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Carmenza Gallo Taxes and State Power Political Instability in Bolivia, 1900-1950 TEMPLE UNIVERSITY PRESS PHILADELPHIA Temple University Press, Philadelphia 19122 Copyright © 1991 by Temple University. All rights reserved Published 1991 Printed in the United States of America The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences-Permanence of Paper for Printed Library Materials, ANSI Z39-48-1984 § Library of Congress Cataloging-in-Publication Data Gallo, Carmenza. Taxes and state power : political instability in Bolivia, 1900-1950 I Carmenza Gallo. p. em. Includes bibliographical references and index. ISBN 0-87722-800-0 1. Bolivia-Economic policy. 2. Finance, Public-Bolivia. 3· Taxation-Bolivia. 4-Exports-Bolivia. 5. Social classes Bolivia. 6. Bolivia-Politics and government-1879-1938. 7- Bolivia-Politics and government-1938-1952. I. Title. HCI82.G34 1991 336.2'00984-dC20 90-42055 C!P For Tom CONTENTS Acknowledgments ix Issues and Concepts 3 II The Tin Industry's Demand for Public Services 29 III Agricultural Production and State Services 55 IV Class Contradictions and the State's Political Basis 75 v Tax Policy 97 VI State Building and Political Instability 119 VII Taxes and State Power in Comparative Perspective I45 Notes I 53 Bibliography I 59 Index I7I vii ACKNOWLEDGMENTS First I wish to thank Susan Eckstein for her intelligent guidance and always useful comments and criticisms, and for conscientiously read ing the various earlier versions of my dissertation and later the book manuscript. Her work on Latin America kindled my interest in politi cal economy and in Bolivia. Above all, I want to thank her for her encouragement and constant support. Several other professors and colleagues made crucial contribu tions to the development of the manuscript. Special thanks are due to S. M. Miller for his challenging and provocative comments and for much-needed guidance in rethinking and rewriting many sections; to Merilee Grindle, Mike Useem, Jeff Coulter, and Sally Cassidy for reading the drafts and for their useful suggestions; and to Juan Antonio Morales for his thoughtful comments on drafts of several chapters and for his encouragement to continue. Steven Bunker, Ira Katznelson, John Markoff, and Christopher Mitchell all read the book manuscript and gave me invaluable sug gestions. Their comments are reflected in crucial ways both in the overall organization of the book and in the content of many of the chapters. William Canak's, Thorvald Gran's, and Eric Hobsbawn's perceptive suggestions helped me rewrite parts of the manuscript. My debt to Charles Tilly can hardly be overstated. Without his encouragement, advice, and help, it is unlikely that the manuscript would have become a published book. With rare intellectual and per sonal generosity, he gave me numerous insights that resulted in the recasting of main ideas and in significant revisions of the crucial first i X x Acknowledgments chapter. He not only helped me to eliminate the unnecessary and to recognize the limitations of my argument but also found time to advise me in a variety of practical matters. His pro-seminar on state formation at the New School for Social Research in New York was an ongoing source of intellectual stimulation and helped me to broaden the intellectual foundations of my research. I also want to thank the International Business and Professional Women's Foundation for a Sally Butler Fellowship, which provided financial assistance for the initial stages of the research. Maria Clara Uribe, Juliana Pakes, and Roger Whitaker, with out complaints, endured conversations in which I rehearsed my ideas on Bolivia. They helped me enormously with their friendship. Jane Churchman carefully and patiently helped edit parts of the manu script; Ellen Levine and Shoshana Vasheetz efficiently and cheerfully helped with the typing of the various drafts. Barbara Bailey prepared the manuscript for the publisher. She took care of the last-minute corrections and adjustments that can make the last stage of a book project such a nightmare. I very much appreciate C. Lloyd Bailey's help with the tedious task of cheeking the manuscript. And Doris Braendel, my editor at Temple University Press, was enthusiastic, helpful, and supportive. I have an immense intellectual and personal debt to my hus band, Thomas R. Bailey. His challenges and criticisms during our innumerable discussions were invaluable for the formulation of all the ideas that shape this work. He was willing to take time away from his own work to help with the practical chores of preparing the many drafts and to help me rewrite my long, latinate English sentences any that remain should not be blamed on him. Finally, our daughter, Daniela, cannot remember a time when she has not had to compete with the dissertation and (as if that were not enough) the book for her mother's time-a competition that Daniela has carried out with charm, wit, and tenacity. She will be often told the many ways the joy and happiness that she gave us speeded up the completion of this project. Taxes and State Power: Political Instability in Bolivia, 1900-1950