Falling Inequality in Latin America

Policy Changes and Lessons

Edited by Giovanni Andrea Cornia

WIDER Studies in Development Economics

Analyzes a new and positive economic trend
Provides a rigorous explanation of this trend on the basis of two methodological approaches
Looks at macroeconomics, foreign trade, taxation, labour market, human capital formation, and social assistance
Shows how the 'open economy policy model' can decrease inequality
Places the economic and econometric analysis within the context of the political changes that have taken place in the region since the early 1990s and in particular since 1998

Falling Inequality in Latin America

Policy Changes and Lessons

Edited by Giovanni Andrea Cornia

WIDER Studies in Development Economics

Description

The volume aims to document and explain the sizeable decline of income inequality that has taken place in Latin America during the 2000s. It does so through an exploration of inequality changes in six representative countries, and ten policy chapters dealing with macroeconomics, foreign trade, taxation, labour market, human capital formation, and social assistance, which point to the emergence of a 'new policy model'. The volume addresses a major issue in economic development with profound implications for many developing regions and those OECD countries mired in a long-lasting financial crisis and economic stagnation.

For at least the last quarter of the twentieth century, Latin America suffered from low growth, rising inequality, and frequent financial crises. However, since the turn of the century, growth accelerated, inequality declined, poverty fell, and macroeconomic stability improved, all this in parallel to the spread of centre-left political regimes in three quarters of the region. This inequality decline has taken many by surprise as, for a long time, the region has been a symbol of a deeply entrenched unequal distribution of assets, incomes, and opportunities, limited or no state redistribution, and a deeply embedded authoritarianism enforcing an unjust status quo.

The recent Latin American experience is particularly valuable as inequality was reduced under open economy conditions and in a period of intensifying global integration, which have often been considered as a source of rising inequality. In this sense, however imperfect, the recent Latin American experience may be of interest to countries completing their transition to the market and liberal democracy (as in the former socialist countries of Europe), facing a political transition (as those affected by the Arab Spring, Myanmar and countries in sub-Saharan Africa), or recording rises in inequality and social tensions in spite of rapid economic growth (as in China and India).

Until recently there was not much agreement on the drivers of the inequality decline in the region, which was attributed to changes in the supply/demand of skilled workers, improvements in terms of trade, the spread of social assistance schemes, or 'luck'. In this respect, the volume offers the first scholarly and systematic exploration of this unexpected change. As income inequality has been rising and is currently rising in many parts of the world, a good understanding of the Latin American experience over the 2000s is a topic that will inform and generate a lot of attention.

Falling Inequality in Latin America

Policy Changes and Lessons

Edited by Giovanni Andrea Cornia

WIDER Studies in Development Economics

Part I: Inequality Changes and the Surfacing of New Policy Approaches
1:Recent Distributive Changes in Latin America: An Overview, Giovanni Andrea Cornia
2:Inequality Trends and their Determinants: Latin America over 1990-2010, Giovanni Andrea Cornia
3:The Politics of Inequality and Redistribution in Latin America's Post-Adjustment Era, Kenneth M. Roberts
Part II: Recent Inequality Changes in Six Representative Latin American Countries
4:Redistribution without Structural Change in Ecuador: Rising and Falling Income Inequality in the 1990s and 2000s, Juan Ponce and Rob Vos
5:Policy Regimes, Inequality, Poverty and Growth: The Chilean Experience, 1973-2010, Dante Contreras and Ricardo Ffrench-Davis
6:Uruguay's Income Inequality and Political Regimes over 1981-2010, Véronica Amarante, Marco Colafranceschi, and Andrea Vigorito
7:The Rise and Fall of Income Inequality in Mexico, 1989-2010, Raymundo Campos-Vazquez, Gerardo Esquivel, and Nora Lustig
8:Social Policies or Private Solidarity? The Equalizing Role of Migration and Remittances in El Salvador, Carlos Acevedo and Maynor Cabrera
9:The Dynamics of Inequality Change in a Highly Dualistic Economy, Stephan Klasen, Thomas Otter, and Carlos Villalobos Barría
Part III: Main Policy Changes and Inequality during the Last Decade
10:Macroeconomic Policies, Growth, Employment, Poverty, and Inequality in Latin America, Mario Damill and Roberto Frenkel
11:Trade and Income Distribution in Latin America: Is There Anything New to Say?, Miguel Székely and Claudia Sámano-Robles
12:Changes in Labour Market Conditions and Policies and their Impact on Wage Inequality during the Last Decade, Saúl N. Keifman and Roxana Maurizio
13:What Can Latin America Learn from China's Labour Market Reforms?, Richard B. Freeman
14:Tax Policy and Income Distribution during the Last Decade, Giovanni Andrea Cornia, Juan Carlos Gómez-Sabaini, and Bruno Martorano
15:Inequality in Education: Evidence for Latin America, Guillermo Cruces, Carolina García Domench, and Leonardo Gasparini
16:On the Distributional Implications of Social Protection Reforms in Latin America, Armando Barrientos

Falling Inequality in Latin America

Policy Changes and Lessons

Edited by Giovanni Andrea Cornia

WIDER Studies in Development Economics

Author Information

Edited by Giovanni Andrea Cornia, Professor of Economics, University of Florence

Since 2000, Giovanni Andrea Cornia has taught economics at the University of Florence. Prior to that he was the Director of UNU-WIDER and held research positions in various UN agencies. He has lectured in several Italian and foreign universities in both developing and developed countries and has been visiting professors or visiting scholars in six universities. Since 2010 he has been a member of Committee for Development Policies of the United Nations. His main research interests are in the field of development economics, and in particular in the fields of macroeconomics, inequality, poverty, and, political economy as well as food security, famines, and child wellbeing. In all these areas he has published extensively.

Contributors:

Carlos Acevedo, Central Bank of El Salvador
Véronica Amarante, ECLAC, Santiago de Chile
Armando Barrientos, University of Manchester
Maynor Cabrera, Instituto Centroamericano de Estudios Fiscales
Raymundo Campos-Vazquez, El Colegio de Mexico
Marco Colafranceschi, Universidad de la República, Uruguay
Dante Contreras, Universidad de Chile
Giovanni Andrea Cornia, University of Florence
Guillermo Cruces, Universidad Nacional de La Plata, Argentina
Mario Damill, Centro de Estudios de Estado y Sociedad
Carolina García Domench, Center for Distributive, Labor and Social Studies
Gerardo Esquivel, El Colegio de México
Ricardo Ffrench-Davis, University of Chile
Richard B. Freeman, Harvard University
Roberto Frenkel, CEDES
Leonardo Gasparini, Universidad Nacional de La Plata, Argentina
Juan Carlos Gómez-Sabaini, Consultant
Saúl N. Keifman, Universidad de Buenos Aires
Stephan Klasen, University of Göttingen
Nora Lustig, Tulane University
Bruno Martorano, UNICEF IRC
Roxana Maurizio, University of General Sarmiento
Thomas Otter, Göttingen University
Juan Ponce, Institute of Social Sciences, The Hague
Kenneth M. Roberts, Cornell University
Claudia Sámano-Robles, Universidad Nacional Autónoma de México
Miguel Székely, Tecnológico de Monterrey
Andrea Vigorito, Universidad de la República, Uruguay
Carlos Villalobos BarrÍa, University of Göttingen
Rob Vos, Food and Agricultural Organization, Rome