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Chile: The Unbearable Burden of Inequality

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  • López, Ramón
  • Miller, Sebastian J.

Abstract

Summary Chile has been cited as a successful case of development. Relatively fast economic growth over almost two decades has been accompanied by a significant reduction in absolute poverty. However, persistent economic growth and a mostly pro-poor structure of public expenditures have not been sufficient to reduce inequality in one of the most unequal countries in the world. We show that the key factors explaining this persistent inequality have been a low level of fiscal expenditures caused by low tax revenues that have not permitted enough public investment in human capital and knowledge generation and diffusion.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 36 (2008)
Issue (Month): 12 (December)
Pages: 2679-2695

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Handle: RePEc:eee:wdevel:v:36:y:2008:i:12:p:2679-2695

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: inequality growth government expenditure taxes Latin America Chile;

References

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  1. Dasgupta, Partha, 1996. "The economics of the environment," Environment and Development Economics, Cambridge University Press, vol. 1(04), pages 387-428, October.
  2. Antonio Estache & Vitor Gaspar, 1995. "Why Tax Incentives Don't Promote Investment in Brazil," ULB Institutional Repository 2013/44076, ULB -- Universite Libre de Bruxelles.
  3. Haque, Nadeem U & Montiel, Peter, 1989. "Consumption in Developing Countries: Tests for Liquidity Constraintsand Finite Horizons," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 408-15, August.
  4. Dante Contreras & Emerson Melo & Susana Ojeda, 2005. "¿Estimando el retorno a la educación o a los no observables?: evidencia de datos de panel," Estudios de Economia, University of Chile, Department of Economics, vol. 32(2 Year 20), pages 187-199, December.
  5. Lee, Jong-Wha, 1996. " Government Interventions and Productivity Growth," Journal of Economic Growth, Springer, vol. 1(3), pages 391-414, September.
  6. Chen, Shaohua & Ravallion, Martin, 2004. "How Have the World's Poorest Fared Since the Early 1980s?," Policy Research Working Paper Series 3341, The World Bank.
  7. Svedberg, Peter & Tilton, John E., 2006. "The real, real price of nonrenewable resources: copper 1870-2000," World Development, Elsevier, vol. 34(3), pages 501-519, March.
  8. Lopez, Ramon & Galinato, Gregmar I., 2007. "Should governments stop subsidies to private goods? Evidence from rural Latin America," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1071-1094, June.
  9. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  10. Bergström, Fredrik, 1998. "Capital Subsidies and the Performance of Firms," Working Paper Series in Economics and Finance 285, Stockholm School of Economics.
  11. Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
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Citations

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Cited by:
  1. Peter Hoeller & Isabelle Joumard & Mauro Pisu & Debra Bloch, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 1. Mapping Income Inequality Across the OECD," OECD Economics Department Working Papers 924, OECD Publishing.
  2. Dusan Paredes, 2012. "Spatial wage disparities and the role of spatial labor sorting," Documentos de Trabajo en Economia y Ciencia Regional 28, Universidad Catolica del Norte, Chile, Department of Economics, revised Sep 2012.
  3. Solimano, Andres, 2009. "Three Decades of Neoliberal Economics in Chile: Achievements, Failures and Dilemmas," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Susana Katherine Chacón Espejo & Dusan Paredes Araya, 2013. "Spatial Income Inequality in Chile and the Rol of Spatial Labor Sorting," Documentos de Trabajo en Economia y Ciencia Regional 46, Universidad Catolica del Norte, Chile, Department of Economics, revised Apr 2013.
  5. Lopez, Ramon, 2009. "Natural disasters and the dynamics of intangible assets," Policy Research Working Paper Series 4874, The World Bank.
  6. Eduardo Borensztein & Sebastián J. Miller & Gabriel Sánchez & Patricio Valenzuela, 2014. "Development Diagnostics for the Southern Cone," IDB Publications 85194, Inter-American Development Bank.
  7. Riumallo-Herl, Carlos Javier & Kawachi, Ichiro & Avendano, Mauricio, 2014. "Social capital, mental health and biomarkers in Chile: Assessing the effects of social capital in a middle-income country," Social Science & Medicine, Elsevier, vol. 105(C), pages 47-58.

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