In a revised edition of the same volume, published a decade later, Samuel Fitch wrote,
“The political map of Latin America has changed remarkably in the period since Abraham
Lowenthal’s 1974 essay on armies and policies…The tide of military takeovers that swept Latin
America in the 1960s and early 70s has been followed by an equally strong tide of military

3
Scott Mainwaring, “The Crisis of Representation in the Andes,” Journal of Democracy 17, no. 3 (2006).; Waltraud
Q. Morales, "From Revolution to Revolution: Bolivia's National Revolution and the “Re-founding” Revolution of
Evo Morales," Latin Americanist 55, no.1 (2011): 135.
4
Arturo Valenzuela, "Latin American Presidencies Interrupted," Journal of Democracy 15, n. 4 (2004): 5. Only
democratic regimes in Colombia, Costa Rica, and Venezuela endured during this period.
5
Scott Mainwaring and Aníbal Pérez-Liñan, “Latin American Democratization since 1978: Democratic Transitions,
Breakdowns, and Erosions,” in The Third Wave of Democratization in Latin America: Advances and Setbacks, ed.
Frances Hagopian and Scott Mainwaring (Cambridge: Cambridge University Press, 2005), 20.
6
J. Samuel Fitch, “Armies and Politics in Latin America: 1975-1985,” in Armies & Politics in Latin America, ed.
Abraham Lowenthal and J. Samuel Fitch (New York: Holmes & Meier, 1986), 27-28.
7
Abraham Lowenthal, “Armies and Politics in Latin America: Introduction to the First Edition,” in Armies &
Politics in Latin America, ed. Abraham Lowenthal and J. Samuel Fitch (New York: Holmes & Meier, 1986), 9.

4
failures. Slowly but steadily military regimes have given way to civilian replacements.”8
The
transformation of the regional political context meant that transitions to democratic rule were
more frequent and that these regimes were more durable.9
As Figure 1 demonstrates, there is an
observable downward trend in the incidence of coup events in Latin America and globally. With
the “Third Wave of Democratization” entering its fourth decade, scholars agree that the
probability of military intervention is much lower than in the past.10
Theories based on regional
economic integration, the enforcement of democratic norms, and a decrease in polarization after
the fall of the Berlin Wall have been advanced to explain this decline.11
Figure 1: Coup Events in the World and Latin America, 1946-201012

8
Fitch, Armies and Politics, 26.
9
Mainwaring and Pérez Liñan, Latin American Democratization, 19.
10
Samuel Huntington, The Third Wave: Democratization in the Late Twentieth Century, (Norman: University of
Oklahoma Press, 1991); David Pion-Berlin, “Introduction,” in Civil-Military Relations in Latin America: New
Analytical Perspectives, ed. David Pion-Berlin (Chapel Hill, NC: University of North Carolina Press, 2001), 10.;
Valenzuela, Latin American Presidencies, 6.; Aníbal Pérez-Liñan, Presidential Impeachment and the New Political
Instability in Latin America (New York, NY: Cambridge University Press, 2007), 43. Kent Eaton, “Backlash in
Bolivia: Regional Autonomy as a Reaction against Indigenous Mobilization,” Politics & Society 35, no. 1 (2007),
43.
10
Fitch, Armies and Politics, 26.
11
Eric Rittinger and Matt Cleary, "Confronting Coup Risk in the Latin American Left," unpublished manuscript
(Syracuse University, 2012); Valenzuela, Latin American Presidencies; Mainwaring and Pérez Liñan, Latin
American Democratization, 38-40.
12
Monty G. Marshall and Donna Ramsey Marshall, “Coup d’État Events, 1946-2010”, Dataset. Center for Systemic
Peace, University of Maryland. http://www.systemicpeace.org/inscr/inscr.htm. (accessed April 14, 2012). Author
elaboration.
0
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25
30
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
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1978
1980
1982
1984
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1990
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Coups Worldwide Coups in Latin America

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It was in this permissive context that Juan Evo Morales Ayma assumed the Bolivian
presidency in 2006. As the country’s first indigenous president and a leader of the social
movements that brought down the established order, Morales’ election symbolized the triumph
of historically marginalized Bolivians. Once in office, Morales transformed Bolivian democracy
by incorporating the indigenous population into decision-making structures, changes embodied
in the progressive 2009 constitution.13
He also fulfilled campaign promises to nationalize
hydrocarbons and enact agrarian reform, remaking the state as the protagonist of economic
development. In their depth and the extent to which they challenged dominant elites, these
reforms are commensurate to those pursued by the MNR fifty years earlier. Perhaps surprisingly,
not only is Morales still in office, but the military has not staged a coup in the past six years. This
is all the more puzzling because theories that account for the general trend of decreased coups
hold little sway in the Bolivian case. The constraints of financial liberalization and integration
have not prevented Morales from pursuing controversial redistributive policies, the commitment
of the United States to democracy promotion in Bolivia is uncertain, and Bolivian politics are
highly polarized along intersecting ethnic, regional, and economic dimensions. Yet, a military
coup has not occurred in Bolivia since Morales’ election. What explains this unexpected
outcome?
The paper will use the definition of a military coup put forth by Monty G. Marshall and
Donna Ramsey Marshall: “A forceful seizure of executive authority and office by a
dissident/opposition faction within the country’s ruling or political elites that results in a

13
Clayton Mendonca Cunha, Filho and Rodrigo Santaella Goncalves, "The National Development Plan as a Political
Economic Strategy in Evo Morales’ Bolivia: Accomplishments and Limitations," Latin American Perspectives 37,
no 4 (2010): 182.

6
substantial change in the executive leadership and the policies of the prior regime.”14
This
definition has two advantages. First, it allows for consistency. The data used in Figure 1 and in
compiling a list of Bolivian coups were assembled using this criterion. Second, it captures the
implications of a military coup for the quality of democracy. Significantly, this definition does
not require that the military take power for itself or that regime type change. Rittinger and Cleary
do incorporate this requirement into their definition, but stipulate that instances classified within
the broader category of military intervention serve as reminders that military rule falls within the
realm of possibility.15
Although Rittinger and Cleary propose a narrower definition, their
categories of “military coup” and “military intervention” carry similar implications. Regardless
of the outcome, military coups are inherently undemocratic. According to the democratic rules of
the game, power is allocated through electoral channels, not violence. A military coup clearly
violates these rules: officers are not elected, and the military is the coercive arm of the state.16
Not only does a military coup undermine democratic procedures, it compromises or reverses
democratic outcomes. Policy changes resulting from a military coup signify that the military and
its allies dictate policymaking rather than popular will expressed through representative
institutions. For the purpose of this paper, the key component of a military coup is the use of
military power to change government policy.
As a country in which the pressures leading to coups are especially strong, Bolivia should
be a deviant case. Although Figure 1 illustrates a general downward trend in coup events, it also
shows that coups and coup plotting did occur in a significant number of countries. Between 1990
and 2010, 133 coups occurred worldwide, 33 of which were successful. 12 of the attempted

14
Marshall and Marshall, Coup d’État Events, 1946-2010.
15
Rittinger and Cleary, Confronting Coup Risk. “Military interventions” include Fujimori’s autogolpe (Peru, 1992),
the alliance of social movements and the military to oust Jamil Mahuad (2000, Ecuador), and the removal of Manuel
Zelaya (2009, Honduras).
16
Pérez-Liñan, Presidential Impeachment, 210-11.

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coups and two successful coups occurred in Latin America, not including the 2009 removal of
Manuel Zelaya in Honduras.17
One instance of coup plotting and four alleged coups also
occurred in the region.18
Many Latin American countries still deal with frequent institutional
crises, politicized militaries, economic recessions, and demands for redistribution, all of which
have been associated with military coups.19
Bolivia is an extreme in all of these respects, and
poor or negative economic growth, poverty, inequality, and a history of exploitation of the ethnic
indigenous minority bodes poorly for stable democracy.20
Surprisingly, Bolivia conformed to the
global trend with flying colors. As Figure 2 demonstrates, Bolivia had the greatest incidence of
coup events in the region during the observed period (19). This conclusion holds even when
examining only successful coups and attempted coups. This figure is also exceptionally high
worldwide, following only Sudan (31) and Iraq (24).21
However, despite this history of severe
political instability and military intervention, a difficult transition to democracy led to 27 coup-
free years.

17
Rittinger and Cleary (2011) suggest that this case was miscoded.
18
Marshall and Marshall, Coup d’État Events, 1946-2010. Does not include plotted or alleged coups.
19
Rittinger and Cleary, Confronting Coup Risk, 3.
20
Mainwaring and Pérez-Liñan, Latin American Democratization, 11.
21
Marshall and Marshall, Coup d’État Events, 1946-2010.

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Figure 2: Incidence of Coup Events in Latin American Countries, 1946-201022
In addition to the greater structural challenges facing Bolivian democracy, theories put
forth to describe the macro trend of decreased coup incidence do not adequately explain the
Bolivian case. As Rittinger and Cleary note, these explanations fall into two categories: regional
economic integration and international norms of democracy, with the corollary of decreased
polarization with the end of the Cold War.23
The liberalization of economies throughout the
region poses constraints on redistributive policies, limiting the ability of leftists to challenge elite
interests to the point of provoking a coup.24
In addition, international organizations and the
United States have demonstrated a stronger commitment to democracy both rhetorically and

22
Marshall and Marshall, Coup d’État Events. Author elaboration.
23
Rittinger and Cleary, Confronting Coup Risk.
24
Daniela Campello, “The Politics of Redistribution in Less Developed Democracies: Evidence from Brazil,
Ecuador, and Venezuela,” in The Great Gap: Inequality and the Politics of Redistribution in Latin America, ed.
Merike Blofield (University Park, PA: Pennsylvania State University, 2011), 9.
24
Fitch, Armies and Politics, 26. Campello, The Politics of Redistribution, 185-188.; Rittinger and Cleary,
Confronting Coup Risk.
0
2
4
6
8
10
12
14
16
18
20
Bolivia
Argentina
Haiti
Panama
Guatemala
Peru
Paraguay
Honduras
El Salvador
Ecuador
Venezuela
Dominican Republic
Nicaragua
Chile
Brazil
Costa Rica
Columbia
Cuba
Uruguay
Mexico
Alleged Coup Plots
Coup Plots
Attempted Coups
Successful Coups

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behaviorally.25
The likelihood of sanctions or other punitive measures rarely determines military
coups, but it does alter the cost-benefit calculation of actors.26
Moreover, during the 1950s, 60s,
and 70s, norms of democracy were subsumed in the Cold War dichotomy. The 1959 Cuban
Revolution exacerbated this polarization, radicalizing the left and the right.27
After 1990, the fall
of the Soviet Union gave way to the hegemony of US-based liberal democracy and capitalism,
discrediting leftist projects. When leftist political parties reemerged, they respected democratic
institutions and left private property intact, making leftism substantially less threatening to
elites.28
Morales has challenged elite economic interests more than theories based on regional
economic integration would expect, suggesting that a reactionary coup is possible. Explanations
based on regional democratic norms are compelling, and the threat of punitive actions by
regional organizations is likely to shape the behavior of domestic actors. However, this may be
insufficient to discourage coup-plotting given the high levels of polarization in contemporary
Bolivian politics.
Contrary to predictions about the moderating influence of neoliberalism, Morales has
significantly challenged regional elites with redistributive policies, suggesting that the risk of a
coup in Bolivia is higher than in other leftist countries. Because of the ease with which investors
can remove capital from a domestic economy, governments must be wary of the tradeoff
between attracting investment and meeting voters’ demands for redistribution. In her analysis of

25
Domingo E. Acevedo and Claudio Grossman, “The Organization of American States and the Protection of
Democracy,” in Beyond Sovereignty: Collectively Defending Democracy in the Americas, ed. Tom Farer (Baltimore:
The Johns Hopkins University Press, 1996); Mainwaring and Pérez-Liñan, Democratization in Latin America, 40-
42; Rittinger and Cleary, Confronting Coup Risk.
26
Mainwaring and Pérez-Liñan, Democratization in Latin America, 39-40.
27
James M. Malloy, Authoritarianism and Corporatism in Latin America (Pittsburgh: University of Pittsburgh
Press, 1977), 16.; Mainwaring and Pérez-Liñan, Democratization in Latin America, 43; Guillermo O’Donnell,
Modernization and Bureaucratic-Authoritarianism: Studies in South American Politics (Berkeley: Institute of
International Studies, University of California, 1973), 72.
28
Steven Levitsky and Kenneth Roberts, “Introduction: Latin America’s “Left Turn”: A Framework for Analysis,”
in The Resurgence of the Latin American Left, ed. Steven Levitsky and Kenneth Roberts (Baltimore: The Johns
Hopkins University Press, 2011), 2-5.

10
the presidencies of Luis Ignacio da Silva (Lula) (Brazil, 2002), Lucio Gutiérrez (Ecuador, 2002),
Rafael Correa (Ecuador, 2006), and Hugo Chávez (Venezuela, 1998), Daniela Campello
demonstrates that the mere possibility of a leftist president induces investor panic and capital
flight. Reacting to this tension, leftist incumbents that campaign on redistributive programs
frequently tone down or renege on their promises.29
Due largely to hydrocarbon windfalls,
Morales has escaped this constraint.30
However, the resource boom did not, as Levitsky and
Roberts conclude for the region generally, allow Morales to “offer material benefits to popular
constituencies…without challenging property rights or adopting highly polarizing redistributive
measures.”31
Natural resources themselves are contentious in Bolivia, with political implications
that are often adverse to democracy.32
By nationalizing the hydrocarbons industry to fund social
programs and extending agrarian reform to the eastern lowlands, Morales has significantly
challenged elite interests.33
This deviation does not mean that Morales has diverged from
neoliberalism entirely. In fact, he has maintained the market-led model and adopted only targeted
forms of state intervention.34
The important point is that Morales intervened in the most
contentious sectors of the economy, the hydrocarbon industry and land tenure system,
significantly challenging elite economic interests. Simply put, Morales is radical where it counts.
Predictions about the impact of the United States and regional organizations on coup risk
in Bolivia are mixed. Both the US and the Organization of American States (OAS) have
demonstrated a marked increase in their commitment to sustaining democracy in the region,

29
Campello, The Politics of Redistribution, 186-210.
30
Campello, The Politics of Redistribution, 190-1.; Levitsky and Roberts, Introduction, 11.; Kurt Weyland, “The
Rise of Latin America’s Two Lefts: Insights from Rentier State Theory,” Comparative Politics 41, no 2 (2009): 153-
157.
31
Levitsky and Roberts, Introduction, 11.
32
Thad Dunning, Crude Democracy: Natural Resource Wealth and Political Regimes (Cambridge, N.Y.:
Cambridge University Press, 2008).
33
Rittinger and Cleary, Confronting Coup Risk, 36.
34
Levitsky and Roberts, Introduction, 22. Levitsky and Roberts label this approach “heterodox.”

11
intervening in countries like Haiti (1991), Peru (1992), Guatemala (1993), and Paraguay (1996),
and Honduras (2009). Actors considering military intervention in Bolivia have many precedents
demonstrating that they can expect punitive measures, raising the cost of a coup.35
In terms of
intervention in Bolivia specifically, regional organizations would be likely to respond to a coup
while the US would be less likely to do so. During the 2008 crisis in the lowland department of
Pando, which Morales alleged to be a civilian coup, Unasur intervened to express support for
Morales.36
By contrast, the US ambassador was expelled from Bolivia amid allegations of coup-
mongering.37
Although the truth in these claims is unknowable, the incident illustrates the poor
bilateral relations between Bolivia and the US and its implications for anti-coup solidarity. US
aid to Bolivia has declined by more than $50 million per year between 2002-2004 and 2008-
2009, and remaining aid goes mostly to departmental governments, the stronghold of the
opposition. The direction of aid to territorial units controlled primarily by the opposition is an
effort to counterbalance the power of Morales, most likely not intended to provoke a coup.38
However, it demonstrates the strains of US-Bolivian relations, suggesting that in the event of a
coup the United States may respond similarly to the Venezuelan coup of 2002.39
Coup actors
will anticipate the intervention of regional organizations with certainty, but will be unsure about
the American stance. While assurance of at least regional condemnation will figure into coup
plans, it will not operate as strongly as in other countries.

35
Mainwaring and Pérez-Liñan, Democratization in Latin America, 40-42.; Rittinger and Cleary, Confronting Coup
Risk.
36
“Move to Tackle Bolivian Turmoil,” BBC News, September 14, 2008.
http://news.bbc.co.uk/2/hi/americas/7614784.stm (accessed April 14, 2012).
37
“Washington Expels Bolivian Envoy,” BBC News, September 11, 2008.
http://news.bbc.co.uk/2/hi/americas/7610915.stm (accessed April 14, 2008).
38
Jonas Wolff, Challenges to Democracy Promotion in the Case of Bolivia (Washington, D.C.: Carnegie
Endowment for International Peace, 2011), 10-11.
http://www.carnegieendowment.org/files/democracy_bolivia.pdf.10-11.
39
Steven Barracca, "Military Coups in the Post-Cold War Era: Pakistan, Ecuador and Venezuela," Peace Research
Abstracts Journal 44, no 4 (2007): 150. Despite knowledge of the coup plot, the US did not act.

12
Although the regional political environment is markedly less polarized, the intersection of
ethnic, class, and regional distinctions shapes Bolivian politics. The rise of ethnic politics in the
1980s and 1990s added a new dimension to the regional political landscape. However, due to the
inclusive nature of the MAS and the fluidity of ethnicity in Bolivia, ethnicity alone does not
polarize society.40
Rather, ethnicity intersects with regional distinctions to increase their
potency. Regional autonomy movements in lowland departments center on the conflict between
lowland economic liberalism and Morales’ redistributive goals, a distinction of economic
interests that is demarcated territorially.41
In addition, in the lowlands, or media luna, the
majority of the population is mestizo or European, whereas the five highland departments are
majority Aymara or Quechua.42
This ethnic distribution corresponds to economic differences,
adding a racial dimension to the autonomy debate. Conducting interviews in Santa Cruz, Kent
Eaton found that ethnic politics increased the threat perceived by elites: “Movement leaders
routinely voiced fears of ethnic domination by the highlands, whereas their counterparts in
Guayas [Ecuador] rarely did.”43
Autonomy movement leaders take great pains to portray their
struggle in territorial rather than ethnic terms, but ethnic differences clearly impact the level of
threat regional elites perceive.44
Despite the intricacies of ethnic, class, and regional identities, to
support the MAS signifies indigenous, poor, highlander, and part of the “masses”; to oppose,
white, affluent, lowlander, and “elite.” Although this type of polarization eludes empirical

40
See Madrid 2005 and Madrid 2008 for discussions of multiethnic support of the MAS; See Albó 2008, Roca 2008,
and Reyes 2008 for different opinions regarding ethnicity in Bolivia.
41
Denise Humphreys Bebbington and Anthony Bebbington, “Anatomy of a Regional Conflict: Tarija and Resource
Grievances in Morales’ Bolivia,” Latin American Perspectives 37, no 4 (2010); Kent Eaton, “Conservative
Autonomy Movements: Territorial Dimensions of Ideological Conflict in Bolivia and Ecuador,” Comparative
Politics 43, no 3 (2011).
42
Eaton, Conservative Autonomy Movements, 300.; José Luis Roca, “Regionalism Revisted,” in Unresolved
Tensions: Bolivia Past and Present, ed. John Crabtree and Laurence Whitehead (Pittsburg, PA: University of
Pittsburg Press, 2008), 74.
43
Eaton, Conservative Autonomy Movements, 301.
44
Eaton, Backlash in Bolivia, 91.

13
measure, the following statement by Miss Bolivia at the 2004 Miss Universe pageant illustrates
the point: “Unfortunately, people who don’t know Bolivia very much think that we are all just
Indians from the west side of the country, that is, La Paz—poor people and very short people and
Indian people. I’m from the other side of the country, the east side, and it’s not cold, it’s very hot
and we are tall and we are white people and we know English.”45
Although the Cold War is
over, polarization unique to Bolivia imbues politics with the qualities of a zero-sum game
reminiscent of the 1950s and 1960s.
Against all odds, Bolivia fulfills the predictions of theories based on regional economic
integration and the end of Cold War polarization. However, as the preceding discussion shows,
the mechanisms detailed by these theories do not explain this outcome. Neoliberal constraints
have not encouraged Morales to moderate on the most controversial economic issues. Although
regional organizations would be likely to intervene on behalf of Morales in the event of a coup,
the US reaction is not so certain. Finally, intense polarization along intersecting ethnic,
economic, and regional divisions poses a serious challenge to compromise through institutional
means, the primary aim of democracy. Bolivia is not “deviant country,” but the very theories
that explain this outcome suggest that it should be.46
To understand this discrepancy, I will take a comparative approach. As Eaton notes, the
current political and economic incorporation of social movements evokes the transformations
unleashed by the 1952 Revolution: “Not unlike the incorporation of labor, which proved to be
the crucial political juncture of the twentieth century, the mobilization of indigenous Latin
Americans represents what could be for many countries the most pivotal political event of the

45
Nicole Fabricant, “Performative Politics: The Camba Countermovement in Eastern Bolivia,” American
Ethnologist 36, no 4 (2009): 775
46
Todd Landman, Issues and Methods in Comparative Politics: An Introduction (London: Routledge, 2000), 33.

14
century.”47
The MNR and the Movimiento al Socialismo (MAS) rely on similar support bases
and pursued comparable reforms in content and depth. Thus, a comparison between the
governing experiences of the two parties will elucidate the pressures that lead to military coup.
This comparison is also advantageous because the choice of two “cases” within one country
controls for cultural and social factors.48
This control is especially useful because Bolivia stands
out in the region as an extreme case of poverty, inequality, extreme political instability, and
ethnic heterogeneity, all variables that could confound analysis.
In chapter one, I will highlight the major reforms pursued by the MNR and the MAS and
analyze their implications for popular and elite power. By “popular,” I refer to historically
marginalized sectors, such as labor, the peasantry, and the informal sector. Although the “middle
classes” often ally or share interests with the popular sectors, they will be referred to as a distinct
entity. By “elite,” I mean those who control economic resources and enjoy preferential access to
political institutions. The analysis will focus on the extent to which reforms undermined elites
and empowered popular sectors both politically and economically. Because the MNR pursued
its most influential reforms during its first four years, this chapter will focus only on the first
term of Víctor Paz Estenssoro (1952-1956). Morales’ ideology has remained consistent into his
second term, so I do not limit the analysis to his first term.
Chapter two addresses the role of natural resource wealth, specifically land, tin, and
hydrocarbons, in shaping political outcomes. Relying on the theoretical frameworks developed
by Guillermo O’Donnell and Thad Dunning, I will analyze the impact of economic policy and
changing economic conditions on support for and opposition to a regime among the popular
sectors and elites.

47
Eaton, Backlash in Bolivia, 71-72.
48
Guy Peters, Comparative Politics: Theory and Methods (New York: New York University Press, 1998), 23.

15
Using Samuel Huntington’s model of “mass praetorianism” as a starting point, chapter
three analyzes the factors that encourage or preclude military intervention in politics. Based on
the works of David Pion-Berlin and Eric Rittinger and Matt Cleary, I focus on the role of
corporate interests, the strength and design of institutions governing civilian-military relations,
and presidential strategies that aim to secure military allegiance.
Finally, I conclude that the ability of Morales and the MAS to implement radical reforms
without provoking a military coup is primarily due to the territorial distribution of resources in
Bolivia and favorable economic circumstances. While successive MNR governments struggled
with severe economic crisis and a unified elite opposition, Morales came to power during a
commodity boom and his policies targeted only regional elites. However, the vulnerability of
export-based economies to resource boom and busts question the sustainability of these reforms.

16
Chapter 1
Reform, Then and Now:
A Comparison of the MNR (1952-1964) and the MAS (2006-Present)
The similarities between the changes occurring in Bolivia today and during the 1950s are
striking. Both the MNR and the MAS came to power with the support of sectors marginalized by
the established political and economic system. Once in power, they governed on behalf of these
sectors, challenging elites that previously wielded disproportionate influence. Expanding and
deepening political participation formed a central part of the MNR and MAS agendas, and both
parties expanded the franchise and created new models of governance to incorporate these
groups. In both cases, the integration of previously excluded sectors into the political system
diminished the influence elites historically wielded through institutional channels. Moreover,
both parties responded to the policy preferences of their constituents, pursuing redistributive
economic policy. The MNR inaugurated a four-decade process of land reform by decree in 1953,
which Morales revitalized and extended to include commercial agriculture in the eastern
lowlands. In addition, the MNR and MAS nationalized key export commodities (tin and
hydrocarbons, respectively) immediately upon gaining power. With “revolutionary” agendas that
similarly expanded political participation and redistributed natural resource wealth, the MNR and
the MAS significantly undermined elite interests (See Table 1).

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Table 1: Structural Turning Points
Political Reforms: From Exclusion to Inclusion
The MNR and the MAS under Evo Morales expanded quantitative and qualitative
participation in political systems that previously excluded or ignored large portions of the
population. These reforms marked an important shift in the source of political power from a
narrow elite to popular groups, including labor, the peasantry, and the informal sector. This
transformation threatened the established influence of elites in politics, resulting in policies that
privileged popular over elite interests.
The landed oligarchy and mine owners dominated the politics and economy of pre-
revolutionary Bolivia, a system that excluded the peasantry and labor from participation in the
Period Level of Political
Participation
Redistributive? Challenged Elites?
Oligarchic Rule
(1900-1952)
Weak/non-existent
state: patronage system
dependent on export
sector, limited
suffrage, linguistic and
geographic boundaries
to participation
No: tin mines owned
by domestic elite,
semi-feudal land
tenure system
No
MNR
(1952-1964)
Weak corporatist state:
universal suffrage,
education reform
Yes: state nationalized
tin mines, land reform
Yes
Democratization and
the Washington
Consensus (1978-
2000)
Elite-driven, middle-
class based parties
with few connections
to labor, peasantry, or
the informal sector
No: mine and
hydrocarbon
ownership partly
privatized, land reform
unevenly implemented
No
Morales
(2006-Present)
“Plurinational” state:
inclusive ideology,
governing strategies
incorporate social
movements, electoral
reforms
Yes: hydrocarbons
nationalized and
revenues used for
redistributive
programs, land reform
extended to eastern
lowlands
Yes

18
political process. A literacy requirement barred 80 percent of the population from voting, and
less than five percent of the population actually voted.49
Economic and political power were
virtually synonymous, and the former was concentrated in a small elite. The Patiño, Hoschchild,
and Aramayo families owned 80 percent of the tin industry, which in turn accounted for 80
percent of Bolivian exports.50
The impressive economic power of these three families percolated
to the political process, making the infamous La Rosca “the most powerful interest combination
in the country, dwarfing all potential competitors including the state.”51
The urban middle
classes, dependent on jobs in the public and service sectors, were beholden to the tin barons for
employment, contracts, and other essential resources. Patronage permeated political institutions
and parties were mere “personalistic factions.”52
As James Malloy concluded, “By all odds
Bolivia was saddled with one of the weakest, least autonomous, and most dependent state
structures in the entire region.”53
Nor could the 70 percent of the population living in the
countryside participate politically, separated from urban centers economically, linguistically, and
geographically.54
A small group of individuals owned most of the country’s land, creating a
semi-feudal agrarian structure. Two thirds of the population spoke either Aymara or Quechua,
and very few spoke Spanish. Exacerbating these divisions, the jungles and savannas in the
northern and eastern parts of the country, respectively, were virtually inaccessible. Although the
decades leading up to revolution saw limited political participation by miners, urban workers,

49
Mitchell, The Legacy of Populism, 12.
50
Dunning, Crude Democracy, 233.
51
Malloy, Authoritarianism and Corporatism, 459. The political power of tin interests is widely observed in the
literature (Dunning 2008, Malloy 1977, Mitchell 1977, Zondag 1969). For an alternative interpretation, see
Dunkerley 2003 in Proclaiming Revolution.
52
Malloy, Authoritarianism and Corporatism, 460.
53
Ibid., 459-462.
54
Ibid., 461.

19
and some peasants, the majority of the Bolivian population remained on the periphery of, or
entirely excluded from, national life.55
The victory of MNR leaders, the military, and armed peasant and labor groups in 1952
inverted the logic of the previous system, empowering popular sectors with the goal of
destabilizing elite power. In its origins and ideology the MNR was beholden to discontented
popular sectors. MNR leaders considered cooperation among social classes essential to reform,
and envisioned the party as the forum for such cohesion.56
The resulting partido policlasista
incorporated unions, urban middle classes, lower middle classes, and the peasantry as interest
groups.57
This strategy of inclusion was an instrument of social confrontation, not harmony:
MNR leaders intended the multiclass coalition to overwhelm the power of the traditional
oligarchy. The party explicitly proclaimed the oligarchy an agent of foreign imperialism and the
enemy of the state.58
A 1948 MNR pamphlet illustrates the party’s view of domestic elites: “The
MNR…is a democratic party which considers that Bolivia can carry out a National Revolution
which will liberate the country from the great mining consortia and monopolies which,
dominating the economic life of the nation, affect its political life as well, keeping Bolivia in
backwardness, isolation, and poverty.”59
The MNR portrayed its strategy as one of confrontation
rather than accommodation, making its program a radical deviation from established power
relations. The MNR mobilized sectors disadvantaged during the preceding period of oligarchic
rule to dismantle elite political power, which the party considered the primary obstacle to
progress.

55
Mitchell, The Legacy of Populism, 12-33.
56
Ibid., 6.
57
Ibid., 27-28.
58
Malloy, Authoritarianism and Corporatism, 10-12.
59
Mitchell, The Legacy of Populism, 31.

20
The MNR expanded political participation by enacting universal suffrage, incorporating
sectoral interests into the state through corporatist structures, and socializing the peasantry into
the national project through expanded rural education. By giving its supporters greater access to
the state, the MNR counterbalanced elite influence in political institutions. In a decree with
consequences that would resonate for decades, the MNR eliminated the literacy requirement to
vote, increasing the voting population by 1200% from 200,000 to 1 million.60
Although
enfranchisement did not lead to the articulation of an autonomous political voice for the
indigenous peasantry until the 1990s, electoral participation provided an unprecedented
connection between rural Bolivia and the centers of political power.61
In addition, the corporatist
structure created new institutional channels for participation. In an effort to create a hegemonic
party akin to Mexico’s PRI, the MNR granted party membership to middle class sectors and
incorporated pre-existing sectoral organizations into the party structure. Represented by the
Central Obrera Boliviana (COB), labor wielded significant power through an autonomous
structure of governance parallel to that of the state. Under cogobierno, labor leaders enjoyed the
right to name government ministers, veto power in COMIBOL (the state mining company), and
six channels of recourse to address grievances.62
Finally, the MNR expanded rural education to
facilitate indigenous peasant participation as a homogenous, Spanish-speaking class.63
The important point is that the MNR organized politically mobilized and inactive groups
into a coalition powerful enough to check the dominance of traditional elites for the first time in

60
Jane Benton, Agrarian Reform in Theory and Practice: A Study of the Lake Titicaca Region of Bolivia (Aldershot:
Ashgate, 1999), 45.
61
Herbert S. Klein, “Social Change in Bolivia since 1952,” in Proclaiming Revolution: Bolivia in Comparative
Perspective, ed. Merilee Grindle and Pilar Domingo (London: Institution of Latin American Studies, 2003), 237.
62
Malloy, Authoritarianism and Corporatism, 467-468; Cornelius H. Zondag, The Bolivian Economy, 1952-65: The
Revolution and Its Aftermath (New York: Praeger, 1966), 90.
63
Xavier Albó, “The ‘Long Memory’ of Ethnicity in Bolivia and Some Temporary Oscillations,” in Unresolved
Tensions: Bolivia Past and Present, ed. John Crabtree and Laurence Whitehead (Pittsburg, PA: University of
Pittsburg Press, 2008), 19.

21
Bolivian history. To be sure, the large gains in political participation under the MNR did not
imply a transition to democracy. The MNR did not aim to create a competitive democracy,
instead seeking to institutionalize societal control through a hegemonic party. The party operated
with the top-down logic of a single-party regime, striving to control its supporters behind the
trappings of democratic institutions. Nor did the importance of patronage diminish under MNR
rule. In fact, clientelism rather than policy-driven representation shaped the election to
government offices or positions.64
However, the MNR’s approach was a radical break with the
past in its assertion of the state’s alliance with popular sectors rather than elites. The MNR’s
corporatist structure provided new recourse for popular demands, leveraging mass power over
elite influence to push substantive reform forward. MNR ideology and reforms dramatically
expanded political participation and challenged elite hegemony.
Political reforms during Paz Estenssoro’s presidency (1952-1956) went far to weaken
elite influence by expanding popular participation. However, renewed discontent emerged after
two decades of military rule followed by two decades of governance by elite pact. Along with
Colombia, Bolivia, Venezuela, and Peru, Bolivia suffers from a “Crisis of Representation,” with
much of society expressing disillusionment with democratic institutions and low support for
democracy as a system of government.65
Political parties, widely considered crucial to a
functioning democracy, were hierarchical, undemocratic organizations that facilitated
governance through behind-the-scenes dealings rather than coherent policy programs.66
Reforms
of the 1990s, like municipal decentralization, land reform, and increased access to education,

64
Eduardo Gamarra and James Malloy, “The Patrimonial Dynamics of Party Politics in Bolivia,” in Building
Democratic Institutions: Party Systems in Latin America, ed. Scott Mainwaring and Timothy Scully (Stanford, CA:
Stanford University Press, 1995), 402-404.
65
Mainwaring, Crisis of Representation, 13-27.
66
Malloy and Gamarra, Patrimonial Dynamics, 415-420.; Scott Mainwaring and Timothy Scully, Building
Democratic Institutions: Party Systems in Latin America, (Stanford, CA: Stanford University Press, 1995).; Gustavo
Flores-Macías, "Statist vs. Pro-Market: Explaining Leftist Governments' Economic Policies in Latin America,"
Comparative Politics 42 no. 4 (2010).

22
failed to increase authentic representation on the national level.67
Despite almost two decades of
democratic rule, by 2000 governing institutions were out of touch with most of society. A
demonstration of successive governments’ inability to meet societal demands, nationwide
protests articulated widespread grievances outside of institutional channels, removing presidents
Gonzálo Sánchez de Lozada (2003) and Carlos Mesa (2005) (citation). Five years of upheaval
culminated in the election of Evo Morales in December 2005, who promised to remake the
Bolivian state in the mold of a plurinational, inclusionary democracy. Just as the MNR increased
political participation of previously excluded sectors in political life, Morales focused on
revitalizing democratic participation of a multitude of interests discontented with neoliberal
economic and political ideology.
The unprecedented electoral success of Morales and the MAS corresponded to a decline
in the performance of traditional parties, increasing the influence of popular sectors while
undermining that of elites. From 1985 to 2000, dominant parties ruled through a series of pacts
between political elites, ensuring the fair distribution of state patronage, rotation of the
presidency, and a firm commitment to neoliberalism.68
After ensuring elite dominance for
almost two decades, these parties performed poorly in the 2002 elections. The MNR, ADN, and
MIR secured a combined 42 percent of the vote, compared to 57 percent in 1997.69
This decline
was juxtaposed against the impressive electoral success of the MAS and Morales, a party and
leader with origins in the cocaleros of Chaparé. The MAS secured 20 percent of the vote in the
congressional election and Morales finished a close second to Sánchez de Lozada in the

67
See Gustafson 2002 for a discussion of reforms under neoliberal governments.
68
Eduardo Gamarra, “Hybrid Presidentialism and Democratization: The Case of Bolivia,” in Presidentialism and
Democracy in Latin America, ed. Scott Mainwaring and Matthew Soberg Shugart (Stanford, CA: Stanford
University Press, 1995), 373-379.
69
The MNR shifted to the right in the 1980s.

23
presidential contest.70
In 2005, Morales won the presidency with a majority of the vote (53.7
percent), the first candidate to do so since the return to democracy.71
The rise of an indigenous,
social movement leader who campaigned on a staunch anti-neoliberal platform to the highest
political office was heavily symbolic in a country plagued by endemic inequality and racism.
Prior to Morales, elites enjoyed favorable relationships with politicians like Sánchez de Lozada,
the American-educated architect of Bolivian neoliberalism, or ex-dictator Hugo Banzer. As a
result of the change, “the executive [was] no longer the plaything of the business leaders who,
during the 1980s and 1990s, exercised strong influence over past leadership and government
appointments. Instead, we have a government made up of trade union leaders and workers from
different sectors, which responds to the leadership of a party with peasant origins.”72
Similar to
the 1952 revolution, Morales’ election replaced the influence of elites with that of popular
sectors like indigenous peasants, cocaleros, labor unions, and urban intellectuals. In both cases,
elites faced a significant decline in influence: political institutions no longer provided the access
to power that they once did.
While the MNR integrated existing trade unions into the state through corporatist ties,
Morales has absorbed social movements into political institutions and the policymaking process.
The MAS operates as the political arm of social movements alongside the official, hierarchical
structure defined by party statues, ensuring grassroots participation in the decision-making
process.73
In addition, popular demands contribute heavily to the government’s agenda, the
government relies on grassroots mobilization to implement changes, and movement members

70
Kent Eaton, Backlash in Bolivia, 82.
71
Sven Harten, “Towards a ‘Traditional Party’? International Organisation and Change in the MAS in Bolivia,” in
Evo Morales and the Movimiento al Socialismo in Bolivia: The First Term in Context, ed. Adrian J. Pearce (London:
Institute for the Study of the Americas, University of London, School of Advanced Study, 2011), 69.
72
Luis Tapia, “Constitution and Constitutional Reform in Bolivia,” in Unresolved Tensions: Bolivia Past and
Present, ed. John Crabtree and Laurence Whitehead (Pittsburg, PA: University of Pittsburg Press, 2008), 169.
73
Harten, Towards a ‘Traditional Party’?, 75-76.

24
must approve government officials.74
This collaboration is not just rhetorical: mobilization at the
base both enables and prevents the implementation of government policy. In 2011, opposition
erupted over Morales’ plan to construct a road through the TIPNIS indigenous territory,
ultimately forcing him to back down.75
Morales used referenda three times in his first term to
resolve controversial political questions, first in 2006 on regional autonomies, second in 2008
concerning his presidency, and third in 2009 on the draft constitution.76
Although the opposition
retained control of the lower house of the legislature in 2005 elections, Morales’ reliance on
plebiscitary mechanisms like mass mobilization and referenda has weakened this check on the
MAS agenda. Elites clearly consider this threatening, spearheading regional opposition
movements that utilize similar strategies, like demonstrations, strikes, and unilateral autonomy
referenda.77
The rise of the MAS at the expense of traditional parties compromised elite
influence within institutional channels, and Morales’ reliance on direct appeals to his base
circumvents remaining institutional checks.
Economic Reforms: From Concentration to Redistribution
Both the MNR under Paz and the MAS under Morales immediately pursued policies
seeking to expanding political participation quantitatively and qualitatively, marking important
shifts from the previous systems. In both cases, large proportions of the population gained roles
of increasing importance in national political life, while traditional elites were ignored or

74
Benjamin Kohl, “Bolivia under Morales: A Work in Progress,” Latin American Perspectives 37, no 3 (2010): 115.
75
“Bolivia’s Evo Morales Scraps Amazon Road Project,” BBC News, October 21, 2011.
http://www.bbc.co.uk/news/world-latin-america-15409447 (access April 14, 2012).
76
John Crabtree, “Electoral Validation for Morales and the MAS (1999-2010),” in Evo Morales and the Movimiento
al Socialismo in Bolivia: The First Term in Context, ed. Adrian J. Pearce (London: Institute for the Study of the
Americas, University of London, School of Advanced Study, 2011), 128-130.
77
Fabricant, Performative Politics.; Bebbington and Bebbington, Anatomy of a Regional Conflict, 151-153.;
Crabtree, Electoral Validation.

25
ostracized. These changes threatened elite interests by undermining established channels to state
power, like undemocratic parties or limited enfranchisement. Although the change in ideology
alone was frightening, more problematic for elites were the economic implications of these
changes. Like most countries in the region, Bolivia was and continues to be highly unequal.
However, Bolivia stands out as an extreme example of the social and economic stratification
common to the region. As has been previously noted, stark economic, linguistic, cultural, and
geographic distinctions plagued pre-revolutionary Bolivia. Although MNR reforms certainly
made inroads into the pervasive problems of poverty, especially in terms of health and education,
Morales inherited a highly unequal and impoverished society.78
In 2005, 59.9 percent of the
population lived under the national poverty line and 30.4 percent on less than two dollars per
day.79
In 2009, Bolivia was the ninth most unequal country in the world with a Gini coefficient
of 58.2. Given the bleak conditions for the majority of the population, elites fear expanded or
deepened political participation because it signifies greater government responsiveness to new
constituencies in terms of economic policy.
The ascendance of the MNR and Morales to power marked a shift toward redistributive
economic policy, threatening economic elites that had benefitted from minimal state
intervention. Prior to the MNR takeover, the Bolivian state was almost nonexistent,
overwhelmed by the political and economic power of La Rosca. In an effort to undermine the tin
barons and become “masters in their own house,” the MNR incorporated the mines into the
Corporación Minera de Bolivia (COMIBOL) by decree, effectively wresting control of tin rents
from a small, private elite.80
Similarly, the 1953 agrarian reform has been widely praised as one
of the largest land transfers in the region, transforming the influence of the rural, landed

78
Klein, Social Change, 238.
79
World Bank.
80
Zondag, The Bolivian Economy, 82-86.

26
oligarchy and guaranteeing peasant allegiance to the MNR for decades to come.81
Morales has
similarly emphasized redistributive economic policies, redefining the state as the protagonist
driving economic development, rather than market forces. Since taking office in 2006, Morales
has overseen the nationalization, restructuring, or creation of state enterprises in the
hydrocarbon, mining, telecommunications, electricity, food, and transportation industries.82
Perhaps the most important of these was the hydrocarbon industry, as rents would be used for
redistributive programs such as Renta Dignidad, leaving less for the departments in which the
gas is located. In addition, Morales ensured that a new land reform law would include the
lowlands, which had avoided implementation of past reforms.
That the MAS pursued land reform and the nationalization of the key export commodity,
central components of the MNR’s revolutionary platform, 50 years later illustrates the continuing
importance of Bolivian natural resource wealth in politics. Both the MNR and the MAS
approached these contentious issues from an anti-elite position, challenging dominant interests in
crucial economic sectors. In a largely rural country, land reform is a centerpiece of development
programs due to its potential to ameliorate rural poverty, decrease food prices, stimulate growth,
increase government revenue, and address environmental concerns.83
Autonomous control of
communal territory is also a key demand of indigenous peoples, a majority in Bolivia.84
However, changes in land tenure are politically challenging due to the threats they pose to

81
John D. Cameron, “Hacia la Alcaldia: The Municipalization of Peasant Politics in the Andes,” Latin American
Perspectives 36, no 4 (2009): 68; Klein, Social Change; Rosemary Thorp, Corinne Caumartin, and George Gray-
Molina, “Inequality, Ethnicity, Political Mobilisation and Political Violence in Latin America: The Cases of Bolivia,
Guatemala and Peru,” Bulletin of Latin American Research 25, no 4 (2006): 472.
82
“100 Logros del Gobierno para Bolivia (2006-2009),” Estado Plurinacional de Bolivia,
http://www.presidencia.gob.bo/. (accessed April 14, 2012).
83
William C. Thiesenhusen, Broken Promises: Agrarian Reform and the Latin American Campesino (Boulder:
Westview Press, 1995), 10-13.; Annelies Zoomers and Gemma van der Haar, “Introduction: Regulating Land
Tenure under Neo-liberalism,” in Current Land Policy in Latin America: Regulating Land Tenure under Neo-
liberalism, ed. Annelies Zoomers and Gemma van der Haar (Amsterdam: KIT Publishers, 2000), 18-20.
84
Willem Assies, “Land, Territories, and Indigenous Peoples’ Rights,” in Current Land Policy in Latin America:
Regulating Land Tenure under Neo-liberalism, ed. Annelies Zoomers and Gemma van der Haar (Amsterdam: KIT
Publishers, 2000.

27
landowning elites, who find their land expropriated to landless or land-poor peasants.85
Allocation of natural resources is similarly contentious because of private ownership by a small
elite or the unequal geographic distribution of resources. The Bolivian economy is heavily
resource dependent, and redistributionist visions depend largely on rents generated by key export
commodities.86
As an economy based on resource wealth that is concentrated in the hands of the
few, the Bolivian case demonstrates the well-documented authoritarian consequences of natural
resources. The following analysis will focus first on the politics of land reform and second on the
politics of natural resources, demonstrating that both the MNR and the MAS significantly
challenged elite interests in these central economic sectors.
Land Reform
Many observers have heralded the 1953 decree mandating land reform as the
revolutionary government’s most important reform, responsible for widespread redistribution of
land from hacendados to peasants.87
In pre-revolutionary Bolivia, peasants were trapped in what
many considered to be the most regressive, unequal, and exploitative land tenure system in the
region, demonstrated by the widely cited 1950 agrarian census.88
Like the rest of the region, the
structure of land distribution juxtaposed few latifundios, or large haciendas or commercial
holdings, with many minifundios, or small plots insufficient for subsistence.89
In 1950, six
percent of landowners owned plots of 1,000 hectares or more, amounting to 92 percent of

85
Thiesenhusen, Broken Promises, 6-7.
86
Richard M. Auty, Sustaining Development in Mineral Economies: The Resource Curse Thesis (London, New
York: Routledge, 1993); Dunning, Crude Democracy.
87
Thorp, Caumartin, and Gray Molina, Inequality, Ethnicity, Political Mobilisation and Political Violence.;
Cameron, Hacia la Alcaldia.; Klein, Social Change; Zoomers and van der Haar, Introduction, 17.
88
Benton, Agrarian Reform in Theory and Practice, 42-43.; Dwight B. Heath, Charles J. Erasmus, and Hans C.
Buechler, Land Reform and Social Revolution in Bolivia (New York: Praeger, 1969), 34, 38.; Thiesenhusen, Broken
Promises, 57.
89

28
cultivable land. By contrast, 60 percent of landowners owned plots of five hectares or less. While
large plots were minimally utilized, small farmers cultivated a majority of their land,
highlighting the poor economic viability of the minifundio.90
The reform sought to correct these
stark inequalities in land distribution, diversify agriculture, develop the eastern export economy,
and provide inexpensive food for urban areas. The law sanctioned five forms of legal land
tenure, deeming the latifundio illegal, and redistributed lands based on necessity for subsistence
of the farmer or landlord “inefficiency.” To encourage migration to the lowlands, the law set the
maximum amount of transferable land at 2,000 hectares in Santa Cruz, compared to .5 hectares
in the densely populated Cochabamba valley.91
Four decades after the MNR issued the decree,
44 million hectares of land had been distributed to 262,998 individuals.92
Despite later criticisms, land reform under the MNR was clearly antithetical to the
interests of landowning elites. Landowning elites opposed reform as early as the 1940s, a view
expressed by the landowner organization Sociedad Rural Boliviana (SRB) and the press. These
elites remained powerful even after the revolution, and MNR leaders demonstrated reluctance to
pursue the radical reform demanded by the peasantry. In addition, the government prioritized
nationalizing the mines, managing inflation, and consolidating power over land reform.
However, recently armed peasants overcame Paz’s ambivalence through land invasions, strikes,
and violence.93
The capacity of the peasantry to force the hand of the party vis-à-vis economic
policy demonstrated the considerable influence of popular sectors on the government’s agenda.
Elites had clearly opposed reform from its inception and no longer exercised the power necessary
to obstruct its passage. True to elite fears, the reform itself did challenge the hegemony of the

90 Klein, Social Change, 232-233.
91
92
Klein, Social Change, 237,
93

29
rural oligarchy. Especially in the densely populated altiplano and Cochabamba Valley,
redistribution undermined the dominance of landowners and created a new mestizo class.94
Antonio Garcia (1970) goes farther, concluding that the historical significance of land reform
exceeded that of independence:
“The revolution destroyed the hacienda as a social, economic and political structure, and destroyed it for
good. And this fact has meant not only the abolition of compulsory unpaid services and other disguised
types of servitude, but the disruption of a whole system of political and social hegemony. That is why the
revolution is much more important than the Wars of Independence for the huge alienated mass of colonos,
sharecroppers, pegujaleros, hutahuahuas, and farm laborers.”95
Although subsequent scholarship would debate the resurgence of neolatifundismo in Bolivia,
Garcia’s analysis captures the significance of the reform’s break with past social, economic, and
political relationships.96
Aware of its implications for rural social and economic structures, elites
opposed land reform from the start.
The 1953 law had far-reaching consequences in improving the livelihoods of poor rural
Bolivians and challenging elite dominance. However, due to the reform’s limitations, dilutions
over time, and the exemption of Santa Cruz from the 1953 law, land reform remained a divisive
issue in Bolivian politics at the time of Morales’ election. Landowners in the eastern lowland
department of Santa Cruz evaded reform due to the legal distinction between “commercial farm
enterprises” and latifundios. This exemption and state investment after 1953 created a stratified
system reminiscent of the pre-reform agrarian structure in the highlands. In 1984, six percent of
landowners owned almost 84 percent of land in Santa Cruz, and land dispossession and violation
of indigenous land rights were key grievances.97
In addition, the population and economic

94
Albó, The ‘Long Memory’ of Ethnicity, 19.; Klein, Social Change, 237.; Thiesenhusen, Broken Promises, 63.
95
Antonio Garcia, “Agrarian Reform and Social Development in Bolivia,” in Agrarian Problems and Peasant
Movements in Latin America, ed. Rodolfo Stavenhagen (Garden City, NY: Anchor Books/Doubleday & Co, 1970),
309-310.
96
See Thiesenhusen 1995 for discussion of later critiques of the reform.
97
Gabriela Valdivia, “Agrarian Capitalism and Struggles over Hegemony in the Bolivian Lowlands,” Latin
American Perspectives 37, no 4 (2010): 69-72.

30
dynamism of the region increased dramatically, transferring the locus of economic power to the
lowlands.98
Between 1950 and 2001, the population of Santa Cruz had increased from nine to 25
percent of the national population, and in 2007 Santa Cruz contributed 29 percent of GDP.99
The
political influence of Santa Cruz increased with its economic performance and population,
making the region the bastion of opposition to reform initiatives. Similar to the response of pre-
revolutionary elites to early MNR proposals for reform, Cruceño elites vehemently opposed the
1996 land reform law (INRA) promulgated by Sánchez de Lozada. After the approval of the law,
Santa Cruz responded with a two-day general strike to symbolize its future loss in income as a
result of reform.100
The level of elite opposition led Jane Benton (1999) to conclude that the law
was “an anathema to the empresarios (commercial farmers) and latifundistas of the eastern
lowland regions” and that “few laws in Bolivia’s history have aroused stronger feelings.”101
The
fierce elite opposition generated by INRA, a reform based on neoliberal principles crafted by a
fellow economic elite, highlights the threat posed by land distribution. Moreover, modifications
to the law under former dictator Hugo Banzer (1997-2001) undermined its ability to affect true
change in the eastern lowlands, softening the blow for elites.102
While Cruceño elites enjoyed
preferential treatment during Banzer’s dictatorship (1971-1978), Morales does not rely on Santa
Cruz for political support. Instead, he is accountable to indigenous peasants, who strongly
advocate land reform. Elites could no longer count on their power to offset the implementation of
reforms, increasing the threat posed by land reform under Morales.

98
99
See Appendix A, Tables 5 and 6.
100
Bret Gustafson, “Paradoxes of Liberal Indigenism: Indigenous Movements, State Processes, and Intercultural
Reform in Bolivia,” in The Politics of Ethnicity: Indigenous Peoples in Latin American States, ed. David Maybury-
Lewis (Cambridge, MA: Harvard University, David Rockefeller Center for Latin American Studies, 2002), 282.
101
Benton, Agrarian Reform, 81, 91.
102
Valdivia, Agrarian Capitalism, 74.

31
With the unequal distribution of land in Santa Cruz in mind, Morales approached reform
with the central goal of rectifying the imbalances created by the 1953 decree and insufficiently
addressed by neoliberal agrarian reform (1996, INRA). Under the 2006 Ley de Reconducción
(Law 3545, Extension Law), Morales granted titles for 23.46 million hectares to 100,000 people
between 2006 and July of 2009, exceeding his initial goal by over 3 million hectares.103
As
demonstrated by Table 2, Morales distributed over half of the total hectares transferred by the
MNR in only three years, compared to four decades of implementation of the 1953 law. Critics
have called into question the efficacy of the MNR reform because of the slow titling process,
which allowed elites to manipulate distribution through bureaucratic channels.104
With respect to
speed, Morales has gone far beyond the MNR in challenging elite interests. Although the MNR
distributed land to a significantly greater number of individuals than Morales, the average
number of hectares per person transferred by Morales is 264, compared to 70 by the MNR.
Because of the poor economic performance of the minifundios created by the 1953 reform, the
greater quantity of land distributed to individuals under Morales may indicate more meaningful
benefits. Law 3545 also distributed almost three times as many hectares as INRA, a law that
triggered extensive elite opposition. In respect to the area of land transferred and the speed of
implementation, the reform pursued by the Morales administration significantly deepened the
change begun by the 1953 decree and continued by INRA. Because both reforms sparked fierce
elite reactions, the distribution of more land at higher rates would be expected to generate as
much or more opposition to Morales.
Table 2: Land Distributed

103
Raúl L. Madrid, “The Origins of the Two Lefts in Latin America,” Political Science Quarterly 125, No 4 (2010):
591.
104
Into A. Goudsmit, “Exploiting the 1953 Agrarian Reform: Landlord Persistence in Northern Potosí, Bolivia,”
Journal of Latin American and Caribbean Anthropology 13, no 2 (2008): 377.
Reform Land Distributed
(ha)
Titles Distributed Number of
Beneficiaries

32
Unsurprisingly given the magnitude and speed of land redistribution, elites in Santa Cruz
perceived land reform as an economic and cultural threat. Regional landowning interests,
represented by the Cámara Agropecuaria del Oriente (CAO), consider agrarian reform, the
nationalization of hydrocarbons, and changes in export and import regulations for agricultural
products profoundly threatening to the lowland economy. In a 2008 speech, CAO president
Mauricio Roca argued that land reform had contributed to a decline in production by diminishing
investor confidence due to fears about the security of titles. Elites oppose land reform and other
signature Morales policies because, they argue, these policies diminish the region’s
competitiveness in domestic and international markets.105
Moreover, the regional narrative
considers the success of capitalist agroindustry the product of hard work, a value that is
threatened by a redistributionist model that encourages paternalistic welfare dependency. Land
reform is threatening because of its economic implications but also as part of a broader model
that compromises the foundation on which regional success was built. Thus, Santa Cruz has been
the bastion of the opposition since Morales’ election.
Natural Resources
Just as land distribution exposes deep economic, political, and cultural divisions within
Bolivian society, natural resource rents are a perennial feature of Bolivian politics. The MNR
asserted the role of the state in distributing rents, which it did for the benefit of its supporters and
at the expense of elites. Prior to the revolution, the Bolivian economy depended heavily on

105
Decree Law No. 3464
(1953-1993)
44 million 831,000 626,998
INRA (1996-2005) 9.3 million n.a. n.a.
Law 3545 (2006-2009) 23.46 million n.a. 100,000

33
mineral exports. Tin accounted for 80 percent of Bolivian exports and between 25 and 50 percent
of the world market until World War II.106
Dismantling the traditional influence of the tin
interests was essential to consolidating MNR power, and MNR leaders largely owed their rise to
power to highly mobilized and politically articulate miners.107
The decision to nationalize, made
due to a convergence of MNR and miner interests, confronted the mine-owning elite for the
benefit of previously exploited labor. Because La Rosca owned 80 percent of the tin industry,
nationalization equated redistribution, implying a substantial decrease in the elite share of tin
wealth. Indeed, during the 1940s the “tin barons in Bolivia exerted their substantial political
influence to oppose democratizing reforms that might lead to greater redistribution of tin wealth
itself,” demonstrating the extent to which nationalization challenged these interests.108
For
miners and other MNR supporters, nationalization meant greater access to tin wealth in the form
of state spending. Thus, nationalization juxtaposed the interests of elites and the popular sectors,
and the MNR acted on behalf of the popular sectors, against elites. The nationalization of the
mines successfully destroyed the political and economic influence of the mine-owning elite.
During the 50 years that followed the revolution, hydrocarbons comprised an increasing
proportion of Bolivian exports, replacing tin as the most contentious natural resource.109
Like the MNR distributed tin rents to its constituencies, Morales redistributed gas wealth
to poorer segments of society, ending elite control over hydrocarbons. In what Kurt Weyland
called an “ostentatious military occupation,” Morales nationalized hydrocarbons by transferring
operational control of the industry to the state-owned enterprise Yacimientos Petrolíferos

106
107
108
Dunning, Crude Democracy, 234-325.
109
See Appendix B, Table 7.

34
Fiscales Bolivianos (YPFB) by decree.110
The decree reversed the privatization enacted during
the first administration of Gonzalo Sánchez de Lozada (1993-1997), a policy that favored foreign
investors and the extractive industry based in the lowland department of Tarija.111
This shift
away from policies favoring foreign investors and domestic elites gains significance when
contextualized in the heavily symbolic value of gas in Bolivia. In 2003, social movement protests
led by Morales and Felipe Quispe added the export of gas through Chile at rates lower than
market price, a policy that for the marginalized majority symbolized the historical privilege of
internal and external elites.112
Memories of the Gas War, which culminated in the exit of then-
president Sánchez de Lozada, still resonate, lending gas a central position in Morales’
presidential campaign. The decree was titled “Heroes del Chaco,” emphasizing the role played
by highland Indians in defending hydrocarbon reserves from Paraguay in the Chaco War (1932-
1935), the conflict from which the revolutionary fervor of the MNR base emerged.113
In this
context, the nationalization of hydrocarbons spurned elites while realizing a central demand of
social movements.
As a critical source of revenue, hydrocarbon rents are essential to funding contradicting
departmental and national visions of development. The lowland department of Tarija possesses
the majority of hydrocarbon reserves, of which the regional autonomy movement demands
greater control. As Kent Eaton notes, conflicts surrounding gas amount to a dispute over
economic models: “Beyond simply demanding to keep more of the tax revenues that are
collected in subnational regions, conservative autonomy movements are demanding deeper

110
Clayton Mendonça Cunha, Filho and Rodrigo Santaella Gonçalves, “The National Development Plan as a
Political Economic Strategy in Evo Morales’ Bolivia: Accomplishments and Limitations,” Latin American
Perspectives 37, no 4 (2010): 184.; Weyland, Latin America’s Two Lefts, 157.
111
Bebbington and Bebbington, Anatomy of a Regional Conflict, 144.
112
Donna Lee Van Cott, From Movements to Parties in Latin America: The Evolution of Ethnic Politics
(Cambridge, New York: Cambridge University Press, 2005), 97.
113
Bebbington and Bebbington, Anatomy of a Regional Conflict, 145; Benjamin Kohl and Linda Farthing, Impasse
in Bolivia: Neoliberal Hegemony and Popular Resistance (London: Zed Books, 2006), 44.

35
changes that would allow subnational regions to deviate from national development models.”114
While Morales advocates redistribution and a move toward statism, lowland elites argue that
neoliberalism should be maintained in their regions.115
Given the country’s narrow tax base, gas
is essential to funding the social programs like Renta Dignidad and the Bono Juancito Pinto.
Funding for Renta Dignidad, which transfers a monthly stipend that totals US$340 per year to
Bolivians above the age of 60, amounts to 30 percent of total revenue from the direct
hydrocarbons tax. The benefit is universal, but in practice it amounts to redistribution of wealth
because of the concentration of hydrocarbon reserves in Tarija.116
Tarija also depends heavily on
hydrocarbon revenues, which have generated 89 percent of the department’s income since the
establishment of the direct hydrocarbons tax (2005). This income is invested in infrastructure,
free health care, programs supporting the development of small farms, and the university.117
The
regional concentration of natural resources in contemporary Bolivia is analogous to the private
ownership of the tin mines before 1952. In 1952, nationalization resulted in redistribution from
domestic elite to labor, the peasantry, and other popular sectors. In 2006, it resulted in
redistribution from a wealthy department to poorer departments, creating elite-led opposition
from within the region. Because of the cultural resonance of gas and the reliance of national and
departmental actors on revenues, control of revenues is a zero-sum game. On the question of
nationalization, social movement and popular sectors “won” and regional elites “lost.”
Both Morales and the MNR harnessed the discontent of sectors marginalized in national
economic and political life. Morales and MNR promised to create a more inclusive polity, and

114
Eaton, Conservative Autonomy Movements, 307.
115
Ibid., 294.
116
The Global South-South Development Academy, “The Dignity Pension (Renta Dignidad): A Universal Old-Age
Pension Scheme in Bolivia,” United Nations Development Program.
http://tcdc2.undp.org/GSSDAcademy/SIE/SIEV1CH2/SIEV1CH2P1.aspx. (accessed April 14, 2012).
117
Bebbington and Bebbington, Anatomy of a Regional Conflict, 154.

36
they delivered with reforms that incorporated their support bases into the political process in
novel ways. While the MNR implemented a corporatist structure that organized access to the
state on the basis of economic sector, Morales and García Linera have integrated social
movements into policymaking through party structure and plebiscitary means, both formal and
informal. The creation of new channels for participation or the formalization of old ones
accompanied quantitative expansions in the electorate, including the beginning of universal
suffrage under the MNR and extension of the vote to Bolivians living abroad under Morales. In
both cases, political inclusion translated to economic inclusion, threatening elites with
redistribution of resources central to the Bolivian economy, politics, and society. The allocation
of land and natural resources is theme that resonates throughout Bolivian history. Both Morales
and the MNR asserted the sovereignty of all Bolivians, as conceived in their political ideologies,
over the country’s natural resource wealth. Despite the common approaches of MNR leaders and
Morales to highly conflictive issues, which empowered popular sectors at the expense of
powerful elites, Morales has so far avoided a military coup akin to the one that ended 12 years of
MNR rule. How did Morales overcome the acute challenges to meaningful reform in Bolivia,
one of the most socially and economically stratified countries in the world?

37
Chapter 3
Economic Crash and Resource Wealth:
Political Implications in an Atypical Rentier State
Morales’ redistributive economic policies have significantly challenged regional elite
interests, especially in the departments of Tarija and Santa Cruz, leading observers to attribute
his ability to implement such changes due to favorable export prices. Due to a commodities
boom beginning in 2002, the region has grown at an average of 5.5 percent. Steven Levitsky and
Kenneth Roberts partially attribute the longevity of leftist governments to increased rents, which
expand the possibilities of redistribution without seriously challenging elite interests.118
Daniela
Campello agrees with Levitsky and Roberts’ premise that high rents increase the policy options
available to leftists. Based on the model of Boix (2003), Campello argues that financial
liberalization constrains the possibilities of redistribution because investors can easily remove
capital from a domestic economy, leading many Latin American leftists to moderate once in
office. Her analysis of the presidencies of Lula in Brazil, Gutierrez and Correa in Ecuador, and
Chávez in Venezuela demonstrates that exogenous shocks can mediate this tension.119
Kurt
Weyland takes this proposition farther, concluding that resource rents actually “stimulate
radicalism and voluntarist attacks on the established socioeconomic and political order.”120
Resource rents have clear political implications, warranting further analysis in the Bolivian case.
If greater resource rents enable or induce redistributionist economic programs, a decline
in prices should constrain them. What would be the political consequences if Morales’

118
Levitsky and Roberts, Introduction, 10-11.
119
Campello, The Politics of Redistribution, 190-1, 195-210.
120
Weyland, Latin America’s Two Lefts, 146.

38
redistributive programs became unsustainable? How would the termination or continuation of
these programs in adverse economic conditions affect Morales’ support among domestic actors?
The theoretical frameworks proposed by Guillermo O’Donnell and Thad Dunning offer insight
into this problem. Applying the concepts elaborated by these two authors to the Bolivian case
will help analyze the shifting dynamics of support for two social categories, “popular sectors”
and “elites.” O’Donnell’s concept of ISI exhaustion will be applied to the case of the MNR,
showing that while economic crash forced the party to make policy choices that alienated key
supporters, it lacks explanatory power for the timing of the coup. Analysis of the contemporary
case with this same framework demonstrates that an economic crash under Morales would
similarly create conditions conducive to a coup, removing a key source of protection from anti-
systemic actors. While O’Donnell’s model explains the dynamics that shape popular support for
or opposition to a regime, Dunning’s work provides a good starting point for analyzing elite
incentives.
Rents enable governments to meet the demands of the “masses” and avoid the
catastrophic “demands-performance gap” detailed by Guillermo O’Donnell. In his seminal study
of Bureaucratic-Authoritarian regimes in Brazil and Argentina, O’Donnell explains the
relationship between economic crisis and the disintegration of the populist coalition. State-led
development initially fostered economic growth, sustaining a political alliance based on
increased consumption capacity and anti-oligarchic nationalism. However, unstable export prices
resulted in balance of payment problems and high inflation. The decreased ability of the popular
sectors to consume created a gap between demands and regime performance. The necessity of
orthodox economic measures became clear to many sectors, but popular sector mobilization
made liberalization politically impossible. “Salient social problems remained unsolved,

39
competition was increasingly zero-sum, gains were precarious, and praetorianism undermined
the problem-solving capabilities of existing institutions. The threshold for a definitive crisis in
the political system was reached when most of the political actors focused on changing the rules
of the ‘political game’ altogether.”121
Those sectors that advocate austerity measures coalesce in
a coup coalition that considers “severe constraints” on political participation the only way to
overcome the chaos of mass praetorianism.122
With some slight modifications, O’Donnell’s model describes the challenges faced by the
MNR that set the stage for the 1964 coup. Unlike in Argentina and Brazil, the Bolivian state did
not rely on a powerful oligarchy to supply foreign exchange: the nationalization of tin removed
industry ownership from a domestic oligarchy to the state. However, in economic terms this
distinction was irrelevant, and the political effects of the resulting downturn were strikingly
similar in the Bolivian case. Indeed, the fate of the MNR intertwined with that of the tin industry,
as expected rents from the mines were essential to meeting the demands of mobilized
supporters.123
However, in the coming years the tin industry rapidly deteriorated. Production
sharply declined from 26,034 to 14,829 metric tons between 1953 and 1961 and the gross value
of tin exports decreased from $84.8 to $57.3 million between 1952 and 1963.124
The collapse
limited the ability of the MNR to meet the demands of its followers and the still-influential
landowning oligarchy.125
The lack of foreign exchange from tin revenues led to hyperinflation,
and the loose clientelist system under the auspices of the party transformed into a competition for
state resources. In 1956, President Hernán Siles Zuazo was forced to adopt a political
challenging IMF stabilization plan to retain American aid, which imposed suffering largely on

121
O’Donnell, Modernization and Bureaucratic-Authoritarianism, 77.
122
Ibid., 56-77.
123
124
125

40
MNR supporters: “The regime had to confront the choice of which of its multiplicity of support
groups would gain and which would lose; in short, the early phase of inclusion gave way to the
perceived need to shift to a politics of exclusion.”126
The “demands-performance gap” model accurately describes the Bolivian case up to
1956. When faced with polarizing circumstances, the MNR reversed its advocacy of the popular
sectors during its first four years. These “politics of exclusion” alienated the MNR from its
support base, which provided the necessary force to counter dominant sectors in society.
However, the MNR clung to power for another eight years: Bolivia clearly descended into
praetorianism as early as 1956, and the anticipated backlash only occurred in 1964. Beginning in
1956, the MNR successfully implemented austerity measures, relying on the military to oppress
labor. The economic stabilization under Siles and the Alliance for Progress Triangular Plan
under Paz succeeded at restoring growth by 1960 (see Table 3). It seemed that the MNR had
“place[d] severe constraints on the political activities of those who are outside the winning
coalition” to pursue the economic policies deemed necessary by key sectors.127
Because the
MNR had already done what an authoritarian intervention would be expected to achieve, the
state’s decision-making paralysis in the face of high polarization does not explain the turn to
authoritarianism in 1964. As will be seen, power politics within the MNR and the military
provided the trigger point that led to the coup in 1964.128
The model posed by O’Donnell
accurately describes the disintegration of the MNR coalition, which critically undermined
popular support. However, this model only set the stage for a coup, stopping short of a complete
explanation.

126
Malloy, Authoritarianism and Corporatism, 472.
127
O’Donnell, Modernization and Bureaucratic Authoritarianism, 78.
128
Charles D. Corbett, The Latin American Military as a Socio-Political Force: Case Studies of Bolivia and
Argentina (Coral Gables, Florida: Center for Advanced International Studies, University of Miami, 1972), 41-42.;
Mitchell, The Legacy of Populism, 92-96.

41
Morales has benefitted from continuously high export prices, making it impossible to
definitively apply the demands-performance gap to the contemporary case. In sharp contrast to
the almost immediate collapse of the tin industry, Morales has enjoyed a general upward trend in
the prices of hydrocarbons, minerals, and soybeans. Although the prices of these exports all
dipped in 2008, they remained substantially higher than 2006 levels, the start of Morales’ term.
In addition, tin, which still comprises a significant share of exports, has remained at high prices
despite a small dip in 2011.129
Short-term fluctuations are typical, and short dips are unlikely to
trigger the widespread defections necessary to support a coup, a risky endeavor. While the
decline of tin led to chronic foreign exchange shortage under the MNR, Morales has run fiscal
surpluses.130
Perhaps the most important difference is the absence of hyperinflation, the thorn in
the MNR’s side, under Morales. Between 1952 and 1957 the money supply increased by 371
billion Bs, severe hyperinflation.131
Even including spikes to double digits in 2008 and 2011,
Morales has kept inflation in check when compared to the 1950s.132
A comparison of growth
rates in the 1950s and between 2006-2012 demonstrates the economic big picture: Morales has
sustained growth while also pursuing redistributive policies, while for the MNR redistribution
and growth were mutually exclusive. During the first four years of his administration, the
economy grew at an average rate of 4.7 percent, which includes a drop during the 2008
recession. The first four years of the MNR provide a large contrast, in which average growth
reached a striking -6.6 percent (See Table 3). The favorable economic circumstances during

129
34 percent of merchandise exports in 2010 (See Appendix X)
130
Mark Weisbrot and Luis Sandoval, “Bolivia’s Economy—An Update,” International Journal of Health Services
38, no. 2 (2008): 400.
131
132
The World Factbook, “Bolivia,” Central Intelligence Agency, https://www.cia.gov/library/publications/the-
world-factbook/geos/bl.html. (accessed April 14, 2012).; Data, “Bolivia,” The World Bank,
http://data.worldbank.org/country/bolivia. (accessed April 14, 2012).

42
Morales’ presidency diminished Bolivian dependence on the United States and international
monetary institutions, a stark difference from the circumstances of the MNR. The MNR was
beholden to the United States, which financed Bolivia’s external debt and provided $392.1
million of aid between 1946 and 1964.133
Contrary to the close bilateral relations between
Bolivia and the United States during this period, this relationship deteriorated since the election
of Morales. The worsening of relations corresponded to a decrease in aid, and what remained
went largely to departmental governments.134
However, Morales can continue his policy
program because of decreased dependence on US assistance. The evolution of Bolivia’s
relationship with the United STates from the 1950s to the present elucidates the starkly different
economic contexts and allows Morales much more policy latitude and retain his support base.
Table 3: Annual Growth Rates, GDP135
MNR Morales
Year GDP % Growth Year GDP % Growth
1953-1954 -10.7 2006 4.8
1955-1956 2.5 2007 4.6
1957 -3.4 2008 6.1
1958 2.4 2009 3.4
1959 3.0 2010 4.1
1960 2.1 2011 5.0
1961 3.4
1962 4.2
1963 6.2
1964 6.2
Morales, who hails from a social movement background and encourages the mobilization
of his supporters, would likely face similar choices as the MNR in the event of a prolonged
economic crash. One study noted a significant increase in conflicts per month (40.4) in 2006,

133
Zondag, The Bolivian Economy, 188, 192.
134
Wolff, Challenges to Democracy Promotion, 10-11.
135
Author elaboration based on GDP estimates in Zondag, The Bolivian Economy, 202; the World Bank; CIA World
FactBook.

43
putting conflict levels during the Morales administration at the third highest in the last 40
years.136
Morales’ supporters continue to take to the streets in pursuit of salary raises, subsidies,
and other forms of state spending. Two examples, the Gasolinazo of December 2010 and the
nationwide protests of April 2011, illustrate these dynamics. In the Gasolinazo, the government
announced the end of fuel subsidies in December 2010, citing high costs and smuggling,
prompting trade unions to march extensively and transportation workers to declare an indefinite
strike. Morales ultimately backed down under the pressure, withdrawing the decree.137
A few
months later, discontent over rising food and transport prices coalesced into COB-led protests
demanding a 15 percent pay increase in La Paz, Cochabamba, Santa Cruz, and Tarija. The
protests, the worst faced by Morales since coming to office, turned violent, with police using tear
gas and protesters responding with stones and slingshots. Although Morales argued that an
increase of greater than 10 percent was unaffordable and emphasized his support of open
dialogue, protests continued.138
These two instances of mobilization to maintain or increase
government spending resulting in clashes with police are reminiscent of the reaction to MNR-era
IMF stabilization. Although the cutback in gas subsidies and refusal to raise wages more than 10
percent certainly do not impose the same level of suffering as full-scale orthodox stabilization,
the reaction was immediate and violent. Both events occurred when natural gas and petroleum
prices were still above 2006 levels, suggesting that the reaction would be much greater in the
event of full economic crisis (See Figure 3). A decline in export prices would trigger an

136
Roberto Laserna and Miguel Villarroel Nikitenko, 38 Años de Conflictos Sociales en Bolivia: Enero de 1970-
Enero de 2008: Descripción General y por Periodos Gubernamentales (Cochabamba, Bolivia: CERES, Centro de
Estudios de la Realidad Económica y Social, 2008), 26. The greatest number of protests per month (54.0) occurred
under Hernán Siles Zuazo of the UDP (December 1982-August 1985), followed by the period leading to the removal
of Carlos Mesa (October 2003-June 2005) (52.4)
137
“Bolivia’s Morales Drops Planned Food Price Hike,” BBC News, January 1, 2011.
http://www.bbc.co.uk/news/world-latin-america-12101199 (accessed April 14, 2012).
138
“Bolivia Protests Challenge Evo Morales,” BBC News, April 15, 2011. http://www.bbc.co.uk/news/world-latin-
america-13099827 (accessed April 14, 2012).

44
economic downturn, which would likely have similar political effects as the recession of the
early 1950s. While this does not determine the incidence of a coup, Morales would be
increasingly constrained in his ability pursue redistributive economic policy, undermining a
critical source of support.
Figure 2: Natural Gas and Petroleum Prices, January 2006-February 2012139
Dunning addresses the role of natural resources in shaping elite support for or opposition
to democratic regimes. In his model of anti-democratic coups, he postulates two conflicting
incentives for elites. Resource wealth has a “direct authoritarian effect” because it increases the
benefits of controlling the state, which encompasses control of the distribution of rents.
However, elites are also concerned with redistributive taxation, that is, the taxation of non-
resource income with the goal of ameliorating inequality. By providing additional revenue that
does not come directly out of elite pockets, resource booms decrease the necessity for taxation of

139
Author elaboration based on World Bank data.

45
non-resource income, increasing the cost of a coup relative to the cost of living under
democracy. In an economy with high inequality of non-resource income, elites would fear
redistributive taxation more than they desire control of the state, and mitigation will have a
stronger influence.140
When applied to the Bolivian case, this model suggests that when resource
rents are high, highland and lowland elites have diverging interests, and when resource rents are
low these interests converge in opposition to the Morales government.
As Dunning notes, Bolivia does not consistently operate as a classic rentier state.141
Private ownership of the tin mines before 1952 meant that nationalization signified
redistribution. Although the mine-owning elite wielded its considerable influence to oppose the
MNR prior to 1952, the revolution provided the popular momentum to nationalize the mines and
therefore destroy La Rosca’s power. Similarly, agrarian reform redistributed land, definitively
severing the party’s ties with a substantial portion of the landed oligarchy. The interests of
lowland elites, primarily in Santa Cruz and Tarija, are analogous to those of the highland landed
and mine-owning oligarchies during the 1950s and 60s. Like La Rosca, Tarijeño elites dislike
Morales because revenues generated by gas found in the department fund nationwide social
programs, essentially redistributing wealth from one department to the rest. Cruceño elites
similarly oppose Morales due to land reform, a redistributive program, and other policies that
regulate the liberalized eastern economy. Notably, the leader of the CAO also considered the
nationalization of hydrocarbons a contributor to the “crisis of production” in Santa Cruz,
providing an alliance with the gas industry in Tarija based on opposition to a specific policy
rather than a convenient convergence of interests.142
Facing reallocation of their primary source
of income, lowland elites pursued secession to gain control of land and rent distribution: “It is

140
Dunning, Crude Democracy, 8-11.
141
Ibid., 232, 252.
142

The Consequences of Incorporation- Reform and Heightened Coup Risk in Bolivia

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