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Latin American Inequality: Colonial Origins, Commodity Booms, or a Missed 20th Century Leveling?

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  • Jeffrey G. Williamson

Abstract

Most analysts of the modern Latin American economy have held the pessimistic belief in historical persistence -- they believe that Latin America has always had very high levels of inequality, and that it’s the Iberian colonists’ fault. Thus, modern analysts see today a more unequal Latin America compared with Asia and most rich post-industrial nations and assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this fact supported rent-seeking and anti-growth institutions which help explain the disappointing growth performance we observe there even today. The recent leveling of inequality in the region since the 1990s seems to have done little to erode that pessimism. It is important, therefore, to stress that this alleged persistence is based on an historical literature which has made little or no effort to be comparative, and it matters. Compared with the rest of the world, inequality was not high in the century following 1492, and it was not even high in the post-independence decades just prior Latin America’s belle époque and start with industrialization. It only became high during the commodity boom 1870-1913, by the end of which it had joined the rich country unequal club that included the US and the UK. Latin America only became relatively high between 1913 and the 1970s when it missed the Great Egalitarian Leveling which took place almost everywhere else. That Latin American inequality has its roots in its colonial past is a myth.

Suggested Citation

  • Jeffrey G. Williamson, 2015. "Latin American Inequality: Colonial Origins, Commodity Booms, or a Missed 20th Century Leveling?," NBER Working Papers 20915, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20915
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Latin American Inequality: Colonial Origins, Commodity Booms, or a Missed 20th Century Leveling?
      by maximorossi in NEP-LTV blog on 2015-02-20 22:48:42
    2. Chile’s First Globalisation: Inequality, Frontier Expansion, and Immigration
      by pseudoerasmus in Pseudoerasmus on 2015-04-24 16:03:26

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    Cited by:

    1. Javier Rodríguez Weber, 2018. "Alta desigualdad en América Latina: desde cuándo y por qué," Documentos de trabajo 51, Programa de Historia Económica, FCS, Udelar.
    2. Pablo Astorga, 2015. "Functional Inequality in Latin America: News from the Twentieth Century," Oxford Economic and Social History Working Papers _135, University of Oxford, Department of Economics.
    3. 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.
    4. María Gómez-León, 2015. "The Rise of the Middle Class, Brazil (1839-1950)," Working Papers 0091, European Historical Economics Society (EHES).
    5. Christian Daude & Virginia Robano, 2015. "On intergenerational (im)mobility in Latin America," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-29, December.
    6. Enriqueta Camps & Stanley L. Engerman, 2016. "The Impact of Race and Inequality on Human Capital Formation in Latin America During the Nineteenth and Twentieth Centuries," Working Papers 885, Barcelona Graduate School of Economics.

    More about this item

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean
    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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