Paper short abstract:

This work analyses the sub-national politics of natural gas revenue sharing in Peru and Bolivia, and particularly how the institutional outcome and the sub-national context address spatial inequalities at the sub-national level

Paper long abstract:

The 'golden age of natural gas' in Peru and Bolivia has delivered to the sub-national governments a large amount of revenues because of revenue sharing policies. These policies prioritize the distribution of taxes and royalties of natural gas to the sub-national levels where extraction take place. Even though many countries have revenue sharing policies, the political design of those policies might be understood as a result of sub-national power relations within each country. This work looks for analyze the political junctures which trigger sub-national oriented revenues sharing policies in Bolivia and Peru, as well as the effects of those policies over spatial inequalities and sub-national politics. Against this background, this paper addresses three related questions: a) which political conditions enhance revenue sharing politics in each country?; b) how natural gas revenues impacted on spatial inequalities at sub-national level?; c) how those revenues produce new political junctures?

Empirically this analysis is based on Peru and Bolivia in the context of natural gas production, and specifically in the sub-national levels which receive the largest amount of revenues from this resource: Cuzco and Tarija. The results show that a) the territoriality of sub-national powers must be spatially overlapped over the natural resources, and specific sub-national struggles impacted over the whole national frame of revenue sharing; b) the related extractive revenues might reduce spatial inequalities in social expenditures, but do not in terms of productive capacity; and c) the geographical distribution of the expenditure unleash political junctures which might produce new sub-national divisions.