Social policy in Bolivia has changed substantially since the increase in world oil prices. According to the Supreme Decree 29565 enacted in May 2008, the increase of revenues coming from the direct hydrocarbon taxes (IDH) should be used, among others, for social protection programs. However, there is not a clear relationship between the logic of the intervention of social programs and the allocation of IDH resources.

As of two years ago, Bolivia was considered a low income country. During 2008, however, the high commodity prices (especially oil, minerals and soy beans) gave the country a strong comparative advantage, and the resulting GDP growth has caused Bolivia to shift to the medium income group.

The rise in IDH revenues has multiplied the income revenue for the Municipal Governments 9 times. Therefore, municipalities have become more dependent on the IDH revenues, making social investment very sensible to the international context.

With the new administration there are important changes in the structure of the social protection programs. Most of them are “universal” but there is a tendency to focalize them “geographically” through the Index of Food Safety Vulnerability (VAM) and the Index of Basic Needs (NBI). Most interventions take place only in those municipalities that have the highest VAM index and/or NBI greater than 70 percent.

Various social programs like “Zero Malnutrition”, PROPAIS, EXTENSA, Cash Incentives for Pregnant Women, and “Escuela Amiga” are programs which are geographically focalized.

The new social programs of the current government are characterized not only by individual interventions covering distinct age groups but also interventions that address “social and indigenous communities” such as “Comunidades en Acción”, “Comunidades Recíprocas” and “Comunidades Solidarias”.

Another important element is the cash transfer programs. This type of programs has been very common in several Latin American countries, however, for Bolivia, this is somewhat new and has different shades: i) conditional cash transfers (Bono Juancito Pinto, Cash Incentives to Pregnant Women); ii) unconditional cash transfers (Renta Dignidad); and iv) cash transfer offered to communities and adapted to their own objectives for specific purposes (Comunidades en Acción, Comunidades Recíprocas y Comunidades Solidarias).

A lot is going on to protect all the age groups and we could be assuming that Bolivia has a consistent and integral policy of social protection for the poor. However, the reality is that among 15 “star” social programs, only six are implemented: “PROPAIS”, “Juancito Pinto”, “Desnutrición Cero”, “Yo Sí Puedo”, “Operación Milagro” and “Mi primer empleo digno”. Of these six programs, only the Zero Malnutrition Program has planned an impact evaluation study and has a baseline survey. This means that in the future we are not going to be able to know the impact of these programs in the beneficiary population.

Moreover, the allocation of IDH is not consistent with the design of the social programs. The departments and municipalities that receive greater resources by IDH have not been selected by the poverty criteria and much less by the criteria of geographic focalization (VAM.) In the future, this situation may generate a lack of liquidity for the municipal governments classified with high NBI and VAM.

Many of these programs are implemented at the municipal level and additionally, some municipal governments have had their own social program initiatives (1). Nevertheless, many implementation limitations exist. According to the “Federación de Asociaciones Municipales” (2), the municipalities have declared their concern about the “lack of clarity in the information on the part of the Central Government with respect to the distribution of the IDH resources that are handled with a lot of uncertainty at the moment to carry out projections of adequate incomes for the planning of the municipal management".

On the other hand, there is a high level of social participation and community empowerment that make social programs achievable. Bolivians are more likely to have a sense of “ownership” over these social programs; such is the case with “Renta Dignidad” (which before was known as “Bonosol”) and School Breakfast programs. These programs are no longer considered a temporary public benefit, but rather an acquired human right, which means that the population will demand that these programs are continued at any cost.

We know that, after two boom years, the future is uncertain and could be reverted at any time due to the high social and political instability in the country, the potential negative impacts of the current international financial crisis, and the current crisis of the YPFB. If we add the high level of empowerment of the social movements and their strong demand with respect to the social programs, in the long term, the lack of coherence between the "planning" and the "financing", could not only result in low levels of implementation, but also could stress the social tensions due to promises not fulfilled.