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Corruption, privatisation and the distribution of income in Latin America

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  • Antonio Rodriguez Andres
  • Carlyn Ramlogan-Dobson

Abstract

This paper presents new evidence on income inequality in Latin America over the period 1981-2000. Using a panel data methodology, we find that a reduction in corruption is associated with a rise in inequality. This counterintuitive result can be explained by privatisation. Privatisation removes industries from government influence (and corruption) and worsens income inequality as new owners strive for efficiency and profits. The paper argues that structural reform policies aimed primarily at achieving positive and increasing growth rates do not adequately address the income distribution problem.

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File URL: http://www.ntu.ac.uk/research/document_uploads/85421.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by Nottingham Trent University, Nottingham Business School, Economics Division in its series Working Papers with number 2008/11.

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Date of creation: Jul 2008
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Handle: RePEc:nbs:wpaper:2008/11

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Web page: http://www.ntu.ac.uk/nbs

Related research

Keywords: Corruption; Latin America; Income inequality; Instrumental variables; Panel data; Privatisation.;

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