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Declining Inequality in Latin America: Some Economics, Some Politics - Working Paper 251


  • Nancy Birdsall, Nora Lustig, and Darryl McLeod


Latin America is known to have income inequality among the highest in the world. That inequality has been invoked to explain low growth, poor education, macroeconomic volatility, and political instability. But new research shows that inequality in the region is falling. In this paper, we summarize recent findings on the decline in inequality across the region, analyze how the type of political regime (populist, social democratic, right of center) matters to the sustainability of the decline, and investigate the relationship between changes in inequality and changes in the size of the middle class in the region. We conclude with some questions about whether and how changes in income distribution and in middle-class economic power will affect the politics of distribution in the future.

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  • Nancy Birdsall, Nora Lustig, and Darryl McLeod, 2011. "Declining Inequality in Latin America: Some Economics, Some Politics - Working Paper 251," Working Papers 251, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:251

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    References listed on IDEAS

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    4. Eric A. Hanushek & Ludger Woessmann, 2007. "The Role of School Improvement in Economic Development," NBER Working Papers 12832, National Bureau of Economic Research, Inc.
    5. Daron Acemoglu, 2010. "Theory, General Equilibrium, and Political Economy in Development Economics," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 17-32, Summer.
    6. Marie Gaarder & Amanda Glassman & Jessica Todd, 2010. "Conditional cash transfers and health: unpacking the causal chain," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 2(1), pages 6-50.
    7. Laura B. Rawlings, 2005. "Evaluating the Impact of Conditional Cash Transfer Programs," World Bank Research Observer, World Bank Group, vol. 20(1), pages 29-55.
    8. Lant Pritchett, 2002. "It pays to be ignorant: A simple political economy of rigorous program evaluation," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 251-269.
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    Cited by:

    1. Barrientos, Armando, 2011. "On the Distributional Implications of Social Protection Reforms in Latin America," WIDER Working Paper Series 069, World Institute for Development Economic Research (UNU-WIDER).
    2. Gabriela Dutrénit & Juan Carlos Moreno-Brid & Martín Puchet & Eduardo Moreno, 2014. "Economic growth, innovation and inequality in Latin America: improvements, setbacks and pending issues post-Washington Consensus," Chapters,in: National Innovation Systems, Social Inclusion and Development, chapter 11, pages 304-348 Edward Elgar Publishing.
    3. Cornia, Giovanni Andrea, 2014. "Income inequality in Latin America. Recent decline and prospects for its further reduction," Macroeconomía del Desarrollo 149, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Paul Mosley, 2012. "The politics of what works for the poor in public expenditure and taxation: a review," Brooks World Poverty Institute Working Paper Series esid-011-12, BWPI, The University of Manchester.
    5. Pablo Astorga, 2015. "Functional Inequality in Latin America: News from the Twentieth Century," Oxford University Economic and Social History Series _135, Economics Group, Nuffield College, University of Oxford.
    6. Cornia, Giovanni Andrea, 2012. "Inequality Trends and their Determinants: Latin America over 1990-2010," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).
    7. Iván Gachet & Diego F. Grijalva & Paúl Ponce & Damián Rodríguez, 2016. "Vertical and horizontal inequality in Ecuador: The lack of sustainability," WIDER Working Paper Series 106, World Institute for Development Economic Research (UNU-WIDER).
    8. Nancy Birdsall, 2015. "Does the Rise of Middle Class Lock in Good Government in the Developing World?," Working Papers id:7861, eSocialSciences.
    9. Yang Wang, 2015. "Education Expansion and Decline in Tertiary Premium in Brazil: 1995-2013," Working Papers 1525, Tulane University, Department of Economics.
    10. repec:unu:wpaper:wp2012-09 is not listed on IDEAS
    11. Nancy Birdsall, Nora Lustig, Christian Meyer, 2013. "The Strugglers: The New Poor in Latin America?-Working Paper 337," Working Papers 337, Center for Global Development.
    12. Marcus André Melo & Armando Barrientos & André Canuto Coelho, 2014. "Taxation, redistribution and the social contract in Brazil," Brooks World Poverty Institute Working Paper Series iriba_wp11, BWPI, The University of Manchester.
    13. Martner Fanta, Ricardo & González, Ivonne, 2012. "Overcoming the empty box syndrome": eterminants of income distribution in Latin America"," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    14. Nancy Birdsall, 2012. "A Note on the Middle Class in Latin America," Working Papers 303, Center for Global Development.
    15. Andy Sumner, 2012. "The Buoyant Billions: How “Middle Class†Are the New Middle Classes in Developing Countries? (And Why Does It Matter?)," Working Papers id:5169, eSocialSciences.
    16. World Bank, 2013. "Managing Medium-Term Fiscal Challenges," World Bank Other Operational Studies 16573, The World Bank.


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