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Inequality and poverty under Latin America’s new left regimes

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Author Info

  • Darryl McLeod

    () (Fordham University)

  • Nora Lustig

    () (Tulane University and Center for Global Development)

Abstract

Inequality and poverty fell sharply in many Latin American countries during a decade in which voters in ten countries chose left-leaning leaders. Are these developments related? Using data for 18 Latin American countries, this paper presents econometric evidence that social democratic regimes in Brazil and Chile were more successful at reducing inequality and poverty than the so-called populist regimes of Argentina, Bolivia, and Venezuela. Both groups implemented policies to redistribute income, but the social democratic regimes’ efforts were more effective. The left populists regimes such as Argentina and Venezuela started the 1990-2008 sample window with lower levels of inequality, so to some extent recent reductions in inequality are a return to “normal” levels (as estimated by fixed effects). Conversely, inequality and poverty in Brazil and Chile fell to historic lows. Moreover, overall terms of trade shocks were more favorable to Argentina and Venezuela, so part of the drop in inequality can be attributed to commodity price booms.

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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 208.

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Length: 31 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2011-208

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Keywords: inequality; poverty; social policy; new left; Latin America.;

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References

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  1. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli, 2009. "Recent trends in income inequality in Latin America," Working Papers 132, ECINEQ, Society for the Study of Economic Inequality.
  2. Paul Collier & Benedikt Goderis, 2007. "Commodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum," CSAE Working Paper Series 2007-15, Centre for the Study of African Economies, University of Oxford.
  3. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2011. "A Political Theory of Populism," Levine's Working Paper Archive 661465000000001179, David K. Levine.
  4. Paul Collier & Benedikt Goderis, 2008. "Commodity Prices and Growth: An empirical investigation," OxCarre Working Papers 014, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  5. Giovanni Andrea cornia, 2009. "Income Distribution under Latin America’s New Left Regimes," Working Papers Series wp2009_16.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze dell'Economia e Dell'Impresa.
  6. Maxim Pinkovskiy & Xavier Sala-i-Martin, 2009. "Parametric Estimations of the World Distribution of Income," NBER Working Papers 15433, National Bureau of Economic Research, Inc.
  7. Lustig, N. & Mcleod, D., 1996. "Minimum Wages and Poverty in Developing Countries : Some Empirical Evidence," Papers 125, Brookings Institution - Working Papers.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Inequality and Poverty under Latin America’s New Left Regimes
    by maximorossi in NEP-LTV blog on 2011-02-21 12:20:36
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Cited by:
  1. Nancy Birdsall & Nora Lustig & Darryl McLeod, 2011. "Declining inequality in Latin America: Some economics, some politics," Working Papers 201, ECINEQ, Society for the Study of Economic Inequality.

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