Miguel Buitrago of MABB on Bolivia has a chart showing that the regions in Bolivia that receive the most and the least government spending.

Guess which ones are the richest and which ones are the poorest? Go see here.

For those who claim more government spending means more wealth, that the rich are only rich at the expense of the poor, that there is only so much to go around, that the economic pie is only a matter of slicing and not expanding, that redistribution from rich to poor is the only answer, there are going to be some surprises. But for fans of Hayek and Bastiat, the classical economics about the nature of government spending and how the more government expands, the less private sector there is, it’s a full-page advertisement for the free market.

Miguel’s data show that the richest regions of Bolivia are those that create private wealth. The poorest regions of Bolivia are those that take government handouts. And guess what, they’re poorer than ever. If government spending is the ‘answer,’ how come so much new poverty is created?

The very poorest regions of Bolivia just happen to be the ones where government spending is the highest and the hand of government is the most visible. The richest ones are definitely taxed the most in this redistributionist scheme, but get the lowest rate of return for their contributions. Their wealth is ‘redistributed’ elsewhere. But they are the lucky ones because the government is not such a big presence in their lives and they are not dependent on government handouts. It is as if the very presence of government (along with all its money) crowds out the private sector. Not surprisingly, many Bolivians are moving into the cities where the hand of government is the least visible.

This has some implications for the political stability of the country. Those who are already on the receiving end of government largess and who do not create wealth or value, have many supporters of Evo Morales. Those who are creators of wealth and who must pay disproportionate taxes are opponents of the Marxist-inspired Morales.

The question: Are there more givers or takers in Bolivia’s economy? That could point the way to how Bolivia’s Dec. 4 election goes and whether Bolivia becomes a Cuban satellite or a free country that draws immigrants.

Go see Miguel’s post here.

UPDATE: Oh man, it’s the exact same theme! On the exact same day! But the country now is Venezuela! Go see the new Veneconomy item here.