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Bolivian President Evo Morales recently won re-election by a smashing margin. His eight-year rule has weakened the notion of property rights in Bolivia. He has also indulged in frequent nationalizations and demonized capitalism.

And yet, the Morales years have also produced Bolivias best growth rates in several decades, far better than those achieved when orthodox economic policies were pursued in the 1985-2003 period.

All of this must puzzle many elites around the globe. Thus, Morales recent policy of making Bolivian clocks run backwards seems reflected by the apparent successful defiance of theory in his economics.

In reality, though, there is a fairly simple explanation, and it is an important lesson for other poor countries no less than for global elites.

His economic policies have a certain logic to them. Through nationalization and tearing up contracts, he has enabled the Bolivian state to quadruple its revenues from minerals and energy extraction.

Fortuitously for him and his nation, this occurred at a time when prices were high. So the big bucks arrived in his state coffers. Otherwise, mining and energy companies would have made those windfall profits.

This good timing on his part has enabled Morales to increase the Bolivian welfare state without drastically unbalancing the budget. Indeed, aided by the windfall in resource revenues, his budgetary policies have been a model of restraint.

Bolivias performance in that regard is far better than that of most other Latin American countries, or indeed than that of the rich nations of Europe, the United States or Japan. Purely judged on his budgetary policies, we might well envisage for Morales a post-Presidential career as the successor to the United States Jack Lew or the UKs George Osborne!

The results of Bolivias economic policies have been excellent. An average growth rate of over 5% since Morales took office in 2006, with the 2008-09 recession survived with barely a hiccup.

With the budget so close to balance, Bolivias international debts are also modest, although a 2008 default on outstanding international bonds for a time made it difficult for the country to borrow. However in late 2012, the hyper-liquid state of global bond markets enabled Bolivia to borrow again, raising $500 million of ten-year money at a rate of only 4.875%.

Read more here:
Where Socialism Appears to Work: A Close-Up Look at Evo Morales