Policies·bolivia_nsa_decree_21060_1985

New Economic Policy — Decree 21060 (Bolivia stabilisation 1985)

BOL·1985 – ·enacted 1985-08-29·MNR (social-revolutionary, historically leftist, implementing neoliberal reform)candidate

movescentral bank independence↑trade openness↑product market competition↑sectoral subsidy↓

What the policy did

Signed by President Víctor Paz Estenssoro under advice from Jeffrey Sachs. Shock-therapy programme ending Bolivia's 1984-1985 hyper- inflation (peak ~60,000% annualised, Hanke-Krus catalogued episode). Measures: (1) immediate peso devaluation + unified exchange rate, (2) price liberalisation, (3) fiscal adjustment via wage freeze + tax reform, (4) trade liberalisation, (5) central-bank independence restoration. Inflation collapsed from 24,000% (1985) to ~15% (1987). Bolivian stabilisation became an early template for Eastern European shock-therapy programmes 1989-1991 (Sachs advising Polish and Russian governments drew on this experience).

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended

↑

central bank independence

monetary.central_bank_independence

De jure and de facto independence of the central bank from fiscal authority. Per D.1.5 scope, one of the framework's defensible monetary positions.

increased · strong

greater independence (legal, operational, personnel)

↑

trade openness

regulatory.trade_openness

Trade policy openness — tariffs, non-tariff barriers, FTAs, industrial protection.

increased · strong

more open trade

↑

product market competition

regulatory.product_market_competition

Product-market regulation, entry barriers, licensing burdens, network-industry regulation, price controls.

increased · strong

more competition-friendly (lower entry barriers)

↓

sectoral subsidy

fiscal.sectoral_subsidy

Targeted industrial and sectoral subsidies (renewable energy, chip manufacturing, agriculture, green hydrogen, etc).

decreased · strong

reduced sectoral subsidies

Enacted by

bolivia_paz_estenssoro_mnr_1985_1989

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Every documented hyperinflation episode since 1900 (Weimar Germany, post-WW2 Hungary, Yugoslavia 1990s, Zimbabwe 2000s, Venezuela 2010s-2020s, among others) was preceded by fiscal dominance — a state of affairs where monetary policy is subordinated to financing government deficits that cannot be financed by taxation or market-rate borrowing.

hyperinflation_requires_fiscal_dominance

INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['hanke:hyperinflation_table']

run pending

Estonia adopted among the most radical market-liberalisation packages of any post-Soviet state — flat tax (26% universal rate, 1994), currency board (EEK pegged to DM/EUR, 1992), rapid privatisation, unilateral free trade, and minimal capital controls — and by 2007 had recovered to Soviet-era GDP per capita levels and substantially exceeded them, while Belarusian and Ukrainian peers had not recovered comparably.

estonia_market_reform_post_soviet_growth_1991_2007inferred

viaregulatory.trade_opennessregulatory.product_market_competition

PARTIAL — recovery threshold pass=True (year_recovered=1998, 2007 vs 1991 = 70.53282727739165); Baltic−CIS gap pass=False (gap=5.1509956229348575)

partial

Across a broad panel of economies 1980-2020, market reforms (privatisation, trade liberalisation, and price decontrol) produce durable gains in real GDP per capita growth only when rule-of-law scores exceed a minimum threshold (WGI Rule of Law > -0.5, approximately the 40th percentile of the global distribution).

rule_of_law_market_reform_complementarityinferred

viaregulatory.product_market_competitionregulatory.trade_openness

REFUTED — coef=-0.1483 (sign opposite claim +), p=0.00481

refuted

In a panel of middle-income countries 1990-2020, export complexity (Hausmann-Hidalgo Economic Complexity Index) rises more following reforms that improve foreign market access and reduce domestic entry barriers than following expansions of subsidy-only industrial policy.

export_complexity_market_access_vs_subsidyinferred

viaregulatory.trade_opennessfiscal.sectoral_subsidyregulatory.product_market_competition

PARTIAL — coef=+4.68e-14, p=0.393; effect magnitude effectively zero

partial

Canada’s long-run prosperity after the Canada–US Free Trade Agreement (1988) and NAFTA (1994) is more associated with market openness than with national industrial-policy initiatives.

canada_market_liberalisation_vs_state_industry_1988_2024inferred

viaregulatory.trade_opennessregulatory.product_market_competitionfiscal.sectoral_subsidy

INCONCLUSIVE_DATA_PENDING — treatment 'canada_post_1988' has no within-country variation under country fixed effects

run pending

Among high-income economies 1990-2020, services-sector competition — measured by low barriers to entry, low incumbent-protection scores, and high churn in retail, transport, communications, and professional services — predicts long-run prosperity (real GDP per capita growth and labour-productivity growth) better than manufacturing-specific industrial policy spending.

sectoral_competition_services_productivityinferred

viaregulatory.product_market_competitionregulatory.trade_opennessfiscal.sectoral_subsidy

PARTIAL — coef=+0.000842, p=0.361 (above α=0.05); direction inconclusive

partial

Consumer product variety and price-adjusted welfare improve more after episodes of trade liberalisation and competition-policy reform than after state industrial-policy episodes of comparable duration and scale, in a panel of middle- and high-income countries 1980-2020.

consumer_choice_variety_trade_market_reforminferred

viaregulatory.trade_opennessfiscal.sectoral_subsidyregulatory.product_market_competition

INCONCLUSIVE_DATA_PENDING — treatment 'competition_reform_episode' has no within-country variation under country fixed effects

run pending

Australia’s long expansion after the Hawke-Keating reforms (1983–1996) — including tariff cuts, financial deregulation, competition-policy introduction, and fiscal consolidation — is better predicted by market liberalisation than by sector-specific state direction.

australia_hawke_keating_reform_long_runinferred

viaregulatory.trade_opennessregulatory.product_market_competition

PARTIAL — coef=-0.03935, p=0.076 (above α=0.05); direction inconclusive

partial

Estonia’s radical market reforms after independence in 1991 — including a currency board, flat tax, rapid privatisation, and full trade liberalisation — generated a cumulative GDP-per-capita convergence gain of at least 15 log-points by 2024 relative to a synthetic counterfactual constructed from gradual post-Soviet reform comparators (Latvia, Lithuania, Russia, Ukraine, Belarus, Kazakhstan).

estonia_market_reform_30yr_income_convergenceinferred

viaregulatory.trade_opennessregulatory.product_market_competitionmonetary.central_bank_independence

supported

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

Rogernomics — New Zealand market reforms 1984-1990

NZL·1984

match

4.0

product market competitiontrade opennesssectoral subsidycentral bank independence

Balcerowicz Plan — Poland shock therapy 1990

POL·1990

match

4.0

product market competitiontrade opennesssectoral subsidycentral bank independence

Yeltsin-Gaidar shock therapy + voucher privatisation (Russia, 1992-1994)

RUS·1992