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The Impact of Inequality in Latin America

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Author Info

  • Patricia Justino

    ()
    (Poverty Research Unit at Sussex, Department of Economics, University of Sussex)

  • Julie Litchfield

    ()
    (Poverty Research Unit at Sussex, Department of Economics, Universtity of Sussex)

  • Laurence Whitehead

    ()
    (Centre for Mexican Studies and Nuffield College, University of Oxford)

Abstract

This paper examines the impact of inequality on poor people in Latin America. It is argued that development policies in Latin America and other developing regions should focus not only on eliminating poverty and deprivation but also on preventing and reducing inequality. By inequality we refer not only to differences in income or consumption between population groups but also to divergences in the access to social and political rights (education, health care, voting, and so on). Although conceptually related, poverty and inequality are two distinct phenomena and it is possible that falls in poverty may be accompanied by increases in inequality and vice-versa. In fact, many Latin America countries have experienced the former in recent years. In the long-term, however, persistent inequalities as those observed in the Latin America region will undermine efforts to reduce poverty and destitution due to the emergence of poverty traps caused by the impossibility of economic and social mobility of certain population groups. This will have important consequences for the challenge of achieving the Millennium Development Goal of halving poverty worldwide by 2015. In addition, persistently high inequalities will also impact negatively on crucial economic, social and political variables and will thus seriously undermine the success of any development strategies.

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File URL: http://www.sussex.ac.uk/Units/PRU/wps/wp21.pdf
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Bibliographic Info

Paper provided by Poverty Research Unit at Sussex, University of Sussex in its series PRUS Working Papers with number 21.

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Length: 86 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:pru:wpaper:21

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Postal: School of Social Sciences and Cultural Studies, Falmer, Brighton BN1 9SN
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Web page: http://www.sussex.ac.uk/Units/PRU/
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Keywords: Inequality; poverty; developing countries; Latin America;

References

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  1. Javier Escobal & Jaime Saavedra-Chanduví & Máximo Torero, 1999. "Los activos de los pobres en el Perú," IDB Publications 7601, Inter-American Development Bank.
  2. Ahmad, Ehtisham, 1991. "Social Security and the Poor: Choices for Developing Countries," World Bank Research Observer, World Bank Group, vol. 6(1), pages 105-27, January.
  3. Kevin M. Murphy & Andrei Shleifer & Robert Vishny, 1988. "Income Distribution, Market Size, and Industrialization," NBER Working Papers 2709, National Bureau of Economic Research, Inc.
  4. S. M. Ravi Kanbur, 1987. "Measurement and Alleviation of Poverty: With an Application to the Effects of Macroeconomic Adjustment (Evaluation quantitative de la pauvreté et remèdes possibles: analyse des effets d'un ajust," IMF Staff Papers, Palgrave Macmillan, vol. 34(1), pages 60-85, March.
  5. Kanbur, Ravi, 2000. "Income distribution and development," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 13, pages 791-841 Elsevier.
  6. Ravallion, M. & Datt, G., 1991. "Growth and Redistribution Components of Changes in Poverty Measures," Papers 83, World Bank - Living Standards Measurement.
  7. Mesa-Lago, Carmelo, 1983. "Social security and extreme poverty in Latin America," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 83-110.
  8. Lucia Hanmer & Niek De Jong & Rachel Kurian & Jos Mooij, 1999. "Are the DAC targets achievable? Poverty and human development in the year 2015," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(4), pages 547-563.
  9. Kanbur, Ravi & Lustig, Nora, 1999. "Why is Inequality Back on the Agenda?," Working Papers 127690, Cornell University, Department of Applied Economics and Management.
  10. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
  11. Harrison, Elizabeth & Seidl, Christian, 1994. " Perceptional Inequality and Preferential Judgements: An Empirical Examination of Distributional Axioms," Public Choice, Springer, vol. 79(1-2), pages 61-81, April.
  12. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
  13. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June.
  14. Ahluwalia, Montek S., 1976. "Inequality, poverty and development," Journal of Development Economics, Elsevier, vol. 3(4), pages 307-342, December.
  15. Perotti, Roberto, 1993. "Political Equilibrium, Income Distribution, and Growth," Review of Economic Studies, Wiley Blackwell, vol. 60(4), pages 755-76, October.
  16. Lam, David & Schoeni, Robert F, 1993. "Effects of Family Background on Earnings and Returns to Schooling: Evidence from Brazil," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 710-40, August.
  17. Patricia Justino & Arnab Acharya, 2003. "Inequality in Latin America: Processes and Inputs," PRUS Working Papers 22, Poverty Research Unit at Sussex, University of Sussex.
  18. Cline, William R., 1975. "Distribution and development : A survey of literature," Journal of Development Economics, Elsevier, vol. 1(4), pages 359-400, November.
  19. Ravallion, Martin & Datt, Gaurav, 1999. "When is growth pro-poor? Evidence from the diverse experiences of India's states," Policy Research Working Paper Series 2263, The World Bank.
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Citations

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Cited by:
  1. Patricia Justino, 2003. "Social Security in Developing Countries: Myth or Necessity? Evidence from India," PRUS Working Papers 20, Poverty Research Unit at Sussex, University of Sussex.
  2. Blanco, Luisa, 2010. "Life is Unfair in Latin America, But Does it Matter for Growth?," World Development, Elsevier, vol. 38(3), pages 393-404, March.
  3. Guisan, M.C. & Aguayo, E., 2007. "Health Expenditure, Poverty and Economic Development in Latin America 2000-2005," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 4(2), pages 5-24.

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