Executive power resides in the president of the republic and his ministers of state. The ministers of state conduct the day-to-day business of public administration. In 1989 the Council of Ministers included sixteen ministries. In addition to the Council of Ministers, the president headed the National Economic and Planning Council (Consejo Nacional de Economía y Planificación--Coneplan), the National Council for Political and Social Affairs (Consejo Nacional Político y Social--Conapol), and the National Security Council (Consejo Nacional de Seguridad-- Conase).
The president and vice president are chosen through direct elections to a four-year term. To win an election, a candidate must secure a majority of the popular vote. If a majority is not achieved, Congress selects the next president from among the top three candidates. This reliance on Congress, rather than on a second round of elections, has contributed greatly to the instability of democratically elected executives. Because of a recurring executive-legislative split, elections produced governments that had only formal power. Until 1985 real power, or the effective capacity to rule, had eluded democratically elected presidents.
Under the Constitution, reelection of the incumbent is not permitted; however, after four years the previous president may again run for office. Similarly, an incumbent vice president may not run for president until four years after the end of his term. In 1985, however, a pact between the major political parties allowed Vice President Jaime Paz Zamora to run for the presidency.
To become president, a person must be at least thirty-five years of age, literate, a registered voter, and the nominee of a political party. Members of the armed forces on active duty, Roman Catholic clergy, and ministers of other religions may not run for office. Blood relatives and relatives to the second degree by affinity of the incumbent president and vice president are ineligible to run for the presidency. Incumbent ministers of state who seek the executive office must resign at least six months before election day.
By tradition and constitutional law, the president is a strong executive. Conducting foreign relations, making economic policy, enforcing and regulating laws, negotiating treaties and ratifying them after prior approval by Congress, appointing officials, commanding the armed forces, and preserving and defending the public order are all prerogatives guaranteed the chief executive under the Constitution of 1967. In emergency situations, such as internal turmoil or international war, the president has the power to call a state of siege.
The power of appointment enables the president to exercise control over the large number of public servants at all levels of government. The president appoints the ministers of state, members of the bureaucracy, and prefectos (prefects) of departamentos (departments). From lists submitted by the Senate, the president appoints the comptroller general, the attorney general, the national superintendent of banks, and the heads of state enterprises. As captain general of the armed forces, the president has the power to appoint the commander in chief of the armed forces and the commanders of the navy, army, air force, and public safety.
The executive branch also included a number of decentralized institutions and autonomous enterprises, such as the Social Security Institute (Colegio Nacional de Seguridad Social--CNSS), the Mining Corporation of Bolivia (Corporación Minera de Bolivia -- Comibol), the Bolivian State Petroleum Enterprise (Yacimientos Petrolíferos Fiscales Bolivianos--YPFB), the National Railroad Enterprise (Empresa Nacional de Ferrocarriles--Enfe), and the National Telecommunications Enterprise (Empresa Nacional de Telecomunicaciones--Entel). The state also owned and operated Lloyd Bolivian Airline.
One of the largest state enterprises, the Bolivian Development Corporation (Corporación Boliviana de Fomento--CBF), grouped a number of smaller industries ranging from dairy products to matches. As a result of a decentralization program, control over the CBF was passed on to regional development corporations in 1985. These were in turn given the task of selling enterprises to the private sector.
The dependent nature of Bolivia's middle class and the lack of a broad economic base often resulted in state bureaucracies' being used for political gain. Because of the small size of private industry, the middle class coveted positions in the state bureaucracy. As a result, competition for a limited number of bureaucratic positions frequently engendered political conflict. Government remained a prized commodity struggled over by factions made up of leaders drawn from the elite and ambitious personal followers drawn from the middle class.
By the mid-1980s, the state had become a large but extremely weak apparatus. Approximately 220,000 public employees bloated the bureaucracy, and the prevalence of patronage prevented the dismissal of inefficient employees. This huge payroll seriously inflated the public deficit.
Reforms undertaken since 1985 under the guise of the New Economic Policy (Nueva Política Económica--NPE) reduced the size of the state sector by privatizing or decentralizing state enterprises. To reduce public spending, 20,000 miners from Comibol were laid off. Through the restructuring of state enterprises, the government also fired employees in YPFB and other bureaucracies. Critics of the reforms noted, however, that workers were dismissed instead of the government officials whose salaries were responsible for most of the increases in public spending.
In 1989 the Integrated System of Financial Administration and Governmental Control (Sistema Integrado de Administración Financiera y Control Gubernamentales--Safco), a program funded by the United States Agency for International Development (AID) and the World Bank, was introduced to monitor hiring and firing practices and to reduce corruption in the public sector. The program's central objective was to make government bureaucracies efficient administrative entities. Reforms undertaken by Safco also sought to reduce the number of ministries in order to make the state apparatus leaner and more manageable.
In early 1989, President Paz Estenssoro commanded a cabinet divided equally between politicians and technocrats. Old members of the MNR shared responsibilities with managers drawn from the private sector. Paz Estenssoro's cabinet was credited with enforcing the rigid austerity aims of the NPE. With the economy creeping toward reactivation, the attempt to reduce the size of the public sector appeared to have succeeded.
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