A System Built on Disorder | Un sistema construido sobre el desorden

Editorial, Bolivian Thoughts:

Bolivia Is Not Held Back by a Lack of Work, but by a System That Lives Off Disorder

There is a scene far too common in Bolivia: a citizen walks into a public office to solve a simple matter and ends up trapped between stamps, forms, photocopies, objections, lines, and service windows. He is sent to another institution, then another, then told to come back tomorrow. When he finally believes he has gathered everything, he discovers a new requirement is missing or the responsible official is unavailable.

For years, we assumed this was simply part of Bolivian life — a minor annoyance, an unavoidable routine. But it is not. That daily bureaucracy is one of the reasons Bolivia has become a country where people work harder and harder for less and less return.

The recent visit to La Paz by Federico Sturzenegger, Argentina’s Minister of Deregulation and State Transformation, mattered because it placed on the table a truth Bolivia usually avoids confronting: no country can grow if its own public apparatus systematically obstructs productive activity. Invited by Rodrigo Paz’s government to support the “Tranca Cero” program, Sturzenegger summarized the issue clearly: deregulation means freeing people from unnecessary obstacles so they can build businesses and grow (1). 

In Bolivia, that statement does not sound technical. It sounds disruptive.

Because here, citizens do not perceive the State as a facilitator, but as a force that controls, delays, and demands. And that dynamic is not new.

For two decades, the dominant political model expanded the State through more offices, more controls, more certifications, and more permits under the premise that greater intervention meant greater governing capacity. The result, however, was a heavier, slower, and less service-oriented apparatus. Productive activity did not strengthen at the same pace; administrative mediation did.

Today, the government itself acknowledges that this so-called “State bottleneck” costs Bolivia roughly 6% of its Gross Domestic Product in inefficiency, wasted time, and redundant processes (2). In today’s Bolivia — marked by foreign currency shortages, economic slowdown, and growing emigration — that cost becomes even more serious. Rodrigo Paz has also pointed out that many citizens must pass through multiple institutions just to complete a single public procedure (3).  The problem, therefore, is not only economic: it’s also operational. And that operational aspect has direct consequences.

A small merchant trying to formalize a business faces a chain of requirements before selling a single product. A farmer must obtain permits to move or commercialize production. An importer is subjected to cumbersome customs procedures. A citizen attempting to regularize property enters a maze of notaries, land registries, and public records.

In all these cases, the experience is similar: before producing, one must first survive the system.

That is why Bolivia has developed a massive informal economy. Roughly 85% of economic activity operates outside formality, according to figures cited by the government itself (4). This number reflects not merely tax evasion, but a strained relationship between citizens and the formal system. For many Bolivians, entering legality means assuming costs, delays, and risks that are rarely compensated with clear benefits. 

At the same time, such broad informality creates fertile spaces not only for subsistence activity, but also for more complex dynamics: contraband, difficult-to-trace money flows, and parallel financing circuits. The harder formalization becomes, the greater the incentive to remain outside the system, and the less transparent the national economy becomes.

Within that environment, certain actors adapt — and even benefit — from persistent complexity. Intermediaries who “solve” paperwork, informal collection networks, economies tied to contraband, and political mobilization structures all find functional ground there. Over the years, organized sectors — including elements of the Central Obrera Boliviana, intercultural groups, and other permanently mobilized organizations — have played an active role in national politics, often under leadership increasingly questioned for opaque internal practices and growing dependence on resources circulating outside the formal economy.

This helps explain why structural reforms in Bolivia often face resistance that goes far beyond simple administrative inertia.

To this must be added a climate of rising insecurity that, in some cases, has already reached operators within the institutional system itself. The recent murder of the dean of Bolivia’s Tribunal Agroambiental, Jorge Luis Murillo, forms part of a chain of events that has heightened concern over the reach of violence and its intimidating effect on authorities, judges, prosecutors, police, and public officials. When the environment is perceived this way, decision-making becomes slower, more cautious, and more vulnerable to pressure.

In a country where bureaucracy already creates friction, such signals deepen the sensation of paralysis.

That is why Sturzenegger’s visit should be interpreted less as a diplomatic event and more as a moment of contrast. In other contexts, deregulation efforts have sought precisely to reduce unnecessary burdens in order to reactivate economic life. Bolivia today faces a scenario in which that discussion is no longer theoretical.

Supreme Decree 5595 and the Tranca Cero program represent a first step (5), but Bolivia is no longer in a position to settle for superficial modernization. Digitizing forms or opening complaint channels will do little if citizens continue to depend on offices that never respond on time and on accumulated regulations that turn any initiative into an endurance contest. 

The real signal would have to be felt in simpler things: public procedures with firm completion dates instead of indefinite duration; small businesses able to formalize without spending months trapped between taxes, licenses, and objections; permits and certificates that exist only to sustain desks and gatekeepers finally disappearing; legality no longer feeling like a threat to those merely trying to grow.

That is, in essence, what Sturzenegger came to remind Bolivia of: when the State stops consuming the citizen’s energy, that energy returns to production.

Bolivia needs exactly that, because the country no longer faces only a weakened economy, but a dangerous accumulation of social exhaustion. Dollars are scarce, stagnant businesses are everywhere, emigration is rising, and the feeling grows that any additional effort is absorbed by a machinery that demands time, papers, and patience while giving very little back.

Under those conditions, continuing to administer delay is not simply bureaucratic clumsiness. It is prolonging paralysis.

And prolonging paralysis, in a Bolivia besieged by interests that adapt comfortably to disorder, means continuing to leave room for those who prosper precisely when lawful production becomes more difficult.

The question, then, is no longer whether bureaucracy is inconvenient.

The question is whether Bolivia is willing to stop protecting a system that has turned citizen exhaustion into one of its most ordinary forms of control.

As long as opening a file folder remains easier than opening a business, Bolivia will continue to produce the same result: people who work, people who endure, but a country that never quite manages to move forward.


DOCUMENTARY SOURCES

(1) Federico Sturzenegger’s statements in La Paz on deregulation and removing obstacles to entrepreneurship.
(2) Official and multilateral estimates on the cost of Bolivia’s bureaucratic “State bottleneck.”
(3) Government acknowledgment that citizens often pass through multiple institutions for a single public procedure.
(4) Official figures placing Bolivia’s informal economy near 85%.
(5) Supreme Decree 5595 and the launch of the Tranca Cero program.

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