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Distribution and growth in Latin America in an era of structural reform

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  • Morley, Samuel A.

Abstract

The first section of this paper reviews the most recent evidence on inequality in 18 Latin American countries and shows that in all but four the changes in inequality over the 1990s were small and nsignificant. The distribution depends on the ownership and rate of return on assets, particularly human capital. In the short run changes in these two variables tend to be offsetting-growth widens skill-differentials which is regressive, but advances in education are progressive. The two effects roughly cancel each other out absent severe macroeconomic shocks or revolutionary changes in the rules of the game. The paper then summarizes various recent papers as well as the author's recent work on the impact of structural reforms on inequality. That work shows that the recent reforms have had a negative but small regressive impact on inequality mainly because many of the individual reforms had offsetting effects. Trade and tax reform have been unambiguously regressive, but opening up the capital account is progressive. Finally, the paper presents evidence of a significant slowdown in the growth rate and argues that given this fact and the insensitivity of the distribution to feasible policy measures, the main problem facing the region at present is not how to improve the distribution but rather how the increase the growth rate.

Suggested Citation

  • Morley, Samuel A., 2001. "Distribution and growth in Latin America in an era of structural reform," TMD discussion papers 66, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:tmddps:66
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    File URL: http://www.ifpri.org/sites/default/files/publications/tmdp66.pdf
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    References listed on IDEAS

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    1. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality We Measure: An Investigation Using Latin American Data," IDB Publications (Working Papers) 6458, Inter-American Development Bank.
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    3. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-591, September.
    4. Nancy Birdsall & Juan Luis Londoño, 1997. "Asset Inequality Does Matter: Lessons from Latin America," Research Department Publications 4066, Inter-American Development Bank, Research Department.
    5. Williamson, Jeffrey G, 1997. "Globalization and Inequality, Past and Present," World Bank Research Observer, World Bank Group, vol. 12(2), pages 117-135, August.
    6. Eduardo Lora & Gustavo Márquez, 1998. "The Employment Problem in Latin America: Perceptions and Stylized Facts," Research Department Publications 4114, Inter-American Development Bank, Research Department.
    7. Suzanne Duryea & Miguel Székely, 1998. "Labor Markets in Latin America: A Supply-Side Story," Research Department Publications 4120, Inter-American Development Bank, Research Department.
    8. Jere R. Behrman & Nancy Birdsall & Miguel Székely, 2003. "Economic Policy and Wage Differentials in Latin America," Working Papers 29, Center for Global Development.
    9. Nancy Birdsall & Juan Luis Londoño, 1997. "Asset Inequality Does Matter: Lessons from Latin America," IDB Publications (Working Papers) 6426, Inter-American Development Bank.
    10. Eduardo Lora, 1997. "Una década de reformas estructurales en América Latina: ¿Qué se ha reformado y cómo cuantificarlo?," Research Department Publications 4075, Inter-American Development Bank, Research Department.
    11. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
    12. Lasso, Francisco Javier & Tovar, Camilo Ernesto & Ocampo, José Antonio & Pérez, María José, 1998. "Macroeconomía, ajuste estructural y equidad en Colombia: 1978-1996," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 31169, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    13. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality we Measure: An Investigation Using Latin American Data," Research Department Publications 4188, Inter-American Development Bank, Research Department.
    14. Marianne Hilgert & Miguel Székely, 1999. "Whats Behind the Inequality We Measure? An Investigation Using Latin American Data," LIS Working papers 234, LIS Cross-National Data Center in Luxembourg.
    15. repec:idb:brikps:66098 is not listed on IDEAS
    16. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality We Measure: An Investigation Using Latin American Data," IDB Publications (Working Papers) 1309, Inter-American Development Bank.
    17. repec:idb:wpaper:371 is not listed on IDEAS
    18. Machado, Roberto & Morley, Samuel A. & Pettinato, Stefano, 1999. "Indexes of structural reform in Latin America," Series Históricas 12, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    19. Morley, Samuel A., 2000. "La distribución de ingreso en América Latina y el Caribe," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1657 edited by Cepal, December.
    20. Suzanne Duryea & Miguel Székely, 1998. "Labor Markets in Latin America: A Supply-Side Story," Research Department Publications 4120, Inter-American Development Bank, Research Department.
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