Institutionality, logistics and international cooperation for the economic and social development: The case of the Plurinational State of Bolivia

Abstract

The limitations faced by landlocked countries have an impact upon economic and social development since landlocked countries are highly dependent on the transportation infrastructure of neighboring countries to access maritime routes. This results in an increase in the time and cost to trade —factors which can significantly reduce the competitiveness and complementarity of the exports of a landlocked country as well as increase the price of imports. Studies indicate that the Plurinational State of Bolivia’s landlockedness results in losses estimated at 0.5% to 2% of GDP annually. However, some studies, as well as international evidence, conclude that developing adequate logistics and infrastructure is a way of increasing efficiency and contributing to the overall economy. In some countries, the investment in logistics reaches almost 25% of GDP. In this vein, investing in infrastructure, transportation and logistics are significant factors in fostering economic and social development.