The Political Economy of Managing Extractives in Bolivia, Ecuador and Peru

The aim of this chapter is to show how history shapes the political economy of managing extractives in contemporary Peru, Ecuador and Bolivia. Within this history, we are particularly concerned with the interactions among socio-political and economic structures, the international economy and national geographies. In the first section we describe what we mean by a ‘political economy of managing extractives’, ¹ present some basic structural data on the countries and offer a synthetic view of the continuing importance of the colonial legacy and of how these three domestic political economies evolved over the first century or so after Independence. ² In the second section we discuss what we refer to as ‘shaping events’ of the twentieth century and trace their implications for the political economy of managing extractives. The first of the five ‘shaping events’ is the trajectory of the international economy over the middle decades of the century, when the 1929 Depression and two world wars pushed Latin American economies to develop instruments that would allow them both to diversify away from traditional primary exports and to broaden the spread of benefits from extraction. The second event is the emergence of political violence and/or stronger social movements in the post-war period, notably in the 1960s (a theme discussed in more detail by Crabtree and Crabtree-Condor in Chapter 3), while the third is the growth of the drugs economy from the 1970s onwards. The fourth shaping event is the continent-wide shift in paradigm towards neoliberalism and a market-based economy following the debt crisis of 1982. The fifth is the remarkable boom in mineral and hydrocarbons prices that occurred during the 1990s and 2000s. The chapter concludes by discussing the implications of these historically evolving political economies for today’s management of the extractives sector.