Efficiency in poverty reduction in Bolivia

Abstract

A decline in poverty at the national level can mask regional disparities related to heterogeneous levels of efficiency among states that may limit the effectiveness of poverty reduction programs. To address this, we propose an empirical framework to unveil regional differences in poverty reduction and their drivers. Our method identifies the potential for poverty reduction and the factors crucial for designing place-based public policies. Applying this method to Bolivia for the period 2000–2021, we find that inefficiency in poverty reduction is largely persistent in specific states, underscoring the need for long-term strategies, especially those targeting informality and unemployment.